[Congressional Record Volume 161, Number 103 (Thursday, June 25, 2015)]
[Senate]
[Pages S4650-S4653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. WYDEN:
S. 1687. A bill to amend the Internal Revenue Code of 1986 to
restrict the insurance business exception to passive foreign investment
company rules; to the Committee on Finance.
Mr. WYDEN. Mr. President, I rise today to introduce the Offshore
Reinsurance Tax Fairness Act. This bill closes a tax loophole that is
being used by some U.S.-based hedge funds that set up insurance
companies in places like Bermuda and the Cayman Islands where they
aren't taxed and where their earnings are sheltered from U.S. taxes.
Offshore businesses that reinsure risks and that invest in U.S. hedge
funds create the potential for tax avoidance of hundreds of millions of
dollars.
Under these arrangements, a hedge fund or hedge fund investors make a
capital investment in an offshore reinsurance company. The offshore
reinsurance company then reinvests that capital, as well as premiums it
receives, in the hedge fund. The owners of the reinsurer take the
position that they are not taxed on corporate earnings until either
those earnings are distributed, or the investors sell the corporation's
stock at a gain reflecting those earnings.
However, the hedge fund ``reinsurers'' are taking advantage of an
exception to the passive foreign investment company--or PFIC--rules of
U.S. tax law. The PFIC rules are designed to prevent U.S. taxpayers
from delaying U.S. tax on investment income by holding investments
through offshore corporations. However, the PFIC rules provide an
exception for income derived from the active conduct of an insurance
business. The exception applies to income derived from the active
conduct of an insurance business by a corporation which is
predominantly engaged in an insurance business and which would be
subject to tax under Subchapter L if it were a domestic corporation.
Current law does not prescribe how much insurance or reinsurance
business the company must do to be considered predominantly engaged in
an insurance business. Our investigative efforts show that some
companies that are not legitimate insurance companies are taking
advantage of this favorable tax treatment.
About a year ago I asked the Treasury Department and IRS to issue
guidance to shut down this abuse. And in April, Treasury and IRS issued
regulations that take a first step at addressing this issue. However,
while the guidance offers clarity in this area, a legislative fix is
required to fully close this loophole.
Therefore, today I am introducing the Offshore Reinsurance Tax
Fairness Act to shut down this abuse once and for all. My bill would
provide a bright-line test for determining whether a company is truly
an insurance company for purposes of the exception to the PFIC rules.
Under the new rule, to be considered an insurance company, the
company's insurance liabilities must exceed 25 percent of its assets.
If the company fails to qualify because it has 25 percent or less--but
not less than 10 percent--in insurance liability assets, the company
may still be predominantly engaged in the insurance business based on
facts and circumstances. A company with less than 10 percent of
insurance liability assets will not be considered an insurance company
and, therefore, would be ineligible for the PFIC exception and subject
to current taxation.
The Offshore Reinsurance Tax Fairness Act will disqualify most of the
hedge fund reinsurance companies that are taking advantage of the
current law loophole, making them ineligible for the PFIC exception and
stopping this abuse. I look forward to working with my colleagues to
enact this important reform.
Mr. President, I ask unanimous consent that the text of the bill and
a technical explanation be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1687
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 ``Offshore Reinsurance Tax
Fairness Act''.
SEC. 2. RESTRICTION ON INSURANCE BUSINESS EXCEPTION TO
PASSIVE FOREIGN INVESTMENT COMPANY RULES.
(a) In General.--Section 1297(b)(2)(B) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(B) derived in the active conduct of an insurance
business by a qualifying insurance corporation (as defined in
subsection (f)),''.
(b) Qualifying Insurance Corporation Defined.--Section 1297
of the Internal Revenue Code of 1986 is amended by adding at
the end the following new subsection:
``(f) Qualifying Insurance Corporation.--For purposes of
subsection (b)(2)(B)--
``(1) In general.--The term `qualifying insurance
corporation' means, with respect to any taxable year, a
foreign corporation--
``(A) which would be subject to tax under subchapter L if
such corporation were a domestic corporation, and
``(B) the applicable insurance liabilities of which
constitute more than 25 percent of its total assets,
determined on the basis of such liabilities and assets as
reported on the corporation's applicable financial statement
for the last year ending with or within the taxable year.
``(2) Alternative facts and circumstances test for certain
corporations.--If a corporation fails to qualify as a
qualified insurance corporation under paragraph (1) solely
because the percentage determined under paragraph (1)(B) is
25 percent or less, a United States person that owns stock in
such corporation may elect to treat such stock as stock of a
qualifying insurance corporation if--
``(A) the percentage so determined for the corporation is
at least 10 percent, and
``(B) under regulations provided by the Secretary, based on
the applicable facts and circumstances--
``(i) the corporation is predominantly engaged in an
insurance business, and
``(ii) such failure is due solely to temporary
circumstances involving such insurance business.
``(3) Applicable insurance liabilities.--For purposes of
this subsection--
``(A) In general.--The term `applicable insurance
liabilities' means, with respect to any life or property and
casualty insurance business--
``(i) loss and loss adjustment expenses, and
``(ii) reserves (other than deficiency, contingency, or
unearned premium reserves) for life and health insurance
risks and life and health insurance claims with respect to
contracts providing coverage for mortality or morbidity
risks.
``(B) Limitations on amount of liabilities.--Any amount
determined under clause (i) or (ii) of subparagraph (A) shall
not exceed the lesser of such amount--
``(i) as reported to the applicable insurance regulatory
body in the applicable financial statement described in
paragraph (4)(A) (or, if less, the amount required by
applicable law or regulation), or
[[Page S4651]]
``(ii) as determined under regulations prescribed by the
Secretary.
``(4) Other definitions and rules.--For purposes of this
subsection--
``(A) Applicable financial statement.--The term `applicable
financial statement' means a statement for financial
reporting purposes which--
``(i) is made on the basis of generally accepted accounting
principles,
``(ii) is made on the basis of international financial
reporting standards, but only if there is no statement that
meets the requirement of clause (i), or
``(iii) except as otherwise provided by the Secretary in
regulations, is the annual statement which is required to be
filed with the applicable insurance regulatory body, but only
if there is no statement which meets the requirements of
clause (i) or (ii).
``(B) Applicable insurance regulatory body.--The term
`applicable insurance regulatory body' means, with respect to
any insurance business, the entity established by law to
license, authorize, or regulate such business and to which
the statement described in subparagraph (A) is provided.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2015.
Technical Explanation of the Offshore Reinsurance Tax Fairness Act
Introduced by Senator Wyden on June 25, 2015
Present Law
Passive foreign investment companies
A U.S. person who is a shareholder of a passive foreign
investment company (``PFIC'') is subject to U.S. tax in
respect to that person's share of the PFIC's income under one
of three alternative anti-deferral regimes. A PFIC generally
is defined as any foreign corporation if 75 percent or more
of its gross income for the taxable year consists of passive
income, or 50 percent or more of its assets consists of
assets that produce, or are held for the production of,
passive income. Alternative sets of income inclusion rules
apply to U.S. persons that are shareholders in a PFIC,
regardless of their percentage ownership in the company. One
set of rules applies to passive foreign investment companies
that are ``qualified electing funds,'' under which electing
U.S. shareholders currently include in gross income their
respective shares of the company's earnings, with a separate
election to defer payment of tax, subject to an interest
charge, on income not currently received. A second set of
rules applies to passive foreign investment companies that
are not qualified electing funds, under which U.S.
shareholders pay tax on certain income or gain realized
through the company, plus an interest charge that is
attributable to the value of deferral. A third set of rules
applies to PFIC stock that is marketable, under which
electing U.S. shareholders currently take into account as
income (or loss) the difference between the fair market value
of the stock as of the close of the taxable year and their
adjusted basis in such stock (subject to certain
limitations), often referred to as ``marking to market.''
Passive income
Passive income means any income which is of a kind that
would be foreign personal holding company income, including
dividends, interest, royalties, rents, and certain gains on
the sale or exchange of property, commodities, or foreign
currency.
However, among other exceptions, passive income does not
include any income derived in the active conduct of an
insurance business by a corporation that is predominantly
engaged in an insurance business and that would be subject to
tax under subchapter L if it were a domestic corporation.
In Notice 2003-34, the Internal Revenue Service identified
issues in applying the insurance exception under the PFIC
rules. One issue involves whether risks assumed under
contracts issued by a foreign company organized as an insurer
are truly insurance risks, and whether the risks are limited
under the terms of the contracts. In the Notice, the Service
also analyzed the status of the company as an insurance
company. The Service looked to Treasury Regulations issued in
1960 and last amended in 1972, as well as to the statutory
definition of an insurance company and to the case law. The
question to resolve in determining a company's status as an
insurance company is whether ``the character of all of the
business actually done by [the company] . . . indicate[s]
whether [the company] uses its capital and efforts primarily
in investing rather than primarily in the insurance
business.'' The Notice concluded that ``[t]he Service will
scrutinize these arrangements and will apply the PFIC rules
where it determines that [a company] is not an insurance
company for federal tax purposes.''
Proposed regulations on the insurance exception under the
PFIC rules published on April 24, 2015, provide that ``the
term insurance business means the business of issuing
insurance and annuity contracts and the reinsuring of risks
underwritten by insurance companies, together with those
investment activities and administrative services that are
required to support or are substantially related to insurance
and annuity contracts issued or reinsured by the foreign
corporation.'' The proposed regulations provide that an
investment activity is an activity producing foreign personal
holding company income, and that is ``required to support or
[is] substantially related to insurance and annuity contracts
issued or reinsured by the foreign corporation to the extent
that income from the activities is earned from assets held by
the foreign corporation to meet obligations under the
contracts.''
The preamble to the proposed regulations specifically
requests comments on the proposed regulations ``with regard
to how to determine the portion of a foreign insurance
company's assets that are held to meet obligations under
insurance contracts issued or reinsured by the company,'' for
example, if the assets ``do not exceed a specified percentage
of the corporation's total insurance liabilities for the
year.''
Reasons for Change
The establishment of offshore businesses that reinsure
risks and that invest in U.S. hedge funds has been
characterized as creating the potential for tax avoidance. In
these arrangements, a hedge fund or hedge fund investors make
a capital investment in an offshore reinsurance company. The
offshore reinsurance company then reinvests that capital (as
well as premiums it receives) as reserves in the hedge fund.
Because the capital may be held largely or completely in one
investment (the hedge fund), an insurance regulator may
require a higher level of reserves to compensate for the lack
of diversification. This can magnify the effect of holding a
high level of reserves relative to a low level of insurance
liabilities.
The owners of the offshore reinsurance company take the
position that the reinsurance company is not a PFIC, and that
investors in it are not taxed on its earnings until those
earnings are distributed or the investors sell the
reinsurance company stock at a gain reflecting those
earnings. U.S. PFIC rules designed to prevent tax deferral
through offshore corporations provide an exception for income
derived in the active conduct of an insurance business. What
it takes to qualify under this exception as an insurance
business, including how much insurance or reinsurance
business the company must do to qualify under the exception,
may not be completely clear.
The hedge fund reinsurance arrangement is said to provide
indefinite deferral of U.S. taxation of the hedge fund's
investment earnings, such as interest and dividends. At the
time the taxpayer chooses to liquidate the investment,
ordinary investment earnings are said to be converted to
capital gains, which are subject to a lower rate of tax. The
use of offshore reinsurance companies allows large-scale
investments that are said to be consistent with capital and
reserve requirements applicable to the insurance and
reinsurance business.
Media attention to hedge fund reinsurance has described the
practice as dating from an arrangement set up in 1999. In
recent years, the practice has grown, giving rise to a
serious income mismeasurement problem. The ``Offshore
Reinsurance Tax Fairness Act'' seeks to prevent this income
mismeasurement by modifying the definition of an insurance
company for purposes of the PFIC rules. The ``Offshore
Reinsurance Tax Fairness Act'' provides that objective
measures of a firm's real insurance risks compared to its
assets are used to determine whether a firm is an insurance
company, or is a disguise cloaking untaxed offshore income.
Explanation of Provision
Applicable insurance liabilities as a percentage of total
assets
Under the provision, passive income for purposes of the
PFIC rules does not include income derived in the active
conduct of an insurance business by a corporation (1) that
would be subject to tax under subchapter L if it were a
domestic corporation; and (2) the applicable insurance
liabilities of which constitute more than 25 percent of its
total assets as reported on the company's applicable
financial statement for the last year ending with or within
the taxable year.
For the purpose of the provision's exception from passive
income, applicable insurance liabilities means, with respect
to any property and casualty or life insurance business (1)
loss and loss adjustment expenses, (2) reserves (other than
deficiency, contingency, or unearned premium reserves) for
life and health insurance risks and life and health insurance
claims with respect to contracts providing coverage for
mortality or morbidity risks. This includes loss reserves for
property and casualty, life, and health insurance contracts
and annuity contracts. Unearned premium reserves with respect
to any type of risk are not treated as applicable insurance
liabilities for purposes of the provision. For purposes of
the provision, the amount of any applicable insurance
liability may not exceed the lesser of such amount (1) as
reported to the applicable insurance regulatory body in the
applicable financial statement (or, if less, the amount
required by applicable law or regulation), or (2) as
determined under regulations prescribed by the Secretary.
An applicable financial statement is a statement for
financial reporting purposes that (1) is made on the basis of
generally accepted accounting principles, (2) is made on the
basis of international financial reporting standards, but
only if there is no statement made on the basis of generally
accepted accounting principles, or (3) except as otherwise
provided by the Secretary in regulations, is the annual
statement required to be filed with the applicable insurance
regulatory body, but only if there is no statement made on
either of the foregoing bases. Unless otherwise provided in
regulations, it is intended that generally accepted
accounting principles means U.S. GAAP.
[[Page S4652]]
The applicable insurance regulatory body means, with
respect to any insurance business, the entity established by
law to license, authorize, or regulate such insurance
business and to which the applicable financial statement is
provided. For example, in the United States, the applicable
insurance regulatory body is the State insurance regulator to
which the corporation provides its annual statement.
Election to apply alternative test in certain circumstances
If a corporation fails to qualify solely because its
applicable insurance liabilities constitute 25 percent or
less of its total assets, a United States person who owns
stock of the corporation may elect in such manner as the
Secretary prescribes to treat the stock as stock of a
qualifying insurance corporation if (1) the corporation's
applicable insurance liabilities constitute at least 10
percent of its total assets, and (2) based on the applicable
facts and circumstances, the corporation is predominantly
engaged in an insurance business, and its failure to qualify
under the 25 percent threshold is due solely to temporary
circumstances involving such insurance business.
Whether the corporation's applicable insurance liabilities
constitute at least 10 percent of its total assets is
determined in the same manner as whether the corporation's
applicable insurance liabilities constitute more than 25
percent of its total assets.
In determining whether the corporation is predominantly
engaged in an insurance business, relevant facts and
circumstances under this election include: the number of
insurance contracts issued or taken on through reinsurance by
the firm; the amount of insurance liabilities (determined as
above) with respect to such contracts; the total assets of
the firm (determined as above); information with respect to
claims payment patterns for the current and prior years; the
nature of risks underwritten and the data available on
likelihood of the risk occurring (extremely low-risk but
extremely high cost risks are less indicative of being
engaged in an insurance business); the firm's loss exposure
as calculated for a regulator such as the SEC or for a rating
agency, or if those are not calculated, for internal pricing
purposes; the percentage of gross receipts constituting
premiums for the current and prior years; whether the firm
makes substantial expenditures during the taxable year with
respect to marketing or soliciting new insurance or
reinsurance business; and such other facts or circumstances
as the Secretary may prescribe.
Facts and circumstances that tend to show the firm may not
be predominantly engaged in an insurance business include a
small number of insured risks with low likelihood but large
potential costs; workers focused to a greater degree on
investment activities than underwriting activities; and low
loss exposure. The fact that a firm has been holding itself
out as an insurer for a long period is not determinative
either way.
Temporary circumstances include the fact that the company
is in runoff, that is, it is not taking on new insurance
business (and consequently has little or no premium income),
and is using its remaining assets to pay off claims with
respect to pre-existing insurance risks on its books.
Temporary circumstances may also include specific
requirements with respect to capital and surplus relating to
insurance liabilities imposed by a rating agency as a
condition of obtaining a rating necessary to write new
insurance business for the current year.
Temporary circumstances do not refer to starting up an
insurance business; the present-law PFIC rules include a
special start-up year rule under which a foreign corporation
that would be a PFIC under the income or assets test will not
be considered a PFIC in the first year in which it has gross
income if, among other requirements, the corporation is not a
PFIC in either of the two following years. This start-up year
exception to status as a PFIC applies broadly to all foreign
corporations including those in the insurance business.
Effective Date
The provision applies to taxable years beginning after
December 31, 2015.
______
By Mr. GRASSLEY (for himself and Ms. Heitkamp):
S. 1697. A bill to provide an exception from certain group health
plan requirements to allow small businesses to use pre-tax dollars to
assist employees in the purchase of policies in the individual health
insurance market, and for other purposes; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, over the past year and half or more,
many small business owners have discovered they could be subject to
punitive penalties simply for helping their employees purchase health
insurance. This is the result of a little understood provision in the
Affordable Care Act, ACA.
Farmers, ranchers, and small business owners frequently do not have
the resources to offer a traditional group health plan to their
employees. However, many still want to help their employees obtain
health coverage. They have frequently done this by reimbursing their
employees on a pre-tax basis for the cost of health insurance the
employee purchases on the individual market.
However, as a result of so-called market reforms in the ACA, small
business owners who want to help their employees purchase insurance on
the individual market could be subject to a $100 a day per employee
penalty.
This fails to meet the common sense test. These businesses have no
obligation under the ACA to offer any form of insurance. However, they
would like to do what they can to help their employees obtain coverage.
This is a practice that should be commended, not penalized.
I have had a number of farmers, small business owners, and
accountants reach out to me over the past year explaining how this
penalty has the potential to be devastating. Just as examples, I want
to read excerpts from a couple emails I have received from Iowans.
The first is from a constituent who is a dentist in Sioux City, IA:
Help! . . . I am a small business owner--7 employees. I
have been helping to subsidize my employee's health insurance
for 20 years. I just found out that the Market Reforms of the
ACA have made that illegal. . . . Now all of my employees
will have to pay taxes on the money I gave them for Health
Insurance. They all live paycheck to paycheck and won't be
able to come up with the taxes on this money. They also most
likely won't qualify for the exchanges and any government
subsidy. They are caught in the middle. I can't subsidize
their Health Insurance because I risk a $100/day/employee
penalty . . . Please hurry and do something to help the
millions of middle class small business employees who are
caught between a rock and a hard place.
This next one is from an accountant in Zwingle, IA:
I recently completed two classes for CPE credit for my CPA
license. These classes covered the Affordable Care Act and
the presenters were adamant that we contact our senators and
representatives on behalf of small businesses. I do have a
client that this affects that could potentially be put out of
business.
Businesses that have section 105 plans or that provide
additional salary to employees for the employees to purchase
health insurance privately or through the government
marketplace can be fined $100 per day per employee. That is
$36,500 per employee per year!
I'm trying to help my client to figure out how to stop the
payments to the employees and not be destroyed by the
potential fines. This could be absolutely devastating.
No doubt, there are countless other small business owners who have
similarly been caught off guard. In fact, due to widespread confusion,
the IRS granted penalty relief earlier this year. However, this penalty
relief runs out at the end of this month. Legislation is necessary to
eliminate this unfair and potentially devastating penalty once and for
all.
Toward this end, I have been working with Senator Heitkamp, along
with Representatives Charles Boustany and Mike Thompson in the House,
on bipartisan, bicameral legislation. Today, we are pleased to
introduce this legislation.
This common sense legislation will permit small businesses to
continue offering a benefit to their employees that many have provided
for years--namely reimbursing their employees for the cost of health
insurance purchased on the individual market.
According to the National Federation of Independent Business, around
18 percent of small businesses last year reimbursed employees or
provided other financial support to workers who bought individual
insurance plans. Many others responded that they would be interested in
such an option. Our legislation ensures this option is, and continues
to be, available by eliminating the potential for devastating
penalties.
This legislation should be a no brainer for anyone who supports small
business. I hope that my colleagues on both sides of the aisle will
join in this effort.
______
By Mr. TILLIS (for himself, Mr. Carper, Mr. Burr, Mr. Kaine, and
Mr. Warner):
S. 1698. A bill to exclude payments from State eugenics compensation
programs from consideration in determining eligibility for, or the
amount of, Federal public benefits; read the first time.
Mr. TILLIS. Mr. President, I am introducing the Treatment of Certain
Payments in Eugenics Compensation Act, which would exclude payments
[[Page S4653]]
from State eugenics compensation programs from consideration in
determining eligibility for, or the amount of, Federal public benefits.
My colleagues, Senator Richard Burr, Senator Tom Carper, Senator Tim
Kaine, and Senator Mark Warner have agreed to cosponsor the bill. In
addition, Congressman Patrick McHenry will introduce a companion bill
in the House of Representatives.
A dark chapter in American history, eugenics and compulsory
sterilization laws were implemented in the first decades of the 20th
century by more than 30 States, leading to the forced sterilization of
more than 60,000 disabled citizens. Only California and Virginia
sterilized more citizens than North Carolina under these laws, though
North Carolina was considered as having the most aggressive State-run
program.
In 2013, North Carolina became the first State in the country to
enact legislation to compensate living victims of these forced-
sterilization laws. Most of the victims of the State-run eugenics
program were poor and disadvantaged individuals and many remain so to
this day. Therefore, concerns have been raised in both States that the
compensation provided to the victims could unintentionally render them
ineligible under Federal law to continue receiving Federal benefits
that are subject to income thresholds. The bill introduced today would
specifically exclude all payments from any State eugenics compensation
program from being used in determining eligibility for, or the amount
of, any public benefits from the Federal government.
The implementation of State-run eugenics and sterilization programs
represent a dark and shameful chapter in our Nation's history. While
North Carolina and Virginia have recently created State compensation
programs to help victims recover from horrible wrongs that have been
perpetrated against them in the past, Federal laws can unintentionally
punish victims who receive eugenics compensation by preventing them
from receiving Federal benefits. This bipartisan legislation will
ensure that will not happen.
I wish to offer a special, much deserved thank you to my friend and
former colleague, North Carolina State representative Larry Womble, who
has provided extraordinary leadership in the decades-long fight for
justice for the living victims of North Carolina's eugenics program.
______
By Mr. WYDEN (for himself and Mr. Merkley):
S. 1699. A bill to designate certain land administered by the Bureau
of Land Management and the Forest Service in the State of Oregon as
wilderness and national recreation areas and to make additional wild
and scenic river designations in the State of Oregon, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. WYDEN. Mr. President, today I am introducing the Oregon Wildlands
Act to designate hundreds of miles of Oregon Rivers as Wild and Scenic,
to protect thousands of acres of beautiful Oregon lands as National
Recreation Areas, and to expand Wilderness for some of Oregon's most
treasured areas.
Oregon is a unique State and Oregonians take pride in the many
natural treasures throughout our diverse landscape. From the Oregon
Coast to the high desert of Eastern Oregon, our State boasts some of
the most beautiful scenery, varied ecosystems, and unmatched outdoor
recreation opportunities in the nation. Protecting these lands and
rivers ensures that they will be treasured for generations to come.
Oregon's rivers and landscapes are also home to threatened and
endangered species, old-growth trees, and delicate ecosystems that
deserve the highest protections.
Enjoying the outdoors is in Oregonians' DNA--across the State,
opportunities to get outside and enjoy Oregon's treasures bring in
visitors from all over the world and make residents proud to call
Oregon home. Protecting the lands and waters that support recreation is
also an investment in our rural economies. In Oregon alone, the tourism
industry employed more than 100,000 Oregonians during 2014 and
generated $10.3 billion for the State's economy. Nationwide, outdoor
recreation supports a $646 billion industry. Ensuring that visitors
have pristine rivers to fish and float on, wilderness areas to hike in,
and recreation areas to explore is a guaranteed way to make certain
that visitors will return year after year.
All told, the bill designates approximately 118,000 acres of
Recreation Areas, approximately 250 miles of Wild and Scenic Rivers,
and over 86,600 acres of Wilderness. Each area offers significant
opportunities for recreation and ecosystem protections.
The protections in this bill highlight some of Oregon's most
environmentally significant areas, such as Devil's Staircase near the
Oregon Coast. Devil's Staircase is the epitome of Wilderness in
Oregon--it is rugged, pristine, and remote, with hikers following elk
and deer trails to navigate the rugged terrain. My bill would protect
approximately 30,540 acres as wilderness and 14.6 miles of Wasson Creek
and Franklin Creek, which run through the Devil's Staircase area as
Wild and Scenic Rivers. Devil's Staircase is home to the most
remarkable old-growth forest on Oregon's Coast Range, where giant
Douglas-fir, cedar, and hemlock support threatened and endangered
species habitat, such as marbled murrelets and Northern Spotted Owls.
My proposal would expand the Wild Rogue Wilderness by approximately
56,100 acres and include an additional 125 miles to the incomparable
Wild and Scenic Rogue River. The Rogue is world-renowned as a premier
recreation destination for rafting and fishing, with its free flowing
waters starting at Oregon's Crater Lake National Park and emptying into
the Pacific Ocean. Along the way, the Rogue River flows through a
diverse landscape and its cold waters are the perfect habitat for
salmon--the river is home to runs of Coho, spring and fall Chinook, and
winter and summer Steelhead. By protecting the Rogue River and its
tributaries we are protecting the fish and wildlife that depend on
clean, healthy water. Additionally, the Wilderness expansion would
protect the habitat for bald eagles, osprey, spotted owls, bear, elk,
and cougars.
In addition, my proposal designates approximately 35.2 miles of the
Elk River and 21.3 miles of the Molalla River as a new recreational,
scenic, and wild rivers, and withdraws 19 miles of the Chetco River,
one of the most endangered rivers in the country, from mineral
development. By protecting hundreds of miles of Wild and Scenic Rivers,
as well as the lands that surround those rivers, my proposal ensures
that important wildlife habitat can thrive, that Oregon's treasured
recreation destinations remain scenic and pristine, and that Oregonians
continue to have clean sources of drinking water.
I am pleased to be joined on this bill by my colleague from Oregon
Senator Jeff Merkley who has worked closely with me over the years to
protect Oregon's natural treasures.
____________________