[Congressional Record (Bound Edition), Volume 149 (2003), Part 12]
[Senate]
[Pages 16089-16104]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. VOINOVICH:
  S. 1326. A bill to establish the position of Assistant Secretary of 
Commerce for Manufacturing in the Department of Commerce; to the 
Committee on Commerce, Science, and Transportation.
  Mr. VOINOVICH. Mr. President, I rise today to ask my colleagues' 
support for legislation I have introduced creating the new position of 
Assistant Secretary for Manufacturing in the Department of Commerce.
  In America we are blessed with ingenuity, gumption, and a can-do 
spirit that is recognized around the world. At the turn of the last 
century we helped lead the world into the Industrial age. American 
inventors gave electricity and air travel to the world.
  As we enter the 21st century, American manufacturing has as much 
potential as it has ever had at any time in our Nation's history. 
Accomplishments in the high-tech industry have been rapidly integrated 
into manufacturing to make our factories and our workers more 
productive, reduce costs, and save time.
  At the same time, substantial new trade, training, energy, labor, and 
foreign competition challenges have arisen. Helping our manufacturing 
interests deal with these challenges is something that private sector 
organizations such as the National Association Manufacturers have done 
well for years. It only stands to reason that we focus resources in the 
Government sector in support of manufacturing as well.
  I am concerned about the slow economic recovery and our Nation's 
declining position in the global marketplace, particularly for 
manufacturing, which is the backbone of our economy, both in Ohio and 
the Nation. There is a genuine panic by the manufacturing community 
over their future and the jobs created from manufacturing. They feel 
they are under siege from environmental regulations, rising health care 
costs, litigation, escalating natural gas costs, and the prospect of 
dramatically higher electricity costs if energy reform legislation is 
not passed.
  First, health care costs continue to rise. Nationwide, we have seen 
double-digit increases in health care premiums over the last 2 years 
alone. In Ohio, the business community tells me they are seeing 20 to 
50 percent increases in their health care costs. These increases raise 
labor costs, decreasing capital that otherwise would be available to 
make investments, and, ultimately, negatively impact our global 
competitiveness. In addition, these costs are being passed on to 
employees, limiting their take-home pay and increasing the number of 
uninsured.
  Second, high natural gas prices are also having a detrimental effect 
on industry in Ohio and across the Nation. Many industries cannot 
compete internationally because of these high prices. Over the last 10 
years, the average price for natural gas has been less than $3.00 per 
million cubic feet (Mcf). This year, companies in Ohio have been paying 
almost $10.00 per Mcf, more than a threefold increase. These price 
spikes are felt the hardest by Ohio's agriculture, chemical, and 
manufacturing industries. In order to be competitive, we cannot afford 
to hamper American companies in this manner.
  Additionally, I have heard from companies in both the manufacturing 
and the chemical sectors that they cannot survive with these high 
prices. In particular, two chemical companies in Ohio have informed me 
that they are considering moving their operations not only out of Ohio, 
but outside of the United States because of these high costs. At the 
same time, suppliers of these companies are considering temporary 
shutdowns because they cannot afford to operate. Ohio's companies have 
not been able to budget and plan sufficiently because these prices have 
been so unpredictable this year.
  As natural gas prices continue to rise, the President's National 
Energy Policy Task Force projects that over

[[Page 16090]]

1,300 new power plants will need to be built to satisfy America's 
energy needs over the next 20 years. As a result of the emissions 
limits and regulatory uncertainty triggered by the Clean Air Act, the 
Department of Energy currently predicts that over 90 percent of these 
new plants will be powered by natural gas. Further, analysis by EIA and 
the EPA shows that a large percentage of coal-fired plants are likely 
to be replaced by natural gas-fired plants in the near future.
  Third, manufacturers need reliable transportation infrastructure to 
bring in supplies and ship out their products. We are a ``just in 
time'' economy and we are falling behind in our national investment in 
highways and bridges. According to the U.S. Department of 
Transportation, for each $1 billion of Federal spending on highway 
construction, 47,500 jobs are created annually. Furthermore, the 
Department estimates that every dollar invested in our highways yields 
$5.70 in economic benefits due to reduced delays, improved safety and 
reduced vehicle operating cost. Clearly, transportation investment in 
needed ``ready-to-go'' projects could go a long way in getting the 
economy back on track.
  Finally, manufacturing companies are distressed by the surge in 
foreign competition, particularly from China. As a matter of fact, if a 
vote were taken today among Ohio manufacturers, many would oppose 
normal trade relations with China.
  These are only a few of the challenges facing American manufacturers. 
Their profitability and survivability is impacted by virtually every 
policy and/or agency within the Federal Government. Moreover, the fact 
that there has been limited coordination of Government policies and 
agencies that impact manufacturing has contributed to a prolonged, 
steady decline of what I believe is the most critical sector of our 
economy.
  According to USA Today, U.S. manufacturers laid off 95,000 workers in 
April--the 33rd consecutive month of decline and the largest drop in 15 
months. Since July 2000, manufacturing has lost 2.6 million jobs. My 
own State of Ohio has lost 154,500 manufacturing jobs, over a 15-
percent decline. New orders for manufactured goods in April decreased 
by $9.4 billion, or 2.9 percent, to $320 billion. This was the largest 
percent decline since November 2001. Shipments decreased by $7.1 
billion or 2.2 percent to $320.6 billion. This was the largest percent 
decline since February 2002.
  According to the National Association of Manufacturers, ``If the U.S. 
manufacturing base continues to shrink at its present rate and the 
critical mass is lost, the manufacturing innovation process will shift 
to other global centers. Once that happens, a decline in U.S. living 
standards in the future is virtually assured.''
  Unfortunately, up to now, there has been no senior level policymaker 
responsible for examining prospective and existing Government policies 
to determine their potential impact on manufacturing. This is more than 
an unfortunate oversight; it is a potential economic disaster. 
Government policies are often developed without regard to their impact 
on manufacturing. Too many Government decisionmakers view manufacturing 
as a ``dying sector'' that is better transferred overseas so Americans 
can focus on the more profitable service sector. What these people fail 
to realize is that manufacturing is the foundation of the service 
sector.
  There is no retail industry without manufactured products to sell. 
There is no transportation industry without manufactured products to 
transport. There is no repair industry without manufactured products to 
repair. Even services such as accounting, financial management, 
banking, and information technology sell their services to 
manufacturers and could not remain profitable without a vibrant 
manufacturing sector.
  Manufacturing growth spawns more additional economic activity and 
jobs than any other economic sector. Every $1 of final demand for 
manufactured goods generates an additional 67 cents in other 
manufactured products, and 76 cents in products and services from 
nonmanufacturing sectors.
  In fact, manufacturers are responsible for almost two-thirds of all 
private sector Research & Development--$127 billion in 2002. In 
addition, spillovers from R&D benefit other manufacturing and 
nonmanufacturing firms.
  Manufacturing productivity gains are historically higher than those 
of any other economic sector. For example, over the past two decades, 
manufacturing averaged twice the annual productivity gains of the rest 
of the private sector. These gains enable Americans to do more with 
less, increase our ability to compete, and facilitate higher wages for 
all employees.
  Manufacturing salaries and benefits average $54,000, which is higher 
than the average for the total private sector. Two factors in 
particular attract workers to manufacturing: one, higher pay and 
benefits, and, two, opportunities for advanced education and training.
  Manufacturing has been an important contributor to regional economic 
growth and tax receipts at all levels of government. During the 1990s, 
manufacturing corporations paid 30 to 34 percent of all corporate taxes 
collected by State and local governments, as well as Social Security 
and payroll taxes, excise taxes, import and tariff duties, 
environmental taxes and license taxes.
  Furthermore, manufacturing is a secure foundation for future economic 
prosperity. Capital investments in factories and equipment tend to 
anchor businesses more securely to a community, a State or a nation. 
When a corporation owns property in a community, they are more likely 
to be an active participant in helping improve the quality of life, 
stability, and economic vitality of that community.
  Our competitors recognize this and are moving rapidly to claim the 
manufacturing preeminence that once characterized the U.S. economy. 
While America's industrial leadership is being squeezed by rising 
health care costs, runaway litigation, excessive regulation and some of 
the highest taxes on investment in the industrialized world, our 
foreign competitors are taking a larger market share with less 
expensive products that make it difficult to raise prices. The result 
is a dramatic decline in manufacturing cashflow that forces firms to 
cut back on R&D and capital investment, and to reduce employment. The 
U.S. manufacturing base is receding--and with it the all-important 
innovation that is the seedbed of our industrial strength and 
competitive edge.
  Unfortunately, while many countries support their manufacturing 
sector with favorable government policies, tax incentives, and even 
financial subsidies, the United States does not even coordinate 
government initiatives that might impact our own manufacturers. Within 
the U.S. Government, however, we do have Cabinet level Departments to 
represent the interests of agriculture, transportation, and energy. 
These three sectors combined do not generate as much economic activity, 
nor employ as many individuals as manufacturing. Nevertheless, there is 
no senior level policymaker anywhere in the Federal Government whose 
sole responsibility is the health and growth of manufacturing. Is it 
any wonder we are losing market share to foreign competition?
  The bill I am introducing today will help rectify this unfortunate 
situation. It will establish an Assistant Secretary in the Commerce 
Department who will: one, represent and advocate for the interests of 
the manufacturing sector; two, aid in the development of policies that 
promote the expansion of the manufacturing sector; three, review 
policies that may adversely impact the manufacturing sector; and, four, 
assist the manufacturing sector in other ways as the Secretary of 
Commerce shall prescribe.
  The new Assistant Secretary of Commerce for Manufacturing will also 
submit to Congress an annual report that contains: one, an overview of 
the state of the manufacturing sector in the United States; two, 
forecast of the future state of the manufacturing sector in the United 
States; and, three, an analysis of current and significant

[[Page 16091]]

laws, regulations, and policies that adversely impact the manufacturing 
sector in the United States.
  It is a small step forward but an important one. I look forward to 
working with my colleagues to enact this important legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1326

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

     SECTION 1. ASSISTANT SECRETARY OF COMMERCE FOR MANUFACTURING.

       (a) Establishment.--There is in the Department of Commerce 
     the position of Assistant Secretary of Commerce for 
     Manufacturing. The Assistant Secretary shall be appointed by 
     the President by and with the advice and consent of the 
     Senate.
       (b) Duties.--The Assistant Secretary of Commerce for 
     Manufacturing shall--
       (1) represent and advocate for the interests of the 
     manufacturing sector;
       (2) aid in the development of policies that promote the 
     expansion of the manufacturing sector;
       (3) review policies that may adversely impact the 
     manufacturing sector; and
       (4) perform such other duties as the Secretary of Commerce 
     shall prescribe.
       (c) Reporting Requirements.--The Assistant Secretary of 
     Commerce for Manufacturing shall submit to Congress an annual 
     report that contains the following:
       (1) An overview of the state of the manufacturing sector in 
     the United States.
       (2) A forecast of the future state of the manufacturing 
     sector in the United States.
       (3) An analysis of current and significant laws, 
     regulations, and policies that adversely impact the 
     manufacturing sector in the United States.
       (d) Compensation.--Section 5314 of title 5, United States 
     Code, relating to Level IV of the Executive Schedule, is 
     amended by inserting before ``and Assistant'' in the item 
     relating to the Assistant Secretaries of Commerce the 
     following: ``Assistant Secretary of Commerce for 
     Manufacturing,''.
                                 ______
                                 
      By Mr. CORZINE:
  S. 1327. A bill to reduce unsolicited commercial electronic mail and 
to protect children from sexually oriented advertisements; to the 
Committee on Commerce, Science, and Transportation.
  Mr. CORZINE. Mr. President, today I am introducing legislation, the 
Restrict and Eliminate the Delivery of Unsolicited Commercial 
Electronic Mail, REDUCE, Spam Act, to curb the influx of unwanted junk 
e-mail, or ``spam,'' that is clogging our inboxes and wasting the time 
and money of American consumers and businesses.
  The flood of spam is growing so fast that it will soon account for 
more than half of all e-mail sent in the United States. Spam already 
accounts for nearly 40 percent of e-mail traffic, and costs U.S. 
businesses $10 billion annually in lost productivity and additional 
equipment, software and manpower costs necessary to manage this burden. 
Microsoft Inc. estimates that more than 80 percent of the more than 2.5 
billion e-mail messages sent each day to Hotmail users are spam. And 
data suggests that the problem is only growing.
  The problem of spam goes well beyond inconvenience and cost. The 
Federal Trade Commission examined a random sample of 1000 spam messages 
and, in a report issued on April 30, 2003, found staggering evidence of 
fraud. According to the report, 33 percent of the messages sampled 
contained false routing information; 22 percent contained false 
information in the subject line; 40 percent contained false statements 
in the text; and a full 66 percent contained false information of some 
sort. Most alarmingly, in the case of spam touting business or 
investment opportunities, 96 percent contained some sort of fraudulent 
information.
  In addition, pornographic spam is a growing problem for parents 
trying to shield their children from such images. The FTC report found 
that 17 percent of spam advertising pornographic websites included 
adult images in the body of the message. This is not acceptable when 
our children are using email more and more each day.
  Unfortunately, it is very difficult to track down those who send 
spam. Often, spammers use multiple e-mail addresses or disguise routing 
information to avoid being identified. Finding spammers can take not 
just real expertise, but persistence, time, energy and commitment.
  To attack the problem of spam, my proposal adopts a two-prong 
approach championed by the leading thinker about cyberlaw, Professor 
Lawrence Lessig of Stanford Law School. Congresswoman Zoe Lofgren also 
has introduced similar legislation in the House of Representatives. The 
approach is simple: first, anyone sending bulk unsolicited commercial 
e-mail would have to include on each e-mail a simple prefix--either 
ADV: or ADV:ADLT. Second, anyone who finds a spam-source who has failed 
to properly label unsolicited commercial e-mail would be eligible for a 
monetary reward from the FTC.
  The first part of this proposal would enable Internet Service 
Providers, ISPs, employers and individual users to filter spam from 
business and personal email. This would give people the ability to tell 
their Internet service provider to block ADV e-mail, or they could 
automatically filter such e-mail into a spam folder on their own 
computer. This approach would enable far more effective filtering than 
currently possible.
  The second part of my proposal would require the FTC to pay a bounty 
to anyone who tracks down a spammer who has failed properly to label 
unsolicited commercial e-mail. The proposal would invite anyone across 
the world who uses the Internet to hunt down these law-violating 
spammers. The FTC would then fine them and pay a portion of that fine 
as a reward to the bounty hunter who found them. The FTC could use the 
remainder of the fine to track down and prosecute other spammers.
  Creating incentives for private individuals to help track down 
spammers is likely to substantially strengthen the enforcement of anti-
spam laws. And with proper enforcement, spammers would soon learn that 
neglecting to label spam does not pay. In the end, that will mean that 
more spammers will label their spam or give up and stop spamming 
altogether. Either way, we will have fixed, or at least started to fix, 
the problem.
  Professor Lessig is so convinced that this approach will 
substantially reduce spam that he has pledged to resign from his job at 
Stanford if it does not. While I will not hold him to that warranty, I 
do share his enthusiasm about this innovative approach, which is likely 
to be much more effective than relying exclusively on government 
investigators to identify spammers.
  Having said that, I recognize that any domestic anti-spam legislation 
potentially is subject to evasion by spammers who relocate overseas in 
order to continue sending spam. To respond to that possibility, my bill 
also orders the Administration to study the possibility of an 
international agreement to reduce spam. This is an issue that affects 
us globally, and, in my view, we should consider a coordinated 
response.
  In addition to these primary provisions, my bill would require 
marketers to establish a valid return e-mail address to which an e-mail 
recipient can write to ``opt-out'' of receiving further e-mails, and 
would prohibit marketers from sending any further e-mails after a 
person opts-out. The bill also would prohibit spam with false or 
misleading routing information or deceptive subject headings, and would 
authorize the Federal Trade Commission to collect civil fines against 
marketers who violate these requirements. Furthermore, my proposal 
would give Internet Service Providers the right to bring civil actions 
against marketers who violate these requirements and disrupt their 
networks, and, finally, the proposal would establish criminal penalties 
for fraudulent spam.
  I know that the Commerce Committee recently ordered reported 
legislation to deal with the problem of spam, and I am hopeful that 
bill will come before the full Senate before long. When it does, it is 
my intention to work with my colleagues to see if some of the concepts 
in the REDUCE Spam Act, such as the establishment of individual rewards 
for bounty hunters,

[[Page 16092]]

and a report on a possible international agreement on spam, can be 
incorporated into the broader package, to ensure that any legislation 
sent to the President will actually be effective in reducing spam.
  I ask unanimous consent that the text of the legislation be printed 
in the Record at this point, along with a related article by Professor 
Lawrence Lessig.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1327

       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 ``Restrict and Eliminate the 
     Delivery of Unsolicited Commercial Electronic Mail or Spam 
     Act of 2003'' or the ``REDUCE Spam Act of 2003''.

     SEC. 2. DEFINITIONS.

        In this Act:
       (1) Commercial electronic mail message.--
       (A) In general.--The term ``commercial electronic mail 
     message'' means any electronic mail message the primary 
     purpose of which is the commercial advertisement or promotion 
     of a commercial product or service (including content on an 
     Internet website operated for a commercial purpose).
       (B) Reference to company or website.--The inclusion of a 
     reference to a commercial entity or a link to the website of 
     a commercial entity in an electronic mail message does not, 
     by itself, cause such message to be treated as a commercial 
     electronic mail message for purposes of this Act if the 
     contents or circumstances of the message indicate a primary 
     purpose other than commercial advertisement or promotion of a 
     commercial product or service.
       (2) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (3) Electronic mail address.--
       (A) In general.--The term ``electronic mail address'' means 
     a destination (commonly expressed as a string of characters) 
     to which an electronic mail message can be sent or delivered.
       (B) Inclusion.--In the case of the Internet, the term 
     ``electronic mail address'' may include an electronic mail 
     address consisting of a user name or mailbox (commonly 
     referred to as the ``local part'') and a reference to an 
     Internet domain (commonly referred to as the ``domain 
     part'').
       (4) FTC act.--The term ``FTC Act'' means the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.).
       (5) Header information.--The term ``header information'' 
     means the source, destination, and routing information 
     attached to an electronic mail message, including the 
     originating domain name and originating electronic mail 
     address.
       (6) Initiate.--The term ``initiate'', when used with 
     respect to a commercial electronic mail message, means to 
     originate such message or to procure the transmission of such 
     message, either directly or through an agent, but shall not 
     include actions that constitute routine conveyance of such 
     message by a provider of Internet access service. For 
     purposes of this Act, more than 1 person may be considered to 
     have initiated the same commercial electronic mail message.
       (7) Internet.--The term ``Internet'' has the meaning given 
     that term in section 231(e)(3) of the Communications Act of 
     1934 (47 U.S.C. 231(e)(3)).
       (8) Internet access service.--The term ``Internet access 
     service'' has the meaning given that term in section 
     231(e)(4) of the Communications Act of 1934 (47 U.S.C. 
     231(e)(4)).
       (9) Pre-existing business relationship.--
       (A) In general.--The term ``pre-existing business 
     relationship'', when used with respect to a commercial 
     electronic mail message, means that either--
       (i) within the 5-year period ending upon receipt of a 
     commercial electronic mail message, there has been a business 
     transaction between the sender and the recipient, including a 
     transaction involving the provision, free of charge, of 
     information, goods, or services requested by the recipient 
     and the recipient was, at the time of such transaction or 
     thereafter, provided a clear and conspicuous notice of an 
     opportunity not to receive further commercial electronic mail 
     messages from the sender and has not exercised such 
     opportunity; or
       (ii) the recipient has given the sender permission to 
     initiate commercial electronic mail messages to the 
     electronic mail address of the recipient and has not 
     subsequently revoked such permission.
       (B) Applicability.--If a sender operates through separate 
     lines of business or divisions and holds itself out to the 
     recipient as that particular line of business or division, 
     then such line of business or division shall be treated as 
     the sender for purposes of subparagraph (A).
       (10) Recipient.--The term ``recipient'', when used with 
     respect to a commercial electronic mail message, means the 
     addressee of such message.
       (11) Sender.--The term ``sender'', when used with respect 
     to a commercial electronic mail message, means the person who 
     initiates such message. The term ``sender'' does not include 
     a provider of Internet access service whose role with respect 
     to electronic mail messages is limited to handling, 
     transmitting, retransmitting, or relaying such messages.
       (12) Unsolicited commercial electronic mail message.--The 
     term ``unsolicited commercial electronic mail message'' means 
     any commercial electronic mail message that--
       (A) is not a transactional or relationship message; and
       (B) is sent to a recipient without the recipient's prior 
     affirmative or implied consent.

     SEC. 3. COMMERCIAL ELECTRONIC MAIL CONTAINING FRAUDULENT 
                   HEADER OR ROUTING INFORMATION.

       (a) In General.--Chapter 63 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1351. Unsolicited commercial electronic mail 
       containing fraudulent header information

       ``(a) Any person who initiates the transmission of any 
     unsolicited commercial electronic mail message, with 
     knowledge and intent that the message contains or is 
     accompanied by header information that is false or materially 
     misleading, shall be fined or imprisoned for not more than 1 
     year, or both, under this title.
       ``(b) For purposes of this section, the terms `unsolicited 
     commercial electronic mail message' and `header information' 
     have the meanings given such terms in section 2 of the REDUCE 
     Spam Act of 2003.''.
       (b) Conforming Amendment.--The chapter analysis at the 
     beginning of chapter 63 of title 18, United States Code, is 
     amended by adding at the end the following:

``1351. Unsolicited commercial electronic mail.''.

     SEC. 4. REQUIREMENTS FOR UNSOLICITED COMMERCIAL ELECTRONIC 
                   MAIL.

       (a) Subject Line Requirements.--It shall be unlawful for 
     any person to initiate the transmission of an unsolicited 
     commercial electronic mail message to an electronic mail 
     address within the United States, unless the subject line 
     includes--
       (1) except in the case of an unsolicited commercial 
     electronic mail message described in paragraph (2)--
       (A) an identification that complies with the standards 
     adopted by the Internet Engineering Task Force for 
     identification of unsolicited commercial electronic mail 
     messages; or
       (B) in the case of the absence of such standards, ``ADV:'' 
     as the first four characters; or
       (2) in the case of an unsolicited commercial electronic 
     mail message that contains material that may only be viewed, 
     purchased, rented, leased, or held in possession by an 
     individual 18 years of age and older--
       (A) an identification that complies with the standards 
     adopted by the Internet Engineering Task Force for 
     identification of adult-oriented unsolicited commercial 
     electronic mail messages; or
       (B) in the case of the absence of such standards, 
     ``ADV:ADLT'' as the first eight characters.
       (b) Return Address Requirements.--
       (1) Establishment.--It shall be unlawful for any person to 
     initiate the transmission of an unsolicited commercial 
     electronic mail message to an electronic mail address within 
     the United States, unless the sender establishes a valid 
     sender-operated return electronic mail address where the 
     recipient may notify the sender not to send any further 
     commercial electronic mail messages.
       (2) Included statement.--All unsolicited commercial 
     electronic mail messages subject to this subsection shall 
     include a statement informing the recipient of the valid 
     return electronic mail address referred to in paragraph (1).
       (3) Prohibition of sending after objection.--Upon 
     notification or confirmation by a recipient of the 
     recipient's request not to receive any further unsolicited 
     commercial electronic mail messages, it shall be unlawful for 
     a person, or anyone acting on that person's behalf, to send 
     any unsolicited commercial electronic mail message to that 
     recipient. Such a request shall be deemed to terminate a pre-
     existing business relationship for purposes of determining 
     whether subsequent messages are unsolicited commercial 
     electronic mail messages.
       (c) Header and Subject Heading Requirements.--
       (1) False or misleading header information.--It shall be 
     unlawful for any person to initiate the transmission of an 
     unsolicited commercial electronic mail message that such 
     person knows, or reasonably should know, contains or is 
     accompanied by header information that is false or materially 
     misleading.
       (2) Deceptive subject headings.--It shall be unlawful for 
     any person to initiate the transmission of an unsolicited 
     commercial electronic mail message with a subject heading 
     that such person knows, or reasonably should know, is likely 
     to mislead a recipient, acting reasonably under the 
     circumstances, about a material fact regarding the contents 
     or subject matter of the message.
       (d) Affirmative Defense.--A person who violates subsection 
     (a) or (b) shall not be liable if--

[[Page 16093]]

       (1)(A) the person has established and implemented, with due 
     care, reasonable practices and procedures to effectively 
     prevent such violations; and
       (B) the violation occurred despite good faith efforts to 
     maintain compliance with such practices and procedures; or
       (2) within the 2-day period ending upon the initiation of 
     the transmission of the unsolicited commercial electronic 
     mail message in violation of subsection (a) or (b), such 
     person initiated the transmission of such message, or one 
     substantially similar to it, to less than 1,000 electronic 
     mail addresses.

     SEC. 5. ENFORCEMENT.

       (a) In General.--Section 4 shall be enforced by the 
     Commission under the FTC Act. For purposes of such Commission 
     enforcement, a violation of this Act shall be treated as a 
     violation of a rule under section 18 (15 U.S.C. 57a) of the 
     FTC Act prohibiting an unfair or deceptive act or practice.
       (b) Rulemaking.--Not later than 30 days after the date of 
     enactment of this Act, the Commission shall institute a 
     rulemaking proceeding concerning enforcement of this Act. The 
     rules adopted by the Commission shall prevent violations of 
     section 4 in the same manner, by the same means, and with the 
     same jurisdiction, powers, and duties as though all 
     applicable terms and provisions of the FTC Act were 
     incorporated into and made a part of this section, except 
     that the rules shall also include--
       (1) procedures to minimize the burden of submitting a 
     complaint to the Commission concerning a violation of section 
     4, including procedures to allow the electronic submission of 
     complaints to the Commission;
       (2) civil penalties for violations of section 4 in an 
     amount sufficient to effectively deter future violations, a 
     description of the type of evidence needed to collect such 
     penalties, and procedures to collect such penalties if the 
     Commission determines that a violation of section 4 has 
     occurred;
       (3) procedures for the Commission to grant a reward of not 
     less than 20 percent of the total civil penalty collected to 
     the first person that--
       (A) identifies the person in violation of section 4; and
       (B) supplies information that leads to the successful 
     collection of a civil penalty by the Commission;
       (4) a provision that enables the Commission to keep the 
     remainder of the civil penalty collected and use the funds 
     toward the prosecution of further claims, including for 
     necessary staff or resources; and
       (5) civil penalties for knowingly submitting a false 
     complaint to the Commission.
       (c) Regulations.--Not later than 180 days after the date of 
     enactment of this Act, the Commission shall conclude the 
     rulemaking proceeding initiated under subsection (b) and 
     shall prescribe implementing regulations.

     SEC. 6. PRIVATE RIGHT OF ACTION.

       (a) Action Authorized.--A recipient of an unsolicited 
     commercial electronic mail message, or a provider of Internet 
     access service, adversely affected by a violation of section 
     4 may bring a civil action in any district court of the 
     United States with jurisdiction over the defendant to--
       (1) enjoin further violation by the defendant; or
       (2) recover damages in an amount equal to--
       (A) actual monetary loss incurred by the recipient or 
     provider of Internet access service as a result of such 
     violation; or
       (B) at the discretion of the court, the amount determined 
     under subsection (b).
       (b) Statutory Damages.--
       (1) In general.--For purposes of subsection (a)(2)(B), the 
     amount determined under this subsection is the amount 
     calculated by multiplying the number of willful, knowing, or 
     negligent violations by an amount, in the discretion of the 
     court, of up to $10.
       (2) Per-violation penalty.--In determining the per-
     violation penalty under this subsection, the court shall take 
     into account the degree of culpability, any history of prior 
     such conduct, ability to pay, the extent of economic gain 
     resulting from the violation, and such other matters as 
     justice may require.
       (c) Attorney Fees.--In any action brought pursuant to 
     subsection (a), the court may, in its discretion, require an 
     undertaking for the payment of the costs of such action, and 
     assess reasonable costs, including reasonable attorneys' 
     fees, against any party.

     SEC. 7. INTERNET ACCESS SERVICE PROVIDERS.

       Nothing in this Act shall be construed--
       (1) to enlarge or diminish the application of chapter 121 
     of title 18, relating to when a provider of Internet access 
     service may disclose customer communications or records;
       (2) to require a provider of Internet access service to 
     block, transmit, route, relay, handle, or store certain types 
     of electronic mail messages;
       (3) to prevent or limit, in any way, a provider of Internet 
     access service from adopting a policy regarding commercial 
     electronic mail messages, including a policy of declining to 
     transmit certain types of commercial electronic mail 
     messages, or from enforcing such policy through technical 
     means, through contract, or pursuant to any other provision 
     of Federal, State, or local criminal or civil law; or
       (4) to render lawful any such policy that is unlawful under 
     any other provision of law.

     SEC. 8. EFFECT ON OTHER LAWS.

       Nothing in this Act shall be construed to impair the 
     enforcement of section 223 or 231 of the Communications Act 
     of 1934 (47 U.S.C. 223 or 231), chapter 71 (relating to 
     obscenity) or 110 (relating to sexual exploitation of 
     children) of title 18, United States Code, or any other 
     Federal criminal statute.

     SEC. 9. FTC STUDY.

        Not later than 24 months after the date of enactment of 
     this Act, the Commission, in consultation with appropriate 
     agencies, shall submit a report to Congress that provides a 
     detailed analysis of the effectiveness and enforcement of the 
     provisions of this Act and the need, if any, for Congress to 
     modify such provisions.

     SEC. 10. STUDY OF POSSIBLE INTERNATIONAL AGREEMENT.

       Not later than 6 months after the date of enactment of this 
     Act, the President shall--
       (1) conduct a study in consultation with the Internet 
     Engineering Task Force on the possibility of an international 
     agreement to reduce spam; and
       (2) issue a report to Congress setting forth the findings 
     of the study required by paragraph (1).

     SEC. 11. EFFECTIVE DATE.

       The provisions of this Act shall take effect 180 days after 
     the date of enactment of this Act, except that subsections 
     (b) and (c) of section 5 shall take effect upon the date of 
     enactment of this Act.
                                  ____


             [From the Philadelphia Inquirer, May 4, 2003]

                       How to Unspam the Internet

                          (By Lawrence Lessig)

       The Internet is choking on spam. Billions of unsolicited 
     commercial messages--constituting almost 50 percent of all e-
     mail traffic--fill the in-boxes of increasingly impatient 
     Internet users. These messages offer to sell everything from 
     human growth hormones to pornography. And increasingly the 
     offers to sell pornography are themselves pornographic.
       So far, Congress has done nothing about this burden on the 
     Internet. Many states have passed laws that have tried. 
     Virginia just passed the most extreme of these laws, making 
     it a felony to send spam with a fraudulent return address. 
     Other states are considering the same.
       Yet all of these regulations suffer from a similar flaw: 
     Spamsters know the laws will never be enforced. The cost of 
     bringing a lawsuit is extraordinarily high. Most of us have 
     better things to do than sue spamsters. Thus, despite a 
     patchwork of regulation that in theory should be restricting 
     spam, the practice of spam continues to increase at an 
     astonishing rate.
       But last week, U.S. Rep. Zoe Lofgren (D., Calif.) 
     introduced a bill that, if properly implemented by the 
     Federal Trade Commission, would actually work. I am so 
     confident she is right that I've offered to resign my job if 
     her proposal does not significantly reduce the burden of 
     spam.
       The Restrict and Eliminate Delivery of Unsolicited 
     Commercial E-mail (REDUCE) Spam Act has two important parts. 
     First, anyone sending bulk unsolicited commercial e-mail must 
     include on each e-mail a simple tag--either ADV: or ADV:ADLT. 
     Second, anyone who finds a spamster who fails properly to 
     label unsolicited commercial e-mail will be paid a bounty by 
     the FTC.
       The first part of the proposal would enable simple filters 
     to block unwanted spam. Users could tell their Internet 
     service provider to block ADV e-mail, or they could 
     automatically filter such e-mail into a spam folder on their 
     own computer. These simple filters would replace the 
     extraordinarily sophisticated filters companies have been 
     developing to identify and block spam.
       These complex filters, though ingenious, are necessarily 
     one step behind. Spamsters will always find a way to trick 
     them. The filters will be changed to respond, but the 
     spamsters will in turn change their spam to find a way around 
     the filters. Thus the filters will never block all spam, but 
     they will always block a certain number of messages that are 
     not spam.
       But part one of the Lofgren legislation would never work if 
     it weren't for part two: A spamster bounty. Lofgren's 
     proposal would require the FTC to pay a bounty to anyone who 
     tracks down a spamster who has failed properly to label 
     unsolicited commercial e-mail. This proposal would invite 
     savvy 18-year-olds from across the world to hunt down these 
     law-violating spamsters. The FTC would then fine them, after 
     paying a reward to the bounty hunter who found them.
       The bounty would assure that the spam law was enforced. 
     Properly enforced, the law would teach most spamsters that 
     failing to label spam doesn't pay. The spamsters in turn 
     would decide either to label their spam or give up and get a 
     real job. Either way, the burden of spam would be reduced.
       No doubt no solution would eliminate 100 percent of spam. 
     Much is foreign; American laws would not easily reach those 
     spamsters. But the question lawmakers should ask is what is 
     the smallest, least burdensome regulation that would have the 
     most significant effect. If Lofgren's proposal were passed, 
     the vast majority of spamsters would have to change their 
     ways. Technologists could then

[[Page 16094]]

     target their filters on the spamsters that remain.
       What about free speech? Don't spamsters have First 
     Amendments rights?
       Of course they do. And many of the laws proposed right now 
     go too far in censoring speech. Threatening a felony for a 
     bad return address, as the Virginia law does, is a dangerous 
     precedent. Laws that ban spam altogether are much worse.
       But Lofgren's proposal simply requires a proper label so 
     consumers can choose whether they want to receive the speech 
     or not. And most important, by reducing the clutter of 
     unsolicited and unwanted spam, the law would improve the 
     opportunity for other speech--including political speech--to 
     get through.
       More fundamentally, free speech is threatened just as much 
     by bad filters as by bad laws. A well-crafted law--narrow in 
     its scope, and moderate in its regulation--can in turn 
     eliminate the demand for bad filters. Lofgren's proposal 
     would have just this effect. Congress should act to follow 
     Lofgren's lead. In Internet time, not Washington time.
                                 ______
                                 
      By Mr. HATCH (for himself and Mrs. Clinton):
  S. 1328. A bill to provide for an evaluation by the Institute of 
Medicine of the National Academy of Sciences of leading health care 
performance measures and options to implement policies that align 
performance with payment under the Medicare program under title XVIII 
of the Social Security Act; to the Committee on Finance.
  Mr. HATCH. Mr. President, I rise today to address an issue of 
importance to all Americans, the quality and safety of health care in 
the United States.
  Numerous studies have identified serious shortcomings in the quality 
and safety of health care. However, addressing these shortcomings and 
improving health care outcomes in a complex health care system requires 
long-range strategies and specific goals.
  The Medicare program, as one of the largest purchasers of health 
care, is ideally situated to take a leadership role in encouraging 
quality improvement. Currently, however, Medicare's payment methods and 
regulations provide few incentives to pursue innovative quality 
improvement strategies and to reward those who achieve exemplary 
performance.
  Traditional Medicare pays most physicians according to a fee schedule 
and pays hospitals according to a DRG-based payment system. 
Medicare+Choice plans are paid a capitated rate and, in turn, pay 
physicians using a range of approaches, from salary to capitation to 
fee-for-service, none of which directly reward enhanced quality.
  Attempts to adjust Medicare payments to reward performance 
improvements in safety and quality have been hampered, in part, by the 
lack of measures and data for assessing performance. Although the 
Centers for Medicare and Medicaid Services recently began an initiative 
to develop voluntary consensus performance measures for 10 clinical 
conditions for hospitals, standardized measures of quality for 
hospitals and providers do not otherwise exist.
  As the Senate considers a new Medicare prescription drug benefit and 
additional measures to reform the Medicare program, it is more 
important than ever that we consider also measures to ensure that these 
new benefits are provided as safely and effectively as possible.
  That is why I am today introducing a bill charging the Institute of 
Medicine with performing a study to evaluate leading health care 
performance measures and options to implement policies that align 
performance with payment in Medicare.
  We have learned much about health care quality in the last several 
years. The Institute of Medicine, in its studies entitled ``To Err Is 
Human,'' and ``Crossing the Quality Chasm,'' has identified the health 
care safety and quality shortcomings that exist and the need for 
improvement. In a recent study performed at the request of Congress, 
``Leadership by Example,'' the Institute of Medicine identified the 
leadership role that Government can take in improving health care 
quality in government sponsored health care programs and those in the 
private sector.
  The bill that I am introducing today, and the study that will result, 
represents the next step toward improving health care quality and 
safety in the United States. It is an important step and one that we 
must take in order to ensure that Medicare beneficiaries receive the 
highest quality health care services available. I urge my colleagues to 
join me in supporting this legislation.
  Mrs. CLINTON. Mr. President, I am pleased to join my friend from 
Utah, Senator Hatch, today in introducing a bill that will commission a 
study from IOM to identify performance measures and payment incentives 
that reward high quality providers in Medicare.
  Currently Medicare pays the same amount for good care as it does for 
poor quality care. It's easy to assume that the dollars that go to 
Medicare all yield high quality care, but the evidence is otherwise.
  Take heart disease, the leading cause of death in the U.S. 
Cholesterol management after a heart attack can mean the difference 
between disability and an active lifestyle. Yet we don't have adequate 
data that show us whether most Medicare beneficiaries are getting this 
clinically appropriate care. And the only data that we do have, from 
NCQA, The State of Health Care Quality 2002, tells us that in 2001 
almost one-quarter, 23 percent, of Medicare beneficiaries in health 
plans did not have their cholesterol managed after a heart attack.
  In New York, between 14 and 22 percent of diabetic beneficiaries in 
health plans did not get a blood sugar control test in 2001.
  When Medicare and Medicare enrollees pay the same amount to providers 
that give excellent care as it does to those who provide mediocre care, 
that may unintentionally create incentives for providers to skimp or 
cut corners on quality. We debate endlessly over ways to control costs 
in Medicare, but we have not taken one of the simple steps that will, 
almost certainly, drive quality up and assure that we are getting good 
value for the dollars we spend.
  Medicare should be a leader in national efforts to improve quality. 
Medicare, with its $250 billion of purchasing power, 40 million 
enrollees, programs data, and professional experience can bring more 
resources to bear on these quality problems than any other purchaser.
  The study we are proposing today would be the first step down this 
path. It would cost relatively little but yield great rewards as a 
guide to how to measure and pay for quality in the future. The study 
would develop measures to assess quality, including outcome measures. 
It would tell us what payment incentives have worked in the private 
sector. And it would identify approaches to use incentives to improve 
quality that can be implemented across all of Medicare.
  So I am pleased that we are making this effort today, and hope that 
it is just the first step of many more that we will take down the path 
of improving Medicare for patients and consumers.
                                 ______
                                 
      By Ms. MURKOWSKI:
  S. 1330. A bill to establish the Kenai Mountains-Turnagain Arm 
National Heritage Area in the State of Alaska, and for other purposes; 
to the Committee on Energy and Natural Resources.
  Ms. MURKOWSKI. Mr. President, the Kenai Mountains-Turnagain Arm 
National Heritage Area is one of the best examples for preserving the 
heritage of one of this Nation's first pioneer areas. This legislation 
will create a national heritage corridor that covers an area from 
Seward to Anchorage.
  This national heritage corridor will protect the natural and cultural 
resources of a well established region. The Kenai Mountains-Turnagain 
Arm National Heritage Area will follow along a corridor that was 
established by pioneering Alaskans. This route will partially follow 
two nationally recognized treasures--the Iditarod Trail and the Seward 
Highway National Scenic Byway. It will honor Native traders, gold rush 
stampeders and the route of the Alaska Railroad. One of the biggest 
gold discoveries along this route was the Bear Creek gold find near 
Hope in 1895. The route of the Alaska Railroad was finished in 1923.

[[Page 16095]]

  Unlike many others, this national heritage corridor will not be 
managed by the Federal Government, but instead, by a group of local 
community leaders. The preservation of historic areas depends largely 
upon the community and its support, and clearly, no one entity can 
provide the adequate management, protection and preservation for these 
extensive resources. In fact, over the past five years, a group of 
local community leaders has been working hard for this national 
heritage designation. They have been successful in garnering support 
from communities throughout this entire route. These local folks have 
extensive knowledge of the resources; they are personally acquainted 
with the area; they understand the ruggedness and the beauty of the 
land, and certainly appreciate the potential economic value this 
designation would bring to the area.
  The preservation of history and heritage depends upon the mutual 
support and assistance from public and private groups. This national 
heritage designation has been a vision of many people from Seward to 
Anchorage, and comprises lands in the Kenai Mountains and the upper 
Turnagain Arm region. An 11-member board will be established and 
charged with seeing the vision become a reality. This non-profit board 
will be tasked with coordinating and supporting the protection of trail 
resources; interpreting the trail, and identifying the cultural 
landscapes of the Kenai Mountains-Turnagain Arm historic transportation 
corridor. A plan will also be developed for the management of the 
heritage corridor, and will complement existing Federal, State, borough 
and local plans. To ensure even greater support of this designation, 
there will be opportunities provided to the public for their full 
participation as the plan is being developed.
  The purposes of designating this national treasure are to: Enable all 
people to envision and experience the heritage and impacts of 
transportation routes used first by indigenous people, followed by 
pioneers to the Nation's first frontier;
  Encourage economic viability in the affected communities.
  This national heritage corridor is significant for a whole host of 
reasons: Allow citizens to help preserve the heritage of the pioneers; 
protect and honor the history of Native traders, gold seekers and 
pioneers; decisions and management will be made by local citizens; 
support of several historical associations, the cities of Seward, 
Girdwood, Hope and Anchorage; an 11-member non-profit local board will 
plan and operate the heritage corridor; increase public awareness and 
appreciation for the natural, historical and cultural resources, and 
modern resource development of the heritage corridor; restore historic 
buildings and structures that are located within the boundaries of the 
heritage corridor; and, no additional lands will be acquired by the 
Federal Government or by the local management group.
  Rarely ever do we have such an opportunity when whole communities, 
Federal, State and local governments agree on and support such a 
national designation. Through adequate funding from the Department of 
the Interior, interpretation signs and technical assistance to conduct 
local planning will help to preserve and protect natural, historical, 
landscape and cultural resource values for current and future 
generations of the Kenai Mountains-Turnagain Arm National Heritage 
Area.
  And, finally, with the passage of this bill, visitors to the area can 
enjoy the shore lines of Turnagain Arm and watch the world's second 
largest tidal range move 30 foot tides in and out. A traveler through 
the mountain passes of the heritage area can view evidence of 
retreating glaciers and avalanches. Visitors will be amazed at the 
abundant wildlife that make their home in the area. The history of 
early settlers will be preserved for current and future generations.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1330

       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 ``Kenai Mountains-Turnagain 
     Arm National Heritage Area Act''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) The Kenai Mountains-Turnagain Arm transportation 
     corridor is a major gateway to Alaska and includes a range of 
     transportation routes used first by indigenous people who 
     were followed by pioneers who settled the Nation's last 
     frontier;
       (2) the natural history and scenic splendor of the region 
     are equally outstanding; vistas of nature's power include 
     evidence of earthquake subsidence, recent avalanches, 
     retreating glaciers and tidal action along Turnagain Arm, 
     which has the world's second greatest tidal range;
       (3) the cultural landscape formed by indigenous people and 
     then by settlement, transportation and modern resource 
     development in this rugged and often treacherous natural 
     setting stands as powerful testimony to the human fortitude, 
     perseverance, and resourcefulness that is America's proudest 
     heritage from the people who settled the frontier;
       (4) there is a national interest in recognizing, 
     preserving, promoting, and interpreting these resources;
       (5) the Kenai Mountains-Turnagain Arm region is 
     geographically and culturally cohesive because it is defined 
     by a corridor of historic routes--trail, water, railroad, and 
     roadways through a distinct landscape of mountains, lakes, 
     and fjords;
       (6) national significance of separate elements of the 
     region include, but are not limited to, the Iditarod National 
     Historic Trail, the Seward Highway National Scenic Byway, and 
     the Alaska Railroad National Scenic Railroad;
       (7) national heritage area designation provides for the 
     interpretation of these routes, as well as the national 
     historic districts and numerous historic routes in the region 
     as part of the whole picture of human history in the wider 
     transportation corridor including early Native trade routes, 
     connections by waterway, mining trail, and other routes;
       (8) national heritage area designation also provides 
     communities within the region with the motivation and means 
     for ``grass roots'' regional coordination and partnerships 
     with each other and with borough, State, and Federal 
     agencies; and
       (9) national heritage area designation is supported by the 
     Kenai Peninsula Historical Association, the Seward Historical 
     Commission, the Seward City Council, the Hope and Sunrise 
     Historical Society, the Hope Chamber of Commerce, the Alaska 
     Association for Historic Preservation, the Cooper Landing 
     Community Club, the Alaska Wilderness Recreation and Tourism 
     Association, Anchorage Historic Properties, the Anchorage 
     Convention and Visitors Bureau, the Cook Inlet Historical 
     Society, the Moose Pass Sportsman's Club, the Alaska 
     Historical Commission, the Girdwood Board of Supervisors, the 
     Kenai River Special Management Area Advisory Board, the Bird/
     Indian Community Council, the Kenai Peninsula Borough Trails 
     Commission, the Alaska Division of Parks and Recreation, the 
     Kenai Peninsula Borough, the Kenai Peninsula Tourism 
     Marketing Council, and the Anchorage Municipal Assembly.
       (b) Purposes.--The purposes of this Act are--
       (1) to recognize, preserve, and interpret the historic and 
     modern resource development and cultural landscapes of the 
     Kenai Mountains-Turnagain Arm historic transportation 
     corridor, and to promote and facilitate the public enjoyment 
     of these resources; and
       (2) to foster, through financial and technical assistance, 
     the development of cooperative planning and partnership among 
     the communities and borough, State, and Federal Government 
     entities.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Heritage area.--The term ``Heritage Area'' means the 
     Kenai Mountains-Turnagain Arm National Heritage Area 
     established by section 4(a) of this Act.
       (2) Management entity.--The term ``management entity'' 
     means the 11 member Board of Directors of the Kenai 
     Mountains-Turnagain Arm National Heritage Corridor 
     Communities Association.
       (3) Management plan.--The term ``management plan'' means 
     the management plan for the Heritage Area.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.

     SEC. 4. KENAI MOUNTAINS-TURNAGAIN ARM NATIONAL HERITAGE AREA.

       (a) Establishment.--There is established the Kenai 
     Mountains-Turnagain Arm National Heritage Area.
       (b) Boundaries.--The Heritage Area shall comprise the lands 
     in the Kenai Mountains and upper Turnagain Arm region 
     generally depicted on the map entitled ``Kenai Peninsula/
     Turnagain Arm National Heritage Corridor'', numbered ``Map 
     #KMTA-1, and dated ``August 1999''. The map shall be on file 
     and available for public inspection in the offices of the 
     Alaska Regional Office of the National Park Service and in 
     the offices of the Alaska State Heritage Preservation 
     Officer.

[[Page 16096]]



     SEC. 5. MANAGEMENT ENTITY.

       (a) The Secretary shall enter into a cooperative agreement 
     with the management entity, to carry out the purposes of this 
     Act. The cooperative agreement shall include information 
     relating to the objectives and management of the Heritage 
     Area, including the following:
       (1) A discussion of the goals and objectives of the 
     Heritage Area;
       (2) An explanation of the proposed approach to conservation 
     and interpretation of the Heritage Area;
       (3) A general outline of the protection measures, to which 
     the management entity commits.
       (b) Nothing in this Act authorizes the management entity to 
     assume any management authorities or responsibilities on 
     Federal lands.
       (c) Representatives of other organizations shall be invited 
     and encouraged to participate with the management entity and 
     in the development and implementation of the management plan, 
     including but not limited to: The State Division of Parks and 
     Outdoor Recreation; the State Division of Mining, Land and 
     Water; the Forest Service; the State Historic Preservation 
     Office; the Kenai Peninsula Borough; the Municipality of 
     Anchorage; the Alaska Railroad; the Alaska Department of 
     Transportation; and the National Park Service.
       (d) Representation of ex-officio members in the non-profit 
     corporation shall be established under the bylaws of the 
     management entity.

     SEC. 6. AUTHORITIES AND DUTIES OF MANAGEMENT 
                   ENTITY.

       (a) Management Plan.--
       (1) In general.--Not later than 3 years after the Secretary 
     enters into a cooperative agreement with the management 
     entity, the management entity shall develop a management plan 
     for the Heritage Area, taking into consideration existing 
     Federal, State, borough, and local plans.
       (2) Contents.--The management plan shall include, but not 
     be limited to--
       (A) comprehensive recommendations for conservation, 
     funding, management, and development of the Heritage Area;
       (B) a description of agreements on actions to be carried 
     out by Government and private organizations to protect the 
     resources of the Heritage Area;
       (C) a list of specific and potential sources of funding to 
     protect, manage, and develop the Heritage Area;
       (D) an inventory of the resources contained in the Heritage 
     Area; and
       (E) a description of the role and participation of other 
     Federal, State, and local agencies that have jurisdiction on 
     lands within the Heritage Area.
       (b) Priorities.--The management entity shall give priority 
     to the implementation of actions, goals, and policies set 
     forth in the cooperative agreement with the Secretary and the 
     heritage plan, including assisting communities within the 
     region in--
       (1) carrying out programs which recognize important 
     resource values in the Heritage Area;
       (2) encouraging economic viability in the affected 
     communities;
       (3) establishing and maintaining interpretive exhibits in 
     the Heritage Area;
       (4) improving and interpreting heritage trails;
       (5) increasing public awareness and appreciation for the 
     natural, historical, and cultural resources and modern 
     resource development of the Heritage Area;
       (6) restoring historic buildings and structures that are 
     located within the boundaries of the Heritage Area; and
       (7) ensuring that clear, consistent, and appropriate signs 
     identifying public access points and sites of interest are 
     placed throughout the Heritage Area.
       (c) Public Meetings.--The management entity shall conduct 2 
     or more public meetings each year regarding the initiation 
     and implementation of the management plan for the Heritage 
     Area. The management entity shall place a notice of each such 
     meeting in a newspaper of general circulation in the Heritage 
     Area and shall make the minutes of the meeting available to 
     the public.

     SEC. 7. DUTIES OF THE SECRETARY.

       (a) The Secretary, in consultation with the Governor of 
     Alaska, or his designee, is authorized to enter into a 
     cooperative agreement with the management entity. The 
     cooperative agreement shall be prepared with public 
     participation.
       (b) In accordance with the terms and conditions of the 
     cooperative agreement and upon the request of the management 
     entity, and subject to the availability of funds, the 
     Secretary may provide administrative, technical, financial, 
     design, development, and operations assistance to carry out 
     the purposes of this Act.

     SEC. 8. SAVINGS PROVISIONS.

       (a) Regulatory Authority.--Nothing in this Act shall be 
     construed to grant powers of zoning or management of land use 
     to the management entity of the Heritage Area.
       (b) Effect on Authority of Governments.--Nothing in this 
     Act shall be construed to modify, enlarge, or diminish any 
     authority of the Federal, State, or local governments to 
     manage or regulate any use of land as provided for by law or 
     regulation.
       (c) Effect on Business.--Nothing in this Act shall be 
     construed to obstruct or limit business activity on private 
     development or resource development activities.

     SEC. 9. PROHIBITION ON THE ACQUISITION OR REAL PROPERTY.

       The management entity may not use funds appropriated to 
     carry out the purposes of this Act to acquire real property 
     or interest in real property.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       (a) First Year.--For the first year $350,000 is authorized 
     to be appropriated to carry out the purposes of this Act, and 
     is made available upon the Secretary and the management 
     entity completing a cooperative agreement.
       (b) In General.--There is authorized to be appropriated not 
     more than $1,000,000 to carry out the purposes of this Act 
     for any fiscal year after the first year. Not more than 
     $10,000,000, in the aggregate, may be appropriated for the 
     Heritage Area.
       (c) Matching Funds.--Federal funding provided under this 
     Act shall be matched at least 25 percent by other funds or 
     in-kind services.
       (d) Sunset Provision.--The Secretary may not make any grant 
     or provide any assistance under this Act beyond 15 years from 
     the date that the Secretary and management entity complete a 
     cooperative agreement.

                                 ______
                                 
      By Mr. SANTORUM (for himself, Mr. Conrad, and Mr. Breaux):
  S. 1331. A bill to clarify the treatment of tax attributes under 
section 108 of the Internal Revenue Code of 1986 for taxpayers which 
file consolidated returns; to the Committee on Finance.
  Mr. SANTORUM. Mr. President, today I am introducing a bill along with 
Senator Conrad that would close a gaping loophole in the Internal 
Revenue Code. This loophole involves the treatment of companies whose 
debt is cancelled in a bankruptcy proceeding. Under existing law, these 
companies are not required to immediately pay tax on their income from 
debt cancellation. They are, however, required to reduce their net 
operating losses, NOLs, and other tax attributes. These attribute 
reductions have the effect of allowing bankrupt companies to defer, but 
not permanently avoid, paying tax on income from debt cancellation.
  It has come to my attention that MCI/WorldCom and certain other 
bankrupt companies are attempting to circumvent these rules. In plain 
English, MCI/WorldCom--the group of corporations that has perpetrated 
the greatest business fraud--is trying to relieve itself of $35 billion 
of debt and yet emerge from bankruptcy with an NOL that is estimated to 
range from $10 to $15 billion. Such an NOL will, post-bankruptcy, 
eliminate federal income tax of $3.5 billion to $5.25 billion on MCI/
WorldCom's first $10 to $15 billion of income.
  Plainly, if this tax loophole is not eliminated, MCI/WorldCom will 
not pay taxes for the foreseeable future. By attempting to utilize this 
loophole, MCI/WorldCom is demonstrating that it is not, in fact, a new 
company--instead, it is the same reckless company that we have come to 
know. The legislation I am introducing today will assure that MCI/
WorldCom doesn't get away with this outrageous behavior. It will also 
prevent other companies from imitating this approach.
  Such results would be bad tax policy for two reasons. First, they 
would clearly be contrary to the policy objectives that Congress 
intended to achieve when it enacted the current tax attribute reduction 
rules. Second, equivalent taxpayers would be treated differently under 
Section 108 based on their corporate structure and borrowing 
practices--factors that, form a tax policy standpoint, do not justify 
any difference in treatment.
  Based on rulings and court cases, I believe this bill reflects the 
current tax position of the Treasury Department with respect to NOLs. 
Although it is also clear that aggressive taxpayers and their lawyers 
have utilized this tax loophole. The approach to this provision is 
contrary to United Dominion Industries, Inc. v. United States, 532 U.S. 
822 (2001). Although not dealing directly with Section 108, the case is 
clear that the only NOL of a consolidated group is the group's entire 
NOL. I am introducing this bill with an effective date of today to 
provide notice to MCI/WorldCom, and all similarly situated taxpayers, 
that this Congress will not stand for this.
  I encourage my colleagues to support closing this loophole to avoid 
such

[[Page 16097]]

abuse in the future. I ask unanimous consent to have the Business Week 
story from May 12, 2003, ``Why This Tax Loophole For Losers Should 
End,'' and the text of the bill be printed in the Record.

                                S. 1331

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

     SECTION 1. CLARIFICATION OF THE TREATMENT OF TAX ATTRIBUTES.

       (a) In General.--Section 108(b) of the Internal Revenue 
     Code of 1986 (relating to reduction of tax attributes) is 
     amended by adding at the end the following new paragraph:
       ``(6) Affiliated groups.--If the taxpayer is a member of an 
     affiliated group of corporations which files a consolidated 
     return under section 1501, the tax attributes described in 
     paragraph (1) shall be the aggregate tax attributes of such 
     group. The Secretary shall prescribe such regulations as may 
     be necessary under section 1502 to carry out the purposes of 
     this paragraph.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to discharges of indebtedness occurring after 
     June 25, 2003, except that discharges of indebtedness under 
     any plan of reorganization in a case under title 11, United 
     States Code, shall be deemed to occur on the date such plan 
     is confirmed.
  There being no objection, the additional material ordered to be 
printed in the Record, as follows:

                   [From Business Week, May 12, 2003]

              Why This Tax Loophole for Losers Should End

                            (By David Henry)

       Is there no end to the ugly superlatives that fallen 
     telecom giant WorldCom Inc. is amassing? First, its top execs 
     reigned over the greatest alleged accounting fraud in 
     history. Then, the company filed the largest corporate 
     bankruptcy. Now, it is lining up to collect what could be one 
     of the biggest single corporate tax breaks of all time.
       To the fury of its competitors, WorldCom is angling to 
     snare a $2.5 billion benefit from Uncle Sam. How? By 
     exploiting a provision in the Internal Revenue Service code 
     so it can hanging onto previous losses of at least $6.6 
     billion and enjoy years of tax-free earnings. What's more, 
     the ploy would protect new management against any takeover 
     for at least two years. And, WorldCom could use the losses to 
     offset even income it picks up by taking over other 
     companies. ``WorldCom is in an enviable position,'' says 
     Robert Willens, tax accounting analyst at Lehman Brothers 
     Inc. ``It will have a copious tax losses and can be a 
     powerful acquirer.''
       WorldCom's new owners--the holders of its $41 billion of 
     bad debt--are driving a truck through a loophole that needs 
     to be closed pronto. It was left open by Congress when the 
     lawmakers overhauled IRS rules to stamp out a notorious trade 
     in corporate tax losses. At one time, owners of loss-making 
     businesses could sell their companies along with their 
     accumulated tax loss--often their only asssit--to profitable 
     companies. Now, tax losses are snuffed out when company 
     ownership changes hands.
       So, WorldCom is going through hoops to avoid that fate. 
     Pending a final vote by creditors later this year, the 
     company is changing its bylaws to prohibit anyone from 
     building a stake of more than 4.75 percent in the company. 
     They have to keep bidders at bay for at least two years, 
     otherwise the IRS would argue that control of WorldCom has 
     changed hands and that the tax losses--which, assuming a 38 
     percent tax rate, could give a $2.5 billion boost to 
     earnings--should be wiped out. ``It is the perfect poison 
     pill,'' says Carl M. Jenks, tax expert at law firm Jones Day.
       The perverse tactic is increasingly popular. The former 
     Williams Communication Group put a similar 5 percent 
     ownership limit in place last fall when it became WilTil 
     Communications Group Inc. after a bankruptcy reorganization. 
     The bankruptcy judge overseeing UAL Corp. agreed on Feb. 24 
     to a similar restriction on UAL securities in order to 
     preserve its $4 billion of tax losses. ``We will generally 
     recommend that any company with net operating losses worth 
     anything adopt these restrictions,'' says Douglas W. Killip, 
     a tax lawyer at Akin Gump Strauss Hauer & Field.
       For WorldCom's rivals, the tax break is salt on a wound. 
     William P. Barr, a former U.S. attorney general and now 
     general counsel of Verizon Communications, fumes that 
     WorldCom is trying to ``compound its fraud by escaping the 
     payment of taxes.'' WorldCom's bankruptcy reorganization will 
     eliminate the cost of servicing some $30 billion of debt. 
     That, the company projects, will help it to make $2 billion 
     before taxes next year. By using the tax losses, it will be 
     able to keep about $780 million in cash it would otherwise 
     owe the government. In fact, it won't be liable for any tax 
     at least until the accumulated losses are worked through. 
     And, because it racked up the $6.6 billion in losses just 
     through 2001, WorldCom could have billions more to play with 
     once the numbers for 2002 are finally worked out.
       What's more, the poison pill is likely to deter any company 
     from buying WorldCom and dumping some of the obsolete assets 
     still clogging the telecom industry. That will slow any 
     recovery in capital spending and hurt WorldCom's competitors. 
     ``It is bad when business decisions are motivated by tax 
     reasons and not based on sound economics,'' says Anthony 
     Sabino, bankruptcy law professor at St. John's University.
       Rivals are likely to push the IRS to find a way to stop 
     WorldCom from utilizing the losses, observers say. But their 
     chances of success are slim because the IRS never issued 
     regulations that could have nullified the ploy. And the 
     courts generally rule against the agency when it attempts to 
     write rules retroactively, Willens says.
       Still, it's time to close the stable door before any more 
     horses bolt. Besides, Uncle Sam could use the money right 
     now.
                                 ______
                                 
      By Mr. HATCH:
  S. 1332. A bill to amend title XVIII of the Social Security Act to 
provide regulatory relief, appeals process reforms, contracting 
flexibility, and education improvements under the Medicare program, and 
for other purposes; to the Committee on Finance.
  Mr. HATCH. Mr. President, there is no question that our need to 
improve the Medicare program by adding prescription drug coverage for 
beneficiaries is extremely important, as this debate indicates.
  But, our discussions would not be complete if we neglected another 
major Medicare improvement which is also long overdue, and that is the 
need to improve the climate in which providers strive to provide high 
quality services to patients.
  Medicare's anticipated regulations--three times longer than the U.S. 
tax code--prevent providers from delivering health care efficiently and 
beneficiaries from receiving the care they need.
  Complex Federal regulations and reams of paperwork require physicians 
to spend hours each day filling out government forms rather than caring 
for their patients. The array of Federal Medicare rules with which 
physicians must comply is overwhelming. Doctors are required to 
complete claims forms, advance beneficiary notices, certify medical 
necessity, file enrollment forms, and comply with code documentation 
guidelines. Indeed, these rules and mandates are not only extensive, 
they are constantly changing and they may be interpreted differently in 
different regions of the country.
  The complexity of the rules and the variation in their interpretation 
has prompted outcries from all centers of our country. In fact, I have 
heard loud and clear from the physicians in my home State of Utah about 
the severity of the problem.
  Leon Sorensen, Executive Vice President of the Utah Medical 
Association, recently wrote to me and said:

       ``The Utah Medical Association has long been concerned 
     about the unnecessary burdens placed upon physicians by the 
     voluminous regulations of Medicare. Not only does compliance 
     with these regulations take physicians' time away from 
     patients, but also the regulations contribute to the high 
     cost of medical care while contributing little of value. They 
     discourage physicians from participating fully in Medicare. 
     They are often punitive in nature rather than an educational. 
     They use tactics that would not be tolerated by businesses or 
     government if applied to them.
       An example is the practice of extrapolating a small sample 
     of billing errors over the physician's entire practice, 
     making the physician liable for payback of thousands of 
     dollars of ``overpaid'' claims when demonstrated over 
     billings may amount only to a few dollars. If this process 
     were used by the IRS in a tax audit, the public outcry would 
     be deafening.
       Medicare also requires that alleged ``overpayments'' to 
     physicians by repaid within 60 days, even if a physician 
     chooses to appeal Medicare's allegations. When assessed a 
     Medicare overpayment, the only way physicians can appeal is 
     to subject their practices to another audit, using a 
     ``statistically valid random sample.'' Statistical sample 
     audits can shut down a physician's practice for days, 
     preventing physicians from treating patients. Physicians are 
     forced to settle with Medicare rather than be subjected to 
     such unfair scrutiny.
       Any defense against this kind of administrative abuse is 
     extremely costly, time consuming and often ineffective.

  Indeed, failure to follow Medicare's complex rules--or just the 
perception of such failure--can result in an audit of a physician's 
billing records, withholding of payments and crippling of a physician's 
practice.

[[Page 16098]]

  And, physicians are not the only individuals affected by these rules. 
Medicare beneficiaries are affected--both directly and indirectly--by 
Medicare's onerous rules and burdensome paperwork. Both patients and 
providers are confused by obscure paperwork and apparently conflicting 
rules. Physicians have difficulty understanding how to bill for their 
services and beneficiaries find it difficult to understand the forms 
and billing information that they receive. Indeed, the administrative 
costs associated with managing this paperwork and the fear of harsh 
consequences in response to clerical errors has led some providers to 
consider whether they should continue to participate in the Medicare 
program.
  The problem has not escaped the attention of the administration and 
addressing it is a priority for President Bush and it should be for 
Congress also. Secretary Thompson has said, ``Patients and providers 
alike are fed up with voluminous and complex paperwork. Rules are 
constantly changing. Complexity is overloading the system, 
criminalizing honest mistakes and driving doctors, nurses, and other 
health care professionals out of the program.''
  Congress has considered legislation over the past few years to 
provide relief from this regulatory burden. Former Senator Frank 
Murkowski should be given great credit for drafting S. 452, the 
``Medicare Education and Regulatory Fairness Act of 2001''--legislation 
that he introduced in the Senate on March 5, 2001 but which never came 
to a vote.
  The legislation that I am introducing today, the ``Medicare Education 
Regulatory Reform and Contracting Improvement Act of 2003,'' MERCI, 
builds on that initiative. It will improve the Medicare program for 
beneficiaries and providers alike by clarifying regulations, rewarding 
quality and by enhancing services. I am introducing this legislation 
today because the need for Medicare regulatory reform remains. In fact, 
the need for Medicare regulatory reform has never been greater. In 
addition, the regulatory reform that I am proposing in MERCI fits hand 
in glove with the reforms that we have proposed in S. 1, the 
``Prescription Drug and Medicare Improvement Act of 2003.'' The 
reformed Medicare program must include reformed regulations if it is to 
provide efficient service to beneficiaries.
  Let me take a moment to review a few of the important provisions in 
this bill. The educational provisions of the MERCI Act are designed to 
decrease Medicare billing and claims payment errors by improving 
education and training programs for Medicare providers. It includes 
also provisions that will improve communication between the Department 
of Health and Human Services and Medicare providers. Furthermore, the 
bill will improve communication with Medicare beneficiaries by 
providing for central toll-free telephone services to require free, 
appropriate referrals to individuals seeking information or assistance 
with Medicare.
  The MERCI Act includes regulatory reform provisions that are designed 
to reduce waste, fraud and abuse in Medicare; provisions that are just 
and fair for beneficiaries, contractors, and providers. Among other 
things, the bill eliminates retroactive application of regulatory 
changes and expedites the appeals processes for beneficiaries, 
providers, and suppliers of Medicare services.
  Finally, the MERCI Act will improve Medicare contracting; increasing 
competition, improving service and reducing costs by providing for a 
competitive bidding process for Medicare contractors that takes into 
account performance quality, price and other factors that are important 
to beneficiaries.
  Medicare beneficiaries and Medicare providers have been suffering 
from burdensome and confusing regulations for too long. It is time that 
they received some mercy. The time for Medicare regulatory reform has 
come and the bill that I am introducing today provides that mercy. 
MERCI, the ``Medicare Education, Regulatory Reform and Contracting 
Improvement Act of 2003'' takes a common sense approach to providing 
relief for the Medicare beneficiaries and providers who have been 
suffering this burden for so long.
  I believe that MERCI will improve the delivery of health care 
services to Medicare beneficiaries by enhancing the efficiency of the 
Medicare program for all concerned.
  Finally, I would be remiss if I did not thank Chairman Grassley and 
Senator Baucus for working with me to include the MERCI legislative 
language in S. 1, the ``Prescription Drug and Medicare Improvement Act 
of 2003.'' Senators Grassley and Baucus have worked for many years to 
reform Medicare's complex regulations, as have I, and their agreement 
to include this language is appreciated greatly.
  And so, it is with a great appreciation for my colleagues who have 
worked with me on this legislation and for those who have worked on 
similar legislation in the past, that I urge my colleagues in the 
Senate today to join me in addressing the needs of Medicare 
beneficiaries and providers by supporting this legislation.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Bingaman, Mr. Bunning, Mr. 
        Daschle, Mr. Rockefeller, Mr. Baucus, Ms. Snowe, Mr. Thomas, 
        Mr. Smith, Mr. Conrad, Mr. Graham of Florida, Mr. Kerry, Mr. 
        Breaux, Mrs. Lincoln, and Mr. Jeffords):
  S. 1333. A bill to amend the Internal Revenue Code of 1986 to provide 
for the treatment of certain expenses of rural letter carriers; to the 
Committee on Finance.
  Mr. GRASSLEY. Mr. President, the U.S. Postal Service provides a vital 
and important communication link for the Nation and the citizens of my 
home State of Iowa. Rural Letter Carriers play a special role and have 
a proud history as an important link in assuring the delivery of our 
mail. Rural letter carriers first delivered the mail with their own 
horses and buggies, later with their own motorcycles, and now in their 
own cars and trucks. They are responsible for maintenance and operation 
of their vehicles in all types of weather and road conditions. In the 
winter, snow and ice is their enemy, while in the spring, the melting 
snow and ice causes potholes and washboard roads. In spite of these 
quite adverse conditions, rural letter carriers daily drive over 3 
million miles and serve 24 million American families on over 66,000 
routes.
  Although the mission of rural carriers has not changed since the 
horse and buggy days, the amount of mail they deliver has changed 
dramatically. As the Nation's mail volume has increased throughout the 
years, the Postal Service is now delivering more than 200 billion 
pieces of mail a year. The average carrier delivers about 2,300 pieces 
of mail a day to about 500 addresses.
  Most recently, e-commerce has changed the type of mail rural letter 
carriers deliver. This fact was confirmed in a GAO study entitled 
``U.S. Postal Service: Challenges to Sustaining Performance 
Improvements Remain Formidable on the Brink of the 21st Century,'' 
dated October 21, 1999. As this report explains, the Postal Service 
expects declines in its core business, which is essentially letter 
mail, in the coming years. The growth of e-mail on the Internet, 
electronic communications, and electronic commerce has the potential to 
substantially affect the Postal Service's mail volume.
  First-Class mail has always been the bread and butter of the Postal 
Service's revenue, but the amount of revenue from First-Class letters 
is declining. E-commerce is providing the Postal Service with another 
opportunity to increase another part of its business. That is because 
what individuals and companies order over the Internet must be 
delivered, sometimes by the Postal Service and often by rural letter 
carriers. Currently, the Postal Service had about 33 percent of the 
parcel business. Rural letter carriers are now delivering larger 
volumes of business mail, parcels, and priority mail packages. But, 
more parcel business means more cargo capacity is necessary in postal 
delivery vehicles, especially in

[[Page 16099]]

those owned and operated by rural letter carriers.
  When delivering greeting cards or bills, or packages ordered over the 
Internet, rural letter carriers use vehicles they currently purchase, 
operate and maintain. In exchange, they receive a reimbursement from 
the Postal Service. This reimbursement is called an Equipment 
Maintenance Allowance, EMA. Congress recognizes that providing a 
personal vehicle to deliver the U.S. Mail is not typical vehicle use. 
So, when a rural letter carrier is ready to sell such a vehicle, it's 
going to have little trade-in value because of the typically high 
mileage, extraordinary wear and tear, and the fact that it is probably 
right-hand drive. Therefore, Congress intended to exempt the EMA 
allowance from taxation in 1988 through a specific provision for rural 
mail carriers in the Technical and Miscellaneous Revenue Act of 1988.
  That provision allowed an employee of the U.S. Postal Service who was 
involved in the collection and delivery of mail on a rural route, to 
compute their business use mileage deduction as 150 percent of the 
standard mileage rate for all business use mileage. As an alternative, 
rural letter carrier taxpayers could elect to utilize the actual 
expense method, business portion of actual operation and maintenance of 
the vehicle, plus depreciation. If EMA exceeded the allowable vehicle 
expense deductions, the excess was subject to tax. If EMA fell short of 
the allowable vehicle expenses, a deduction was allowed only to the 
extent that the sum of the shortfall and all other miscellaneous 
itemized deductions exceeded two percent of the taxpayer's adjusted 
gross income.
  The Taxpayer Relief Act of 1997 further simplified the tax returns of 
rural letter carriers. That Act permitted the EMA income and expenses 
``to wash,'' so that neither income nor expenses would have to be 
reported on a rural letter carrier's return. That simplified taxes for 
approximately 120,000 taxpayers, but the provision eliminated the 
option of filing the actual expense method for employee business 
vehicle expenses. The lack of this option, combined with the dramatic 
changes the Internet is having on the mail, specifically on rural 
letter carriers and their vehicles, is a problem I believe Congress 
must address.
  The mail mix is changing and already Postal Service management has, 
understandably, encouraged rural letter carriers to purchase larger 
right-hand drive vehicles, such as Sports Utility Vehicles, SUVs, to 
handle the increase in parcel loads. Large SUVs are much more expensive 
than traditional vehicles. So without the ability to use the actual 
expense method and depreciation, rural letter carriers must use their 
salaries to cover vehicle expenses. Additionally, the Postal Service 
has placed 11,000 postal vehicles on rural routes, which means those 
carriers receive no EMA.
  These developments have created a situation that is contrary to the 
historical Congressional intent of using reimbursement to fund the 
government service of delivering mail, and also has created an 
inequitable tax situation for rural letter carriers. If actual business 
expenses exceed the EMA, a deduction for those expenses should be 
allowed. To correct this inequity, I am introducing a bill today that 
reinstates the ability of a rural letter carrier to choose between 
using the actual expense method for computing the deduction allowable 
for business use of a vehicle, or using the current practice of 
deducting the reimbursed EMA expenses.
  Rural letter carriers perform a necessary and valuable service and 
face many changes and challenges in this new Internet era. We must make 
sure that these public servants receive fair and equitable tax 
treatment as they perform their essential role in fulfilling the Postal 
Service's mandate of binding the Nation together.
  I urge my colleagues to join Senators Bingaman, Daschle, Bunning, 
Rockefeller, Snowe, Thomas, Smith of Oregon, Conrad, Graham of Florida, 
Kerry, Breaux, Lincoln and myself in sponsoring this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1333

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

     SECTION 1. CERTAIN EXPENSES OF RURAL LETTER CARRIERS.

       (a) In General.--Section 162(o) of the Internal Revenue 
     Code of 1986 (relating to treatment of certain reimbursed 
     expenses of rural mail carriers) is amended by redesignating 
     paragraph (2) as paragraph (3) and by inserting after 
     paragraph (1) the following:
       ``(2) Special rule where expenses exceed reimbursements.--
     Notwithstanding paragraph (1)(A), if the expenses incurred by 
     an employee for the use of a vehicle in performing services 
     described in paragraph (1) exceed the qualified 
     reimbursements for such expenses, such excess shall be taken 
     into account in computing the miscellaneous itemized 
     deductions of the employee under section 67.''.
       (b) Conforming Amendment.--The heading for section 162(o) 
     of the Internal Revenue Code of 1986 is amended by striking 
     ``Reimbursed''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

  Mr. BINGAMAN. Mr. President, I join Senator Grassley, the chairman of 
the Finance Committee, and several of our colleagues in introducing 
legislation that will allow rural letter carriers to deduct their 
actual expenses when they use their own vehicle to deliver the mail. 
This Tax Code correction will reduce the out-of-pocket costs currently 
incurred by our Nation's rural letter carriers, giving them comparable 
tax treatment enjoyed by others using their vehicles in their line of 
business.
  For many years, rural letter carriers were allowed to calculate their 
deductible expenses by using either a special formula or keeping track 
of their costs. In 1997, Congress simplified the tax treatment for 
letter carriers, but disallowed them the ability to use the actual 
expense method--business portion of actual operation and maintenance of 
the vehicle, plus depreciation--for calculating their costs. 
Unfortunately, this has resulted in many letter carriers being unable 
to account for their real expenses when using their own vehicle to 
deliver the mail. This problem is worse in more rugged parts of our 
country where road conditions and severe weather can require letter 
carriers to use an SUV or four-wheel-drive vehicle that are more 
expensive to maintain. This legislation will ensure that these mail 
carriers are fully reimbursed for the costs associated with the 
operation of their vehicles.
  Although the Internet has made the world seem smaller, purchased 
goods must still be delivered. The benefits of Internet purchases in 
remote locations is limited if the purchased item cannot be delivered. 
For this reason, in rural States, such as New Mexico, these letter 
carriers play an important role in delivering the majority of the 
State's mail and parcels. On a daily basis across the Nation, rural 
letter carriers drive over 3 million miles delivering mail and parcels 
to over 30 million families. We need to be sure that we have not 
created a tax impediment for these dedicated individuals. I look 
forward to working with the chairman and my colleagues to get this 
legislation passed this year.
  I ask unanimous consent that the text of the bill be printed in the 
Record immediately following the statement of Senator Grassley on the 
introduction of this legislation.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Graham of Florida, Ms. 
        Mikulski, and Mr. Breaux):
  S. 1335. A bill to amend the Internal Revenue Code of 1986 to allow 
individuals a deduction for qualified long-term care insurance 
premiums, use of such insurance under cafeteria plans and flexible 
spending arrangements, and a credit for individuals with long-term care 
needs; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I rise today to introduce the Long-Term 
Care and Retirement Security Act. This legislation, which I sponsored 
in the 106th and 107th Congress with my distinguished colleague from 
Florida, Senator Bob Graham, would ease the tremendous cost of long-
term care.

[[Page 16100]]

  The bill that Senator Graham and I are re-introducing today would 
allow individuals a tax deduction for the cost of long-term care 
insurance premiums. Increasingly, Americans are interested in private 
long-term care insurance to pay for nursing home stays, assisted 
living, home health aides, and other services. However, most people 
find the policies unaffordable. The younger the person, the lower the 
insurance premium, yet most people aren't ready to buy a policy until 
retirement. A deduction would encourage more people to buy long-term 
insurance.
  Our proposal would also give individuals or their care givers a 
$3,000 tax credit to help cover their long-term care expenses. This 
would apply to those who have been certified by a doctor as needing 
help with at least three activities of daily living, such as eating, 
bathing, or dressing. This credit would help care givers pay for 
medical supplies, nursing care and any other expenses incurred while 
caring for family members with disabilities.
  One family that would benefit from this legislation is the Gardner 
family of Waterloo, IA. Ruth Gardner is a 70-year-old mother of nine 
who suffers from a degenerative tissue disorder, Scleroderma, atrial 
fibrillation, congestive heart failure and is a breast cancer survivor. 
For the last 3 years her nine children, their spouses and numerous 
grandchildren have worked tirelessly to fulfill Ms. Gardner's wish of 
spending her last months with dignity and respect at home.
  While Ms. Gardner's wish may seem small, the task of managing her 
care is not. Each week family members meet to organize their schedules 
in an effort to provide over 20 hours of daily care for Ms. Gardner. 
Working relentlessly, and at a considerable cost, the Gardner family 
manages to provide around-the-clock care while balancing both work and 
their family lives. All this effort comes at a great cost, both 
emotionally and financially. The Gardners have been able to locate some 
funding to help support the care for Ms. Gardner; however, the family 
continues to bear considerable costs. These costs include weekly 
nursing visits that cost $102 per visit, emergency response service at 
$30 a month, daily hospice service at $32 an hour and not to mention 
the hours and hours of personal time donated by the family.
  The Long-Term Care and Retirement Security Act would help the 22 
million family caregivers like the Gardners. A $3,000 tax credit would 
help to pay for Ms. Gardner's monthly hospice care, weekly nurse visits 
or help to hire a nurse to cover some of the time that the family 
currently donates. This legislation would also help the increasing 
number of families placed in the difficult situation by allowing them 
to purchase long-term care insurance. Had this legislation been enacted 
earlier, long-term care insurance would have been an affordable option 
for Ms. Gardner, alleviating the difficult situation that her family 
currently faces.
  As it has in the past, the bill that Senator Graham and I are 
introducing today has been endorsed by both the AARP and the Health 
Insurance Association of America. A companion bill sponsored by 
Representatives Nancy Johnson, Karen Thurman and Earl Pomeroy is 
pending in the House of Representatives.
  An aging nation has no time to waste in preparing for long-term care, 
and the need to help people afford long-term care is more pressing than 
ever. I look forward to working with Senator Graham and our colleagues 
in the Senate to get our bill passed into law as soon as possible.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1335

       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 ``Long-Term Care and 
     Retirement Security Act of 2003''.

     SEC. 2. TREATMENT OF PREMIUMS ON QUALIFIED LONG-TERM CARE 
                   INSURANCE CONTRACTS.

       (a) In General.--Part VII of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to additional 
     itemized deductions) is amended by redesignating section 223 
     as section 224 and by inserting after section 222 the 
     following new section:

     ``SEC. 223. PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE 
                   CONTRACTS.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a deduction an amount equal to the 
     applicable percentage of the amount of eligible long-term 
     care premiums (as defined in section 213(d)(10)) paid during 
     the taxable year for coverage for the taxpayer and the 
     taxpayer's spouse and dependents under a qualified long-term 
     care insurance contract (as defined in section 7702B(b)).
       ``(b) Applicable Percentage.--For purposes of subsection 
     (a)--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, the applicable percentage shall be determined in 
     accordance with the following table based on the number of 
     years of continuous coverage (as of the close of the taxable 
     year) of the individual under any qualified long-term care 
     insurance contracts (as defined in section 7702B(b)):

``If the number of years of continuous coThe applicable percentage is--
      Less than 1..................................................60  
      At least 1 but less than 2...................................70  
      At least 2 but less than 3...................................80  
      At least 3 but less than 4...................................90  
      At least 4.................................................100.  

       ``(2) Special rules for individuals who have attained age 
     55.--In the case of an individual who has attained age 55 as 
     of the close of the taxable year, the following table shall 
     be substituted for the table in paragraph (1):

``If the number of years of continuous coThe applicable percentage is--
      Less than 1..................................................70  
      At least 1 but less than 2...................................85  
      At least 2.................................................100.  

       ``(3) Only coverage after 2003 taken into account.--Only 
     coverage for periods after December 31, 2003, shall be taken 
     into account under this subsection.
       ``(4) Continuous coverage.--An individual shall not fail to 
     be treated as having continuous coverage if the aggregate 
     breaks in coverage during any 1-year period are less than 60 
     days.
       ``(c) Coordination With Other Deductions.--Any amount paid 
     by a taxpayer for any qualified long-term care insurance 
     contract to which subsection (a) applies shall not be taken 
     into account in computing the amount allowable to the 
     taxpayer as a deduction under section 162(l) or 213(a).''.
       (b) Long-Term Care Insurance Permitted To Be Offered Under 
     Cafeteria Plans and Flexible Spending Arrangements.--
       (1) Cafeteria plans.--Section 125(f) of the Internal 
     Revenue Code of 1986 (defining qualified benefits) is amended 
     by inserting before the period at the end ``, except that 
     such term shall include the payment of premiums for any 
     qualified long-term care insurance contract (as defined in 
     section 7702B) to the extent the amount of such payment does 
     not exceed the eligible long-term care premiums (as defined 
     in section 213(d)(10)) for such contract''.
       (2) Flexible spending arrangements.--Section 106 of such 
     Code (relating to contributions by an employer to accident 
     and health plans) is amended by striking subsection (c).
       (c) Conforming Amendments.--
       (1) Section 62(a) of the Internal Revenue Code of 1986 is 
     amended by inserting after paragraph (18) the following new 
     paragraph:
       ``(19) Premiums on qualified long-term care insurance 
     contracts.--The deduction allowed by section 223.''.
       (2) The table of sections for part VII of subchapter B of 
     chapter 1 of such Code is amended by striking the last item 
     and inserting the following new items:

``Sec. 223. Premiums on qualified long-term care insurance contracts.
``Sec. 224. Cross reference.''.

       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2003.
       (2) Cafeteria plans and flexible spending arrangements.--
     The amendments made by subsection (b) shall apply to taxable 
     years beginning after December 31, 2004.

     SEC. 3. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25B the following new section:

     ``SEC. 25C. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

       ``(a) Allowance of Credit.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the applicable credit amount multiplied by 
     the number of applicable individuals with respect to whom the 
     taxpayer is an eligible caregiver for the taxable year.
       ``(2) Applicable credit amount.--For purposes of paragraph 
     (1), the applicable credit

[[Page 16101]]

     amount shall be determined in accordance with the following 
     table:

``For taxable years beginning in calenThe applicable credit amount is--
    2004.......................................................$1,000  
    2005....................................................... 1,500  
    2006....................................................... 2,000  
    2007....................................................... 2,500  
    2008 or thereafter........................................ 3,000.  

       ``(b) Limitation Based on Adjusted Gross Income.--
       ``(1) In general.--The amount of the credit allowable under 
     subsection (a) shall be reduced (but not below zero) by $100 
     for each $1,000 (or fraction thereof) by which the taxpayer's 
     modified adjusted gross income exceeds the threshold amount. 
     For purposes of the preceding sentence, the term `modified 
     adjusted gross income' means adjusted gross income increased 
     by any amount excluded from gross income under section 911, 
     931, or 933.
       ``(2) Threshold amount.--For purposes of paragraph (1), the 
     term `threshold amount' means--
       ``(A) $150,000 in the case of a joint return, and
       ``(B) $75,000 in any other case.
       ``(3) Indexing.--In the case of any taxable year beginning 
     in a calendar year after 2004, each dollar amount contained 
     in paragraph (2) shall be increased by an amount equal to the 
     product of--
       ``(A) such dollar amount, and
       ``(B) the medical care cost adjustment determined under 
     section 213(d)(10)(B)(ii) for the calendar year in which the 
     taxable year begins, determined by substituting `2003' for 
     `1996' in subclause (II) thereof.

     If any increase determined under the preceding sentence is 
     not a multiple of $50, such increase shall be rounded to the 
     next lowest multiple of $50.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Applicable individual.--
       ``(A) In general.--The term `applicable individual' means, 
     with respect to any taxable year, any individual who has been 
     certified, before the due date for filing the return of tax 
     for the taxable year (without extensions), by a physician (as 
     defined in section 1861(r)(1) of the Social Security Act) as 
     being an individual with long-term care needs described in 
     subparagraph (B) for a period--
       ``(i) which is at least 180 consecutive days, and
       ``(ii) a portion of which occurs within the taxable year.

     Notwithstanding the preceding sentence, a certification shall 
     not be treated as valid unless it is made within the 39\1/2\ 
     month period ending on such due date (or such other period as 
     the Secretary prescribes).
       ``(B) Individuals with long-term care needs.--An individual 
     is described in this subparagraph if the individual meets any 
     of the following requirements:
       ``(i) The individual is at least 6 years of age and--

       ``(I) is unable to perform (without substantial assistance 
     from another individual) at least 3 activities of daily 
     living (as defined in section 7702B(c)(2)(B)) due to a loss 
     of functional capacity, or
       ``(II) requires substantial supervision to protect such 
     individual from threats to health and safety due to severe 
     cognitive impairment and is unable to perform, without 
     reminding or cuing assistance, at least 1 activity of daily 
     living (as so defined), or to the extent provided in 
     regulations prescribed by the Secretary (in consultation with 
     the Secretary of Health and Human Services), is unable to 
     engage in age appropriate activities.

       ``(ii) The individual is at least 2 but not 6 years of age 
     and is unable due to a loss of functional capacity to perform 
     (without substantial assistance from another individual) at 
     least 2 of the following activities: eating, transferring, or 
     mobility.
       ``(iii) The individual is under 2 years of age and requires 
     specific durable medical equipment by reason of a severe 
     health condition or requires a skilled practitioner trained 
     to address the individual's condition to be available if the 
     individual's parents or guardians are absent.
       ``(2) Eligible caregiver.--
       ``(A) In general.--A taxpayer shall be treated as an 
     eligible caregiver for any taxable year with respect to the 
     following individuals:
       ``(i) The taxpayer.
       ``(ii) The taxpayer's spouse.
       ``(iii) An individual with respect to whom the taxpayer is 
     allowed a deduction under section 151(c) for the taxable 
     year.
       ``(iv) An individual who would be described in clause (iii) 
     for the taxable year if section 151(c)(1)(A) were applied by 
     substituting for the exemption amount an amount equal to the 
     sum of the exemption amount, the standard deduction under 
     section 63(c)(2)(C), and any additional standard deduction 
     under section 63(c)(3) which would be applicable to the 
     individual if clause (iii) applied.
       ``(v) An individual who would be described in clause (iii) 
     for the taxable year if--

       ``(I) the requirements of clause (iv) are met with respect 
     to the individual, and
       ``(II) the requirements of subparagraph (B) are met with 
     respect to the individual in lieu of the support test of 
     section 152(a).

       ``(B) Residency test.--The requirements of this 
     subparagraph are met if an individual has as his principal 
     place of abode the home of the taxpayer and--
       ``(i) in the case of an individual who is an ancestor or 
     descendant of the taxpayer or the taxpayer's spouse, is a 
     member of the taxpayer's household for over half the taxable 
     year, or
       ``(ii) in the case of any other individual, is a member of 
     the taxpayer's household for the entire taxable year.
       ``(C) Special rules where more than 1 eligible caregiver.--
       ``(i) In general.--If more than 1 individual is an eligible 
     caregiver with respect to the same applicable individual for 
     taxable years ending with or within the same calendar year, a 
     taxpayer shall be treated as the eligible caregiver if each 
     such individual (other than the taxpayer) files a written 
     declaration (in such form and manner as the Secretary may 
     prescribe) that such individual will not claim such 
     applicable individual for the credit under this section.
       ``(ii) No agreement.--If each individual required under 
     clause (i) to file a written declaration under clause (i) 
     does not do so, the individual with the highest modified 
     adjusted gross income (as defined in section 32(c)(5)) shall 
     be treated as the eligible caregiver.
       ``(iii) Married individuals filing separately.--In the case 
     of married individuals filing separately, the determination 
     under this subparagraph as to whether the husband or wife is 
     the eligible caregiver shall be made under the rules of 
     clause (ii) (whether or not one of them has filed a written 
     declaration under clause (i)).
       ``(d) Identification Requirement.--No credit shall be 
     allowed under this section to a taxpayer with respect to any 
     applicable individual unless the taxpayer includes the name 
     and taxpayer identification number of such individual, and 
     the identification number of the physician certifying such 
     individual, on the return of tax for the taxable year.
       ``(e) Taxable Year Must Be Full Taxable Year.--Except in 
     the case of a taxable year closed by reason of the death of 
     the taxpayer, no credit shall be allowable under this section 
     in the case of a taxable year covering a period of less than 
     12 months.''.
       (b) Conforming Amendments.--
       (1) Section 6213(g)(2) of the Internal Revenue Code of 1986 
     is amended by striking ``and'' at the end of subparagraph 
     (L), by striking the period at the end of subparagraph (M) 
     and inserting ``, and'', and by inserting after subparagraph 
     (M) the following new subparagraph:
       ``(N) an omission of a correct TIN or physician 
     identification required under section 25C(d) (relating to 
     credit for taxpayers with long-term care needs) to be 
     included on a return.''.
       (2) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 25B the 
     following new item:

``Sec. 25C. Credit for taxpayers with long-term care needs.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 4. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-TERM CARE 
                   INSURANCE.

       (a) Additional Protections Applicable to Long-Term Care 
     Insurance.--Subparagraphs (A) and (B) of section 7702B(g)(2) 
     of the Internal Revenue Code of 1986 (relating to 
     requirements of model regulation and Act) are amended to read 
     as follows:
       ``(A) In general.--The requirements of this paragraph are 
     met with respect to any contract if such contract meets--
       ``(i) Model regulation.--The following requirements of the 
     model regulation:

       ``(I) Section 6A (relating to guaranteed renewal or 
     noncancellability), and the requirements of section 6B of the 
     model Act relating to such section 6A.
       ``(II) Section 6B (relating to prohibitions on limitations 
     and exclusions).
       ``(III) Section 6C (relating to extension of benefits).
       ``(IV) Section 6D (relating to continuation or conversion 
     of coverage).
       ``(V) Section 6E (relating to discontinuance and 
     replacement of policies).
       ``(VI) Section 7 (relating to unintentional lapse).
       ``(VII) Section 8 (relating to disclosure), other than 
     section 8F thereof.
       ``(VIII) Section 11 (relating to prohibitions against post-
     claims underwriting).
       ``(IX) Section 12 (relating to minimum standards).
       ``(X) Section 13 (relating to requirement to offer 
     inflation protection), except that any requirement for a 
     signature on a rejection of inflation protection shall permit 
     the signature to be on an application or on a separate form.
       ``(XI) Section 25 (relating to prohibition against 
     preexisting conditions and probationary periods in 
     replacement policies or certificates).
       ``(XII) The provisions of section 26 relating to contingent 
     nonforfeiture benefits, if the policyholder declines the 
     offer of a nonforfeiture provision described in paragraph 
     (4).

[[Page 16102]]

       ``(ii) Model act.--The following requirements of the model 
     Act:

       ``(I) Section 6C (relating to preexisting conditions).
       ``(II) Section 6D (relating to prior hospitalization).
       ``(III) The provisions of section 8 relating to contingent 
     nonforfeiture benefits, if the policyholder declines the 
     offer of a nonforfeiture provision described in paragraph 
     (4).

       ``(B) Definitions.--For purposes of this paragraph--
       ``(i) Model provisions.--The terms `model regulation' and 
     `model Act' mean the long-term care insurance model 
     regulation, and the long-term care insurance model Act, 
     respectively, promulgated by the National Association of 
     Insurance Commissioners (as adopted as of September 2000).
       ``(ii) Coordination.--Any provision of the model regulation 
     or model Act listed under clause (i) or (ii) of subparagraph 
     (A) shall be treated as including any other provision of such 
     regulation or Act necessary to implement the provision.
       ``(iii) Determination.--For purposes of this section and 
     section 4980C, the determination of whether any requirement 
     of a model regulation or the model Act has been met shall be 
     made by the Secretary.''.
       (b) Excise Tax.--Paragraph (1) of section 4980C(c) of the 
     Internal Revenue Code of 1986 (relating to requirements of 
     model provisions) is amended to read as follows:
       ``(1) Requirements of model provisions.--
       ``(A) Model regulation.--The following requirements of the 
     model regulation must be met:
       ``(i) Section 9 (relating to required disclosure of rating 
     practices to consumer).
       ``(ii) Section 14 (relating to application forms and 
     replacement coverage).
       ``(iii) Section 15 (relating to reporting requirements), 
     except that the issuer shall also report at least annually 
     the number of claims denied during the reporting period for 
     each class of business (expressed as a percentage of claims 
     denied), other than claims denied for failure to meet the 
     waiting period or because of any applicable preexisting 
     condition.
       ``(iv) Section 22 (relating to filing requirements for 
     marketing).
       ``(v) Section 23 (relating to standards for marketing), 
     including inaccurate completion of medical histories, other 
     than paragraphs (1), (6), and (9) of section 23C, except 
     that--

       ``(I) in addition to such requirements, no person shall, in 
     selling or offering to sell a qualified long-term care 
     insurance contract, misrepresent a material fact; and
       ``(II) no such requirements shall include a requirement to 
     inquire or identify whether a prospective applicant or 
     enrollee for long-term care insurance has accident and 
     sickness insurance.

       ``(vi) Section 24 (relating to suitability).
       ``(vii) Section 29 (relating to standard format outline of 
     coverage).
       ``(viii) Section 30 (relating to requirement to deliver 
     shopper's guide).

     The requirements referred to in clause (vi) shall not include 
     those portions of the personal worksheet described in 
     Appendix B relating to consumer protection requirements not 
     imposed by section 4980C or 7702B.
       ``(B) Model act.--The following requirements of the model 
     Act must be met:
       ``(i) Section 6F (relating to right to return), except that 
     such section shall also apply to denials of applications and 
     any refund shall be made within 30 days of the return or 
     denial.
       ``(ii) Section 6G (relating to outline of coverage).
       ``(iii) Section 6H (relating to requirements for 
     certificates under group plans).
       ``(iv) Section 6I (relating to policy summary).
       ``(v) Section 6J (relating to monthly reports on 
     accelerated death benefits).
       ``(vi) Section 7 (relating to incontestability period).
       ``(C) Definitions.--For purposes of this paragraph, the 
     terms `model regulation' and `model Act' have the meanings 
     given such terms by section 7702B(g)(2)(B).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to policies issued more than 1 year after the 
     date of the enactment of this Act.

  Mr. GRAHAM of Florida. Mr. President, there has been a renewed 
interest in health issues, particularly the plight of the uninsured. 
That issue presents lawmakers with significant challenges, particularly 
finding the right mixes of programs to provide health care coverage to 
the vastly different populations that make up this group.
  There is an equally daunting health care issue facing our country, 
but it is one that has received far less attention. That issue is the 
increasing need for long-term care. Over 13 million people in the 
United States need help with basic activities of daily living such as 
eating, getting in and out of bed, getting around inside, dressing, 
bathing and using the toilet. While many Americans believe that long-
term care is an issue primarily affecting seniors, the reality is that 
5.2 million adults between the ages of 18 to 64 and over 450,000 
children need long-term care services. These numbers are expected to 
double as the baby boom generation begins to retire.
  Most long-term is provided at home or in the community by informal 
caregivers. However, in situations where individuals must enter nursing 
homes or other institutional facilities, costs are paid largely out-of-
pocket. Such a financing structure jeopardizes the retirement security 
of many Americans who have worked hard their entire lives.
  In order to help families address their long-term care needs, Senator 
Grassley and I are re-introducing the ``Long-Term Care and Retirement 
Security Act.'' This legislation provides two important tools to help 
Americans and their families meet their immediate and future long-term 
care needs--an above-the-line income tax deduction for the purchase of 
long-term care insurance and a caregiver tax credit.
  First, the bill provides an above-the-line deduction for long-term 
care premiums to make long-term care insurance more affordable for a 
greater number of Americans. Today, such premiums are deductible, but 
the availability of the deduction is severely limited. First, the 
current deduction is available only for the thirty percent of taxpayers 
who itemize their deductions. That leaves the remaining seventy percent 
of taxpayers with absolutely no benefit. Second, the deduction is 
limited to an amount, which in addition to other medical expenses 
exceeds 7.5 percent of the taxpayers adjusted gross income. This AGI 
limit further decreases the utilization of the current deduction.
  The Graham-Grassley legislation removes these restrictions and makes 
the deduction for long-term care premiums available to all taxpayers.
  In order to provide sufficient incentives for families to maintain 
long-term care coverage, the deduction allowed under this bill 
increases the longer the policy is maintained. The deduction starts at 
60 percent for premiums paid during the first year of coverage and 
gradually increases each year thereafter until the deduction reaches 
100 percent after at least 4 years of continuous coverage. This 
schedule is accelerated for those age 55 or older. For them, the 
deduction starts at 70 percent for the first year and increases to 100 
percent with at least two years of continuous coverage.
  Second, the bill provides an income tax credit for taxpayers with 
long-term care needs. The credit is phased in over 4 years, starting at 
$1,000 for 2003 and eventually reaching $3,000. To target assistance to 
those most in need, the credit phases out for married couples with 
income above $150,000, $75,000 for single taxpayers.
  In addition to the deduction and tax credit, our bill allows 
employers to offer long-term care insurance under cafeteria plans and 
include long-term care services as reimbursable costs under flexible 
spending arrangements. The bill also updates the requirements that 
long-term care policies must meet in order to qualify for the income 
tax deduction. These updated requirements reflect the most recent model 
regulations and code issued by the National Association of Insurance 
Commissioners.
  I urge my colleagues to join Senator Grassley and me in cosponsoring 
this legislation.
                                 ______
                                 
      By Mr. BROWNBACK (for himself and Mr. Kennedy):
  S. 1336. A bill to allow North Koreans to apply for refugee status or 
asylum; to the Committee on the Judiciary.
  Mr. BROWNBACK. Mr. President, I ask unanimous consent that the text 
of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1336

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

     SECTION 1. PURPOSE.

       The purpose of this Act is to ensure that North Koreans are 
     not barred from eligibility for refugee status or asylum in 
     the United States on account of any legal right to 
     citizenship they may enjoy under the Constitution of the 
     Republic of Korea. This Act

[[Page 16103]]

     is not intended in any way to prejudice whatever rights to 
     citizenship North Koreans may enjoy under the Constitution of 
     the Republic of Korea.

     SEC. 2. TREATMENT OF NATIONALS OF THE DEMOCRATIC PEOPLE'S 
                   REPUBLIC OF KOREA.

       For purposes of eligibility for refugee status under 
     section 207 of the Immigration and Nationality Act (8 U.S.C. 
     1157), or for asylum under section 208 of such Act (8 U.S.C. 
     1158), a national of the Democratic People's Republic of 
     Korea shall not be considered a national of the Republic of 
     Korea.
                                 ______
                                 
      By Mr. SMITH:
  S. 1337. A bill to establish an incentive program to promote 
effective safety belt laws and increase safety belt use; to the 
Committee on Commerce, Science, and Transportation.
  Mr. SMITH of Oregon. Mr. President, I rise today to introduce the 
Safe, Efficient, Automobile Travel to Better Ensure Lives in Transit, 
SEAT BELT, Act of 2003.
  This bill will establish an incentive grant program that rewards 
States that have enacted or will enact primary seat belt laws. The bill 
also gives a premium to those States that increase seat belt usage.
  According to the National Highway Traffic Safety Administration, 
NHTSA, motor vehicle crashes are responsible for 95 percent of all 
transportation-related deaths and 99 percent of all transportation-
related injuries. It is estimated that in 2002, 42,850 people were 
killed in vehicle crashes and roughly 3 million more were injured. 
Motor vehicle crashes are ranked as the leading cause of death for 
Americans ages 1 to 34.
  In addition to the thousands of transportation-related deaths and 
injuries, the economic costs associated with vehicle crashes constitute 
a serious public health problem and significant fiscal burden to the 
Nation. The total annual economic cost to the U.S. economy of all motor 
vehicle crashes is an astonishing $230.6 billion, or 2.3 percent of the 
U.S. gross domestic product. This translates into an average of $820 
for every person living in the United States.
  Increasing seat belt usage is a guaranteed and proven way to lower 
the number of transportation-related deaths and costs associated with 
vehicle crashes. In 2002, 59 percent of vehicle occupants killed were 
not restrained by seat belts or child safety seats. Safety experts 
agree that the best short-term and most immediate way to reduce traffic 
crash fatalities and serious injuries is to increase seat belt use.
  Experience in the United States and other countries has shown that 
sound laws coupled with high-visibility enforcement are the keys to 
high seat belt use. Currently, the effectiveness of most State seat 
belt laws is reduced by secondary enforcement provisions that preclude 
law enforcement from stopping an unbelted motorist unless another 
traffic law violation is also observed.
  Primary enforcement seat belt laws are significantly correlated with 
higher seat belt usage levels. States with primary enforcement laws 
have an average of 80 percent belt usage, compared to just 69 percent 
in States having secondary enforcement laws. Currently, only 19 
jurisdictions have primary seat belt laws. Nearly 4000 lives would be 
saved each year if seat belt use were to increase from the national 
average of 75 percent to 90 percent.
  The SEAT BELT Act creates two grant programs to encourage seat belt 
use. The first grant program rewards States that have or will have 
primary seat belt enforcement. Forty percent of the available funds for 
this program will be applied to the first grant category.
  Every State that enacts a primary seat belt law or currently has one 
will receive two times their Section 402 allotment. Those States that 
enact a primary seat belt law sooner will receive their incentive grant 
sooner. Any funds not obligated by the end of FY 2008 will be made 
available to States qualified to receive funds under the second grant 
category.
  The second grant program would reward States that increase their seat 
belt usage. Sixty percent of the available funds for this program will 
be applied to the second grant category. The Secretary of 
Transportation shall carry out this program which is designed to 
maximize the effectiveness of the awarded funds and the fairness of the 
distribution of such funds; increase the national seat belt usage rate 
as expeditiously as possible; reward States that maintain a seat belt 
usage rate above 85 percent, as determined by NHTSA; and reward States 
that demonstrate an increase in their seat belt usage rates.
  The SEAT BELT Act will ensure that funds are distributed fairly by 
rewarding the 19 jurisdictions, including my home state of Oregon, 
which took an early lead to enact a primary seat belt law. The Act also 
provides sufficient financial incentives to persuade the States that 
have not enacted a primary seat belt law to do so. And lastly, the Act 
provides continuing incentives to States to encourage them to have high 
seat belt usage rates and rewards them for their persistence in 
striving towards higher usage rates.
  I urge my colleagues to cosponsor this important legislation and ask 
unanimous consent that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1337

       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 ``Safe, Efficient Automobile 
     Travel to Better Ensure Lives in Transit (SEATBELT) Act of 
     2003''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) According to the National Highway Traffic Safety 
     Administration (NHTSA), motor vehicle crashes are responsible 
     for 95 percent of all transportation-related deaths and 99 
     percent of all transportation-related injuries.
       (2) Motor vehicle crashes are the leading cause of death 
     for Americans between the ages of 1 and 34.
       (3) It is estimated that, in 2002, 42,850 people were 
     killed and approximately 3,000,000 people were injured in 
     vehicle crashes.
       (4) NHTSA estimates that if safety belt use were to 
     increase from 75 percent to 90 percent, nearly 4,000 lives 
     would be saved each year.

     SEC. 3. SAFETY BELT INCENTIVE GRANTS.

       (a) Requirements for Grant Programs.--
       (1) In general.--Chapter 4 of title 23, United States Code, 
     is amended by adding at the end the following new section:

     ``Sec. 412. Safety belt incentive grants

       ``(a) Primary Enforcement Safety Belt Use Law Incentive 
     Grants.--
       ``(1) Eligibility.--The Secretary shall make a grant to 
     each State that, as determined by the Secretary, has in 
     effect a primary enforcement safety belt use law.
       ``(2) Amount of grant.--The amount of a grant for which a 
     State qualifies under this subsection shall equal the amount 
     of funds allocated to the State under section 402 of this 
     title for fiscal year 2003 multiplied by 2.
       ``(3) Distribution of funds.--Funds awarded to a State 
     under this subsection shall be distributed over a 2-year 
     period.
       ``(4) Funds available for grant program.--Forty percent of 
     the funds made available to carry out the occupant protection 
     programs under section 405 of this title in a fiscal year 
     shall be available for grants under this subsection during 
     such fiscal year.
       ``(5) Disposition of unused funds.--Any funds available for 
     grants under this subsection that have not been awarded by 
     the end of fiscal year 2008 shall be made available for the 
     safety belt usage grant program under subsection (b).
       ``(b) Safety Belt Usage Award Grants.--
       ``(1) In general.--The Secretary shall carry out a program 
     for making safety belt usage award grants to eligible States. 
     The program shall be designed to--
       ``(A) maximize the effectiveness of the awarded funds and 
     the fairness of the distribution of such funds;
       ``(B) increase the national seat belt usage rate as 
     expeditiously as possible;
       ``(C) reward States that maintain a seat belt usage rate 
     above 85 percent (as determined by the National Highway 
     Traffic Safety Administration); and
       ``(D) reward States that demonstrate an increase in their 
     seat belt usage rates.
       ``(2) Funds available for grant program.--Sixty percent of 
     the funds made available to carry out the occupant protection 
     programs under section 405 of this title in a fiscal year 
     shall be available for grants under this subsection during 
     such fiscal year.
       ``(c) Use of Funds.--Grants awarded under this section may 
     be used to carry out activities under this title.
       ``(d) Definitions.--In this section:
       ``(1) Passenger motor vehicle.--The term `passenger motor 
     vehicle' has the meaning

[[Page 16104]]

     given the term in section 405(f)(5) of this title.
       ``(2) Primary Enforcement Safety Belt Use Law.--The term 
     `primary enforcement safety belt use law' means a law that 
     meets the criteria for such laws published by the Secretary 
     in a rule relating to the grant program under this section.
       ``(3) Safety belt.--The term `safety belt' has the meaning 
     given the term in section 405(f)(6) of this title.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of that chapter is amended by inserting after the 
     item relating to section 411 the following new item:

``412. Safety belt incentive grants.''.

       (b) Interim Final Rule.--Not later than 90 days after the 
     date of the enactment of this Act, the Secretary of 
     Transportation shall publish an interim final rule listing 
     the criteria for awarding grants pursuant to section 412 of 
     title 23, United States Code, as added by subsection (a), 
     including the criteria to be used by the Secretary in 
     determining whether a law is a primary enforcement safety 
     belt use law for purposes of such section.

                          ____________________