[Congressional Record Volume 165, Number 121 (Thursday, July 18, 2019)]
[Senate]
[Pages S4950-S4954]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. THUNE (for himself, Mr. Cardin, and Mr. Roberts):
  S. 2156. A bill to amend the Internal Revenue Code of 1986 to provide 
for S corporation reform, and for other purposes; to the Committee on 
Finance.
  Mr. THUNE 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. 2156

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; REFERENCE.

       (a) Short Title.--This Act may be cited as the ``S 
     Corporation Modernization Act of 2019''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

     SEC. 2. MODIFICATIONS TO S CORPORATION PASSIVE INVESTMENT 
                   INCOME RULES.

       (a) Increased Percentage Limit.--Section 1375(a)(2) is 
     amended by striking ``25 percent'' and inserting ``60 
     percent''.
       (b) Repeal of Excessive Passive Income as a Termination 
     Event.--Section 1362(d) is amended by striking paragraph (3).
       (c) Conforming Amendments.--
       (1) Section 1375(b) is amended by striking paragraphs (3) 
     and (4) and inserting the following new paragraph:
       ``(3) Passive investment income defined.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the term `passive investment income' means gross 
     receipts derived from royalties, rents, dividends, interest, 
     and annuities.
       ``(B) Exception for interest on notes from sales of 
     inventory.--The term `passive investment income' shall not 
     include interest on any obligation acquired in the ordinary 
     course of the corporation's trade or business from its sale 
     of property described in section 1221(a)(1).
       ``(C) Treatment of certain lending or finance companies.--
     If the S corporation meets the requirements of section 
     542(c)(6) for the taxable year, the term `passive investment 
     income' shall not include gross receipts for the taxable year 
     which are derived directly from the active and regular 
     conduct of a lending or finance business (as defined in 
     section 542(d)(1)).
       ``(D) Treatment of certain dividends.--If an S corporation 
     holds stock in a C corporation meeting the requirements of 
     section 1504(a)(2), the term `passive investment income' 
     shall not include dividends from such C corporation to the 
     extent such dividends are attributable to the earnings and 
     profits of such C corporation derived from the active conduct 
     of a trade or business.
       ``(E) Exception for banks, etc.--In the case of a bank (as 
     defined in section 581) or a depository institution holding 
     company (as defined in section 3(w)(1) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1813(w)(1))), the term `passive 
     investment income' shall not include--
       ``(i) interest income earned by such bank or company, or
       ``(ii) dividends on assets required to be held by such bank 
     or company, including stock in the Federal Reserve Bank, the 
     Federal Home Loan Bank, or the Federal Agricultural Mortgage 
     Bank or participation certificates issued by a Federal 
     Intermediate Credit Bank.
       ``(F) Gross receipts from the sales of certain assets.--For 
     purposes of this paragraph--
       ``(i) Capital assets other than stock and securities.--In 
     the case of dispositions of

[[Page S4951]]

     capital assets (other than stock and securities), gross 
     receipts from such dispositions shall be taken into account 
     only to the extent of capital gain net income therefrom.
       ``(ii) Stock and securities.--In the case of sales or 
     exchanges of stock or securities, gross receipts shall be 
     taken into account only to the extent of the gain therefrom.
       ``(G) Coordination with section 1374.--The amount of 
     passive investment income shall be determined by not taking 
     into account any recognized built-in gain or loss of the S 
     corporation for any taxable year in the recognition period. 
     Terms used in the preceding sentence shall have the same 
     respective meanings as when used in section 1374.''.
       (2)(A) Section 26(b)(2)(J) is amended by striking ``25 
     percent'' and inserting ``60 percent''.
       (B) Section 1375(b)(1)(A)(i) is amended by striking ``25 
     percent'' and inserting ``60 percent''.
       (C) The heading for section 1375 is amended by striking 
     ``25 percent'' and inserting ``60 percent''.
       (D) The item relating to section 1375 in the table of 
     sections for part III of subchapter S of chapter 1 is amended 
     by striking ``25 percent'' and inserting ``60 percent''.
       (3) Section 1042(c)(4)(A)(i) is amended by striking 
     ``section 1362(d)(3)(C)'' and inserting ``section 
     1375(b)(3)''.
       (4) Section 1362(f)(1)(B) is amended by striking 
     ``paragraph (2) or (3) of subsection (d)'' and inserting 
     ``subsection (d)(2)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2019.

     SEC. 3. EXPANSION OF S CORPORATION ELIGIBLE SHAREHOLDERS TO 
                   INCLUDE IRAS.

       (a) In General.--Section 1361(c)(2)(A)(vi) is amended to 
     read as follows:
       ``(vi) A trust which constitutes an individual retirement 
     account under section 408(a), including one designated as a 
     Roth IRA under section 408A.''.
       (b) Sale of Stock in IRA Relating to S Corporation Election 
     Exempt From Prohibited Transaction Rules.--Section 
     4975(d)(16) is amended--
       (1) by striking subparagraphs (A) and (B) and by 
     redesignating subparagraphs (C), (D), (E), and (F) as 
     subparagraphs (A), (B), (C), and (D), respectively, and
       (2) by striking ``such bank or company'' in subparagraph 
     (A) (as so redesignated) and inserting ``the issuer of such 
     stock''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 2020.

     SEC. 4. TREATMENT OF S CORPORATION BUILT-IN GAIN AMOUNT UPON 
                   DEATH OF SHAREHOLDER.

       (a) In General.--Part II of subchapter S of chapter 1 is 
     amended by adding at the end the following:

     ``SEC. 1369. AMORTIZATION OF BUILT-IN GAIN AMOUNT UPON DEATH 
                   OF SHAREHOLDER.

       ``(a) In General.--A person holding stock in an electing S 
     corporation the basis of which is determined under section 
     1014(a) (hereafter in this section referred to as the 
     `shareholder') shall be allowed a deduction with respect to 
     the S corporation built-in gain amount. The amount of such 
     deduction for any taxable year shall be determined by 
     amortizing the S corporation built-in gain amount over the 
     15-year period beginning with the month which includes the 
     applicable valuation date.
       ``(b) S Corporation Built-In Gain Amount.--For purposes of 
     this section, the term `S corporation built-in gain amount' 
     means the lesser of--
       ``(1) the excess (if any) of--
       ``(A) the basis of the stock referred to in subsection (a) 
     as determined under section 1014(a), over
       ``(B) the adjusted basis of such stock immediately before 
     the death of the decedent, or
       ``(2) the pro rata share (determined as of the applicable 
     valuation date) of--
       ``(A) the aggregate fair market value of all property held 
     by the S corporation which is of a character subject to 
     depreciation or amortization, over
       ``(B) the aggregate adjusted basis of all such property 
     held by the S corporation as of such date.
       ``(c) Electing S Corporation.--For purposes of this 
     section, the term `electing S corporation' means, with 
     respect to any shareholder, any S corporation which elects 
     the application of this section with respect to such 
     shareholder at such time and in such form and manner as the 
     Secretary may prescribe.
       ``(d) Applicable Valuation Date.--For purposes of this 
     section, the term `applicable valuation date' means--
       ``(1) in the case of a decedent with respect to which the 
     executor of the decedent's estate elects the application of 
     section 2032, the date 6 months after the decedent's death, 
     and
       ``(2) in the case of any other decedent, the date of the 
     decedent's death.
       ``(e) Accelerated Deduction in Case of Disposition of S 
     Corporation Property.--
       ``(1) In general.--If the electing S corporation disposes 
     of any property which was taken into account under subsection 
     (b)(2), then the deduction allowed under subsection (a) with 
     respect to any stock, for the taxable year of the shareholder 
     in which or with which the taxable year of the S corporation 
     which includes the date of such disposition ends, shall 
     (except as otherwise provided in this section) not be less 
     than the lesser of--
       ``(A) the pro rata share of the gain recognized on such 
     disposition, or
       ``(B) the amount determined under subsection (b)(2) by only 
     taking into account such property.
       ``(2) Overall allowance not increased.--No deduction shall 
     be allowed under subsection (a) with respect to any stock for 
     any taxable year to the extent that such deduction (when 
     added to the deductions so allowed for all prior taxable 
     years) exceeds the S corporation built-in gain amount with 
     respect to such stock.
       ``(f) Recharacterization of Gains as Ordinary Income to 
     Extent of Deduction.--If--
       ``(1) stock of an S corporation with respect to which a 
     deduction was allowed under this section, or
       ``(2) property which was taken into account under 
     subsection (b)(2) with respect to such stock,
     is disposed of at a gain (determined without regard to 
     whether or not such gain is recognized and reduced by any 
     amount of gain which is treated as ordinary income under any 
     other provision of this subtitle), the amount of such gain 
     (or the shareholder's pro rata share of such gain in the case 
     of property described in paragraph (2)) shall be treated as 
     gain which is ordinary income (and shall be recognized 
     notwithstanding any other provision of this subtitle) to the 
     extent of the excess of the aggregate deductions allowable 
     under this section with respect to such stock for the taxable 
     year of such disposition and all prior taxable years over the 
     amounts taken into account under this subsection for all 
     prior taxable years.
       ``(g) Termination of Amortization.--No deduction shall be 
     allowed under subsection (a) with respect to any stock in an 
     electing S corporation with respect to any period beginning 
     after the earlier of--
       ``(1) the date on which the corporation's election under 
     section 1362 terminates, or
       ``(2) the date on which the shareholder transfers such 
     stock to any other person.
       ``(h) Treatment of Certain Transfers.--
       ``(1) Distributions from estates or trusts.--
     Notwithstanding any other provision of this section, in the 
     case of a distribution of stock from an estate or trust to a 
     beneficiary, the beneficiary (and not the estate or trust) 
     shall be treated as the shareholder to which this section 
     applies with respect to periods after such distribution.
       ``(2) Certain transfers involving spouses.--Notwithstanding 
     any other provision of this section, in the case of a 
     transfer described in section 1041, the transferee (and not 
     the transferor) shall be treated as the shareholder to which 
     this section applies with respect to periods after such 
     transfer.
       ``(i) Treatment of Income in Respect of the Decedent.--
       ``(1) Adjustment to built-in gain of property held by s 
     corporation.--For purposes of subsection (b)(2), the fair 
     market value of any property taken into account under 
     subparagraph (A) thereof shall be decreased by any amount of 
     income in respect of the decedent with respect to such 
     property to which section 691 applies. For purposes of 
     subsection (e)(1)(A), the gain recognized on the disposition 
     of such property shall be reduced by such amount.
       ``(2) Adjustment to basis of s corporation stock.--For 
     adjustment to basis of S corporation stock, see section 
     1367(b)(4)(B).
       ``(j) Reporting.--Except as otherwise provided by the 
     Secretary, for purposes of section 6037, the amounts 
     determined under subsections (b)(2), (e)(1), and (f)(2) shall 
     be treated as items of the corporation and the pro rata share 
     determined under such subsection shall be furnished to the 
     shareholder under section 6037(b).''.
       (b) Adjustment to Basis of Stock.--
       (1) In general.--Section 1367(a)(2) is amended by striking 
     ``and'' at the end of subparagraph (D), by striking the 
     period at the end of subparagraph (E) and inserting ``, 
     and'', and by inserting after subparagraph (E) the following 
     new subparagraph:
       ``(F) the amount of the shareholder's deduction allowable 
     under section 1369.''.
       (2) Adjustment not taken into account in determining 
     treatment of distributions.--Section 1368 is amended--
       (A) in subsection (d)(1), by inserting ``(other than 
     subsection (a)(2)(F) thereof)'' after ``section 1367'', and
       (B) in subsection (e)(1)(A)--
       (i) by striking ``this title and the phrase'' and inserting 
     ``this title, the phrase'', and
       (ii) by inserting ``, and no adjustment shall be made under 
     section 1367(a)(2)(F)'' after ``section 1367(a)(2)''.
       (c) Clerical Amendment.--The table of sections for part II 
     of subchapter S of chapter 1 is amended by adding at the end 
     the following new item:

``Sec. 1369. Amortization of built-in gain amount upon death of 
              shareholder.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to decedents dying after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 5. REVOCATIONS OF S CORPORATION ELECTIONS.

       (a) Revocations.--Paragraph (1) of section 1362(d) is 
     amended--
       (1) by striking ``subparagraph (D)'' in subparagraph (C) 
     and inserting ``subparagraphs (D) and (E)'', and
       (2) by adding at the end the following new subparagraph:
       ``(E) Authority to treat late revocations as timely.--If--

[[Page S4952]]

       ``(i) a revocation under subparagraph (A) is made for any 
     taxable year after the date prescribed by this paragraph for 
     making such revocation for such taxable year or no such 
     revocation is made for any taxable year, and
       ``(ii) the Secretary determines that there was reasonable 
     cause for the failure to timely make such revocation,
     the Secretary may treat such a revocation as timely made for 
     such taxable year.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to revocations after December 31, 2019.
                                 ______
                                 
      By Mr. LEAHY (for himself and Mrs. Murray):
  S. 2180. A bill to provide oversight of the border zone in which 
Federal agents may conduct vehicle checkpoints and stops and enter 
private land without a warrant, and to make technical corrections; to 
the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, ``Show me your papers.'' Those are words 
that you should never hear once inside the United States. Unless a 
government agent has a legitimate reason to stop and search you--a 
reasonable suspicion or probable cause--Americans should not be subject 
to questioning and detention for merely going about their daily lives. 
This is a fundamental tenet of the Fourth Amendment. Yet Customs and 
Border Protection (CBP) operations are effectively immune from the 
Fourth Amendment within a broadly defined ``border zone.''
  And this so-called border zone need not be near the border at all: 
Seventy-year-old regulations define it as up to 100 miles from any 
border, land or sea. According to the CBP, southern Vermont is in the 
border zone, as is the entire State of Florida, and even Richmond, 
Virginia. In fact two-thirds of the entire U.S. population is in the 
border zone.
  In Vermont, under the Trump administration, the border zone has 
resulted in highway checkpoints and bus boardings. In May, Customs and 
Border Protection (CBP) agents set up the first highway checkpoint in a 
decade. The checkpoint was set up miles from the Canadian border in 
South Hero, Vermont. It was in operation for hours. We do not know how 
many hundreds of cars were stopped, but we do know that it did not lead 
to a single arrest or seizure. Last month, the CBP established a second 
checkpoint in the same location. This time nearly 900 cars were 
stopped, and only one individual was detained--for a visa overstay. 
Border Patrol agents have also boarded Amtrak trains in White River 
Junction and boarded a Greyhound bus at the Burlington airport, 
demanding to know whether passengers were citizens.
  Today, I am joining with Senator Murray in reintroducing the Border 
Zone Reasonableness Restoration Act of 2019. Our legislation would 
establish critical privacy protections by reducing the unjustifiably 
large border zone from 100 miles to 25 miles.
  I find it difficult to believe that these checkpoints are an 
effective use of law enforcement resources. Border Patrol stations in 
Vermont are already stretched thin, And just last month the Senate 
passed a bipartisan $4.6 billion emergency supplemental appropriations 
bill to address the humanitarian crisis on the southern border. The 
Department of Homeland Security's limited resources should be focused 
on improving conditions of detention and providing food, appropriate 
shelter, and medical care to families fleeing violence and dire 
poverty, not conducting pointless vehicle checkpoints miles from the 
northern border in Vermont.
  The Border Zone Reasonableness Restoration Act is based on an 
amendment that Senator Murray and I successfully attached to 
comprehensive immigration reform legislation in 2013. The 100 mile 
``border zone''--and the similar 25 mile zone where many types of 
warrantless property searches are permitted--predates this current 
administration, but the actions of this administration have shown just 
how much we need it. That bill passed the Senate with a bipartisan vote 
of 68 to 32.
  Americans' right to privacy does not end simply because you are 
within 100 miles from our land and sea borders. I hope all members of 
Congress will join us and support this commonsense legislation to 
ensure that every person in this country receives the constitutional 
protections to which they are entitled.
                                 ______
                                 
      By Mr. DURBIN (for himself, Mr. Reed, Mr. Brown, Mr. Cardin, Ms. 
        Baldwin, and Ms. Smith):
  S. 2184. A bill to amend the Truth in Lending Act and the Higher 
Education Act of 1965 to require certain creditors to obtain 
certifications from institutions of higher education, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  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. 2184

       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 ``Know Before You Owe Private 
     Education Loan Act of 2019''.

     SEC. 2. AMENDMENTS TO THE TRUTH IN LENDING ACT.

       (a) In General.--Section 128(e) of the Truth in Lending Act 
     (15 U.S.C. 1638(e)) is amended--
       (1) by striking paragraph (3) and inserting the following:
       ``(3) Institutional certification required.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     before a creditor may issue any funds with respect to an 
     extension of credit described in this subsection, the 
     creditor shall obtain from the relevant institution of higher 
     education where such loan is to be used for a student, such 
     institution's certification of--
       ``(i) the enrollment status of the student;
       ``(ii) the student's cost of attendance at the institution 
     as determined by the institution under part F of title IV of 
     the Higher Education Act of 1965; and
       ``(iii) the difference between--

       ``(I) such cost of attendance; and
       ``(II) the student's estimated financial assistance, 
     including such assistance received under title IV of the 
     Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) and 
     other financial assistance known to the institution, as 
     applicable.

       ``(B) Exception.--Notwithstanding subparagraph (A), a 
     creditor may issue funds with respect to an extension of 
     credit described in this subsection without obtaining from 
     the relevant institution of higher education such 
     institution's certification if such institution fails to 
     provide within 15 business days of the creditor's request for 
     such certification--
       ``(i) notification of the institution's refusal to certify 
     the request; or
       ``(ii) notification that the institution has received the 
     request for certification and will need additional time to 
     comply with the certification request.
       ``(C) Loans disbursed without certification.--If a creditor 
     issues funds without obtaining a certification, as described 
     in subparagraph (B), such creditor shall report the issuance 
     of such funds in a manner determined by the Director of the 
     Consumer Financial Protection Bureau.'';
       (2) by redesignating paragraphs (9), (10), and (11) as 
     paragraphs (10), (11), and (12), respectively; and
       (3) by inserting after paragraph (8) the following:
       ``(9) Provision of information.--
       ``(A) Provision of information to students.--
       ``(i) Loan statement.--A creditor that issues any funds 
     with respect to an extension of credit described in this 
     subsection shall send loan statements, where such loan is to 
     be used for a student, to borrowers of such funds not less 
     than once every 3 months during the time that such student is 
     enrolled at an institution of higher education.
       ``(ii) Contents of loan statement.--Each statement 
     described in clause (i) shall--

       ``(I) report the borrower's total remaining debt to the 
     creditor, including accrued but unpaid interest and 
     capitalized interest;
       ``(II) report any debt increases since the last statement; 
     and
       ``(III) list the current interest rate for each loan.

       ``(B) Notification of loans disbursed without 
     certification.--On or before the date a creditor issues any 
     funds with respect to an extension of credit described in 
     this subsection, the creditor shall notify the relevant 
     institution of higher education, in writing, of the amount of 
     the extension of credit and the student on whose behalf 
     credit is extended. The form of such written notification 
     shall be subject to the regulations of the Bureau.
       ``(C) Annual report.--A creditor that issues funds with 
     respect to an extension of credit described in this 
     subsection shall prepare and submit an annual report to the 
     Bureau containing the required information about private 
     student loans to be determined by the Director of the Bureau, 
     in consultation with the Secretary of Education.''.
       (b) Definition of Private Education Loan.--Section 
     140(a)(8)(A) of the Truth in Lending Act (15 U.S.C. 
     1650(a)(8)(A)) is amended--
       (1) by redesignating clause (ii) as clause (iii);
       (2) in clause (i), by striking ``and'' after the semicolon; 
     and
       (3) by adding after clause (i) the following:
       ``(ii) is not made, insured, or guaranteed under title VII 
     or title VIII of the Public

[[Page S4953]]

     Health Service Act (42 U.S.C. 292 et seq. and 296 et seq.); 
     and''.
       (c) Regulations.--Not later than 365 days after the date of 
     enactment of this Act, the Director of the Consumer Financial 
     Protection Bureau shall issue regulations in final form to 
     implement paragraphs (3) and (9) of section 128(e) of the 
     Truth in Lending Act (15 U.S.C. 1638(e)), as amended by 
     subsection (a). Such regulations shall become effective not 
     later than 6 months after their date of issuance.

     SEC. 3. AMENDMENT TO THE HIGHER EDUCATION ACT OF 1965.

       (a) Amendment to the Higher Education Act of 1965.--Section 
     487(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1094(a)) is amended by striking paragraph (28) and inserting 
     the following:
       ``(28)(A) Upon the request of a private educational lender, 
     acting in connection with an application initiated by a 
     borrower for a private education loan in accordance with 
     section 128(e)(3) of the Truth in Lending Act, the 
     institution shall within 15 days of receipt of the request--
       ``(i) provide certification to such private educational 
     lender--
       ``(I) that the student who initiated the application for 
     the private education loan, or on whose behalf the 
     application was initiated, is enrolled or is scheduled to 
     enroll at the institution;
       ``(II) of such student's cost of attendance at the 
     institution as determined under part F of this title; and
       ``(III) of the difference between--

       ``(aa) the cost of attendance at the institution; and
       ``(bb) the student's estimated financial assistance 
     received under this title and other assistance known to the 
     institution, as applicable;

       ``(ii) notify the creditor that the institution has 
     received the request for certification and will need 
     additional time to comply with the certification request; or
       ``(iii) provide notice to the private educational lender of 
     the institution's refusal to certify the private education 
     loan pursuant to subparagraph (D).
       ``(B) With respect to a certification request described in 
     subparagraph (A), and prior to providing such certification 
     under subparagraph (A)(i) or providing notice of the refusal 
     to provide certification under subparagraph (A)(iii), the 
     institution shall--
       ``(i) determine whether the student who initiated the 
     application for the private education loan, or on whose 
     behalf the application was initiated, has applied for and 
     exhausted the Federal financial assistance available to such 
     student under this title and inform the student accordingly; 
     and
       ``(ii) provide the borrower whose loan application has 
     prompted the certification request by a private educational 
     lender, as described in subparagraph (A)(i), with the 
     following information and disclosures:
       ``(I) The amount of additional Federal student assistance 
     for which the borrower is eligible and the advantages of 
     Federal loans under this title, including disclosure of the 
     fixed interest rates, deferments, flexible repayment options, 
     loan forgiveness programs, and additional protections, and 
     the higher student loan limits for dependent students whose 
     parents are not eligible for a Federal Direct PLUS Loan.
       ``(II) The borrower's ability to select a private 
     educational lender of the borrower's choice.
       ``(III) The impact of a proposed private education loan on 
     the borrower's potential eligibility for other financial 
     assistance, including Federal financial assistance under this 
     title.
       ``(IV) The borrower's right to accept or reject a private 
     education loan within the 30-day period following a private 
     educational lender's approval of a borrower's application and 
     about a borrower's 3-day right to cancel period.
       ``(C) For purposes of this paragraph, the terms `private 
     educational lender' and `private education loan' have the 
     meanings given such terms in section 140 of the Truth in 
     Lending Act (15 U.S.C. 1650).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the effective date of the regulations 
     described in section 2(c).
       (c) Preferred Lender Arrangement.--Section 151(8)(A)(ii) of 
     the Higher Education Act of 1965 (20 U.S.C. 1019(8)(A)(ii)) 
     is amended by inserting ``certifying,'' after ``promoting,''.

     SEC. 4. REPORT.

       (a) In General.--Not later than 24 months after the 
     issuance of regulations under section 2(c), the Director of 
     the Consumer Financial Protection Bureau and the Secretary of 
     Education shall jointly submit to Congress a report on the 
     compliance of--
       (1) private educational lenders with section 128(e)(3) of 
     the Truth in Lending Act (15 U.S.C. 1638(e)(3)), as amended 
     by section 2; and
       (2) institutions of higher education with section 
     487(a)(28) of the Higher Education Act of 1965 (20 U.S.C. 
     1094(a)(28)), as amended by section 3.
       (b) Contents.--The contents of the report described in 
     subsection (a) shall include information about the degree to 
     which specific institutions utilize certifications in 
     effectively--
       (1) encouraging the exhaustion of Federal student loan 
     eligibility by borrowers prior to taking on private education 
     loan debt; and
       (2) lowering private education loan debt by borrowers.
                                 ______
                                 
      By Mr. REED (for himself, Mr. Kennedy, and Mr. Menendez):
  S. 2192. A bill to amend the National Flood Insurance Act of 1968 to 
allow the Administrator of the Federal Emergency Management Agency to 
provide capitalization grants to States to establish revolving funds to 
provide funding assistance to reduce flood risks, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. REED. Mr. President, today I am reintroducing the State Flood 
Mitigation Revolving Fund Act of 2019 along with Senators Kennedy and 
Menendez.
  The purpose of our bill is to reduce flood risk and the costs 
associated with flooding by establishing a State revolving loan program 
to fund mitigation projects for property owners and communities that 
participate in the National Flood Insurance Program. By funding 
projects that reduce risk, such as home elevations, flood proofing, 
acquisitions, and environmental restoration, the bill also provides an 
avenue to help middle-income and low-income property owners reduce 
their flood insurance premiums. It is a proposal that has been endorsed 
by over 200 local and national organizations, including the Pew 
Charitable Trusts, Association of State Floodplain Managers, National 
Association of Mutual Insurance Companies, the Property Casualty 
Insurance Association of America, the Nature Conservancy, the Union of 
Concerned Scientists, the U.S. Resiliency Council, and others.
  Flooding is the most costly hazard facing American property owners. 
With increasing frequency we see news stories of catastrophic flooding 
in communities across the Nation. According to the Pew Charitable 
Trusts, seven out of ten Presidential Disaster Declarations in the last 
ten years have involved flooding, and data from the National Oceanic 
and Atmospheric Administration show that there were 27 flooding 
disasters or hurricanes in the last decade that each caused more than 
$1 billion in damage.
  But the increase in major flooding disasters has also been 
accompanied by increases in nuisance, urban, and high tide flooding 
events, which don't trigger the full complement of Federal disaster 
assistance but are devastating to every homeowner and community that is 
affected.
  Experts agree that the best way to reduce the cost of flooding is to 
engage in proactive, not reactive, flood mitigation. The National 
Institute of Building Sciences' 2018 Natural Hazard Mitigation Saves 
study found that every Federal dollar spent on up-front mitigation 
provides $6 in national benefits, and investments in flood mitigation 
yield $7 in benefits per dollar spent. This is the kind of saving the 
State Flood Mitigation Revolving Fund Act seeks to promote and 
leverage.
  Modeled on the successful Clean Water and Drinking Water State 
Revolving Funds, this bill creates a straightforward and easily 
accessible program through which States can offer low-interest loans to 
property owners and communities who want to mitigate their flood risk. 
By creating a revolving fund, the bill will allow States to design and 
more efficiently implement their own flood mitigation strategies 
provided that such strategies help achieve Federal objectives such as 
reducing disaster payments.
  Within this construct, the bill gives States the flexibility to 
undertake flood mitigation projects expeditiously. The bill requires 
States to provide matching funds and gives them the ability to further 
leverage Federal dollars, as many already do under the drinking water 
and clean water SRF programs.
  Additionally, the bill ensures mitigation assistance is focused on 
where the flood risk is greatest and where people are most vulnerable. 
The bill requires states to prioritize mitigation assistance for low-
income homeowners and geographic areas, pre-FIRM buildings, and severe 
repetitive loss and repetitive loss buildings. Finally, it gives states 
the option of providing additional subsidization for low-income 
property-owners and communities that simply do not have the wherewithal 
to assume additional debt.
  Mr. President, as we talk about appropriate investments in 
infrastructure, mitigation is one place where we

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should be investing. I invite the rest of our colleagues to join me, 
Senator Kennedy, and Senator Menendez in supporting this bipartisan 
legislation.

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