[Congressional Record (Bound Edition), Volume 150 (2004), Part 12]
[Senate]
[Pages 16241-16249]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mrs. LINCOLN:
  S. 2689. A bill to amend the Internal Revenue Code of 1986 to replace 
the recapture bond provisions of the low income housing tax credit 
program; to the Committee on Finance.
  Mrs. LINCOLN. Mr. President, I am introducing legislation today to 
correct a problem that is impairing the efficiency of the Low-Income 
Housing Tax Credit program. As my colleagues know, the low-income 
housing credit has been a remarkably successful incentive for 
encouraging investment in residential rental housing for low-income 
families. Under Section 42 of the Internal Revenue Code, a tax credit 
is available for investment in affordable housing. The credit is 
claimed annually over a period of ten years. Qualified residential 
rental projects must be rented to lower-income households at controlled 
rents and satisfy a number of other requirements throughout a 
prescribed compliance period which is generally 15 years from the first 
taxable year the credit is claimed.
  Today, virtually all of the equity for housing credit investments 
comes from publicly-traded corporations investing through housing 
credit funds. An investor wishing to dispose of an interest in housing 
credit property during its 15-year compliance period is subject to a 
recapture of housing credits previously claimed unless a bond or U.S. 
Treasury securities are posted to the Internal Revenue Service. The 
amount of the bond to be posted is based on the amount of housing 
credits claimed and the duration remaining in the compliance period. 
The purpose of the bond is to guarantee to the IRS that it can collect 
the appropriate recapture tax amount in the event that the property is 
no longer in compliance with the requirements of the housing credit 
program.
  At the time the housing credit program was enacted in 1986, the 
drafters of the statute were concerned that owners would claim the 
benefits of the tax credits and then avoid the continuing compliance 
requirements by transferring the credits to a straw party with minimal 
assets that the IRS could go after to collect recapture tax liability. 
This was a potential concern because housing credits are provided on an 
accelerated basis in the sense that they are claimed over a ten-year 
period, while the property must remain in compliance with the targeting 
rules over a minimum 15-year period.
  However, the experience with the housing credit over the past 15 
years demonstrates that this concern no longer has any validity. When 
the housing credit program was enacted, policymakers were thinking in 
terms of previous affordable housing tax incentives that supported an 
aggressive tax shelter market dominated by individual investors. As it 
turns out, over 99 percent of the investment capital in the housing 
credit program comes from publicly-traded corporations that pose none 
of the risks of noncompliance that motivated enactment of the recapture 
bond rules in the first place. Ironically, sales of individual 
partnership interests in low-income housing fund public partnerships 
with more than 35 investors are exempt from the recapture bond rules.
  There are also a number of other provisions in Code section 42 that 
adequately address potential noncompliance. In 1989, Congress added the 
requirement that all state allocating agencies adopt ``extended use 
agreements'' to be recorded as restrictive covenants on housing credit 
properties, which require the property to remain in compliance. In 
addition, the State allocating agencies were given oversight 
responsibilities to ensure continued compliance through site 
inspections and property audits.
  The requirement to purchase recapture bonds forces investors to incur 
unnecessary costs and has produced a complex administrative burden on 
the IRS. Because bond filings are done building-by-building, and single 
sales transactions frequently involve hundreds of properties, each with 
dozens of buildings, bond filings may involve thousands of separate 
filings. Worse yet, the few remaining surety companies writing this 
type of business operate in a very inefficient market. Recapture surety 
bonds are priced in a fashion that does not measure the true risk of 
non-compliance, but rather relies solely on the credit rating of the 
company requesting the bond. This is a function of the fact that surety 
underwriters do not understand the housing credit program in general or 
the risk of non-compliance in particular. At the same time, the 
incidence of non-compliance with housing credit program rules is 
exceedingly rare.
  Meanwhile in the aftermath of the September 11th terrorist acts and 
the spate of corporate accounting scandals that occurred in 2002, the 
surety market has been in turmoil. Recapture bond premiums, even for 
highly rated public companies, have more than tripled over the past two 
years. This has imposed dead weight costs on the housing credit 
program. By making it more difficult to transfer credit investments, 
the recapture bond rule impairs the liquidity of housing credit 
investments, reducing credit prices generally, and undermining the 
overall efficiency of the program. In the absence of the recapture bond 
requirement, more dollars would flow into affordable housing itself and 
less into the higher rate of return that must be paid to investors to 
compensate for the dead weight costs that the bonds impose on the 
program.
  The IRS recently responded to a series of questions posed about the 
recapture bond requirement. According to the IRS, between 1997 and 
2003, recapture bonds covering approximately $1.8 billion of tax 
credits have been posted with the Treasury but in the 17 years since 
the requirement was enacted, the Service has never made a single claim 
on a recapture bond. That works out to bond premium payments in excess 
of $150 million to ensure against an event that has never occurred. 
These costs are unnecessary and are imposing a real drag on the market 
for investments in housing credit properties.
  My bill will solve this problem by repealing the recapture bond 
requirement effective for disposition of interests in LIHTC properties 
after the date of enactment. An owner of a building, or interest 
therein, that has been the subject of a disposition and is still within 
the remaining 15-year compliance period with respect to such building 
would be required to submit a report to its former investors when a 
recapture event with respect to such building occurs. A copy of 
recapture event forms sent to investors would be required to be filed 
with the IRS in order to provide the Service with the information 
necessary to ensure that all recapture liabilities are timely paid.
  The general statute of limitations applicable to taxpayers would also 
be modified so that investors who dispose of a building after the 
effective date of the legislation would remain liable for any potential 
recapture liability for a period extending through the compliance 
period for such building to provide the IRS with additional time to 
audit the partnership's return to ensure the building's continuing 
compliance with the credit's requirements. Taxpayers who disposed of a 
building (or interest therein) prior to the date of enactment would not 
be required to maintain existing recapture bonds (or other alternative 
security), but cancellation of existing bonds would trigger an 
extension of the statute of limitations provided for in the 
legislation.
  These changes will improve the overall efficiency of the housing 
program and ensure that more dollars actually flow into affordable 
housing. This is a

[[Page 16242]]

very important improvement in an otherwise excellent program, and I 
encourage my colleagues to join with me in cosponsoring this 
legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record. The legislation is identical to a bill that Congressmen 
Houghton, Johnson, Neal, and Rangel have introduced in the House. I 
also ask unanimous consent to include a copy of a letter from 12 
national housing organizations to Chairman Bill Thomas endorsing the 
House bill, H.R. 3610.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2689

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

     SECTION 1. REPEAL OF RECAPTURE BOND RULE.

       (a) In General.--Paragraph (6) of section 42(j) of the 
     Internal Revenue Code of 1986 (relating to recapture of 
     credit) is amended to read as follows:
       ``(6) No recapture on disposition of building (or interest 
     therein) reasonably expected to continue as a qualified low-
     income building.--
       ``(A) In general.--In the case of a disposition of a 
     building or an interest therein, the taxpayer shall be 
     discharged from liability for any additional tax under this 
     subsection by reason of such disposition if it is reasonably 
     expected that such building will continue to be operated as a 
     qualified low-income building for the remaining compliance 
     period with respect to such building.
       ``(B) Statute of limitations.--
       ``(i) Extension of period.--The period for assessing a 
     deficiency attributable to the application of subparagraph 
     (A) with respect to a building (or interest therein) during 
     the compliance period with respect to such building shall not 
     expire before the expiration of 3 years after the end of such 
     compliance period.
       ``(ii) Assessment.--Such deficiency may be assessed before 
     the expiration of the 3-year period referred to in clause (i) 
     notwithstanding the provisions of any other law or rule of 
     law which would otherwise prevent such assessment.''.
       (b) Information Reporting.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 of such Code (relating to information concerning 
     transactions with other persons) is amended by inserting 
     after section 6050T the following new section:

     ``SEC. 6050U. RETURNS RELATING TO PAYMENT OF LOW-INCOME 
                   HOUSING CREDIT REPAYMENT AMOUNT.

       ``(a) Requirement of Reporting.--Every person who, at any 
     time during the taxable year, is an owner of a building (or 
     an interest therein)--
       ``(1) which is in the compliance period at any time during 
     such year, and
       ``(2) with respect to which recapture is required by 
     section 42(j)

     ,shall, at such time as the Secretary may prescribe, make the 
     return described in subsection (b).
       ``(b) Form and Manner of Returns.--A return is described in 
     this subsection if such return--
       ``(1) is in such form as the Secretary may prescribe, and
       ``(2) contains--
       ``(A) the name, address, and TIN of each person who, with 
     respect to such building or interest, was formerly an 
     investor in such owner at any time during the compliance 
     period,
       ``(B) the amount (if any) of any credit recapture amount 
     required under section 42(j), and
       ``(C) such other information as the Secretary may 
     prescribe.
       ``(c) Statements to Be Furnished to Persons With Respect to 
     Whom Information Is Required.--Every person required to make 
     a return under subsection (a) shall furnish to each person 
     whose name is required to be set forth in such return a 
     written statement showing--
       ``(1) the name and address of the person required to make 
     such return and the phone number of the information contact 
     for such person, and
       ``(2) the information required to be shown on the return 
     with respect to such person.

     The written statement required under the preceding sentence 
     shall be furnished on or before March 31 of the year 
     following the calendar year for which the return under 
     subsection (a) is required to be made.
       ``(d) Compliance Period.--For purposes of this section, the 
     term `compliance period' has the meaning given such term by 
     section 42(i).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1) of such Code 
     (relating to definitions) is amended by redesignating clauses 
     (xii) through (xviii) as clauses (xiii) through (xix), 
     respectively, and by inserting after clause (xi) the 
     following new clause:
       ``(xii) section 6050U (relating to returns relating to 
     payment of low-income housing credit repayment amount),''.
       (B) Paragraph (2) of section 6724(d) of such Code is 
     amended by striking ``or'' at the end of subparagraph (AA), 
     by striking the period at the end of subparagraph (BB) and 
     inserting ``, or'', and by adding after subparagraph (BB) the 
     following new subparagraph:
       ``(CC) section 6050U (relating to returns relating to 
     payment of low-income housing credit repayment amount).''.
       (C) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 of such Code is 
     amended by inserting after the item relating to section 6050S 
     the following new item:

``Sec. 6050U. Returns relating to payment of low-income housing credit 
              repayment amount.''.

       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to any liability for the credit recapture 
     amount under section 42(j) of the Internal Revenue Code of 
     1986 that arises after the date of the enactment of this Act.
       (2) Special rule for low-income housing buildings sold 
     before date of enactment of this act.--In the case of a 
     building disposed of before the date of the enactment of this 
     Act with respect to which the taxpayer posted a bond (or 
     alternative form of security) under section 42(j) of the 
     Internal Revenue Code of 1986 (as in effect before the 
     enactment of this Act), the taxpayer may elect (by notifying 
     the Secretary of the Treasury in writing)--
       (A) to cease to be subject to the bond requirements under 
     section 42(j)(6) of such Code (as in effect before the 
     enactment of this Act), and
       (B) to be subject to the requirements of section 42(j) of 
     such Code (as amended by this Act).
                                  ____

                                                February 17, 2004.
     Hon. William M. Thomas,
      Chairman, House Committee on Ways and Means, Washington, DC.
       Dear Chairman Thomas: We are writing in support of H.R. 
     3610, legislation introduced by Representatives Amo Houghton, 
     Nancy Johnson, Charles Rangel, and Richard Neal, to repeal 
     the recapture bond rules under section 42(j) of the Low-
     Income Housing Tax Credit program. We believe that repeal of 
     the recapture bond rules will remove an unnecessary 
     impediment to the transferability of housing credit 
     investments, thereby increasing the overall efficiency of the 
     LIHTC program and ensuring that more private resources wind 
     up in the production of affordable housing in return for 
     federal housing credits.
       Our organizations play an active role in support of 
     affordable housing policies. We represent builders, owners, 
     investors, credit agencies, nonprofit housing groups, and 
     capital aggregators, all with extensive experience with the 
     housing credit program. The housing credit program has been a 
     remarkably successful federal initiative that has delivered 
     affordable housing to over a million low and moderate-income 
     households. The program has operated very successfully and 
     has been an efficient means of delivering federal support. 
     But one notable exception that has been of concern to the 
     industry for many years has been the requirement that when an 
     investor disposes of an interest in housing credit property, 
     a recapture bond must be purchased to guarantee payment to 
     the Treasury of any potential recapture tax liability.
       We believe this requirement impedes the transferability of 
     credits, reduces investor demand for housing credits, and 
     causes yields to be higher than necessary, which means that 
     fewer federal resources wind up in housing credit properties. 
     More importantly, this requirement imposes a significant and 
     unnecessary cost on the program. While tens of millions of 
     dollars have been expended on recapture bond premiums, the 
     IRS has never collected on a recapture bond in the 17-year 
     history of the LIHTC. Furthermore, we believe there is no 
     public policy rationale for such bonds. The housing credit 
     market is made up almost exclusively of large corporate 
     investors who pose no risk to the Treasury that they will 
     ignore their responsibility to pay a potential recapture tax 
     liability. Indeed, there is no other provision in the 
     Internal Revenue Code that requires taxpayers to post a bond 
     to ensure payment of a potential tax liability. Moreover, 
     noncompliance in the housing credit program is very small. In 
     a recent letter to Reps. Houghton and Johnson, the Internal 
     Revenue Service points out that the typical means of 
     ownership through investment partnerships ``minimizes the 
     risk of recapture from any one project.'' In that letter, the 
     Service goes on to say that ``supporting the bond/security 
     process is administratively difficult.''
       H.R. 3610 will correct this situation by removing the 
     requirement that a recapture bond be purchased when there is 
     a disposition of interests in LIHTC properties. The 
     legislation replaces this unnecessary and expensive 
     requirement with two new provisions that will improve the 
     ability of the Treasury to collect potential recapture tax 
     liability. First, investors who dispose of an interest in 
     housing credit property would automatically be subject to a 
     longer statute of limitations for any potential recapture tax 
     liability that is identified in the future in connection with 
     their ownership of housing credits. Second,

[[Page 16243]]

     improved information reporting would be required whereby the 
     owner of housing credit property would be required to notify 
     former investors and the IRS of any recapture liability that 
     arises in connection with the period that the former investor 
     owned an interest in the property.
       We believe these changes will improve the administration of 
     the housing credit program, better protect the interests of 
     the Treasury, and result in more private dollars going into 
     the development of affordable housing.
       National Housing Conference; National Association of Home 
     Builders; Affordable Housing Investors Council; National 
     Multi Housing Council; National Leased Housing Association; 
     National Association of Affordable Housing Lenders; National 
     Association of State and Local Equity Funds; Affordable 
     Housing Tax Credit Coalition; Local Initiatives Support 
     Corporation/National Equity Fund; The Enterprise Foundation/ 
     Enterprise Social Investment Corporation; Council for 
     Affordable and Rural Housing; National Association of Local 
     Housing Finance Agencies.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Sarbanes, and Mrs. Feinstein):
  S. 2692. A bill to authorize the Secretary of the Department of 
Housing and Urban Development to make grants to States for affordable 
housing for low-income persons, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. JEFFORDS. Mr. President, I am pleased today to introduce the 
Affordable Housing Preservation Act of 2004, along with my colleagues, 
Senators Sarbanes and Feinstein. This bill provides matching Federal 
funds to States and localities seeking help to acquire and rehabilitate 
affordable housing that would otherwise be lost from the affordable 
housing inventory.
  Affordable housing is facing a funding crisis. Across the country, 
the administration's proposed $1.6 billion budget cuts for Section 8, 
which serves nearly 3.5 million low-income households nationwide, would 
seriously undermine the availability of quality affordable housing. In 
Vermont, there are 6,080 authorized vouchers available this year. But 
with the proposed budget cut, Vermont could lose more than 700 vouchers 
next year alone. That's a loss of $4 million for housing assistance 
just in my small State. Over the next five years, it is estimated that 
Vermont could lose as many as 1,770 housing vouchers.
  Affordable housing is a basic and critical need in every town and 
city, and these cuts are as indefensible as they are damaging. Cutting 
affordable housing is not about apartments and houses. It is about 
individuals and families, including our seniors, not having a safe and 
affordable place to call home. I have joined with many of my colleagues 
to protest these cuts.
  The bill I am introducing today, the Affordable Housing Preservation 
Act of 2004, represents an effort to complement the good work being 
done throughout the country on Section 8 initiatives, and it strives to 
preserve existing affordable housing. Specifically, this bill would 
conserve federally subsidized housing units by providing matching 
grants to States and localities, seeking to preserve privately owned, 
affordable housing.
  The Secretary of Housing and Urban Development (HUD) would make 
determinations for the grants based on a number of factors, including 
the number of affordable housing units at risk at being lost and the 
local market conditions in which displaced residents would have to find 
comparable new housing options. These funds would make a great deal of 
difference in keeping affordable housing affordable. States and 
localities could use the funds to acquire or rehabilitate affordable 
housing. They could use the funds, in part, for administrative and 
operating expenses. Properties with mortgages insured by HUD, Section 8 
project-based assisted housing, and properties that are being purchased 
by residents would all be eligible for the matching grant funds. I 
believe that flexibility with the funding would make this program more 
efficient and cost effective, and, most importantly, more helpful to 
the recipients themselves.
  Over the past several months, I have heard from many of my 
constituents who are genuinely concerned about Vermonters who are 
threatened with the loss of housing. This bill would give State and 
local housing authorities another tool to keep people in their homes. I 
believe we must act now to preserve our existing stock of affordable 
housing.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2692

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       This Act may be cited as the ``Affordable Housing 
     Preservation Act of 2004''.

     SEC. 2. MATCHING GRANT PROGRAM FOR AFFORDABLE HOUSING 
                   PRESERVATION.

       (a) Findings and Purposes.--
       (1) Findings.--Congress finds that--
       (A) the availability of low-income housing rental units has 
     declined nationwide in the last several years;
       (B) as rents for low-income housing increase and the 
     development of new units of affordable housing decreases, 
     there are fewer privately owned, federally assisted 
     affordable housing units available to low-income individuals 
     in need;
       (C) the demand for affordable housing far exceeds the 
     supply of affordable housing, as evidenced by recent studies;
       (D) the efforts of nonprofit organizations have 
     significantly preserved and expanded access to low-income 
     housing;
       (E) a substantial number of existing federally assisted or 
     federally insured multifamily properties are at risk of being 
     lost from the affordable housing inventory of the Nation 
     through market rate conversion, deterioration, or demolition;
       (F) it is in the interest of the Nation to encourage 
     transfer of control of such properties to competent national, 
     regional, and local nonprofit entities and intermediaries, 
     the missions of which involve maintaining the affordability 
     of such properties;
       (G) such transfers may be inhibited by a shortage of such 
     entities that are appropriately capitalized; and
       (H) the Nation would be well served by providing assistance 
     to such entities to aid in accomplishing this purpose.
       (2) Purposes.--The purposes of this section are--
       (A) to continue the partnerships among the Federal 
     Government, State and local governments, nonprofit 
     organizations, and the private sector in operating and 
     assisting housing that is affordable to low-income persons 
     and families;
       (B) to promote the preservation of affordable housing units 
     by providing matching grants to States and localities that 
     have developed and funded programs for the preservation of 
     privately owned housing that is affordable to low-income 
     families and persons; and
       (C) to minimize the involuntary displacement of tenants who 
     are currently residing in such housing, many of whom are 
     elderly or disabled persons and families with children.
       (b) Definitions.--In this section:
       (1) Capital expenditures.--The term ``capital 
     expenditures'' includes expenditures for acquisition and 
     rehabilitation.
       (2) Consortium.--The term ``consortium'' means a group of 
     geographically contiguous localities that jointly submit an 
     application under subsection (d).
       (3) Eligible affordable housing.--The term ``eligible 
     affordable housing'' means housing that--
       (A) consists of more than 4 dwelling units;
       (B) is insured or assisted under a program of the 
     Department of Housing and Urban Development or the Department 
     of Agriculture under which the property is subject to 
     limitations on tenant rents, rent contributions, or incomes; 
     and
       (C) is at risk, as determined by the Secretary, of 
     termination of any of the limitations referred to in 
     subparagraph (B).
       (4) Eligible entities.--The term ``eligible entities'' 
     means any entity that meets the requirements of subsection 
     (e)(6) and the rules issued under that subsection.
       (5) Locality.--The term ``locality'' means a city, town, 
     township, county, parish, village, or other general purpose 
     political subdivision of a State, or a consortium thereof.
       (6) Low-income affordability restriction.--The term ``low-
     income affordability restriction'' means, with respect to a 
     housing project, any limitation imposed by law, regulation, 
     or regulatory agreement on rents for tenants of the project, 
     rent contributions for tenants of the project, or income-
     eligibility for occupancy in the project.
       (7) Low-income families; very low-income families.--The 
     terms ``low-income families'' and ``very low-income 
     families'' have the meanings given such terms in section 3(b) 
     of the United States Housing Act of 1937 (42 U.S.C. 
     1437a(b)).
       (8) Project-based assistance.--The term ``project-based 
     assistance'' has the same meaning as in section 16(c) of the 
     United

[[Page 16244]]

     States Housing Act of 1937 (42 U.S.C. 1437n(c)), except that 
     the term includes assistance under any successor programs to 
     the programs referred to in that section.
       (9) Qualified limited liability company.--The term 
     ``qualified limited liability company'' means a limited 
     liability company with respect to which a credit is allowed 
     under section 42 of the Internal Revenue Code of 1986 with 
     respect to the company's qualified basis (as defined in 
     section 42 (c)(1) of such Code), in a qualified low-income 
     building (as defined in section 42(c)(2) of such Code) for 
     which grant funds received under this section shall be used.
       (10) Qualified partnership.--The term ``qualified 
     partnership'' means a limited partnership with respect to 
     which a credit is allowed under section 42 of the Internal 
     Revenue Code of 1986 with respect to the partnership's 
     qualified basis (as defined in section 42(c)(1) of such Code) 
     in a qualified low-income building (as defined in section 
     42(c)(2) of such Code) for which grant funds received under 
     this section shall be used.
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of the Department of Housing and Urban Development.
       (12) State.--The term ``State'' means each of the several 
     States of the United States and the District of Columbia.
       (c) Authority To Make Grants.--The Secretary shall, to the 
     extent that amounts are made available in advance under 
     subsection (k), award grants under this section to States and 
     localities for low-income housing preservation and promotion.
       (d) Applications.--
       (1) In general.--Any State or locality that seeks a grant 
     under this section shall submit an application (through 
     appropriate State and local agencies) to the Secretary.
       (2) Contents.--Each application submitted pursuant to 
     paragraph (1) shall contain any information and 
     certifications necessary for the Secretary to determine who 
     is eligible to receive a grant under this section.
       (e) Use of Grants.--
       (1) Eligible uses.--
       (A) In general.--Grants awarded under this section may be 
     used by States and localities only for the purposes of 
     providing assistance--
       (i) for acquisition, rehabilitation, capital expenditures, 
     and related development costs for a housing project that 
     meets the requirements of paragraph (2), (3), (4), or (5); or
       (ii) to eligible entities under paragraph (6) for--

       (I) operational, working capital, and organizational 
     expenses; and
       (II) predevelopment activities to acquire eligible 
     affordable housing for the purpose of ensuring that the 
     housing will remain affordable, as the Secretary considers 
     appropriate, for low-income or very low-income families.

       (B) Use agreement.--A project receiving assistance under 
     this paragraph shall be subject to an agreement (binding on 
     any subsequent owner of such project) that ensures that the 
     project will continue to operate, for a period of not less 
     than 50 years after the date on which any assistance is made 
     available under this paragraph, in a manner that will provide 
     rental housing on terms at least as advantageous to existing 
     and future tenants as the terms required by any program under 
     which the project, if offered, was eligible for assistance, 
     subject to available appropriations.
       (C) Service of under-served and rural areas.--States 
     receiving funds under this section shall ensure that, to the 
     maximum extent practicable, that projects in under-served and 
     rural areas in that State receive assistance.
       (2) Projects with hud-insured mortgages.--A project meets 
     the requirements of this paragraph if the project is financed 
     by a loan or mortgage that is--
       (A) insured or held by the Secretary under section 
     221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3)) 
     and receiving loan management assistance under section 8 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437f) due 
     to a conversion from section 101 of the Housing and Urban 
     Development Act of 1965 (12 U.S.C. 1701s);
       (B) insured or held by the Secretary and bears interest at 
     a rate determined under the proviso of section 221(d)(5) of 
     the National Housing Act (12 U.S.C. 1715l(d)(5)); or
       (C) insured, assisted, or held by the Secretary or a State 
     or State agency under section 236 of the National Housing Act 
     (12 U.S.C. 1715z-1).
       (3) Projects with section 8 project-based assistance.--A 
     project meets the requirements of this paragraph if the 
     project is subject to a contract for project-based 
     assistance.
       (4) Projects purchased by residents.--A project meets the 
     requirements of this paragraph if--
       (A) the project is or was eligible low-income housing (as 
     defined in section 229 of the Low-Income Housing Preservation 
     and Resident Homeownership Act of 1990 (12 U.S.C. 4119)) or 
     is or was a project assisted under section 613(b) of the 
     Cranston-Gonzalez National Affordable Housing Act (12 U.S.C. 
     4125);
       (B) the project has been purchased by a resident council or 
     resident-approved nonprofit organization for the housing, or 
     is approved by the Secretary for such purchase, for 
     conversion to homeownership housing under a resident 
     homeownership program meeting the requirements of section 226 
     of the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990 (12 U.S.C. 4116); and
       (C) the owner of the project has entered into binding 
     commitments (applicable to any subsequent owner) to extend--
       (i) project-based assistance for not less than 15 years 
     (beginning on the date on which assistance is made available 
     for the project by the State or locality under this section); 
     and
       (ii) any low-income affordability restrictions applicable 
     to the project in connection with that assistance.
       (5) Rural rental assistance projects.--A project meets the 
     requirements of this paragraph if--
       (A) the project is a rural rental housing project financed 
     under section 515 of the Housing Act of 1949 (42 U.S.C. 
     1485), or a farm labor housing development financed under 
     section 514 of the United States Housing Act of 1949 (42 
     U.S.C. 1484); and
       (B) the restriction on the use of the project (as required 
     under section 502 of the Housing Act of 1949 (42 U.S.C. 
     1472)) will expire not later than 12 months after the date on 
     which assistance is made available for the project by the 
     State or locality under this subsection.
       (6) Eligible Entities.--
       (A) In general.--The Secretary shall establish, by 
     regulation, standards for eligible entities under this 
     subsection.
       (B) Requirements.--An eligible entity shall--
       (i) be a nonprofit organization (as defined in section 104 
     of the Cranston-Gonzalez National Affordable Housing Act (42 
     U.S.C. 12704)), or a qualified limited liability company or a 
     qualified partnership whose managing member or general 
     partner, respectively, is--

       (I) a nonprofit organization; or
       (II) a for-profit entity that is wholly owned by an 
     eligible non-profit organization;

       (ii) have among its purposes, maintaining the affordability 
     to low-income or very low-income families of multifamily 
     properties that are at risk of loss from the inventory of 
     housing that is affordable to low-income or very low-income 
     families; and
       (iii) demonstrate to the Secretary--

       (I) the need for the types of assistance described under 
     paragraph (1)(A)(ii);
       (II) experience in providing assistance described under 
     that paragraph; and
       (III) its ability to provide the assistance described under 
     that paragraph.

       (7) Funding requirements.--
       (A) Operating support.--Each State and locality awarded a 
     grant under this section shall transfer at least 5 percent, 
     but no more than 10 percent, of such grant to eligible 
     entities for the purposes described under paragraph 
     (1)(A)(ii)(I).
       (B) Nonprofit purchases.--Each State and locality awarded a 
     grant under this section shall transfer at least 15 percent 
     of such grant to eligible entities for the purposes described 
     under paragraph (1)(A)(ii)(II).
       (8) Return of unused funds.--If any amount of a grant 
     awarded to a State or locality under this section has not 
     been obligated 3 years after the grant is awarded, such 
     amount shall be returned to the Secretary to be redistributed 
     in accordance with this section the following fiscal year.
       (9) Administrative costs.--A State or locality that is 
     awarded a grant under this section may use no more than 10 
     percent of such grant for costs associated with the 
     administration of the grant.
       (f) Amount of State and Local Grants.--
       (1) In general.--Subject to paragraph (3) and subsection 
     (g), in each fiscal year, the Secretary shall award to each 
     State and locality approved for a grant under this section a 
     grant in an amount based upon the proportion of the need for 
     assistance of that State or locality under this section (as 
     determined by the Secretary in accordance with paragraph (2)) 
     to the aggregate need among all States and localities 
     approved for assistance under this section for that fiscal 
     year.
       (2) Determination of need.--In determining the proportion 
     of the need of a State or locality under paragraph (1), the 
     Secretary shall consider--
       (A) the number of units in projects in the State or 
     locality that are eligible for assistance under subsection 
     (e)(1)(A)(i) that are, due to market conditions or other 
     factors, at risk for prepayment, opt-out, or otherwise at 
     risk of being lost to the inventory of affordable housing; 
     and
       (B) the difficulty that residents of projects in the State 
     or locality that are eligible for assistance under subsection 
     (e)(1)(A)(i) would face in finding adequate, available, 
     decent, comparable, and affordable housing in neighborhoods 
     of comparable quality in the local market, if those projects 
     were not assisted by the State or locality under subsection 
     (e)(1)(A)(i).
       (3) Limitations.--
       (A) Mandatory allocation.--In any fiscal year, of the total 
     amount appropriated under subsection (k)--
       (i) 40 percent shall be allocated for grants to States; and
       (ii) 60 percent shall be allocated for grants to 
     localities.

[[Page 16245]]

       (B) Minimum grant amount.--Notwithstanding subsection (g), 
     a State receiving a grant under this section shall receive no 
     less than .4 percent of the total amount appropriated under 
     subsection (k) in any fiscal year.
       (g) Matching Requirement.--
       (1) In general.--Except as provided under paragraph (2), a 
     grant under this section to a State or locality for any 
     fiscal year may not exceed an amount that is twice the amount 
     that the State or locality certifies, as the Secretary shall 
     require, that the State or locality will contribute for such 
     fiscal year, or has contributed since January 1, 2003, from 
     non-Federal sources for the purposes described in subsection 
     (e)(1).
       (2) Limitations.--Paragraph (1) shall not apply to any 
     amounts to be used by a State or locality for--
       (A) administrative costs under subsection (e)(9); and
       (B) operating support and working capital of nonprofit 
     organizations under subsection (e)(7)(A).
       (3) Treatment of previous contributions.--Any portion of 
     amounts contributed after January 1, 2003, that are counted 
     for the purpose of meeting the requirement under paragraph 
     (1) for a fiscal year may not be counted for that purpose for 
     any subsequent fiscal year.
       (4) Tax credits and private activity bonds.--Fifty percent 
     of the annual amount of tax credits allocated to the project 
     under section 42 of the Internal Revenue Code of 1986, or 
     proceeds from private activity bonds issued for qualified 
     residential rental projects under section 142 of that Code, 
     shall be considered funds from non-Federal sources for 
     purposes of paragraph (1).
       (h) Treatment of Subsidy Layering Requirements.--Neither 
     subsection (g) nor any other provision of this section may be 
     construed to prevent the use of tax credits allocated under 
     section 42 of the Internal Revenue Code of 1986, in 
     connection with housing assisted with amounts from a grant 
     awarded under this section, to the extent that such use is in 
     accordance with section 102(d) of the Department of Housing 
     and Urban Development Reform Act of 1989 (42 U.S.C. 3545(d)) 
     and section 911 of the Housing and Community Development Act 
     of 1992 (42 U.S.C. 3545 note).
       (i) Reports.--
       (1) Reports to secretary.--Not later than 90 days after the 
     last day of each fiscal year, each State and locality that 
     receives a grant under this section during that fiscal year 
     shall submit to the Secretary a report on the housing 
     projects and eligible entities assisted with amounts made 
     available under the grant.
       (2) Reports to congress.--Based on the reports submitted 
     under paragraph (1), the Secretary shall annually submit to 
     Congress a report on the grants awarded under this section 
     during the preceding fiscal year and the housing projects 
     assisted and eligible entities with amounts made available 
     under those grants.
       (j) Regulations.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary shall issue regulations 
     to carry out this section.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated for grants under this section such sums as 
     may be necessary for each of fiscal years 2005, 2006, 2007, 
     2008, and 2009.

     SEC. 3. PRESERVATION PROJECTS.

       Section 524(e)(1) of the Multifamily Assisted Housing 
     Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) 
     is amended by striking ``amounts are specifically'' and 
     inserting ``sufficient amounts are''.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 2694. A bill to amend title XVIII of the Social Security Act to 
provide for the automatic enrollment of medicaid beneficiaries for 
prescription drug benefits under part D of such title, and for other 
purposes; read the fist time.
  Mr. BINGAMAN. Mr. President, today I am reintroducing the Medicare 
Assurance of Prescription Transition Assistance Act of 2004. It is my 
hope that this will be put on the Senate Calendar so it can be 
considered under rule XIV.
  Let me give a little background about what this legislation is 
intended to correct.
  As all of us know, this last year we passed a major revision, a major 
amendment to the Medicare Act. The Medicare Act was passed in 1965. In 
this last year, the prescription drug bill has been added to it. That 
was a controversial piece of legislation which I wound up opposing in 
its final form. I supported the version we passed through the Senate 
initially. I opposed the version that finally came from the conference 
and was sent to the President for signature.
  But there was one part of that prescription drug legislation that 
contained a very real benefit for a lot of low-income Americans. That 
is the $600 subsidy that was made available this year and again next 
year for Medicare recipients with incomes in this category that allowed 
them to take advantage of the benefit.
  The legislation I am introducing today will provide simply that CMS 
automatically enroll many of these low-income Medicare seniors and 
people with disabilities into this prescription drug card in order that 
they get the benefit of the discount card. Of course, that benefit is 
hard to quantify. They would get that benefit, but more importantly, 
they would get access to this $600 subsidy this year and another $600 
subsidy next year, which would go against the cost of prescription 
drugs they incur during those 2 years.
  Underscoring the need for this legislation, yesterday Dr. Mark 
McClellan, the Administrator of the Centers for Medicare and Medicaid 
Services, or CMS, testified before the Senate Special Committee on 
Aging that only 1 million of the more than 7 million low-income 
Medicare beneficiaries who are eligible for the $600 subsidy under the 
Medicare prescription drug card are currently enrolled.
  This chart makes that point very clearly. The title of this chart is 
``Low Enrollment Plagues Prescription Drug Plan.'' This first bullet 
states that 7 million low-income Medicare beneficiaries are eligible 
for this $600 subsidy. The number of low-income beneficiaries that CMS 
projected would actually enroll would be 5 million. So 5 million of the 
7 million were supposed to enroll. In fact, the number of low-income 
beneficiaries who have enrolled turns out to be 1 million.
  So there are 6 million Americans eligible for the $600 transition 
assistance under the Medicare prescription drug bill who are not 
receiving any help. In other words, 14 percent of those who are 
eligible for this $600 subsidy are actually getting assistance at the 
present time. Unfortunately, many of those seniors who are eligible 
live in my home State of New Mexico, and I am very anxious that we 
provide this benefit to them since it is a part of the law.
  The President and the leadership in the Senate have vowed to bottle 
up any legislation that would reopen the Medicare prescription drug 
bill at this time, or before the end of this Congress. Unfortunately, 
that would include bills such as the one I am reintroducing today, 
which is really intended to ensure that the people who are eligible for 
the limited benefit provided under this bill actually receive that 
benefit.
  If we are serious about trying to provide assistance to our Nation's 
most vulnerable low-income seniors and people with disabilities, then 
we should undertake the rather straightforward but significant step 
that is called for in this legislation, and that is automatically 
enrolling those who are eligible for the $600 subsidy into the discount 
drug card program.
  Considering that it is unclear whether the savings offered by the 
drug discount card itself will amount to much, and that is just hard to 
quantify, frankly, the main benefit is not the discount card itself; it 
is the $600 credit which is available to low-income individuals.
  Specifically, the $600 is available to any individual whose income is 
less than $12,569 per year or any married couple whose income is less 
than $16,862 per year. For those Medicare savings program beneficiaries 
who get cost-sharing assistance through Medicaid because they have 
incomes below 135 percent of poverty but are not receiving prescription 
drug coverage, they clearly meet the income criteria under the act and 
their automatic enrollment is the only way to ensure they will receive 
the $600 subsidy that those of us in Congress intended they receive.
  In fact, when the prescription drug bill was passed, the 
administration claimed that 65 percent of those eligible for the $600 
transitional assistance would actually be enrolled.
  According to the Centers for Medicare and Medicaid Services, or CMS, 
the agency expected 5 million people of the 7 million--again, as is 
stated on this chart--including 29,000 of the estimated 45,000 in my 
home State of New Mexico, would actually enroll. Under

[[Page 16246]]

the CMS assumptions, those beneficiaries combined would save $5 billion 
nationally, or $35 million in my home State of New Mexico, over this 2-
year period.
  Much of that savings is not going to be realized by those seniors 
unless we pass the legislation I am introducing today.
  Part of the explanation for the low enrollment is the poor 
advertising campaign that the General Accounting Office has criticized 
and with which we are generally familiar. This poor advertising 
campaign included running ads in Capitol Hill newspapers such as Roll 
Call and the Hill. Unfortunately, most of the low-income seniors in my 
State do not subscribe to either Roll Call or the Hill. In fact, they 
do not know those publications exist.
  According to a national survey by the Kaiser Family Foundation, only 
18 percent of senior citizens are even aware that the low-income 
transitional assistance program was included in the prescription drug 
bill. So it is hard to believe that 65 percent of those who are 
eligible will enroll when less than one-fifth of them even know the 
program exists.
  Fortunately, CMS has already laid the groundwork for this automatic 
enrollment. Two months ago, the agency issued guidance for how State 
pharmacy assistance programs can automatically enroll their members who 
have incomes below 135 percent of poverty in the low-income assistance 
benefit. Those enrollees continue to represent the bulk of those who 
have enrolled and they remain the model for how to ensure that low-
income beneficiaries get the prescription drug assistance they need.
  CMS can take this additional step, which I am calling for in this 
legislation, to automatically enroll MSP members who do not have 
prescription drug coverage. I believe CMS has the authority to take the 
step on its own right now, but the legislation I have reintroduced 
today would clarify the law in this regard and would ensure that low-
income seniors and people with disabilities actually receive this 
transitional assistance as promised by the administration and the 
Congress.
  As the Medicare Rights Center has asked: Given their definite 
eligibility and clear need for help to pay for their prescription 
drugs, why not save these people and the Government the hassle of 
application and automatically enroll them?
  That is exactly the right question to be asked. There are a number of 
low-income seniors and people with disabilities who are very sick, who 
have cognitive and mental illnesses and do not have access to or feel 
comfortable with the use of the Internet. Many will wrongly slip 
through the cracks and fail to get the $600 subsidy that could benefit 
them substantially this year and next year. In such cases, if an 
individual has not enrolled for whatever reason, it begs the question 
as to what choice automatic enrollment would take away at that point.
  It is not enough to say, look, we believe these seniors have a choice 
of a great many discount cards and we do not want to prejudge that for 
them. The truth is, most of the people I am talking about are 
completely unaware that there is such a thing as a drug discount card 
or that there is such a thing as a $600 subsidy for which they could 
qualify. This lack of knowledge on their part is through no fault of 
their own and we should do all we can, and CMS should do all it can, to 
get them enrolled so they can benefit from this $600 subsidy. Either 
CMS or the States should take the affirmative step of automatically 
enrolling these individuals in the program. If we fail to assist them 
in this manner, what is really lost is not the choice that they might 
have between one card or another but the $1,200 in real prescription 
drug assistance that they do today qualify for and that they should be 
receiving.
  As a Kaiser Family Foundation study last year indicated, Medicare 
beneficiaries with no drug coverage were nearly three times more likely 
than people with drug coverage to forgo needed prescription drugs. 
While CMS has estimated that 65 percent of the low-income beneficiaries 
would sign up for the $600 subsidy, by any measure signing up just 14 
percent of these beneficiaries can only be viewed as a major failure. 
It has not been viewed as that so far either by the administration or 
by the Congress.
  Once again, I call on the administration to take this important step 
on its own and enroll these individuals for this benefit. In light of 
the fact they have failed to do so, despite several calls from me and 
other Members of Congress for them to do so, I am reintroducing this 
bill, and I hope the Senate leadership will bring it to the floor for 
immediate action.
  There is over $1 billion of prescription drug assistance for over 1 
million of our Nation's most vulnerable citizens at stake. It is time 
for the Senate to pass this bill.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2694

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

     SECTION 1. SHORT TITLE.

       This Act, may be cited as the ``Medicare Assurance of Rx 
     Transitional Assistance Act of 2004''.

     SEC. 2. AUTOMATIC ENROLLMENT OF MEDICAID BENEFICIARIES 
                   ELIGIBLE FOR MEDICARE PRESCRIPTION DRUG 
                   BENEFITS.

       (a) Automatic Enrollment of Beneficiaries Receiving Medical 
     Assistance for Medicare Cost-sharing Under Medicaid.--Section 
     1860D-14(a)(3)(B)(v) (42 U.S.C. 1395w-114(a)(3)(B)(v)) is 
     amended to read as follows:
       ``(v) Treatment of medicaid beneficiaries.--Subject to 
     subparagraph (F), the Secretary shall provide that part D 
     eligible individuals who are--
       ``(I) full-benefit dual eligible individuals (as defined in 
     section 1935(c)(6)) or who are recipients of supplemental 
     security income benefits under title XVI shall be treated as 
     subsidy eligible individuals described in paragraph (1); and
       ``(II) not described in subclause (I), but who are 
     determined for purposes of the State plan under title XIX to 
     be eligible for medical assistance under clause (i), (iii), 
     or (iv) of section 1902(a)(10)(E), shall be treated as being 
     determined to be subsidy eligible individuals described in 
     paragraph (1).''.
       (b) Assurance of Transitional Assistance Under Drug 
     Discount Card Program.--
       (1) In general.--Section 1860D-31(b)(2)(A) of the Social 
     Security Act (42 U.S.C. 1395w141(b)(2)(A)) is amended by 
     adding at the end the following new sentence: ``Subject to 
     subparagraph (B), each discount card eligible individual who 
     is described in section 1860D-14(a)(3)(P)(v) shall be 
     considered to be a transitional assistance eligible 
     individual.''.
       (2) Automatic enrollment of medicaid beneficiaries.--
     Section 1860D-31(c)(1) of the Social Security Act (42 U.S.C. 
     1395w-141(c)(1)) is amended by adding at the end the 
     following new subparagraph:
       ``(F) Automatic enrollment of certain beneficiaries.--
       ``(1) In general.--Subject to clause (ii), the Secretary 
     shall--
       ``(I) enroll each discount card eligible individual who is 
     described in section 1860D-14(a)(3)(13)(v), but who has not 
     enrolled in an endorsed discount card program as of August 
     15, 2004, in an endorsed discount, card program selected by 
     the Secretary that serves residents of the State in which the 
     individual resides; and
       ``(II) notwithstanding paragraphs (2) and (3) of subsection 
     (f), automatically determine that such individual is a 
     transitional assistance eligible individual (including 
     whether such individual is a special transitional assistance 
     eligible individual) without requiring any self-certification 
     or subjecting such individual to any verification under such 
     paragraphs.
       ``(ii) Opt-out.--The Secretary shall not enroll an 
     individual under clause (i) if the individual notifies the 
     Secretary that such individual does not wish to be enrolled 
     and be determined to be a transitional assistance eligible 
     individual under such clause before the individual is so 
     enrolled.''.
       (3) Notice of eligibility for transitional assistance.--
     Section 1860D-31(d) of the Social Security Act (42 U.S.C. 
     1395w-141(4)) is amended by adding at the end the following 
     new paragraph:
       ``(4) Notice of eligibility to medicaid beneficiaries.--Not 
     later than July 15, 2004, each State or the Secretary (at the 
     option of each State) shall mail to each discount card 
     eligible individual who is described in section 
     1860D14(a)(3)(B)(v), but who has not enrolled in an endorsed 
     discount card program as of July 1, 2004, a notice stating 
     that--
       ``(A) such individual is eligible to enroll in an endorsed 
     discount card program and to receive transitional assistance 
     under subsection (g);
       ``(B) if such individual does not enroll before August 15, 
     2004, such individual will be

[[Page 16247]]

     automatically enrolled in an endorsed discount card program 
     selected by the Secretary unless the individual notifies the 
     Secretary that such individual does not wish to be so 
     enrolled,
       ``(C) if the individual is enrolled in an endorsed discount 
     card program during 2004, the individual will be permitted to 
     change enrollment under subsection (c)(1)(C)(ii) for 2005; 
     and
       ``(D) there is no obligation to use the endorsed discount 
     card program or transitional assistance when purchasing 
     prescription drugs.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     101 of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).
                                 ______
                                 
      By Mr. SPECTER:
  S. 2695. A bill to amend the Omnibus Crime Control and Safe Streets 
Act of 1968 to expand the definition of firefighter to include 
apprentices and trainees, regardless of age or duty limitations; read 
the first time.
  Mr. SPECTER. Mr. President, I seek recognition today to introduce the 
Christopher Kangas Fallen Firefighter Apprentice Act, a bill designed 
to correct a flaw in the current definition of ``firefighter'' under 
the Public Safety Officer Benefits Act.
  On May 4, 2002, 14-year-old Christopher Kangas was struck by a car 
and killed while he was riding his bicycle in Brookhaven, PA. The local 
authorities later confirmed that Christopher was out on his bike that 
day for an important reason: Chris Kangas was a junior firefighter, and 
he was responding to a fire emergency.
  Under Pennsylvania law, 14- and 15-year-olds such as Christopher are 
permitted to serve as volunteer junior firefighters. While they are not 
allowed to operate heavy machinery or enter burning buildings, the law 
permits them to fill a number of important support roles, such as 
providing first aid. In addition, the junior firefighter program is an 
important recruitment tool for fire stations throughout the 
Commonwealth. In fact, prior to his death Christopher had received 58 
hours of training that would have served him well when he graduated 
from the junior program.
  It is clear to me that Christopher Kangas was a firefighter killed in 
the line of duty. Were it not for his status as a junior firefighter 
and his prompt response to a fire alarm, Christopher would still be 
alive today. Indeed, the Brookhaven Fire Department, Brook-
haven Borough, and the Commonwealth of Pennsylvania have all recognized 
Christopher as a fallen public safety officer and provided the 
appropriate death benefits to his family.
  Yet while those closest to the tragedy have recognized Christopher as 
a fallen firefighter, the Federal Government has not. The Department of 
Justice announced that Christopher Kangas was not a ``firefighter,'' 
and therefore not a ``public safety officer'' for purposes of the 
Public Safety Officer Benefits Act. The DOJ based its determination on 
an arbitrarily narrow definition of ``firefighter,'' deciding that the 
only people who qualify as firefighters are those who play the starring 
role of spraying water on a fire or entering a burning building. 
According to this definition, those who play the essential supporting 
roles of directing traffic, performing first aid, or dispatching fire 
vehicles apparently don't count.
  Any firefighter will tell you that there are many important roles to 
play in fighting a fire beyond operating the hoses and ladders. 
Firefighting is a team effort, and everyone in the Brookhaven Fire 
Department viewed young Christopher as a full member of their team.
  As a result of this DOJ determination, Christopher's family will not 
receive a $267,000 Federal line-of-duty benefit. In addition, 
Christopher will be barred from taking his rightful place on the 
National Fallen Firefighters Memorial in Emmitsburg, MD. For a young 
man who dreamed of being a firefighter and gave his life rushing to a 
fire, keeping him off of the memorial is a particularly cruel blow.
  The bill I introduce today will ensure that the Federal Government 
will recognize Christopher Kangas and others like him as firefighters. 
The bill clarifies that all firefighters will be recognized as such 
``regardless of age, status as an apprentice or trainee, or duty 
restrictions imposed because of age or status as an apprentice or 
trainee.'' The bill applies retroactively back to May 4, 2002 so that 
Christopher can benefit from it.
  My bill is a companion to H.R. 4472, introduced by Congressman Curt 
Weldon, Congressman Weldon, who is himself a former fireman and fire 
chief, is chairman of the Congressional Fire Services Caucus. There is 
no one in Congress better suited to understand this situation than 
Congressman Weldon, and I am honored to join him in the effort to right 
this wrong.
  I am submitting together with this bill a request under Senate rule 
XIV that the bill be placed directly on the Senate calendar and not be 
referred to committee. This is a noncontroversial, technical bill. I 
hope that my colleagues will join me in ensuring its speedy passage 
into law.
                                 ______
                                 
      By Mrs. HUTCHISON:
  S. 2697. A bill to authorize the President to posthumously award a 
gold medal on behalf of the Congress to the seven members of the crew 
of the space shuttle Columbia in recognition of their outstanding and 
enduring contributions to the Nation; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mrs. HUTCHISON. Mr. President, I rise today to introduce a bill to 
honor seven individuals who last year made the ultimate sacrifice. The 
crew of flight STS-107 was tragically lost aboard the space shuttle 
Columbia on February 1, 2003. Debris from the vehicle was found in 
several cities and towns in my home State of Texas, where memorials 
will be raised to the mission's memory.
  Commander Rick Husband, Pilot William McCool, Payload Specialist 
Michael Anderson, Mission Specialists Kalpana Chawla, David Brown and 
Laurel Clark, and Payload Specialist Ilan Ramon, Israel's first 
astronaut, admirably exemplified our commitment to human space 
exploration. These men and women labored for years to join the select 
group of NASA astronauts. Their 16-day mission was dedicated to 
research in physical, life, and space sciences. They conducted 
approximately 80 separate experiments comprised of hundreds of samples 
and tests, for 24 hours a day in alternating shifts. This selfless toil 
has repeatedly formed the basis of NASA's significant discoveries about 
our universe.
  The Columbia crew, by participating in this effort, fully endorsed 
manned space exploration, which has been among NASA's missions since 
its inception in 1958. Beginning with NASA's earliest Mercury, Gemini, 
and Apollo missions which first put men on the moon, to this year's 
Mars rovers, the benefits of space technology are far-reaching and 
affect the lives of every American. The work of people like those lost 
last year has led to myriad tangible benefits here on Earth, such as 
the life-saving CAT Scan. This very American desire to cross frontiers 
and explore our surroundings drives critical innovation and 
development, and it does not exist without people like those we 
commemorate today.
  I believe these cherished husbands and wives, sons, daughters, 
parents, and friends deserve to be counted among another exclusive 
number. For their bravery, dedication, audacity, and perseverance, 
these astronauts should be posthumous recipients of the Congressional 
Gold Medal, which is awarded as the highest expression of national 
appreciation for distinguished achievements and contributions. 
According to convention, this measure must be cosponsored by 67 
Senators before it can be considered, and I am certain my colleagues 
hold the Columbia crew in the same high regard as I do. I ask unanimous 
consent that the text of the bill be printed in the Record.
  There being no objection, the bill ordered to be printed in the 
Record, as follows:

                                S. 2697

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

     SECTION 1. FINDINGS.

       The Congress makes the following findings:
       (1) On Saturday, February 1, 2003, the space shuttle 
     Columbia exploded upon re-entering the atmosphere following a 
     16-day mission.

[[Page 16248]]

       (2) Before the Columbia started its tragic descent, the 
     shuttle crew completed some 80 scientific experiments and 
     much of their research data had already been relayed to 
     Houston where it has added to the pool of scientific 
     knowledge.
       (3) The Nation pays tribute to the memory of Colonel Rick 
     Husband, Lieutenant Colonel Michael Anderson, Commander 
     Laurel Clark, Captain David Brown, Commander William McCool, 
     Dr. Kapana Chawla, and Ilan Ramon, a colonel in the Israeli 
     air force. The diversity of crew represented the ideals of 
     our Nation.
       (4) These seven courageous explorers paid the ultimate 
     price to improve our understanding of the universe, to 
     advance our medical and engineering sciences, to make the 
     Nation safer and more secure, and to keep the United States 
     economy on the cutting edge of technology.

     SEC. 2. CONGRESSIONAL GOLD MEDAL.

       (a) Presentation Authorized.--The President is authorized, 
     on behalf of the Congress, to award a gold medal of 
     appropriate design to each of the seven crew members of the 
     space shuttle Columbia--
       (1) Rick D. Husband;
       (2) Michael P. Anderson;
       (3) Laurel Clark;
       (4) David M. Brown;
       (5) William C. McCool;
       (6) Kapana Chawla; and
       (7) Ilan Ramon.
       (b) Design and Striking.--For the purpose of the 
     presentation referred to in subsection (a), the Secretary of 
     the Treasury shall strike a gold medal with suitable emblems, 
     devices, and inscriptions, to be determined by the Secretary.

     SEC. 3. DUPLICATE MEDALS.

       The Secretary may strike and sell duplicates in bronze of 
     the gold medal struck pursuant to section 2 under such 
     regulations as the Secretary may prescribe, and at a price 
     sufficient to cover the cost thereof, including labor, 
     materials, dies, use of machinery, and overhead expenses, and 
     the cost of the gold medal.

     SEC. 4. NATIONAL MEDALS.

       The medals struck under this Act, are national medals for 
     purposes of chapter 51 of title 31, United States Code.

     SEC. 5. FUNDING.

       (a) Authority to Use Fund Amounts.--There is authorized to 
     be charged against the United States Mint Public Enterprise 
     Fund an amount not to exceed $30,000 to pay for the cost of 
     the medals authorized by this Act.
       (b) Proceeds of Sale.--Amounts received from the sale of 
     duplicate bronze medals under section 3 shall be deposited in 
     the United States Mint Public Enterprise Fund.
                                 ______
                                 
      By Mr. GRASSLEY (for himself and Mr. Baucus):
  S. 2698. A bill to amend title XVIII of the Social Security Act to 
revoke the unique ability of the Joint Commission for the Accreditation 
of Healthcare Organizations to deem hospitals to meet certain 
requirements under the medicare program and to provide for greater 
accountability of the Joint Commission to the Secretary of Health and 
Human Services; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I rise today to speak to an issue that 
is vitally important--hospital safety. For too long, the Federal 
Government has not had the appropriate oversight authority to assure 
safety in our Nation's hospitals.
  I am proud to introduce the Medicare Hospital Accreditation Act, 
bipartisan legislation that will give the Centers for Medicare and 
Medicaid Services (CMS) the same oversight capacity over hospital 
accreditation that it has over all other health care accrediting 
bodies.
  The Joint Commission for Accreditation of Health Organizations 
(JCAHO) is a private, not-for-profit organization. In 1965 Congress 
granted JCAHO ``deeming authority'' for Medicare certification under 
Section 1865 of the Social Security Act. This sweeping authority gave 
hospitals accredited by JCAHO the ability to participate in Medicare 
with minimal CMS oversight. Since then, JCAHO has accredited most of 
our Nation's hospitals--over 80 percent in 2002. No other health care 
accreditation program has had this same statutory exception.
  Congress gave JCAHO an important role to detect and correct problems 
that directly affect the lives of patients in hospitals. Congress, CMS 
and in turn the American people, rely upon JCAHO's work to ensure the 
quality and safety in our Nation's hospitals.
  JCAHO's own mission claims to continuously improve the safety and 
quality of care provided to the public through the provision of health 
care accreditation.
  Unfortunately, JCAHO was entrusted with this responsibility without 
the necessary checks and balances so crucial to a government responsive 
to the needs of the people it serves.
  This GAO report is only the most recent evidence showing problems 
with the Joint Commission. In June of 1990, the GAO found that CMS, 
which was then called the Health Care Financing Administration (HCFA), 
needed to reevaluate the criteria used to evaluate the JCAHO's survey 
process and recommended that HCFA establish a means to detect 
significant differences between state agency and Joint Commission 
surveys.
  In May of 1991, the GAO published a report titled ``Hospitals with 
Quality-of-Care Problems Need Closer Monitoring'' and recommended that 
HCFA closely monitor the Joint Commission's follow-up of hospital 
efforts to correct deficiencies it found related to Medicare conditions 
of participation.
  Then in 1999, the Inspector General for the Department of Health & 
Human Services also raised serious concerns. The IG looked at how well 
the Joint Commission identified deficiencies in hospitals and found 
that the Joint Commission's surveys were not likely to identify 
patterns of deficient care.
  Today's GAO findings are likewise significant. Over the course of 3 
years-- between 2000 and 2002--500 hospitals were surveyed by both 
JCAHO and by a state survey agency on behalf of CMS. According to the 
GAO, a comparison of these surveys revealed that the state surveys 
often found serious deficiencies--serious deficiencies that went 
overlooked or unnoticed by JCAHO.
  In fact, the GAO found that out of the 157 hospitals found with 
serious deficiencies, JCAHO identified only 34. In other words, 
compared to state surveyors, JCAHO missed hospitals with deficiencies 
78 percent of the time.
  A hospital that prepared and administered drugs in violation of 
federal and state laws is just one example of a serious deficiency 
found by a state agency, but missed by JCAHO in its 2000 survey.
  Serious deficiencies found by state agencies but missed by JCAHO 
represent a pattern of deficient care--not merely isolated incidents. 
Unlike isolated incidents, a pattern of deficient care raises grave 
concerns because of the potential to place dozens of lives in danger, 
involving for example a floor or entire wing where many hospital 
patients are receiving their care.
  Because JCAHO's hospital ``deeming authority'' is statutorily 
mandated, CMS cannot terminate this authority. Today, we are taking the 
first step to give CMS the same oversight capability over JCAHO that it 
has over all other health care accrediting organizations.
  This legislation will give CMS the authority and responsibility to 
hold JCAHO accountable and, if necessary, restrict or remove its 
hospital accreditation authority. It will bring uniformity to the 
health care accreditation process and will provide a more effective 
chain-of-command. JCAHO will have to answer to CMS--as it does in other 
sectors of health care accreditation.
  The GAO recommends that Congress grant CMS greater oversight over 
JCAHO's hospital accreditation process. CMS agrees. JCAHO agrees. My 
colleague from across the aisle and across the Capitol, Congressman 
Stark--who as we speak is introducing the companion bill in the House 
of Representatives--agrees with this finding.
  I urge your support for this much-needed legislation.
  Mr. BAUCUS. Mr. President, I rise to call my colleagues' attention to 
a very important matter--the safety of America's hospitals. This is an 
issue that affects every State and people of all political beliefs. In 
an effort to keep American hospitals safe and ensure they provide 
quality health care, Chairman Grassley and I are introducing the 
Medicare Hospital Accreditation Act of 2004, which is simultaneously 
being introduced by our colleagues in the House of Representatives.
  As I can attest through personal experience, America's hospitals 
provide outstanding health care. Every day,

[[Page 16249]]

thousands of people receive the treatment they need from dedicated and 
highly competent hospital staffs working in well-run hospitals across 
the country.
  But confidence in our hospitals should not be confused with 
complacency. Every so often, someone from outside a hospital must come 
in to each facility and look under the hood, so to speak, to read 
through patient charts, check clinical practices and to make sure that 
sprinklers are working and stairways are sound. We have put our trust 
in accrediting organizations to identify problems in hospitals so that 
they may be corrected and quality and safety improved.
  Most hospitals are accredited by the Joint Commission on 
Accreditation of Healthcare Organizations (JCAHO), which has been 
accrediting hospitals for over 50 years. When JCAHO accredits a 
hospital, that hospital is deemed to be in compliance with the 
conditions of participation for Medicare. As today's report by the 
Government Accountability Office (GAO) shows us, JCAHO's record of 
identifying problems in hospitals is far from perfect. Furthermore, the 
GAO points out that government has little oversight authority over 
JCAHO's hospital accreditation process. Less oversight authority, in 
fact, compared to accrediting organizations for other kinds of 
healthcare facilities.
  While the GAO's findings are a reason for concern, the report does 
not mean that American hospitals are unsafe. But it does send a clear 
message--one that the Congress and the Administration should heed--that 
there is room for improvement in identifying problems at hospitals. 
Given my commitment to keep hospitals as safe as possible, I view the 
GAO's recommendations as a call to action.
  Therefore, I am pleased to join Chairman Grassley in introducing 
legislation to remove JCAHO's unique status as an accreditation body 
and to give the Centers for Medicare & Medicaid Services (CMS) the same 
authority over JCAHO's hospital accreditation that it already has with 
respect to the accreditation of other healthcare facilities. Putting 
all accrediting organizations on equal footing will result in better 
accreditation and better healthcare facilities for everyone. Expanding 
oversight by CMS of JCAHO's hospital accreditation will help improve 
the process, keep patients safe and ensure that hospitals continue to 
perform to our expectations.
  The legislation we're introducing today is bipartisan and bicameral. 
I urge my colleagues to join us in co-sponsoring this bill and working 
together to get it passed.
                                 ______
                                 
      By Ms. SNOWE:
  S. 2699. A bill to deauthorize a certain portion of the project for 
navigation, Rockland Harbor, Maine; to the Committee on Environment and 
Public Works.
  Ms. SNOWE. Mr. President, I rise today to introduce legislation that 
could make the mooring of an historic windjammer fleet in Rockland 
Harbor a reality by deauthorizing a section of the Federal Navigational 
Channel that will allow a windjammer wharf to be built. Originally a 
strong fishing port, Rockland retains its rich marine heritage, and it 
is one of the fastest growing cities in the Midcoast. Like many of the 
port cities on the eastern seaboard, Rockland has been forced to 
confront an assortment of financial and environmental changes, but the 
city has been able to respond to these challenges in positive and 
productive ways.
  The City of Rockland has hosted the Windjammer fleet since 1955, 
earning a well-deserved reputation as the Windjammer Capitol of the 
World. Rockland's Windjammers are now National Historic Landmarks, and 
as such, are vitally important to both the City and the State. The 
image of The Victory Chimes--a three-masted, gaff-rigged schooner whose 
National Historic Landmark designation I supported in 1997, and one of 
five vessels slated to be berthed at the new wharf--graces the 2003 
Maine quarter! This beautiful fleet of windjammers symbolizes the great 
seagoing history of Maine as well as the sense of adventure that we 
have come to associate so closely with the American experience.
  Lermond Cove is perfectly situated in the Rockland Harbor to be the 
new and permanent home for these cherished vessels. The proposed 
Windjammer Wharf will also provide a safe harbor from storms, as it is 
tucked nicely near the Maine State Ferry and Department of Marine 
Resources piers.
  The State of Maine capitalizes on the visual impact of the 
Windjammers to promote tourism, working waterfronts and the natural 
beauty that distinguishes our landscape. Over $300,000 is spent yearly 
by the Maine Windjammer Association to advertise and promote these 
businesses. Deauthorizing that part of the Federal navigational channel 
will clearly trigger significant and unrealized economic gains for the 
region, providing many beneficial dollars to the local area and the 
State of Maine. According to the Longwood study, which uses a 
multiplier of 1.5, the economic impact of this spending is 3.8 million 
dollars a year. Conservatively, the Windjammers spend over 2.5 million 
a year in the State.
  My hope is that the legislation I am introducing today can be 
included in the Water Resources Development Act (WRDA), S 2554, which 
has been marked up by the Senate Environment and Public Works Committee 
and awaits floor action. I want to thank the New England Corps of 
Engineers for their help in drafting the language and working with the 
Maine Department of Transportation, which runs the state ferry line, 
and the Rockland city officials, the Rockland Port District, and the 
Captains of the Windjammer vessels--Mainers and busi-
nesspeople with the vision and commitment we need to complete 
Windjammer Wharf and create a permanent home for this historic fleet of 
windjammers in Rockland Harbor.
  My legislation is important to the entire Rockland area, to the 
economy of my State of Maine, and important as a living history of a 
long held tradition in the Northeastern part of the country bordering 
the Atlantic Ocean where eyes have traditionally turned to the sea, 
fixed on hope and the horizon, and a way of life.

                          ____________________