[Congressional Record (Bound Edition), Volume 150 (2004), Part 6]
[Senate]
[Pages 7633-7654]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   INTERNET TAX NONDISCRIMINATION ACT

  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 150) to make permanent the moratorium on taxes 
     on Internet access and multiple and discriminatory taxes on 
     electronic commerce imposed by the Internet Tax Freedom Act.

  Pending:

       McCain amendment No. 2136, in the nature of a substitute.
       Stabenow amendment No. 2141 (to amendment No. 2136) to 
     express the sense of the Senate that the White House and all 
     executive branch agencies should respond promptly and 
     completely to all requests by Members of Congress of both 
     parties for information about public expenditures.

  The PRESIDING OFFICER. The Senator from Arizona.


                      Amendment No. 2136 Withdrawn

  Mr. McCAIN. Mr. President, I now withdraw the pending substitute 
amendment No. 2136.
  The PRESIDING OFFICER. The Senator has a right to withdraw the 
amendment.


                           Amendment No. 3048

  Mr. McCAIN. Mr. President, I send a new substitute amendment to the 
desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain] proposes an amendment 
     numbered 3048.

  The amendment is as follows:

  (Purpose: To extend the moratorium on taxes on Internet access and 
multiple and discriminatory taxes on electronic commerce imposed by the 
     Internet Tax Freedom Act for 4 years, and for other purposes)

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Internet Tax 
     Nondiscrimination Act''.

     SEC. 2. FOUR-YEAR EXTENSION OF INTERNET TAX MORATORIUM.

       (a) In General.--Subsection (a) of section 1101 of the 
     Internet Tax Freedom Act (47 U.S.C. 151 note) is amended to 
     read as follows:
       ``(a) Moratorium.--No State or political subdivision 
     thereof may impose any of the following taxes during the 
     period beginning November 1, 2003, and ending November 1, 
     2007:
       ``(1) Taxes on Internet access.
       ``(2) Multiple or discriminatory taxes on electronic 
     commerce.''.

[[Page 7634]]

       (b) Conforming Amendments.--
       (1) Section 1101 of the Internet Tax Freedom Act (47 U.S.C. 
     151 note) is amended by striking subsection (d) and 
     redesignating subsections (e) and (f) as subsections (d) and 
     (e), respectively.
       (2) Section 1104(10) of the Internet Tax Freedom Act (47 
     U.S.C. 151 note) is amended to read as follows:
       ``(10) Tax on internet access.--
       ``(A) In general.--The term `tax on Internet access' means 
     a tax on Internet access, regardless of whether such tax is 
     imposed on a provider of Internet access or a buyer of 
     Internet access and regardless of the terminology used to 
     describe the tax.
       ``(B) General exception.--The term `tax on Internet access' 
     does not include a tax levied upon or measured by net income, 
     capital stock, net worth, or property value.''.
       (3) Section 1104(2)(B)(i) of the Internet Tax Freedom Act 
     (47 U.S.C. 151 note) is amended by striking ``except with 
     respect to a tax (on Internet access) that was generally 
     imposed and actually enforced prior to October 1, 1998,''.
       (c) Internet Access Service; Internet Access.--
       (1) Internet access service.--Paragraph (3)(D) of section 
     1101(d) (as redesignated by subsection (b)(1) of this 
     section) of the Internet Tax Freedom Act (47 U.S.C. 151 note) 
     is amended by striking the second sentence and inserting 
     ``The term `Internet access service' does not include 
     telecommunications services, except to the extent such 
     services are purchased, used, or sold by a provider of 
     Internet access to provide Internet access.''.
       (2) Internet access.--Section 1104(5) of that Act is 
     amended by striking the second sentence and inserting ``The 
     term `Internet access' does not include telecommunications 
     services, except to the extent such services are purchased, 
     used, or sold by a provider of Internet access to provide 
     Internet access.''.

     SEC. 3. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS.

       The Internet Tax Freedom Act (47 U.S.C. 151 note) is 
     amended--
       (1) by redesignating section 1104 as section 1105; and
       (2) by inserting after section 1103 the following:

     ``SEC. 1104. GRANDFATHERING OF STATES THAT TAX INTERNET 
                   ACCESS.

       ``(a) Pre-October 1998 Taxes.--
       ``(1) In general.--Section 1101(a) does not apply to a tax 
     on Internet access that was generally imposed and actually 
     enforced prior to October 1, 1998, if, before that date, the 
     tax was authorized by statute and either--
       ``(A) a provider of Internet access services had a 
     reasonable opportunity to know, by virtue of a rule or other 
     public proclamation made by the appropriate administrative 
     agency of the State or political subdivision thereof, that 
     such agency has interpreted and applied such tax to Internet 
     access services; or
       ``(B) a State or political subdivision thereof generally 
     collected such tax on charges for Internet access.
       ``(2) Termination.--This subsection shall not apply after 
     November 1, 2006.
       ``(b) Pre-November 2003 Taxes.--
       ``(1) In general.--Section 1101(a) does not apply to a tax 
     on Internet access that was generally imposed and actually 
     enforced as of November 1, 2003, if, as of that date, the tax 
     was authorized by statute and--
       ``(A) a provider of Internet access services had a 
     reasonable opportunity to know by virtue of a public rule or 
     other public proclamation made by the appropriate 
     administrative agency of the State or political subdivision 
     thereof, that such agency has interpreted and applied such 
     tax to Internet access services; and
       ``(B) a State or political subdivision there-of generally 
     collected such tax on charges for Internet access.
       ``(2) Termination.--This subsection shall not apply after 
     November 1, 2005.''.

     SEC. 4. ACCOUNTING RULE.

       The Internet Tax Freedom Act (47 U.S.C. 151 note) is 
     amended by adding at the end the following:

     ``SEC. 1106. ACCOUNTING RULE.

       ``(a) In General.--If charges for Internet access are 
     aggregated with and not separately stated from charges for 
     telecommunications services or other charges that are subject 
     to taxation, then the charges for Internet access may be 
     subject to taxation unless the Internet access provider can 
     reasonably identify the charges for Internet access from its 
     books and records kept in the regular course of business.
       ``(b) Definitions.--In this section:
       ``(1) Charges for internet access.--The term `charges for 
     Internet access' means all charges for Internet access as 
     defined in section 1105(5).
       ``(2) Charges for telecommunications services.--The term 
     `charges for telecommunications services' means all charges 
     for telecommunications services, except to the extent such 
     services are purchased, used, or sold by a provider of 
     Internet access to provide Internet access.''.

     SEC. 5. EFFECT ON OTHER LAWS.

       The Internet Tax Freedom Act (47 U.S.C. 151 note), as 
     amended by section 4, is amended by adding at the end the 
     following:

     ``SEC. 1107. EFFECT ON OTHER LAWS.

       ``(a) Universal Service.--Nothing in this Act shall prevent 
     the imposition or collection of any fees or charges used to 
     preserve and advance Federal universal service or similar 
     State programs--
       ``(1) authorized by section 254 of the Communications Act 
     of 1934 (47 U.S.C. 254); or
       ``(2) in effect on February 8, 1996.
       ``(b) 911 and E-911 Services.--Nothing in this Act shall 
     prevent the imposition or collection, on a service used for 
     access to 911 or E-911 services, of any fee or charge 
     specifically designated or presented as dedicated by a State 
     or political subdivision thereof for the support of 911 or E-
     911 services if no portion of the revenue derived from such 
     fee or charge is obligated or expended for any purpose other 
     than support of 911 or E-911 services.
       ``(c) Non-tax Regulatory Proceedings.--Nothing in this Act 
     shall be construed to affect any Federal or State regulatory 
     proceeding that is not related to taxation.''.

     SEC. 6. EXCEPTION FOR VOICE AND OTHER SERVICES OVER THE 
                   INTERNET.

       The Internet Tax Freedom Act (47 U.S.C. 151 note), as 
     amended by section 5, is amended by adding at the end the 
     following:

     ``SEC. 1108. EXCEPTION FOR VOICE AND OTHER SERVICES OVER THE 
                   INTERNET.

       ``Nothing in this Act shall be construed to affect the 
     imposition of tax on a charge for voice or any other service 
     utilizing Internet Protocol or any successor protocol. This 
     section shall not apply to Internet access or to any services 
     that are incidental to Internet access, such as e-mail, text 
     instant messaging, and instant messaging with voice 
     capability.''.

     SEC. 7. EFFECTIVE DATE.

       The amendments made by this Act take effect on November 1, 
     2003.

  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, this substitute, which I will describe in 
more detail in a minute, is, I hope, a fair and true compromise between 
the opposing sides in this debate. At least I hope it is viewed by a 
majority of the Senate as such.
  I also understand there are very strongly held views on this issue. 
This is not the first time we have been to the Senate floor on this 
issue. This is the third time we have had debate and votes on it, and 
each time it becomes more difficult because we are talking about a lot 
more money, a lot more involvement, a lot more taxes and, of course, as 
technology evolves, of greater importance to America, whether it be 
economically, whether it be entertainment, or politically. The rise of 
the Internet in political campaigns in America today is one of the most 
recent phenomena.
  I hope since we have, at least according to a letter I received from 
Senator Alexander, boiled down our differences to four major 
differences--I in no way understate the importance of those 
differences, but there are only four--perhaps we could propose 
amendments and vote on those four differences and, in the meantime, 
continue our dialog in trying to reach a reasonable compromise.
  I would like to point out it does no one any good for us to leave 
this issue in limbo. If we are going to allow taxation of the Internet 
in a broad variety of ways, then the Senate should decide to do so. If 
we are going to adopt this compromise, then the Senate should do so. 
The House, as we know, long ago passed legislation.
  This particular legislation, before I offered a substitute amendment, 
was reported out of the committee 10 months ago. I hope all will act 
together in good faith and try and resolve it.
  By the way, those four major differences, as defined in the letter to 
me from Senator Alexander, are definition, voice over IP, duration, and 
grandfather clause. I hope we can address each of those either, as I 
said, in the form of negotiation or in the form of amendments which 
would be up or down.
  I have been told the majority leader says we are going to complete 
action on this bill by Thursday night late. The Democrats have a 
retreat beginning on Friday which we all respect. I hope we can get a 
lot done so we do not find ourselves here at a very late hour on 
Thursday night.
  Mr. President, I offer this amendment to the Internet Tax 
Nondiscrimination Act which offers, I believe, a true and fair 
compromise. On one end of the spectrum are those who do not believe the 
tax moratorium should be extended, and on the other end are those who 
want to make it permanent. This proposal, I believe, offers

[[Page 7635]]

a middle-ground alternative to this debate and addresses the concerns 
State and local governments have expressed, while retaining some--many 
have said too few--aspects of the bill that was favorably reported by 
the Commerce Committee last year.
  Before I summarize the substance of the amendment, I would like to 
spend a moment addressing a couple criticisms that have been raised 
about the compromise proposal.
  First, I have heard a few Members talk about how consideration of S. 
150 is moving too fast and that Members and their staffs have not had 
adequate opportunity to consider the substance of this matter.
  With all due respect to my colleagues who believe this has been a 
less than deliberative process, I can think of few debates recently in 
which Members have had more time to prepare and negotiate. We voted the 
bill out of the Commerce Committee in July of last year. The Finance 
Committee, after requesting a sequential referral, discharged the bill 
without amending it.
  Throughout this time, Members, including Senators Dorgan, Hollings, 
Allen, Wyden, Sununu, and many others who have spoken on this floor 
about this matter, continued to negotiate the substance of the 
legislation.
  During that time, we heard from State and local groups such as the 
National Governors Association and the National Association of 
Counties. They had several opportunities, and did, to provide 
significant input.
  We are here after almost 1 year of considering this matter, not 
because we have not discussed the issue thoroughly enough. Nor are we 
here because we have not properly defined Internet access or otherwise 
adequately dealt with the specifics of the Internet tax moratorium. We 
are debating this measure because the two opposing sides will not budge 
from their positions.
  To be clear, the compromise amendment will not likely move those who 
are firmly on one side or the other. As Senator Voinovich said 
yesterday, for some Members the philosophical divide in this debate may 
be ``too deep to bridge.'' Its purpose is only to offer a compromise 
that other Members can vote for knowing that it strikes a reasonable 
balance between those who want a permanent and broad Internet access 
tax moratorium and those who want no moratorium at all.
  Second, some Members who do not want to reinstate the Internet tax 
moratorium have expressed their view that the amendment is not a true 
compromise; that it does not go all the way to meeting their concerns 
about State and local revenues. I must respond to them by saying the 
amendment is a compromise precisely because it does not completely 
satisfy one side or the other. However, the amendment does protect a 
significant portion of the $20 billion in tax revenues from 
telecommunications services that States and localities claim they could 
lose as a result of S. 150.
  In fact, even using the most aggressive revenue loss estimates 
available, it appears what is at stake is not more than 3.5 percent of 
total State and local tax revenues from telecommunications services. In 
my opinion, that is not just a compromise but a very generous 
concession to those who want to defeat the Internet tax moratorium. To 
criticize this proposal at this point as somehow not enough is just an 
empty exercise in moving the proverbial goalpost of this debate.
  It seems to me the goalpost continues to move so much that it would 
not surprise me to hear at the end of this week that some Members 
actually support a Federal law requiring States to tax Internet access. 
I remind my colleagues that this debate is about striking a balance 
between S. 150, the Allen-Wyden bill, and S. 2084, the Alexander-Carper 
bill.
  Clearly, this amendment goes a long way to compromising with the 
opponents of the Internet tax moratorium. Again, I have to repeat this 
because it is a crucial point: This body does not typically operate by 
capitulating 100 percent to one side or the other on a particular 
matter that is before it. In its normal course of business, the Senate 
compromises, and that is exactly what this amendment does.
  Simply put, the amendment offered today is truly a reasonable 
compromise that addresses a host of concerns the States and localities 
have raised over the past 10 months. Throughout the negotiation 
process, State and local groups have asked for a temporary extension to 
the Internet tax moratorium. Specifically, they have asked for a 2-year 
extension of the moratorium. The compromise amendment would extend the 
moratorium for 4 years.
  Why 4 years? If we do it for 2 years, we would almost automatically 
be back revisiting the issue immediately when one looks at the process 
we have just been through. I think 4 years is a great deal less than 
permanent and not much more than 2 years, as the opponents of this 
legislation have alleged.
  Another concern we have heard from State and local government is 
extending the Internet tax moratorium would somehow impact traditional 
telephone services. This amendment would ensure that State and local 
revenues from traditional phone service would not be impacted in any 
way, shape, or form. Again, the amendment would accommodate a concern 
raised by States and localities to the full satisfaction of State and 
local authorities.
  State and local governments have also expressed concern that this 
bill would hamper their ability to tax voice services provided over the 
Internet. This amendment addresses that matter by setting forth a broad 
definition of services, including voice services that are provided over 
the Internet that would not be considered Internet access and therefore 
not be subject to the Internet tax moratorium. Once again, I believe 
this provision should fully address the concern of State and local 
governments.
  The list of concessions made to State and local government interests 
in the amendment is extensive. For example, the compromise amendment 
would clarify that the Internet tax moratorium does not apply to 
nontransactional taxes such as taxes on net income, net worth, or 
property value. The amendment would clarify that otherwise taxable 
services would not become tax free solely because they are offered as a 
package with Internet access. The amendment would grandfather for 3 
years, from November 1, 2003, the States that were taxing Internet 
access in October 1998. It would grandfather for 2 years, from November 
1, 2003, the States that began to tax--according to many, improperly--
Internet access after October 1998. It would ensure that universal 
service would not be affected by the moratorium. It would ensure that 
9-1-1 and e-9-1-1 services would not be affected by the moratorium. 
Finally, it would ensure that regulatory proceedings that do not relate 
to taxation would not be impacted by the Internet tax moratorium.
  I want to point out again, there are really 10 compromises offered in 
this: the 4-year moratorium, the 3-year phaseout of the grandfather 
clause, the 2-year grandfather of taxes on DSL, and voice over IP 
carve-out. It clarifies taxes covered. It clarifies the House's 
language on DSL. It provides a clear and uniform accounting rule. The 
universal service fees are unaffected. As I mentioned, e-9-1-1 taxes 
are unaffected, and nontax regulatory powers are unaffected.
  I hope we can move forward if there is not agreement. Meanwhile, we 
continue to discuss the issue.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, my colleague from Arizona talks about four 
issues. There are three of them we really ought to be able to reach 
agreement on reasonably soon, and the other one is a very difficult 
issue, there is no question about that. That is the definition. But on 
grandfathering and VOIP, for example, the length of time of a 
moratorium, frankly, I think we can reach an agreement on those three 
areas.
  Frankly, if we are able to reach an agreement on the definition, I do 
not care much about the grandfathering. I know some of my colleagues 
do, but that is a lot less important to me. I would also say that the 
length of a

[[Page 7636]]

moratorium on Internet taxation is of much less importance to me as 
well. I would be willing to lengthen it by a substantial number of 
years provided we have the right definition. So I think the thing that 
is going to be difficult for us but one that we should attempt to 
resolve is this definition.
  I want to just make this point: If the purpose of those who are most 
insistent on moving this legislation--and there are several in the 
Chamber who have really worked on this a long time--would be, for 
example, to create a broad new exemption from taxation for certain 
services and certain parts of the backbone of the Internet and so on, 
then that is a problem. I do not support that. I do not think we ought 
to carve out things that are now being taxed by State and local 
governments and say, by the way, we are going to federally preempt 
that. If that is not the purpose, though, then we surely should be able 
to find common ground on a definition that works.
  My hope is that as we proceed we will understand that all of us--I 
think I speak for all of us--believe we ought to have a moratorium on 
taxing the Internet, that is, the connection to the Internet. I support 
that. I believe virtually all of us in this Chamber would agree we 
ought not levy punitive or discriminatory taxes on the Internet. I 
believe we would all agree on the goal that we would want to encourage 
through public policy the build out of broadband and the use of the 
Internet and particularly advanced telecommunications services. All of 
those represent areas of broad, substantial agreement in the Senate 
Chamber.
  As we work through this now, the one area where I think we have 
substantial difficulties is trying to understand what each side means 
with respect to the definition of Internet service. How far up the 
backbone of the Internet does it go? Is it a definition that, in fact, 
would prevent the taxation of certain services that are now taxed, and 
on which State and local governments rely for that revenue? If that is 
the case, we ought to know that and discuss that. If it is not the 
case, we should be able to reach an agreement on the definition.
  Senator Allen, for example, and many others who have been at this, 
Senator Wyden and on the other side Senators Carper and Alexander and 
many others--we need to once again get our heads together and see if we 
can find agreement on this definition. But until that happens and 
unless that happens, it is my guess we are just going to be around here 
spinning our big old tractor wheels and nothing is going to happen. We 
are not going to pass legislation.
  We are not going to agree to amendments. I am guessing the consensus 
wouldn't exist to do that. I wouldn't object to going to vote on some 
things, speaking for myself, but we have a lot of work to do to reach 
some sort of compromise. Let me say to my colleague Senator McCain, I 
recall being in meetings with him a year ago and beyond that, and the 
attempt was to try to figure out, how can we find common ground? How 
can we extend the moratorium that then existed? We never got to the 
point of reaching any kind of agreement, but it wasn't because of any 
lack of effort on the part of the chairman of the committee. I am here. 
I will be here during consideration of this, and I want to work with 
Senator McCain and others to see if we can find a way to make this 
work.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.


                Amendment No. 3049 to Amendment No. 3048

  Mrs. HUTCHISON. Mr. President, I send an amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Texas [Mrs. Hutchison] proposes an 
     amendment numbered 3049 to amendment No. 3048.

  Mrs. HUTCHISON. I ask unanimous consent that the reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To change the definition of Internet access service)

       At the appropriate place, insert the following:

     SEC. __. CHANGE IN DEFINITION OF INTERNET ACCESS SERVICE.

       Paragraph (10) of section 1105 of the Internet Tax Freedom 
     Act, as redesignated by this Act, is amended--
       (1) by striking ``The term'' and inserting the following:
       ``(A) In general.--The term''; and
       (2) by adding at the end the following:
       ``(B) General exception.--The term does not--
       ``(i) include a tax levied upon or measured by net income, 
     capital stock, net worth, or property value; or
       ``(ii) apply to any payment made for use of the public 
     right-of-way or made in lieu of a fee for use of the public 
     right-of-way, however it may be denominated, including but 
     not limited to an access line fee, franchise fee, license 
     fee, or gross receipts or gross revenue fee.''.

  Mrs. HUTCHISON. Mr. President, I thank the Senator from Arizona, the 
chairman of the Commerce Committee, and the distinguished ranking 
member, Senator Dorgan, for bringing this to the floor. As has been 
said by everyone, I think, we have been talking about this issue for a 
long time. It is such a crucial issue for many States and many cities, 
that we must get it right.
  I think the bill of Senator Allen, the underlying bill, and now the 
bill of Senator McCain are attempting to do something that is right. 
They are attempting to assure that interstate commerce is not 
obstructed by taxes on Internet access.
  I am afraid, however, that the language is not clear enough as it 
deals with franchise taxes and right-of-way fees that have been in 
place in cities in many States in our country for a long time. That is 
why I have introduced an amendment that will clarify the definition of 
what is excepted from this Internet access tax ban. It says:

     . . . any payment made for the use of a public right-of-way 
     or made in lieu of a fee for use of the public right-of-way, 
     however it may be denominated, including but not limited to 
     an access line fee, a franchise fee, license fee or gross 
     receipts or gross revenue fee.

  I think we have found out since we started debating this issue years 
ago that cities determine their franchise fees, their right-of-way 
fees, in many different ways. I think it is very important that we not 
make a mistake here that would cause years of litigation, after which a 
city might win, it might lose, but it would certainly disrupt what it 
has been doing. The franchise fee is basically a local tax, not on 
Internet access, not meant to be on Internet access.
  My position is that we should not tax Internet access. I do believe 
it is a taxation of interstate commerce. However, I think that once you 
get off the basic access, just as we have telephone lines' access, use 
of right-of-way, that we must create a level playing field so a line 
that is used for telephone and an Internet computer line will be able 
to be taxed in the same way.
  In my State of Texas, prior to 1999 cities were compensated by 
telecommunications providers for the use of their rights-of-way 
pursuant to individual franchise agreements negotiated between the 
telecommunications company and the cities.
  In the late 1990s, Texas cities and the providers began negotiating 
and drafting major compromises that would lead to more uniformity, more 
regulatory certainty. So the Texas law has established a uniform method 
of compensating cities for use of public rights-of-way. It is called a 
per access line fee. It is implemented to compensate cities for use of 
public rights-of-way.
  The access lines are reported by the individual telecommunications 
providers to the Texas Public Utility Commission. The PUC then applies 
the individual city rate per access line to the total number of lines 
that a particular city may have within their corporate limits. It is a 
fair and equitable system that is used in Texas. An average city gets 
about 3.5 percent of its general revenue from telecommunications right-
of-way compensation fees.
  Passing Federal legislation that would call into question the 
validity of this Texas system could have disastrous effects on the 
ability of Texas cities to provide essential services such as police 
and fire, water, waste water, and parks, just to name a few. The

[[Page 7637]]

right-of-way fees represent as much as $39 million annually to the city 
of Dallas; $9 million for Fort Worth; and $15 million for the city of 
San Antonio.
  Cities in California, Nevada, Florida, Kentucky, and other States 
would also be adversely affected by the bill as it is written. So I am 
trying to clarify why franchise fees should be included. I am hoping we 
are all trying to go in the same direction here. I just want to make 
sure that we don't make a mistake.
  There will be people who say it is really covered. It is covered in 
the underlying law. It is covered in the amendment that is offered by 
Senator McCain and the one underlying by Senator Allen. People will say 
that. However, it is not clear and the city attorneys and these Texas 
cities and other States have looked at the language and they are very 
concerned they are going to be in litigation over this issue. If we 
know today that it is not clear, after the lawyers have looked at it, 
why not be sure? Why not be sure?
  Everyone I have talked to believes that right-of-way and franchise 
fees should not be disturbed. It is part of the level playing field we 
are trying to create. My amendment will make it very clear what is 
accepted by definition. This should not have any impact on Internet 
access as both of the underlying bills would try to protect that from 
taxation. But it does protect cities, particularly since we have 
certain laws in some States that do have a component of a gross 
receipts fee within the access line issue, and I hope we will not step 
on a State with its local issues, trying to stay consistent with what 
has been done and accepted through all these years by passing this law 
without being very clear.
  Mine is a clarification amendment.
  Mr. WYDEN. Will my colleague yield?
  Mrs. HUTCHISON. I am happy to yield to the Senator.
  Mr. WYDEN. I want to make sure I understand this. Cable already pays 
a franchise fee when the streets are torn up in order to offer cable. 
My understanding of this amendment is that now there would be a new 
special tax for right-of-way for the very same service.
  In effect, my reading of this is that cable would be taxed twice. 
They already get hit with a franchise fee and now your right-of-way 
provision would allow for a new special fee, which troubles me, again, 
because it has been our point all along through Internet access that 
you have already paid once.
  Could my colleague from Texas clarify? Otherwise, I would have to 
strongly oppose this.
  Mrs. HUTCHISON. Mr. President, I appreciate the question.
  This is, of course, not to put a new tax in place. This is to try to 
acknowledge that different cities and different States have different 
definitions of franchise tax. It happens that in Texas there is a 
gross-receipts component in the franchise right-of-way access tax. It 
is a standardized law now for the cities of Texas, for cable companies 
and telecommunications companies.
  We have a different definition which I am trying to protect. 
Certainly these cities have already made their contracts with their 
cable companies. This is not meant to change contracts; it is meant to 
allow the contracts which are in existence and use a well recognized 
and different definition of franchise or right-of-way tax.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, this amendment excludes from the 
definition of tax on Internet access transactional taxes such as gross 
receipts or gross revenue fees, constitutes an end run around Internet 
tax freedom, and eviscerates the moratorium itself. If we allow this to 
exclude payments made for use of the public right-of-way, including 
access line fees, franchise fees, et cetera, this amendment should be 
rejected.
  I move to table the amendment, and I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. McCONNELL. I announce that the Senator from South Carolina (Mr. 
Graham) and the Senator from Pennsylvania (Mr. Specter) are necessarily 
absent.
  Mr. REID. I announce that the Senator from Florida (Mr. Graham) and 
the Senator from Massachusetts (Mr. Kerry) are necessarily absent.
  The PRESIDING OFFICER (Mr. Chafee). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 64, nays 32, as follows:

                      [Rollcall Vote No. 72 Leg.]

                                YEAS--64

     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Bond
     Boxer
     Brownback
     Bunning
     Burns
     Campbell
     Cantwell
     Chambliss
     Cochran
     Coleman
     Collins
     Conrad
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dole
     Dorgan
     Ensign
     Fitzgerald
     Frist
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Inhofe
     Johnson
     Kohl
     Kyl
     Leahy
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (NE)
     Nickles
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Stabenow
     Stevens
     Sununu
     Talent
     Warner
     Wyden

                                NAYS--32

     Akaka
     Alexander
     Biden
     Bingaman
     Breaux
     Byrd
     Carper
     Chafee
     Clinton
     Cornyn
     Corzine
     Dodd
     Domenici
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Hollings
     Hutchison
     Inouye
     Jeffords
     Kennedy
     Landrieu
     Lautenberg
     Levin
     Lieberman
     Nelson (FL)
     Sarbanes
     Schumer
     Thomas
     Voinovich

                             NOT VOTING--4

     Graham (FL)
     Graham (SC)
     Kerry
     Specter
  The motion was agreed to.
  Mr. LOTT. Mr. President, I move to reconsider the vote.
  Mr. DORGAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Democratic leader is recognized.


                           Amendment No. 3050

  (Purpose: To eliminate methyl tertiary butyl ether from the United 
 States fuel supply, to increase production and use of renewable fuel, 
           and to increase the Nation's energy independence)

  Mr. DASCHLE. Mr. President, I have an amendment at the desk to the 
underlying bill.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Dakota [Mr. Daschle] proposes an 
     amendment numbered 3050.

  Mr. DASCHLE. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  [The amendment is printed in today's Record under ``Text of 
Amendments.'']
  Mr. DASCHLE. Mr. President, I want very much to be able to continue 
to work on the underlying bill and find a way to resolve many of the 
outstanding issues. I think we have made some progress today.
  Obviously, this is a piece of legislation that provides an 
opportunity for many of us who have concerns about other matters 
relating to our Senate agenda as well.
  I was very concerned this morning to read in Energy Daily that the 
leadership has abandoned its plan to bring up the comprehensive Energy 
bill in May, and may wait now until fall to revisit comprehensive 
energy legislation.
  Now, nearly 6 months after we could have enacted an Energy bill with 
the renewable fuels standard and other important components there is no 
prospect now of action on the legislation any time soon. So I have no 
recourse but to offer the renewable fuels amendment to another 
legislative vehicle, which I have done with this amendment.
  The amendment is very straightforward. It is based on language that

[[Page 7638]]

has passed in the Senate on two previous occasions. It eliminates the 
reformulated gasoline program, RFG, oxygenate standard and replaces it 
with a renewable fuels standard that sets a 10-year schedule for 
assured growth in ethanol demand.
  It contains the same waiver authority agreed to in the energy 
conference report, strikes all liability protection for MTBE as well as 
ethanol.
  It also bans MTBE within 4 years.
  Over two-thirds of the Senate has now gone on record in support of a 
renewable fuels standard and the renewable fuels standard we create 
with this legislation. It has been reported out of committee twice, 
passed by the Senate twice, both times by a margin of more than two-
thirds. A similar proposal has been reported out of the Environment and 
Public Works Committee and is pending now on the Senate calendar.
  Last June, 68 Senators voted to add at that time the Frist-Daschle 
RFS amendment to the Energy bill. It is time to break the impasse.
  As I said, my first choice would have been to bring the Energy bill 
to the floor, have a good debate, and send it on to the President 
without the MTBE liability immunity.
  However, the Energy bill conference report stalled last November 
because of bipartisan opposition to the special interest MTBE liability 
relief provision included in that legislation, in spite of the efforts 
made by many of us to warn that is exactly what would happen. Dropping 
the liability protection from the bill for both MTBE and ethanol would 
have attracted more than enough votes to enact the Energy bill. Yet 
despite the direct intervention by President Bush, the defenders of 
MTBE liability relief remain defiant.
  Senator Frist placed a revised energy bill without MTBE on the Senate 
calendar last February, now almost 3 months ago. He has not chosen to 
call up that bill.
  Today, Energy Daily has reported our Republican friends have 
abandoned plans to move comprehensive energy legislation any time in 
the near future. That is troubling for many of us who wanted to see it 
pass. Now we have little choice but to offer very important components 
of this bill to other legislation that may move through the Senate as 
well as the House.
  The energy tax provisions, for example, that Senator Frist placed on 
the calendar have now been added to the FSC/ETI bill. Senators Cantwell 
and Bingaman are leading the effort to pass stand-alone electricity 
standards to address the circumstances that caused the blackout last 
August.
  It appears it is time to shift gears, not only for the tax provisions 
and the reliability standards, but for the renewable fuels standard as 
well. This bipartisan amendment is a careful balance of the often 
desperate and competing interests and a compromise in the finest 
tradition of the Senate. As I have said on many occasions, two-thirds 
of the Senate is on record in support of the bill. So I hope we can get 
legislation such as this considered quickly.


                             Cloture Motion

  Mr. DASCHLE. Mr. President, I send a cloture motion to the desk. We 
can vitiate it if we get an agreement on a rollcall vote shortly. I am 
very concerned that we move this legislation quickly and 
comprehensively. This amendment is yet another attempt to do that in 
this body.
  I ask that the motion be reported.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of Rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close the debate on the Daschle 
     amendment No. 3050 to S. 150:
         Thomas Daschle, Harry Reid, Jeff Bingaman, Kent Conrad, 
           Byron L. Dorgan, Tom Harkin, Dick Durbin, Max Baucus, 
           Daniel L. Akaka, Evan Bayh, Debbie Stabenow, Mark 
           Dayton, Jay Rockefeller, Ben Nelson, Tim Johnson, Carl 
           Levin.

  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. Mr. President, I was not aware, and I do not believe the 
manager of the legislation who is temporarily off the floor was aware, 
this amendment would be offered at this time. He will return shortly. I 
am sure there are going to be some discussions about the amendment and 
the appropriate way for us to deal with it.
  I understand the importance of this amendment that has been offered 
by Senator Daschle to a number of Senators on both sides of the aisle. 
I agree we should have a national energy policy. We have been talking 
about it for at least 3 years or longer. Yet here we stand today with 
no national energy policy. We do not have legislation on the books that 
gives incentives for more production of oil and gas to relieve some of 
the regulatory problems that delay or make it almost impossible to have 
nuclear plants, hydropower, conservation, alternative fuels, ethanol--
the whole package. Yet last year, the Senate passed energy legislation. 
The House passed it. We had a conference.
  Problems developed in the conference, and we have not been able, 
unfortunately, to move the energy legislation through the Senate 
because we have not been able to get 60 votes, even though we had, I 
think, 57 or 58 who voted for the bill.
  I still think we should find a way to get this legislation through a 
conference or through to completion and send it to the President. If we 
do not, a pox on all our houses because problems are here. They are 
going to stay, and they are going to get worse. We are not going to 
conserve. We are not going to produce. We are not going to do anything. 
We are at the mercy, then, of countries all over the world to provide 
the oil for over 50 percent of our energy needs in this country. This 
is dangerous.
  We need a national energy policy because of economic security and 
national security. So I agree we need to do this. I do not agree with 
all the features in it. I did not like some of the provisions added at 
the end in the conference. I have my reservations about some of the 
renewable fuels. I have reservations about a lot of it, but I voted for 
it, and I am prepared to vote for it again in its current form with 
warts or with another problem. We should deal with this problem.
  There is one way we will not deal with it comprehensively or deal 
with it at all, probably, and that is to pick it apart, pick all the 
meat off the bones of this national energy policy legislation. Piece by 
piece we will devour this good legislation, for example by putting a 
piece of it on the FSC/ETI jobs growth bill. If we put tax policies 
there, put ethanol here, or put it somewhere else, and start picking it 
apart piece by piece, what will happen is we will probably not get a 
comprehensive bill, and we probably will not even get the pieces. This 
is not wise.
  I do not have the impression that it has been indicated by our 
leadership that we are not going to do an energy bill. I think it is on 
the agenda to be considered further, and it should be considered 
further.
  We should work in a bipartisan and a bicameral way to get this 
legislation done. For that reason, I think it is a huge mistake to come 
pull out this one piece a lot of people do like and stick it on this 
legislation, because it is one of the engines that could possibly pull 
us to a national energy policy.
  We will have discussion over the next few minutes about the way we 
would like to deal with it. But I personally do not think we should be 
adding this nongermane amendment, a critical part of the Energy bill, 
on this bill.
  I would also like to say briefly that I think we have a good 
compromise package which Senator McCain, the chairman of the Commerce 
Committee, has developed. He has worked over a long period of time with 
both the proponents and opponents to see if we could find compromise 
language on this Internet tax issue that was acceptable to get the job 
done.
  It has not been easy because neither side wants to give. The 
proponents do not want even a 4-year moratorium. They want a permanent 
moratorium on Internet access taxes. I have in the past been inclined 
to be in that camp.

[[Page 7639]]

  However, I have listened to Senator Alexander and Senator Voinovich. 
I have heard from the Governor of my own State, and there is an 
argument on the other side, there is no question about this. We need to 
deal with this whole issue in a comprehensive way. The Commerce 
Committee needs some time and it will not be easy.
  I went through the legislative process for telecommunications reform 
that we passed in 1996. We worked on it for 2 years. It was very 
laborious and it had the possibility of just falling apart right up 
until the end. It will probably take us a couple of years to get 
further comprehensive telecommunications reform done. In the meantime, 
we should have in place a moratorium on taxing the Internet. In fact, I 
believe there is an overwhelming majority that agrees. We saw the vote 
yesterday. I know that was not a vote on the substance, but anytime 
around here of late that there is a vote of 74 to 11 to go to the 
substance of a bill, that is pretty strong.
  I believe most Senators want to get this moratorium in place. Could 
we tinker with it here or there? Surely, and there will be legitimate 
amendments that we should consider.
  We are on the legislation now. We can begin the amendment process. We 
have had a relevant amendment. Senator Alexander, the opponents, were 
reasonable and have allowed us to do this. They are going to have some 
really good and tough amendments that we are going to have to deal 
with, and that is the way the legislative process is supposed to work, 
I think. To have voted against proceeding to this bill at all would 
have been it. The year would have been over if we could not get on the 
substance of a bill of this nature with such a strong majority being in 
favor of getting results.
  So the 4-year moratorium that is in this proposal that makes Internet 
access 100-percent tax free, while taking care to narrow the definition 
of Internet access to ensure that traditional telephone service is not 
included and while excluding voice over Internet protocol, is the right 
way to go. The Commerce Committee is already beginning to have hearings 
on comprehensive telecom legislation, and that will be the appropriate 
place to address matters such as voice over Internet protocol.
  Senator Sununu has introduced legislation on VOIP, or voice over 
Internet protocol. We should not address that until we know exactly 
what we are doing. Certainly, we should not be saying that taxes are 
going to begin to be assessed in this area until we have thought it 
through. The compromise does grandfather States that taxed Internet 
access prior to the 1998 Internet Tax Freedom Act, and there are some 
10 or 11 States that are in that category. This legislation would 
extend that grandfather status for 3 more years. For a 2-year period, 
it grandfathers the States that currently tax Internet access but were 
not protected under the 1998 grandfather clause.
  So that is an oversimplification, but basically the rest of the bill 
just incorporates the common components between the two bills that were 
pending, the Alexander bill and the Allen bill. We should go forward 
with this legislation. We should get the job done.
  What is happening once again is that while we have had one amendment 
that is germane to the substance, we now have an energy amendment being 
offered to the Internet tax moratorium. We hear there will be other 
nongermane amendments. This is the Senate. That is the way we do 
business, but we have work to do. We all agree this is something we 
want to do in a bipartisan way. My colleagues should take their shot or 
take their shots but make them count, and let's not get hung up on this 
legislation and drag it out with nongermane killer or poison 
amendments, because it will wind up killing or doing great damage to 
what I think is a reasonable compromise.
  Again, I understand the Senate rules very well. My colleagues can 
offer anything on any subject at any time, unless there is agreement to 
the contrary. So Senators on both sides can dump their outbasket on 
this bill, but that would be a mistake. I do not believe the leadership 
on either side wants that to happen.
  The best thing that could happen is for the Senators to get this off 
of our agenda right now. Let's get it off our backs. My colleagues 
would like to be able to vote both ways, or not be able to vote at all. 
We cannot do that because the moratorium has already ended and there 
are a lot of innovative people out there thinking of ways to tax 
Internet access.
  Before my colleagues vote to allow a tax on the Internet, they should 
check with their children. If my colleagues have teenagers or kids in 
college, they will tear their head off. They do not want this 
interconnection to the Internet to be taxed, and if we were to go 
around and ask Senators if they want that, no, we do not want that. 
Let's vote on this issue. Let's deal with the substantive amendments 
and the germane amendments, if my colleagues want to offer a couple of 
relevant amendments.
  I plead with the Senate, do not make this a punching bag because, if 
we do, we are going to show once again that we are incompetent to 
produce anything.
  We did a pension bill. We saw we could do it. It still may not be 
perfect, but we got it done. This is one of those issues that is 
bipartisan. We need to get it done, and we need to get it done this 
week. I hope my colleagues will join in finding a way to make that 
happen.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, the amendment that has been offered a few 
moments ago by my colleague Senator Daschle is not some mysterious 
amendment. It is not some amendment that was offered under some 
mysterious procedure. This is the way the Senate allows amendments to 
be offered.
  Senator Daschle has offered an amendment that deals with the subject 
of energy, and specifically renewable fuels. My colleague from 
Mississippi, Senator Lott, indicated that it is the way the Senate can 
do business. He is absolutely correct about that. The rules allow this 
amendment to be offered. However, I point out that the Senate really 
does not do business much anymore. We are not voting much. We are kind 
of at parade rest. If there was a ``gone fishing'' sign, it would long 
ago have been hung on all three doors of the Senate.
  There is very little activity in the Senate. Very little is 
happening. I expect that is one of the reasons my colleague offered 
this amendment to this bill.
  I will talk for a moment about the Energy bill. The Senator from 
Mississippi and the Senator from South Dakota both indicated that we 
ought to have an energy policy, and indeed we should. I was a conferee 
on the Energy bill. I signed the conference report, much to the 
consternation of some of my friends, because I thought on the whole it 
advanced our country's interest in energy.
  It was not perfect. There were some things in it I did not like much, 
but the fact is, it came to the Senate floor and it lost by two votes. 
Everyone in this Chamber understands why it lost. It lost by two votes 
because the White House and the majority over in the House of 
Representatives decided to put in a retroactive waiver for liability of 
MTBE. They stubbornly persisted and demanded it be part of the bill 
even when they were told it was likely to kill the bill.
  They preferred the bill die rather than take out that provision, the 
provision that was a favoritism provision for a few enterprises. So the 
bill died. Now they want to blame others for the death of that energy 
bill. It does not wash. That energy bill died on the Senate floor, lost 
by two votes, because there were some that stubbornly persisted in 
putting a favor in that bill for some of their friends and they would 
not back away from it. So they lost the bill. They were willing to let 
the bill go down because of that.
  For example, that bill contained important provisions that I thought 
advanced the country's interests: production incentives, conservation, 
an efficiency title, a renewable fuels title. I

[[Page 7640]]

will talk for a moment about the renewable fuels title because that is 
the subject of Senator Daschle's amendment.
  I think the renewal fuels title is very important and advances this 
country's interests. I am a strong supporter of it. Incidentally, I 
will support this amendment, and I hope we get a vote on this 
amendment. It does not do damage to the underlying bill at all. We can, 
should, and will, in my judgment, have a vote on this amendment.
  If we are not going to do a big energy bill, if instead of this week 
having energy on the Senate floor, which I would have preferred, we 
have the underlying Internet tax bill, if the priority is always going 
to be something other than an energy bill for the majority leader, then 
we have no choice but to take provisions of this energy bill that we 
think advances this country's interests, bring it to the Senate floor, 
and see if we can legislate on it.
  I will now talk about the renewable fuels provision. The renewable 
fuels provision is pretty simple. Drive to the gas pump this afternoon 
and see what is going on. We used to see 55 percent of our oil came 
from off of our shores. It is now 60 percent. Sixty percent of the oil 
every single day that we use in this country comes from other parts of 
the world, much of it very troubled.
  We are putting this country at great risk if we do not understand 
that endangers this country's economy, that endangers the opportunity 
for us to expand, grow, and promote opportunity in the future. Yet 
people seem oblivious to it. They say it is 60 percent coming from 
offshore, from Saudi Arabia, from Iraq, from Venezuela, from Kuwait, so 
what? Well, I think many of us understand the so what.
  This country's economy, this country's well-being in the future, is 
held hostage by others, some of whom wish this country ill. In the new 
age of terrorism, we would be well advised to understand that this 
excessive and growing dependence on foreign sources of oil, foreign oil 
specifically, is very dangerous to this country.
  My colleague offers an amendment that says at least one part of the 
Energy bill dealing with renewable fuels allows us to increase supply 
of energy in this country in a very significant way that is not only 
friendly to the environment but allows us to grow some energy in 
America's fields. It allows us to be innovative in creating new forms 
of energy to extend America's energy supply. Let me use ethanol as an 
example. Incidentally, let me say, for those who have heartburn over 
the offering of this amendment, 69 Senators have already voted for this 
amendment. This will not be a big problem if you just allow us to have 
the vote, put it on the bill. If the bill gets signed by the President, 
we have at least advanced this portion of the Energy bill.
  But let me talk for a moment about ethanol. The ability to take the 
drop of ethanol from a kernel of corn and have the protein feedstock 
left and use that drop of alcohol to extend America's energy supply--
good for us. That is called renewable energy. It expands the supply of 
energy. It means we can grow our energy in our fields.
  We have a prodigious appetite for energy in our country. As all of us 
know, when the price of energy goes way up, the price of gasoline at 
the pumps continues to increase relentlessly, and we know we have to do 
something. It ought to be a warning sign.
  My colleague brings to the floor of the Senate a sensible, thoughtful 
provision that had wide bipartisan support in this Chamber. What he 
says is pretty simple. He says if it is the case that we didn't have 
energy on the floor last month, last week, this week, next month, or 
even this summer, if that is the case, if that is what the majority 
wishes to do, to not put the Energy bill back on the Senate floor and 
allow us to work on that to get a good energy bill, then at least let's 
take portions of the bill that we know had strong bipartisan support 
and move that because that will strengthen this country.
  Once again, let me say to those who counsel let's wait, let's just 
wait, the question is, Wait for what? Wait for fall? Wait for October? 
Wait for September? Nobody else is waiting. The price of gasoline is 
not waiting. The threat to our supply of oil is not waiting.
  Read yesterday's newspapers about terrorists who want to interrupt 
the supply of oil. They are not waiting. Why should we wait to 
construct a sensible energy policy for this country's future? Why 
should we wait, above all, to move forward a provision that has strong, 
broad bipartisan support in this Chamber?
  This is not the time to wait. This is time for us to move forward and 
understand that our economy, our Nation is at peril with respect to an 
energy supply if we do not advance those portions of the Energy bill 
that strengthen this country.
  I, for example, believe we ought to advance the conservation title 
and we ought to advance the efficiency title, both of which are very 
important. My colleague offers, I think, perhaps the easiest and 
perhaps the most important provision dealing with renewable fuels. The 
easiest why? Because almost three-fourths of the Senate agree with it. 
Yet the amendment gets offered and we will have people walking around 
here choking on it. Nobody ought to choke on this amendment. The Senate 
ought to agree that this amendment makes sense. This amendment has 
previously been agreed to. This amendment advances this country's 
energy interests. We ought to agree to this amendment. Not yesterday, 
not tomorrow--now. This is not heavy lifting.
  The only thing that is difficult in this Senate these days is that we 
are not doing anything. We face some real serious challenges in this 
country. We have an economy in trouble. We have energy problems. We are 
involved in a war in Iraq and a war in Afghanistan. We are beset by the 
terrorist threat. The fact is, this place is at parade rest. So my 
colleague Senator Daschle comes to the Senate floor and offers 
something that says, let's move on this subject; let's step forward; 
let's do the right thing; let's vote; let's advance this country's 
energy supply by passing the renewable fuels section of the Energy 
bill.
  I understand. I managed the bill on this side on the Internet tax 
issue. I understand this is inconvenient, but inconvenience is a small 
price to pay, incidentally, for advancing that important portion of 
this energy bill. I commend Senator Daschle for offering this, and I 
will strongly support it and hope we can move it quickly.
  Let me just say as one person who is managing this on the floor of 
the Senate--I can't speak for the majority, but let me speak for the 
minority managing this--this should not take much time at all. My guess 
is Senator Daschle would agree to a very short time limit on debate. We 
have already debated this particular issue and had votes on it, so this 
should not interrupt us more than 30 minutes or an hour, after which we 
will have expressed ourselves as a Senate to move a very important 
piece of this energy bill--the renewable fuels portion of the Energy 
bill--forward with this legislation.
  My hope is that is what we will decide to do. There is a possibility, 
however, that what happens the minute someone offers an amendment like 
this is this place goes into some sort of apoplectic seizure; it shuts 
down; we go into a quorum call. Why? Because people want to gnash and 
wipe their brow and wring their hands and fret on what to do because 
they can't deal with this. The way to do it is to put it up for a vote, 
have about 70 Senators vote for it, and add it to this underlying 
legislation, so that in the end we will have this important piece of 
the Energy bill for the American people. That will be good for this 
country and good for the American people, and when we have done it, I 
will say good for the American Senate as well.
  I yield the floor.
  Mr. REID. Mr. President, I have the highest regard for the 
distinguished junior Senator from Mississippi, Senator Lott, but on 
this issue I disagree with him. I believe we have to move forward on 
energy legislation any way we can. If it is piecemeal, let's do that. 
The people of the State of Nevada are suffering from high gasoline 
prices. We have the second or third highest gas prices in all America.
  For example, the bill we are going to take up next week, the FSC 
bill, in

[[Page 7641]]

that bill I think very importantly the managers of that bill added to 
that some very important tax provisions that deal with energy. There 
are some short-term solutions I will speak to briefly, but there are 
some long-term solutions we must address.
  Senators Baucus and Grassley in the FSC bill address that. What have 
they done? They have provided tax credits for alternative energy. The 
tax credit for wind has expired. They are going to add, if we pass that 
legislation, a tax credit for solar, a tax credit for geothermal. This 
is the solution to the energy problems we have in this country. It will 
happen. It is only a question of time, when it is to happen. We need 
not depend forever on the vagaries of what OPEC does. We have to depend 
on what we can do.
  People come to this Senate floor and say we need to produce our way 
out of the problem we have. We cannot do that. The United States has, 
even counting ANWR, less than 3 percent of the entire oil reserves in 
the world. Ninety-seven percent-plus of the oil is someplace other than 
the United States. So it is common sense that we cannot produce our way 
out of the problems we have today. We can do some things with the oil 
that we do have. We can make it better. We can have some of our smaller 
producing wells produce a little more. We can do some with exploration. 
But the answer is not that. We cannot produce our way out of the 
problems we have with oil.
  So what can we do? The one thing we can do is do something with 
alternative energy. The Nevada test site in the deserts of Nevada has 
been the site for almost 1,000 nuclear explosions, some above the 
ground, some below the ground. At the Nevada test site, if you put 
solar panels on the Nevada test site you could produce enough 
electricity to serve the entire United States. The Nevada test site 
with solar panels could produce enough electricity to satisfy all the 
needs of this country.
  We know that wind energy is doing very well. In the Midwest there are 
some farmers making more money on their windmills producing electricity 
than they are from the crops they produce. We know that Nevada has been 
said to be the Saudi Arabia of geothermal. We have, not unlimited, but 
huge amounts of geothermal power in the State of Nevada. You can drive 
places in Nevada and see steam coming out of the ground naturally. It 
is because of geothermal. Some wells have been tapped. The problem with 
tapping the resources we have with geothermal is the people have no tax 
credits to do it like they had for wind. If we did that, there would be 
immediately, in Nevada, a tremendous surge in the production of 
electricity which would feed our state, California, and other parts of 
the West with badly needed electricity. There would not be any 
pollution. The same, of course, applies to solar. So we need to do 
that.
  There are some other solutions to problems we have. Of course, among 
the long-term solutions I did mention is more fuel-efficient vehicles. 
We certainly need to do a better job in that regard.
  In recent years, there have been two major releases of oil from the 
Strategic Petroleum Reserve--during the Clinton years and during the 
first Bush years. It was done because it brought down the price of oil.
  For example, in January 16, 1991, there was a decision made to 
release oil from our petroleum reserve. The next day crude oil prices 
fell from $32 to $21 a barrel. Of course, it dropped. We have done it 
on two separate occasions--during the Clinton years and the first Bush 
years. It made a difference.
  A second release occurred. After that second release, within a week 
of the time the Strategic Petroleum Reserve was being used, the price 
of oil dropped from $37 to $31 per barrel.
  Right now the price of oil is near $40 a barrel. Why doesn't the 
President release this oil from the petroleum reserve? I don't know. I 
know one thing. It would certainly be a help if that happened. It would 
increase the supply in this country. As supply is increased, we would 
have a lessening of prices.
  The other thing which I think is extremely important is that we 
recognize there are other ways of bringing down the cost of oil. One 
thing the President could do is use his bully pulpit and his influence, 
which we understand is significant with the Saudis. Bob Woodward just 
published a book that said they knew about the war before anybody in 
the Congress knew about it.
  Also, of course, we have been told the President has been assured 
that in September they will start releasing more oil. That will also 
bring down the cost of oil. I suggest rather than waiting until this 
fall the President do something now to pressure the Saudis into 
releasing more oil. They have cut by 10 percent their production of oil 
which began on April 1.
  These countries are supposed to be our friends. We have young 
Americans giving their lives in Iraq right now to make that part of the 
world safer and more stable. It doesn't seem right the Saudis and other 
OPEC nations are not recognizing what we are doing for them.
  We also know there are other things that can happen. The bill that 
was defeated on the Senate floor last year had a lot of problems with 
it. Senator McCain referred to it as a ``hooters and polluters'' bill 
because of all of the ornaments that have been attached to the so-
called ``Christmas tree.''
  There are things which we need to do. People have said, Well, these 
things the President can do now do not matter. Getting the Saudis to 
increase the supply of oil would matter and, of course, having more oil 
come out of our strategic reserve would matter. The other thing the 
President could do is say let us stop buying oil to be put in the SPR 
right now. Some analysts suggest prices will only go down by 10 to 20 
cents a gallon. That is significant.
  In Nevada where the prices are approaching $2.50 a gallon, it seems 
to me that would be a help. Anything would help. As far as I am 
concerned, that is a good enough reason to do it.
  Consumers need immediate relief. We are talking about as much as a 
million barrels of oil a week. That is about how much we put in the SPR 
which we are buying from the OPEC nations when they cranked up the 
price of oil. It doesn't make sense to do that. This isn't the huge 
supply of oil that comes into this country on a weekly base, but it 
still is a lot. It will make a difference.
  The latest price spike in Nevada was caused, they say, by the 
shutting down of the refinery in northern California which produces 
only 165,000 barrels of oil a day, or 1.5 million barrels a week. If 
that is the case, that is the same amount of oil we are buying from 
OPEC to put in the SPR. That logically would indicate the price should 
come down.
  I think if we are going to do anything for energy in this country, we 
have to take it piecemeal: Do ethanol, and do what we are going to do 
next week with the legislation that has been crafted by Senators 
Grassley and Baucus to give tax credits to the people who will produce 
good, clean energy.
  The President in his State of the Union message said he wanted to 
move to a hydrogen economy. If we are going to depend on a hydrogen 
economy, we have to do something about producing hydrogen and use 
something other than fossil fuel to produce it, which only compounds 
the pollution. The only way you can have a hydrogen economy is produce 
the hydrogen by using alternative energy--sun, wind, or geothermal.
  I hope we can, as Senator Dorgan has indicated, move forward very 
quickly and dispose of this legislation. If people vote the way they 
did the last time, this should go away very quickly. For people who 
say, I voted for it once, I am not going to this time because it is 
different form and it is stand alone, it seems to me it should be 
easier to do it that way than when it was in the bill which had so many 
different problems.
  I commend and applaud the Senator from South Dakota for moving this 
particular piece of legislation which will improve the energy needs of 
this country.
  I hope we look long term and do things other than what we have been 
doing; that is, try to produce our way out of the situation that is so 
desperate for the people in Nevada who

[[Page 7642]]

have the third or fourth highest gas prices in America.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I ask unanimous consent to be added as a 
cosponsor of the amendment offered by Senator Daschle.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Mr. President, I rise in strong support of this 
amendment. I have listened to the arguments propounded by the Senator 
from Mississippi in reference to this amendment.
  First, we shouldn't shy away from this amendment for fear of being 
overworked. It was announced at our luncheon today we have had exactly 
11 votes in the last 4 weeks in the Senate. There is certainly room for 
more activity here, and certainly activity should be focusing on 
important national issues such as energy.
  Energy security is important for our Nation's future and it is a 
critical part of our foreign policy. Make no mistake: Our focus on the 
Middle East is about a lot of different issues, but it certainly is 
about the issue of energy and its future and America's dependence on 
external sources for its energy. That dependence has led to some 
terrible circumstances.
  We are faced in the Midwest and across the Nation with high gasoline 
prices. In the city of Chicago and across the State of Illinois and all 
around our Nation, we are seeing gasoline prices reach record highs. If 
you ask why is this situation, I am afraid to say the culprit is very 
obvious: OPEC, the oil cartel in the Middle East, has decided to 
restrict the flow and supply of oil to the United States. By cutting 
off supply, demand forces the price up. They know that. We are, 
frankly, at their mercy.
  Interestingly, during the last Presidential campaign when Governor 
Bush of Texas was running against Vice President Gore, he said at one 
point if he faced that situation as President of the United States he 
would take direct action against OPEC to bring down their prices and 
force them to supply oil to the United States. And yet weeks have gone 
by and none of that has occurred. In fact, businesses and families and 
workers all across the Nation are being held captive by the OPEC oil 
cartel.
  Isn't it ironic that at the same moment we have sent over 100,000 
Americans to risk their lives for security and stability in the Middle 
East, at a time when we are placing our military in the Middle East to 
stabilize it for many of these oil-producing countries, they have 
turned on us and said despite our jobless recovery and despite our 
recession they are going to restrict the flow of oil to the United 
States, knowing full well the hardship which it creates.
  If Bob Woodward is accurate in his book, it is scandalous to believe 
the Saudis are doing this with the understanding that at some time 
before the election they will start sending more oil to the United 
States so gasoline prices will come down and benefit the current 
administration. That is what has been stated.
  Prince Bandar, the ubiquitous diplomat in Washington, was the one who 
was brought in by this administration to be forewarned about the 
invasion of Iraq even before Members of Congress. He is such an 
important diplomat and international businessman that the 
administration felt his counsel was more important than the counsel of 
Members of Congress of both political parties.
  If Mr. Woodward is correct in his assertions in his book, that there 
has been some sort of an agreement that the price of gasoline is going 
to go up, creating some discomfort, but come down just in time for an 
election surprise, an October surprise, that is awful; it is really 
unfair to the American people.
  Why do we bring this amendment to the floor today? Well, Senator 
Daschle and Senator Dorgan, as well as Senator Reid of Nevada, have 
made the case that this is a part of the Energy bill which we can pass 
today. We can pass it with a limited amount of debate and with an 
overwhelming, bipartisan rollcall, reflecting the support which alcohol 
fuels have in the Congress.
  We know this fuel source is good for America. First, it is homegrown. 
We do not have to depend on foreign companies and foreign nations to 
befriend the United States.
  We can grow the corn and other feedstocks that are necessary to make 
ethanol.
  Second, it is definitely going to be an improvement on the 
environment. We know that by using alcohol fuels, we reduce pollution, 
which is a very positive thing.
  Third, from a selfish point of view of the Corn Belt, we know that as 
more demand for corn is created by more production of ethanol, the 
price of corn goes up, farm incomes go up, and Federal payments go 
down. So it is a positive effect from three different perspectives.
  Some argue we are making a mistake by trying to go at this one issue 
at a time; rather, we should bring the whole Energy bill before us. I 
saw Senator Domenici from New Mexico on the floor a few moments ago. No 
one has worked harder on this bill than Senator Domenici. I know his 
bitter disappointment when the bill failed by two votes, with 
bipartisan opposition, last December. I was one of the Senators who 
voted against it.
  There were many provisions of that bill which I support, including 
the ethanol provision. But, frankly, at the end of the process, the 
Energy bill had become a dog's breakfast. It turned out to be a 
smorgasbord of special interest groups. They went out and included 
provisions in that energy bill which were nothing short of scandalous.
  Senator Maria Cantwell from the State of Washington came to the floor 
and echoed an earlier comment made by Senator John McCain--Senator 
Cantwell, a Democrat; Senator McCain, a Republican--in which they said 
this bill had been dominated by hooters, polluters, and corporate 
looters. Now, it is a great phrase. When you parse it, you understand 
what they are talking about.
  Imagine, the Energy bill we were being asked to vote for included a 
provision helping someone in the State of Louisiana build a strip mall 
for a Hooters restaurant. Now, I have never been lucky enough to go in 
a Hooters restaurant. I am sure there is a great deal of energy in a 
Hooters restaurant. I cannot believe it is the key to America's energy 
future. But it was part of that bill.
  When it came to the polluters, take a look at the assessment of 
environmental groups of the Energy bill, which we rejected. Almost to a 
person, these environmental groups said we were relaxing standards when 
it came to air pollution; we were turning our back on sound energy 
policy coupled with sound environmental policy.
  When it came to the corporate looters, whether you are dealing with 
electricity or oil, I think it is obvious. As we debate today this 
energy issue, across the street from us, in the Supreme Court, they are 
weighing the arguments in a case that has been brought against the 
Bush-Cheney administration, a case brought by groups that believe there 
should be full disclosure of the special interests that came to the 
table, the outside special interest groups that helped to write the 
Energy bill.
  The Bush-Cheney administration--particularly Vice President Cheney--
has been so adamant to continue to conceal and keep secret the sources 
of information which led to that energy bill that the case has gone all 
the way to the U.S. Supreme Court. That is, frankly, because many of 
those who came to the table must be a great embarrassment to this 
administration. It has been said, it has been admitted by some, that 
Enron--and those were the glory days when Enron was still close friends 
with the White House--Enron was in on the writing of this energy bill. 
It is no surprise. Just read the bill. It was a bill that, frankly, had 
too many of those special interest groups writing too many provisions.
  So here we come today with a proposal by Senator Daschle which is 
long overdue. It tends to take away all of the chaff and leave the 
wheat.
  Let's go to the important part of the Energy bill where there is 
bipartisan

[[Page 7643]]

consensus. Thank goodness we no longer have to labor with those 
provisions which provided a sweetheart deal for the producers of MTBE. 
MTBE is a fuel additive that has been put in gasoline for over 20 years 
in order to make engines run smoother. But over 20 years ago, they 
discovered that MTBE might work in your engine, but outside it was 
dangerous to the environment. It is not biodegradable. So if MTBE 
should leak from an underground fuel tank and get into the water supply 
of an individual with a well or a town that relies on an aquifer, it 
could make the water undrinkable and, in fact, potentially dangerous to 
public health.
  European studies link MTBE contamination to the cancer-causing agents 
which, frankly, we are finding too often in our environment.
  So the producers of MTBE knew about this problem in 1984, continued 
to sell the product, and now communities across America are being 
inundated with MTBE pollution.
  In my State of Illinois, over 25 villages and towns have MTBE 
contamination. Over 200,000 people in my State live in an area where 
they are trying to cope with MTBE contamination of their water supply--
a danger to families, a danger to businesses.
  So what did this energy bill say? Along came a provision in the 
Energy bill which said the producers of MTBE, unlike any other company 
in the United States of America, should not be held accountable in 
court for their wrongdoing. If they knowingly sold a toxic and 
dangerous product, which caused damage to an individual, to their 
health, then, frankly, the Energy bill said: We are going to give them 
a pass. We are going to say they cannot be held accountable in court. 
Let the individuals bear the burden of the cost of the medical bills 
and cleaning up their water supply. Let the villages and towns pay the 
millions of dollars necessary to overcome MTBE contamination.
  That is the reason I voted against that energy bill. I went back to 
Illinois to a meeting of my Illinois Farm Bureau, a group that was very 
strong for this ethanol provision, and it was a cool reception. They 
wanted to know why, after some 20 years on Capitol Hill, I turned my 
back on ethanol.
  Well, I told them. I am still for ethanol. I still believe in it. I 
support this amendment. But I do not believe in the special interest 
favors that were included in that energy bill. They understood. Many of 
those same farmers came to me afterward and said: We understand 
completely. You ought to clean up that bill. You ought to pass the good 
provisions that are good for America and get rid of the rest of that 
mess.
  Well, we are trying to do that today. Senator Daschle's leadership 
has brought an important part of this bill forward. Ethanol is not just 
an American homegrown energy source; in my part of the world, ethanol 
is a job source, and we desperately need jobs in America. We have lost 
over 2 million jobs under the Bush-Cheney administration. We have lost 
hundreds of thousands of manufacturing jobs just in the State of 
Illinois. Ethanol plants being built around the Midwest, around the 
Nation, will create good-paying jobs in rural areas, something we 
desperately need. I think it is important we do it.
  For those who say, ``Well, why don't we wait until later,'' we cannot 
afford to wait. The highway bill, which should have been passed last 
year, that would have created millions of jobs across America, has been 
stalled in this Republican Congress now for 2 straight years. The 
battle between the White House and the Republican leadership I cannot 
even explain at this point, but for reasons that will only be known to 
them, they have held up the passage of the highway bill at exactly the 
wrong moment, the moment when we need jobs so much in America.
  Passage of this amendment on the ethanol provision will get us moving 
toward more investment, more capital creation, and more production of 
ethanol and construction of ethanol plants across America. That is a 
positive, not just for the Midwest but for our Nation.
  I commend Senator Daschle. I think, frankly, we should face this 
issue. We should debate it in a timely fashion. We should vote on it. 
If the 69 or 70-plus Senators who have stood with ethanol on a 
bipartisan basis in the past will continue to do so in the future, we 
can make this part of this bill and send it to the President for his 
signature, and say to those who have been waiting for some hope: When 
it comes to dealing with energy, we have an important part of this bill 
that we have succeeded in passing.
  Many other challenges remain on energy. We can face them, but let's 
do the right thing. Let's adopt the Daschle ethanol amendment today.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Hagel). The Senator from Arizona.
  Mr. McCAIN. Mr. President, I regret that I was not here at the time 
the Democratic leader offered his amendment. But, of course, it would 
not have mattered really much whether I was here.
  I wonder, since we have seen a singular lack of progress in the last 
few months, particularly in the last few weeks--literally every piece 
of legislation, with the rarest exception, has been loaded up with 
extraneous amendments and has had to be brought down. Of course, I have 
only been here for 18 years. That is not a long time compared to some. 
But I have to say, I am unaccustomed to this kind of procedure where in 
good faith we brought this bill to the floor, in good faith we voted 
cloture on the motion to proceed, and then the Democratic leader stands 
up and proposes a totally, completely, absolutely extraneous amendment, 
an entire piece of legislation, the Energy bill, which has been hard 
fought in this body many times, as an amendment on the Internet tax 
moratorium bill, without warning, without saying what he was going to 
do, without having the courtesy to inform me as the chairman of the 
committee and the manager of the bill. If he had, I would have thought, 
well, maybe we ought to not bring it up. The temperature is 85 degrees 
in Phoenix today. It is not raining there like it is outside. Why don't 
we just go home? Why don't we go home, relax with our constituents and 
our families and friends, rather than go through this charade of 
telling Americans that we are legislating.
  There was an old line in the cold war era. The Russians said: We 
pretend to work and they pretend to pay us. Well, we pretend to work 
and we are still getting paid. We are not working. We are not doing 
anything.
  I say to my friend the minority leader and to my friend from Nevada--
and they are my friends--what is this all about? You know very well 
that if an Internet moratorium is passed, an energy bill will not be 
part of it. Now we are going to go through the parliamentary charade of 
having somebody offer a second-degree amendment and somebody else will 
do a substitute, and then somebody else will offer a second-degree 
amendment. What am I supposed to tell my constituents, the taxpayers, 
we are doing here in Washington?
  If I had a townhall meeting and said, yes, we had an Internet tax 
moratorium bill, a bill that is vitally important to both sides as far 
as whether taxation is going to be imposed on transactions over the 
Internet, which some 70 or 80 percent of the American people engage in 
now--billions of dollars--we are going to decide in a parliamentary 
fashion whether those transactions should be taxed or not taxed, and if 
so, under what circumstances--this is the third time we have revisited 
this issue. Ten months ago we passed it.
  The Senator from Tennessee will tell me how many hundreds of hours he 
has devoted to this issue. The Senator from Virginia will tell me how 
many hundreds of hours he has devoted to it. What do we do? We take up 
the bill. We have debated it for barely 2 days. And what do we have? 
The Energy bill as an amendment to the Internet tax moratorium bill.
  What am I supposed to tell my constituents? I will tell you what they 
are going to say: We don't get it. That is what they are going to say: 
We don't get it. Yes, it is important to me, Senator, whether the State 
and local governments can tax the things I buy on

[[Page 7644]]

the Internet. Some people say they should; some people say they should 
not. But can't you guys and women get together and make a decision on 
it so I will be relieved of this lack of knowledge as to what the 
future holds?
  What about all those people who are starting businesses that do 
business over the Internet? What about them? I am sorry, sir, we can't 
address this issue because we have to take up the Energy bill.
  I certainly wouldn't say it is all about ethanol. I certainly 
wouldn't say it is about a product that we have created a market for 
which has absolutely, under no circumstances, any value whatsoever 
except to corn producers and Archer Daniels Midland and other large 
agribusinesses.
  Here we go now. Here we go. The Democrats have a retreat on Friday, 
so we are not going to be here on Friday. No, we are not going to work 
5 days this week. Actually, 3, excuse me. And here we go, now we are 
going to spend late this afternoon jockeying back and forth.
  I am sure there may be a headline in South Dakota that says: Senator 
Daschle fights for ethanol. I bet there will be a whole lot of press 
releases, too, and maybe even the distinguished Senator from North 
Dakota will be fighting for ethanol, too. Meanwhile, we are not 
addressing the issues that the American people care about.
  Right now they care about whether we are going to tax the Internet. I 
urge my colleagues to tell us, all I want to know is, are we going to 
spend between now and when we go out of session at the beginning of 
October in this kind of back and forth?
  My side is also guilty, I freely admit. Are we going to spend that 
time between now and the beginning of October, when we will break to 
take the electioneering from the floor of the Senate out to our 
respective States, and do this or are we going to seriously legislate 
as the American people sent us here to do?
  Obviously, I am upset because this is a bill I have been working on 
for a long time, an issue I have been involved in for many years. 
Obviously, I am upset by it. I apologize if I have offended any of my 
colleagues. But at the same time, this has been going on now for 
months. This is not the first time we have done this. This is about the 
50th time, again, on both sides of the aisle. So why don't we make a 
decision. We are going to attach the minimum wage or we are going to 
attach lawyers' fees or medical malpractice or one of these; we are 
going to attach them all back and forth. And we will be able to force 
votes on it, but unfortunately, we don't legislate.
  Why don't we make a decision? Why don't the leaders and all 100 of us 
get together and decide what we are going to do and what we are not 
going to do. At least the taxpayers may find some comfort in the 
knowledge that at least we would tell them what we are doing.
  I would imagine that as we speak we will have some amendment and then 
a second-degree amendment, and we will fill up the tree, which probably 
very few living Americans understand, including Members of this body, 
but we will consult the Parliamentarian as to how the mechanics work.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. McCAIN. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I know my colleague from Virginia wishes 
to speak on the bill, and perhaps the Senator from New Mexico does.
  Let me say to my friend from Arizona, I understand his angst about 
this. But this is not a new procedure. The Senator from Arizona has 
employed the same procedure, as have I, as now does Senator Daschle 
today--that is, offering an amendment that does not relate to the 
underlying legislation.
  There is a reason that happens. The reason that happens is the 
passion one has for legislating on a specific issue that doesn't get 
resolved because someone else won't allow you to bring it and debate it 
on the floor. So you offer an amendment under the rules of the Senate 
to another piece of legislation. That is what happened here. I say to 
my colleague, he has employed the same tactic, as have I.
  Mr. McCAIN. Never.
  Mr. DORGAN. I will be glad to recite them. I will not do it at this 
moment. There were line-item veto amendments, motor voter, and others. 
Senator Daschle has not offered an amendment for the purpose of a 
headline in South Dakota. I happen to support renewable fuels and 
ethanol, and have for a long while. I make no apology for that, nor 
would Senator Daschle, because I think it advances this country's 
energy interests.
  The reason it has to be offered now, according to Senator Daschle--
and we all understand this--is we had an energy bill that failed here 
by two votes. I would have preferred we pass an entire energy bill in 
this Senate. I voted for it and I signed the conference report. I 
worked with the chairman of the Energy Committee. I would have 
preferred that to pass because it had titles in four areas I supported. 
I didn't agree with a colleague who said a few minutes ago he thought 
there were things that were unworthy and rendered it something we 
should not have passed. There were things in the Energy bill that were 
unworthy and I didn't support, but on balance I believed it would 
advance this country's interests. It failed by two votes in the Senate.
  That bill contained production incentives, conservation efficiency, 
and renewable fuels. The issue of renewable fuels is not new. We have 
worked on this for a long time. If we cannot get the Energy bill, then 
we ought to get the renewable fuels piece at least. That has such wide, 
strong support here in the Senate. We have voted on it. I believe it 
was 69 votes in favor of that provision. We had bipartisan, strong 
support for that provision.
  So if we cannot get the Energy bill, let's at least take that which 
will, in my judgment, be beneficial to this country's long-term 
economic and energy interests. That is what Senator Daschle offers this 
amendment for on this bill, because the other opportunities don't 
exist. If somebody said, well, let's bring an energy bill to the floor 
this week, rather than this bill, or bring it to the floor next week--
and I am guessing; I don't speak for Senator Daschle--he would have 
said let's do that, because he supports certain provisions of that 
bill, voted for it, was the author of the renewable fuels provision and 
ethanol provision. So my guess is he certainly would want that to 
happen. But because we are now told the Energy bill will take a back 
seat to this, that, and the other thing, and that it will now perhaps 
be fall before we talk about it on the floor of the Senate, Senator 
Daschle had every right--perhaps an obligation--to come here and say: I 
have a passion about this, let's advance this. This is an opportunity.
  Again, let me say I will bet, if I do a bit of research, perhaps 
almost all of us on the floor, with the possible exception of the 
Senator from Virginia, because he has been here fewer years-- but I 
would find everybody now on the floor has offered an extraneous 
amendment to pending legislation. That is not unusual. It is called for 
in the Senate rules. We face it every time we bring up a bill. What 
would be counterproductive is if you offer an amendment that becomes 
like throwing a wrench into the crankcase; you strip all the gears and 
shut everything down. That is trouble.
  That is not the case here. We have already voted on this. We know 
there is wide bipartisan support. This isn't throwing a wrench in the 
crankcase; this is advancing a part of the Energy bill that ought to 
advance.
  I will repeat, you have to be completely oblivious to reality not to 
understand we have a serious energy problem. Part of it is going to be 
solved by enhanced production, part by conservation, and part by 
efficiency. But

[[Page 7645]]

another part of it is going to be solved some way, someday, somehow by 
a renewable fuels title that represents an advancement in our ability 
to produce ethanol and other renewable fuels. We are going to do that. 
We can do it sooner or later. We can do it now or we can wait. But I 
submit to you this: Given what we face in this world, the threat of 
terrorism, cutting off an energy supply to our country, 60 percent of 
our oil coming from outside of our shores, much from troubled parts of 
the world, we had better get the entire Energy bill up and get it done. 
I pledge--and I think the Senator from New Mexico will recognize I was 
a constructive part of his deliberations and voted for it and signed 
the conference report--I will again be a constructive part of those 
deliberations.
  But if we are not going to get an energy bill up here, my colleague 
has every right to come to the floor and try to advance this renewable 
fuels provision. I support that. It is an appropriate thing to do. I 
don't believe it should impede us in any way. We can do it in a half 
hour. We know it, we know what it is, and we know what it will do for 
this country. It cannot be suggested this somehow is going to slow down 
this bill; it will not and it need not. The only thing that will do 
that is if those who decide they don't want this piece of the Energy 
bill to advance decide to find a way to interrupt this amendment.
  Having said all that, I will say again it is not about headlines for 
anybody. It is about the right of Senator Daschle to offer an amendment 
that is important, which has already been discussed in the Senate. I 
hope the Senate will have a vote on it and pass it and move on and deal 
with the underlying bill and pass it when we have solved the definition 
problem. I support a moratorium, and I believe since we have had a 
moratorium for 5 years previous, we can find a way to solve the 
definition problem and continue a moratorium with respect to Internet 
taxation.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized.
  Mr. DOMENICI. Mr. President, I wish the Senator from Arizona were 
here, because I would like to tell him I agree with many of the things 
he said. I certainly did not come to the floor--in fact, I left after 
the last vote, assuming I would not be back down here. I thought we 
were going on with something and that his bill, which had been debated, 
although it had a number of small amendments--I thought it would go 
through here and become law. But I have to admit between that little 
visit to my office and what I got on the phone about 25 minutes ago 
were very different. I don't want to be accusatory; I just want to say 
the minority leader, over a long period of time, has been in the same 
predicament we have all been in with reference to an Energy bill. He 
has been in the same predicament regarding ethanol as we have. We 
produced the first bill this year that had ethanol in it. As a matter 
of fact, everybody remembers that comprehensive bill was defeated by 
two votes in a cloture. It got 58 votes--that first one.
  What we have is somebody has taken a piece of the Energy bill and 
attached it not directly to the McCain amendment but to the tree on the 
side, as an amendment which will fail when McCain passes. Nonetheless, 
I guess making the point that you had a vote on ethanol does somebody 
something.


                Amendment No. 3051 to Amendment No. 3050

  Mr. DOMENICI. Mr. President, I want to suggest I am very pleased this 
happened, because I now send to the desk S. 2095 as an amendment to the 
Daschle amendment.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from New Mexico [Mr. Domenici] proposes an 
     amendment numbered 3051 to amendment No. 3050.

  Mr. DOMENICI. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  Mr. REID. I object.
  The PRESIDING OFFICER. Objection is heard.
  The legislative clerk continued with the reading of the amendment.
  Mr. REID. Parliamentary inquiry, Mr. President.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Can the Chair give the Senator from Nevada an idea of how 
long it would take to read the amendment?
  The PRESIDING OFFICER. The Parliamentarian advises the Chair that the 
inquiry is not in order while the amendment is being read.
  Mr. DOMENICI. I did not hear the Chair.
  The PRESIDING OFFICER. The Parliamentarian advises the Chair that an 
inquiry is not in order during the reading of an amendment.
  Mr. DOMENICI. I ask unanimous consent that the reading of the 
amendment be dispensed with.
  Mr. REID. I object.
  The PRESIDING OFFICER. There is objection. The clerk will continue 
with the reading of the amendment.
  The legislative clerk continued with the reading of the amendment.
  Mr. REID. Parliamentary inquiry, Mr. President.
  The PRESIDING OFFICER. The inquiry is not in order.
  Mr. REID. It is not in order?
  The PRESIDING OFFICER. The regular order is the reading of the 
amendment. The clerk will continue.
  The legislative clerk continued with the reading of the amendment.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  Mr. REID. Reserving the right to object.
  The PRESIDING OFFICER. The Senator may not reserve the right to 
object.
  Mr. REID. I object.
  The PRESIDING OFFICER. Objection is heard. The clerk will continue 
with the reading of the amendment.
  The legislative clerk continued with the reading of the amendment.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that there be a 
temporary holdup in the reading of the amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. I object. I don't know what ``temporary'' means.
  Mr. DOMENICI. Will the Senator object if it was understood that the 
reading could continue as soon as we finish our discussion? 
Temporarily, just 5 minutes per side and then the reading will 
continue.
  Mr. REID. Reserving the right to object, Mr. President, it is my 
understanding the Senator from New Mexico is asking that there be 10 
minutes of debate equally divided; following that, the reading of the 
amendment will continue?
  The PRESIDING OFFICER. Is there objection?
  Mr. DOMENICI. And nothing will change.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, might I engage in a conversation with 
the distinguished Senator from Nevada and talk for a minute and tell 
him what is happening?
  What I sent to the desk is a bill we will now call S. 2095, the 
comprehensive bill that we took to the Senate floor that Senator Dorgan 
alluded to. It was H.R. 6. We heard arguments that it was too 
expensive. This bill is no longer expensive. As a matter of fact, it is 
negative cost. It puts money back in the Treasury.
  We heard that Republicans could not vote for it, and some Democrats, 
because of MTBE. That is out of this bill. It is no longer there.
  I went back to the drawing board, took out direct spending, the 
raising of revenue was taken out of this bill, and it was put in 
another bill. So there is no raising of revenue that goes in this bill. 
It is in the tax bill that will be up next week.
  What I came to the floor of the Senate to do, and I say this to the 
distinguished acting leader of the minority, was to see, rather than 
piecemeal this bill, if we couldn't get an agreement that S. 2095 could 
become the subject matter and that we may have three or four or five 
amendments to a side. That is what I propound to the Senator from 
Nevada.

[[Page 7646]]

  I know how strongly Senator Daschle feels about this energy bill as 
it pertains to all the items he wants, including ethanol, and all the 
other items I described. He would have no objection to any of them. 
MTBE is out of the bill. It is no longer subject to criticism because 
it costs too much. As a matter of fact, it is about as cheap a bill as 
you can get and still get an energy bill.
  It does a lot of exciting things. With reference to the electric 
grid, it does great things to eliminate gridlock and to do other very 
important activities. I do not want to waste the time of Senator Reid 
going through this bill because I think he knows what we are doing and 
he knows what he is doing.
  I want to save this energy bill. I want to make sure everybody knows 
it is still alive and that it is good what happened here because some 
time in the next couple of days, we are going to prove that this energy 
bill still lives. I do not intend to kill the amendment of Senator 
McCain. That is not my purpose. I want to make sure everybody knows and 
everybody in this country knows we have a good energy bill that is 
alive, and we have the tax portion alive in another area. Frankly, I 
did not think we could get this far. But I thank the distinguished 
minority leader for opening up this door.
  He opened it a little bit, and I made a nice wide door and put in the 
whole bill. That is what this is about. A little tiny piece of the bill 
yielded an opportunity to put the whole bill in here. Now all I ask is 
that we sit down and make an agreement that this bill be looked at--I 
could say to the distinguished Senator who spoke about a bill that had 
been passed some time ago, I can almost guarantee him that if he liked 
that bill, he will much more like this bill than the one he voted for 
before. It is much better. It is much more streamline. It accommodates 
a lot more interests, and I believe we could get an overwhelming 
majority of votes for it.
  I want to close by saying if there is anybody in this country who 
does not know there is an energy crisis, then they must have been 
sleepwalking for the last 6 months because we are in a crisis of high 
order.
  I am offering a way to make sure we keep alive an energy bill that 
will work.
  I yield the floor and reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, it goes without saying, but I will say it 
again, I have worked with Senator Domenici during my entire 18 years in 
the Senate. During more than half of that time, he and I have worked as 
the chairman or ranking member, as the majority of the Senate goes back 
and forth, on one of the most important subcommittees there is in the 
appropriation process, Energy and Water, so we have worked very closely 
together.
  We are partners in that legislation, and he is my friend. However, on 
this energy bill let me say this: First, today of all days is a day 
when the Supreme Court of the United States was hearing a most 
important case, a case the Vice President of the United States has 
stalled for 3\1/2\ years. He had meetings during the transition period 
after President Bush and he were elected, meetings with people from the 
energy field, oil companies, automobile manufacturers, but we are not 
certain, people from the nuclear industry.
  All the American people have asked for in 3\1/2\ years is tell us who 
they met with, what they talked about, and when the meetings took 
place. He has refused. Now this matter has gone to the Supreme Court, 
and that argument was held today. These were secret meetings, I guess 
is what they are, and if there was ever a time in the history of the 
country where we need to debate the energy crisis, as some refer to it 
openly, it is today. The first step to that would be to find out who 
the Vice President met with, why he met with them, what he talked 
about, and how long the meetings took place. He has refused to do that.
  I also say that this country has arrived at a point in time where we 
are not going to be able to do major legislation. Let me give some 
examples with rare exception. Take, for example, the endangered species 
bill. The endangered species bill has caused problems in the State of 
North Dakota, and I know this because I have heard my two colleagues 
from North Dakota talk about the problems of the endangered species law 
in North Dakota. But it is not limited to North Dakota; the endangered 
species law is a problem for most States in the country. The State of 
Nevada ranks 34th in the number of listings for endangered species.
  A number of years ago Senator Baucus, Senator Chafee, Senator 
Kempthorne and I tried to do a major revision of that bill. We could 
not do it. In that same Environment and Public Works Committee, there 
was a decision made that we needed to do something about Superfund. We 
could not. We have tried. Senator Smith, Senator Lautenberg, and others 
on that committee tried. They were at loggerheads. They could not come 
up with a major revision of that bill.
  So the decision has been made by most legislators that the way to 
improve the Superfund law that now exists is to improve it by bits and 
pieces. The way to improve the endangered species law in this country 
is to do it by bits and pieces. The Energy bill is the same thing.
  I say to my friend, we are not going to pass a bill that the Senator 
from Arizona referred to as the hooters and polluters bill. Why was it 
referred to as the hooters and polluters bill? Well, many of us think 
it did nothing to clear up the environment. Where did the hooters come 
in? One of the ornaments attached to the Christmas tree bill was to 
give a financial stipend to a Hooters operation some place in the 
southern part of this country. That is where it got its name.
  We are not going to pass major legislation on energy in the near 
future. What we can do, though, is pass the part on which there is 
general bipartisan agreement. Ethanol is an example. More than two-
thirds of the Senate voted for that legislation. It seems to me 
entirely logical that we should dispose of that matter. It would do 
some good to help the energy crisis we all acknowledge is in this 
country.
  As I spoke about earlier today, I throw bouquets to Senators Baucus 
and Grassley for having done what they did in the recent FSC bill by 
including in that something that is extremely important--section 45, 
production tax credits for renewable resources--that expands and 
extends a credit for wind, geothermal, solar, and biomass. That is 
important. We should pass that measure next week. I think we are going 
to do that. We should do the ethanol bill now.
  My friend from Arizona, the distinguished senior Senator from 
Arizona, asked, What is going on in the Senate?
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. REID. I ask that the Senator from Nevada be given an extra 4 
minutes and the Senator from New Mexico be given an equal amount of 
time.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The Senator from New Mexico.
  Mr. DOMENICI. Is it possible we could take that off the reading of 
the amendment?
  Mr. REID. It is possible. I will think about it after.
  Mr. DOMENICI. We would think that it would, but that is a guess, 
although it would be a pretty good guess.
  Mr. REID. I ask unanimous consent that I be given 4 additional 
minutes, an extra 4 minutes be given to the Senator from New Mexico, 
and then we go back to reading the amendment when I finish.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The Senator from Nevada.
  Mr. REID. Mr. President, what I was saying is the Senator from 
Arizona asked, What is going on in the Senate? I mean, can anyone 
imagine--and I am paraphrasing--they offered an amendment to energy on 
a bill that deals with the Internet tax?
  My friend from Arizona, who is one of the most astute politicians 
this country has ever seen, knows what is going

[[Page 7647]]

on. We are in the Senate. This has been going on for more than 200 
years. We have the right to do that. In years past, no one ever 
considered it anything out of the ordinary.
  The problem we have in the Senate today is we do not do anything. In 
the last 4 weeks, we have voted 11 times. Why? Because amendments are 
offered to important legislation like FSC and there is a desire to have 
a vote, for example, on overtime. How much time does Senator Harkin 
want to debate that? He will take 10 minutes and vote on it. We have 
not been given that privilege.
  So what is going on in the Senate today is what has gone on for 200 
years. The difference is, nothing is ever brought to conclusion because 
people do not want to vote. The majority has made a decision they do 
not want to vote, so we do not vote.
  So I say to my friend from Arizona, we are doing what has been 
historically done in this body. Some may ask, Well, Senator Reid, why 
would you ask this amendment be read? Because I feel that offering this 
amendment of some 800 to 900 pages is only a message that says we are 
going to continue doing business in the Senate the way we have all year 
long and do nothing. Everybody knows that we are not going to pass 
this. It is the same as the endangered species. It is the same as 
Superfund. We are not going to pass a hooters and polluters bill.
  We can take bits and pieces out of that legislation and do some good 
for this country. I repeat: To do the section 45 production tax credit 
would be a tremendous boon to this country. We would be able to start 
producing energy alternatively. It would help the capital markets. 
There would be construction jobs. I think it is the right way to go.
  I am disappointed that my friend from New Mexico, who has worked 
hard--as my friend from North Dakota said, no one has worked harder on 
this energy bill than my friend from New Mexico, the distinguished 
senior Senator, but I say to him, someone I should not be giving advice 
to because he has far more experience than I have, this bill is not 
going to pass. I repeat for the third time, look at what we have tried 
to do with endangered species, look what we have tried to do with 
Superfund. Those are only two of the numerous other pieces of 
legislation we need to work on, but let's do them piece by piece. That 
will be my suggestion.
  I will give some thought to taking away my objection to reading the 
amendment, but I am going to give some thought to that because I think 
offering this amendment is only a way of preventing our moving forward 
on this important legislation. I have spoken to the manager of this 
bill. He thinks that working with Senator McCain, the chairman of the 
Commerce Committee, that we can come up with a compromise in a 
reasonable period of time. It is totally appropriate that we dispose of 
Senator Daschle's amendment. People should vote it up or down. More 
than two-thirds of the Senate approved it at one time. Why should that 
change?
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. First, I wish to talk about what is going on in the 
Senate. I could hardly believe my friend--and he is my friend; what he 
said about our working together is true, but I could hardly believe my 
ears when he suggested that the Republicans are keeping us from voting 
in the Senate. I mean, I have a list of what has been going on for the 
last 3 months. You know, it is nothing. It is not because of the 
Republicans, but the Democrats on every issue have said they want to 
filibuster it. We have had more clotures in the last 3 months than any 
3 months in the history of the Republic, unless there was one after 
another on one bill of which I am unaware. So let's talk about that in 
reality.
  Let me say to my good friend Senator Reid, if he thinks there is only 
one good provision in this bill that everybody might vote for, let me 
tick off what is in this bill and ask you if you think it would be 51 
or 61 votes for it. Let me start: Encouraging the production of 
domestic oil without violating the environment; encouraging the 
development of more natural gas from three sources, all American; 
encourage the building of necessary infrastructure such as the Alaska 
natural gas pipeline; encourage more renewable energy--everybody speaks 
about it, this bill promotes it, and we can't pass it--promote energy 
efficiency; promote clean coal technology; increase R&D on a variety of 
technologies and improve our electricity grid.
  These are the things in this bill. I don't care how big it is, how 
many pages are in it. If the distinguished minority leader can bring up 
one piece of it because it is popular, then I believe I ought to be 
entitled to bring up the rest of the bill which is also popular. 
Remember, there is no MTBE in it. If we would have brought that first 
bill here without MTBE in it, it would have already passed; we would be 
finished. Yet this bill is more stripped down than that. Because in 
addition to MTBE not being in it, I have already told you that it 
doesn't cost anything. I have told you the tax provisions are somewhere 
else, and I have just given you a litany of what is in it.
  I submit, before we are finished, if it takes all night or however 
long you want us to be here reading it, that we will have a vote and it 
will be a cloture on this bill and I submit there will be two of them. 
There will be one on Senator Daschle's and one on Senator Domenici's. I 
believe Senator Daschle's will fail and I believe mine will pass, and 
what we will have is we will have the hope and have alive the idea that 
a good Energy bill, which we have gone through and swept with all kinds 
of brushes to make it a bill that everybody likes, will be pending 
before us.
  I am hopeful that in the process we will not have taken so much time 
that Senator McCain can't get his bill done. I am very hopeful of that. 
I hope Senator McCain's staff understands that all I have been speaking 
of, unless we have to stay here all night and tomorrow to get this 
read, I am looking for the time, looking ahead here and figuring that 
you can get your amendment done and we can get an important decision by 
this institution, in light of the terrific price of gasoline, whether 
they want an energy bill or not. That is going to be a good one to 
watch and it will be a good one to have a vote on, I will tell you.
  How much time do I have remaining?
  The PRESIDING OFFICER. The Senator has 1 minute 15 seconds remaining.
  Mr. DOMENICI. And how much does Senator Reid have?
  The PRESIDING OFFICER. The Senator has 8 seconds.
  Mr. DOMENICI. Do you want to yield our time back?
  Mr. REID. I would like an additional 1 minute on our side with the 
same rule in effect
  Mr. DOMENICI. I would take 1 in addition in case you say something 
that needs to be rebutted.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Virginia.
  Mr. ALLEN. I ask the Senator from New Mexico to yield for the purpose 
of a question.
  Mr. DOMENICI. Certainly.
  Mr. ALLEN. Mr. President, I ask the Senator from New Mexico, while 
all this discussion is going on about the underlying bill, and while it 
is interesting to talk about endangered species and Supreme Court cases 
and so forth, and energy is important, clean coal and new sources of 
natural gas are important, and oil, and a variety of other things, the 
fuel cell and so forth--at any rate, the reality is when you speak of 
endangered species, there are endangered jobs in rural America.
  Even though this debate is on the ethanol matter, the Corn Growers 
Association is very much strongly in favor of making sure there is no 
taxation on the Internet. They realize how important that is; that this 
measure be passed for jobs and economic growth in rural America. There 
are 35 States in the Corn Growers Association.
  I would ask the Senator from New Mexico, what is the purpose of 
reading this title of this bill as opposed to acting on the Energy 
bill, which I consider

[[Page 7648]]

a detour and a tangent off of the Internet access tax issue, or even 
addressing issues from those who want to tax the Internet and may want 
to put on some more amendments? Why do we have to spend time listening 
to the melodious voice of our clerk reading off the title of your 
amendment?
  Mr. DOMENICI. Senator, I yielded to you without knowing you were 
going to use all the time I had remaining.
  Mr. ALLEN. I am sorry.
  Mr. DOMENICI. If there is anybody I would like to do that for, I 
would do it for you, but how much time do I have remaining?
  The PRESIDING OFFICER. The Senator has 32 seconds remaining.
  Mr. DOMENICI. Senator, I am going to try to answer your question when 
I get back on my feet, but I yield the floor at this point.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, the Senator from New Mexico has stated the 
bill he offered is not the so-called hooters and polluters bill, so 
named by the distinguished Senator from Arizona, but in fact it is a 
slimmed down version of that bill.
  I ask through the Chair of my friend from New Mexico, is that, in 
fact, the case? Could you answer that yes or no? The bill that is now 
before the Senate is a slimmed down version of the so-called hooters 
and polluters bill?
  Mr. DOMENICI. Senator, I can only do that in dollars. The original 
bill cost $31-plus billion; this one costs negative $1.2 billion.
  Mr. REID. I ask, does this bill have in it the section 45 production 
tax credit?
  Mr. DOMENICI. No, it does not.
  Mr. REID. I ask my friend from New Mexico, would you support--
supporting your bill here, that is the one I have offered as an 
amendment, would you support the FSC bill with the section 45 
production tax credit in it?
  Mr. DOMENICI. Sure.
  Mr. REID. Mr. President, I am going to, at this time, that being the 
case, recognizing that what the Senator has offered is a slimmed down 
version and is not the original bill, and that he would support the 
provision in the FSC bill--I think a combination of those two might 
make some interesting votes here in the next day or two--I withdraw my 
objection to waiving reading the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. DOMENICI. Could the Senator tell me what you said about votes in 
the next couple of days? I didn't get it.
  The PRESIDING OFFICER (Mr. Alexander). The Senator from Nevada.
  Mr. REID. I know the Senator from Virginia wants to speak on the 
underlying bill. I will be as brief as I can.
  What I told the Senator from New Mexico, through the Chair, is that 
it was my understanding that the bill that was offered in the form of 
an amendment was nearer the original bill that was offered and cloture 
was not invoked on it previously. I have been told by my staff and 
others that it is a slimmed down version of the original bill. That was 
confirmed by the Senator from New Mexico.
  I further went on to say, to ask the Senator from New Mexico if it 
had the section 45 production tax credit in it. He said no. I then went 
further and said, would he, the Senator from New Mexico, support the 
FSC bill, which does have the production tax credits in it, and he said 
he would.
  I then said, that being the case, that we have a smaller version of 
the original Energy bill than I originally thought, and, further, that 
he would support the FSC bill, including the production tax credit 
provision that was placed in there by Senators Grassley and Baucus. I 
then said I think that is going to make for some interesting votes in 
the next few days.
  Mr. DOMENICI. So you said about 2 days? I still didn't get that.
  Mr. REID. I would assume the alternatives, I say through the Chair to 
my friend from New Mexico. I assume the majority has a number of 
alternatives. They can debate endlessly the amendment you have offered, 
the amendment the Senator from Arizona has offered, and we already have 
cloture having been filed on the minority leader's amendment--so it is 
possible, I don't know if the majority has made that decision, they 
could file cloture on your amendment.
  Mr. DOMENICI. That is correct.
  Mr. REID. They could file cloture on the amendment of the Senator 
from Arizona. That is why I said in a couple of days. It takes 2 days 
for these cloture motions to ripen. Maybe Thursday we could have a vote 
on all these matters, and I said it would make for some interesting 
votes.
  Mr. DOMENICI. Mr. President, I suggest the absence of a quorum. I 
don't quite understand, I say to both Senators. I want to help, but I 
don't understand.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Mr. President, could I ask what the parliamentary 
situation is?
  The PRESIDING OFFICER. There is a pending Domenici second-degree 
amendment to the pending Daschle first-degree amendment to the 
underlying text of the bill.
  Mr. McCAIN. So we are debating the Domenici second-degree amendment 
to the Daschle amendment to the substitute or to the original S. 150.
  The PRESIDING OFFICER. That is correct.
  Mr. McCAIN. I yield the floor. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ALLEN. Mr. President, I have been listening to the debate and the 
reading of titles of amendments. We have seen detours, political 
posturing, partisanship, criticizing of the Vice President, and all 
sorts of cover for past obstructionism.
  Obviously, things such as the geothermal are important. Clean-coal 
technology is important. Biomass, solar photovoltaic, energy policy, 
exploration of the North Slope of Alaska, natural gas pipelines for 
greater quantities of natural gas--all of that is very important. Then 
you listen to people talk about endangered species. A Senator was 
talking about endangered species. I am thinking: You know what is 
endangered in this country--particularly out in rural areas--is jobs 
for people in rural America.
  The main point of this debate and where we are supposed to be today 
is those who want to have the Internet free from taxation and others 
who have other ideas. The Senator from Texas, Senator Hutchinson, had 
an amendment. We voted on it, and we are supposed to be considering 
other amendments on Internet tax. Now we are off on a tangent of 
ethanol. First it was ethanol, and now it is the larger Energy bill. I 
was thinking the key people who like the ethanol provision are people 
who grow corn in America.
  There is an association, the American Corn Growers Association. To 
get everyone to focus a second on the main issue, which is whether the 
Internet ought to be taxed at the State and local level, I will share 
with my colleagues what the American Corn Growers Association actually 
thinks of S. 150, the bill to make sure there is not taxation on the 
Internet.
  They said they support S. 150. They want to make the existing Federal 
moratorium against State and local taxes on Internet access, as well as 
multiple and discriminatory taxes targeting interstate commerce, 
permanent and national in scope. They feel the bill would ensure 
technological neutrality so all Internet users, including their 
members--being the corn growers--are protected by the Federal 
moratorium no matter what technology they use to access the Internet. 
The Corn Growers Association feels the new technologies are 
particularly key to ensuring Internet access to rural America.
  They are exactly right, whether that is through DSL lines, through 
wireless, satellites, or electric power lines, there

[[Page 7649]]

are a variety of ways rural America needs to get access to broadband.
  The American Corn Growers Association, which represents people and 
interests of corn producers in 35 States, works very hard to enhance 
farm income. They care about protecting rural communities. They say 
they recognize the need to have a strong and stable farm economy, not 
just for the farmers, but for consumers, as well. They feel the 
Internet Tax Freedom Act and S. 150 is intended to exempt access to the 
Internet from taxation, including, they recognize, transmission. The 
Corn Growers feel to exempt from taxation the transmission is an 
integral part of accessing the Internet. They feel failure to amend the 
existing law would make consumers susceptible to substantial taxation 
of their Internet access. They also say even the definition of Internet 
access is outdated and does not cover all forms of technology used to 
access the Internet that exists today.
  The wording of the original statute is exclusive of consideration of 
the multiple technological advancements and changes that have developed 
in business since 1998. This is inadequate, says the Corn Growers 
Association, and will almost certainly result in new taxes imposed on 
Internet users. They feel keeping the current language in place will 
perpetuate a competitive disadvantage among providers by exempting some 
of the types of high-speed Internet access while other types would be 
taxable.
  We have the American Corn Growers Association, which undoubtedly 
would be for ethanol provisions proposed on the floor, but clearly the 
American Corn Growers Association, as well as dozens of organizations, 
whether technologically involved or not, care a great deal about 
whether broadband is going to be taxed.
  All these parliamentary procedures and all these delays and tangents 
and detours take us away from the point at hand and the decision that 
needs to be made by the Senate. It ought to be done as quickly as 
possible. The question before us is whether American consumers are 
going to be hit on average with 17-percent telecommunication taxes on 
their monthly Internet service bill. The question is whether Internet 
service bills will look like a telephone bill, with multiple taxes from 
the localities, from the States, and even the Federal Government.
  My friends, it is absolutely essential, I say to my colleagues, that 
we act on the Internet access tax issue. As more and more taxes get 
imposed, it is nearly impossible to ever get those taxes off. Look at 
your telephone bill. There is a slew of taxes; some that are 
incomprehensible. There is one tax placed on there in 1898 as a luxury 
tax. It was a luxury tax in 1898 to finance the Spanish-American War. 
Guess what? We are still paying that tax. That war has been over for 
over 100 years.
  That is why it is important we act and not delay, not dawdle, not get 
off on tangents. If we do get off the point, we need to get back on the 
subject, the point of voting and taking a stand on whether Members 
stand on the side of freedom and opportunity for people by not having 
Internet access hit with 17-percent taxes or more, or whether we will 
stand on the side of freedom, where the broadband can get rolled out--
not just to city areas and suburban areas, but out to the country, to 
rural areas so people can have access if they have their own business, 
access to sell goods or services all over the world, or all over the 
country, as the case may be.
  If we continue to delay on this issue, we will see what has happened 
in the last 2 years. What has happened in the last 2 years, a little 
over 2 years, is unelected bureaucrats come up with revenue rulings or 
taxation rulings that have found a loophole in the original moratorium 
and have started imposing taxes, about $40 million worth of taxes 
across the country. That is not a great deal in money, but nevertheless 
taxing DSL is a great concern to many. When they tax Internet access, 
that means fewer people can afford it. The reason most people do not 
have Internet access is they cannot afford it. We are concerned about 
an economic digital divide. If you want to close the divide and make 
sure people all over this country have greater ability to have access 
to the Internet, and the benefits therefrom--whether education, access 
to information, commerce, telemedicine, a variety of other 
applications, particularly with broadband--then we must not tax 
Internet access. Adding taxes will not help.
  I hope we will make a decision this week. Let the American people 
know where we stand. More importantly, let those companies that will 
have to make investments in the range of tens of millions of dollars to 
serve various areas know what the policy of this country will be. In 
the past, the question has been one of freedom--making sure the 
Internet was free from taxation. We see great growth, great 
opportunity. That should be the approach for the future, from my point 
of view.
  A decision needs to be made so the folks planning expansion of the 
Internet--those companies, those entrepreneurs--know what the playing 
field will be in the future. It is my view, looking at the votes, 
whether on the motion to proceed or the most recent amendment from the 
senior Senator from Texas, the vast majority of the Senators realize 
the Internet ought to remain free from burdensome, onerous taxation. A 
majority of the Senators recognize we need to update the definition of 
Internet access to make sure the DSL, wireless and other methods of 
accessing the Internet, are not subject to these burdensome taxes.
  From these votes, at least in the early indications, it appears that 
a majority of Senators recognizes that we ought to be closing the 
economic digital divide. A strong majority of Senators recognizes there 
are innovations, there are new ideas, and we want to make sure this 
country will be in the lead for adaptations, the benefits, prosperity, 
and opportunity that will flow from new advancements in technology. We 
certainly do not want to be increasing the costs to anybody in this 
country for logging on to the Internet everyday.
  In my view, if the Senate does not act, if the Senate does not invoke 
cloture and pass an updated Federal moratorium on Internet access 
taxation, what we will see are State and local tax commissars imposing 
telecommunication-based taxes that average about 17 percent on the 
Internet. This moratorium that we are trying to get action on here on 
the Senate floor is designed to protect consumers and avert the adverse 
impact of taxation on real people in our real world and in our economy.
  So while there are all these machinations and maneuverings and 
parliamentary procedures and political posturing and tangents and 
detours, I would ask my colleagues, in the midst of this, if we are 
going to have votes on all these other ideas, some of which have a 
great deal of merit--and maybe, for those of us who do not want to tax 
the Internet, we should feel somehow applauded or grateful that people 
would want to attach salutary, positive ideas; they figure this is 
going to pass, and this is the way to get those other ideas done--but 
as you get on to these other nongermane issues, let's act on them 
quickly, and let's also keep our eye on the ball.
  While folks may care about endangered species, let's remember, real 
people in the real world who we want to make sure have the 
opportunities that come from having access to broadband and Internet, 
whether they are a small business owner, a student, or somebody who is 
looking for a better job, let's make sure we pay attention to the issue 
at hand, the underlying measure; and that is, to make sure the Internet 
stays free from onerous and burdensome taxation for all people all over 
the United States of America.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. VOINOVICH. Mr. President, I am kind of surprised that the Corn 
Growers Association of America is supporting the Allen-Wyden 
legislation. I am sure that if they really understood the ramifications 
of this legislation, they would not be supportive of it because they 
would understand that if

[[Page 7650]]

that legislation passes, their real estate taxes or other taxes they 
are paying would increase.
  I am going to make a point of getting in touch with them. I received 
the President's Award last year from the Corn Growers, from Fred Yoder, 
who was their president, and worked very hard, several years ago, to 
get the petroleum people and the Corn Growers together to come up with 
the ethanol compromise that is now in the Energy bill.
  I am glad the Senator from Virginia has pointed out they are 
supporting this legislation. I am going to get in touch with them right 
away and share with them some information they might not have had at 
the time they came out to support this legislation.
  This afternoon the Senator from Arizona quoted from a policy paper of 
the National Governors Association and mentioned the criteria that the 
National Governors Association said should be in any bill that deals 
with this question of Internet taxation. I would like to go through 
that policy paper and share that with my colleagues in the Senate.
  First: NGA supports, as I do and as the Presiding Officer does, 
reasonable extension of the Internet Tax Freedom Act.
  In this policy paper that was quoted from:

       The NGA calls upon Congress to adopt S. 2084, the 
     ``Internet Tax Ban Extension and Improvement Act.'' This 
     compromise bill, sponsored by Senators Alexander and Carper--

and, by the way, Senator Voinovich--

     offers a reasonable extension of the moratorium while 
     addressing industry concerns for technological neutrality 
     without unduly burdening state and local governments.

  I am not going to go into all these, but I ask unanimous consent that 
this policy paper be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   NGA Supports Reasonable Extension of the Internet Tax Freedom Act

       The National Governors Association (NGA) supports extending 
     the federal ban on state and local taxation of Internet 
     access in a manner that is technology neutral and fiscally 
     fair to state and local governments. Unfortunately, two 
     pieces of legislation currently moving through Congress 
     violate these basic principles. The House of Representatives 
     has already passed H.R. 49 and S. 150 is currently under 
     consideration in the Senate. By permanently expanding the 
     definition of tax-free Internet access, both bills rob state 
     and local governments of existing revenues while creating a 
     tax free zone for future communications services.
       The NGA calls upon Congress to adopt S. 2084, the 
     ``Internet Tax Ban Extension and Improvement Act.'' This 
     compromise bill, sponsored by Senators Alexander and Carper, 
     offers a reasonable extension of the moratorium while 
     addressing industry concerns for technological neutrality 
     without unduly burdening state and local governments.


                               background

       Although the U.S. Constitution grants Congress broad 
     authority to regulate interstate commerce, the federal 
     government, historically, has been reluctant to interfere 
     with states ability to raise and regulate its own revenues. 
     State tax sovereignty is a basic tenet of the federalist 
     system and is fundamental to the inherent political 
     independence and viability of states. Only in the most 
     narrowly defined exceptions has Congress crossed that line.
       The 1998 ``Internet Tax Freedom Act'' (ITFA), which imposed 
     a moratorium on state or local taxation of Internet access, 
     is one exception to this long held practice. The ITFA expired 
     briefly in 2000 but Congress renewed it through November 1, 
     2003. Designed to ``jump start'' the then-fledgling Internet 
     industry, the moratorium included three important 
     restrictions to protect states:
       1) it applied only to new taxes--existing taxes were 
     grandfathered;
       2) the definition of Internet access, while broad, excluded 
     telecommunication services; and
       3) the bill expired after two years to allow Congress, 
     states and industry the opportunity to make adjustments for 
     rapidly developing technologies and markets.


                            the nga position

       Today, over 130 million Americans access the Internet using 
     everything from dial-up modems, high-speed broadband, and 
     Digital Subscriber Line (DSL) offerings to wireless 
     technologies and even satellite and power line connections. 
     The Internet's broad reach and technological promise is also 
     transforming entire industries such as telecommunications, 
     which is rapidly migrating all of its services to Internet 
     based technologies and rolling out new services such as Voice 
     Over Internet Protocol (VOIP).
       As Congress considers legislation to extend the moratorium, 
     NGA encourages members to adhere to the following guidelines 
     to maintain the balance struck by the original moratorium, a 
     balance that encouraged the growth of the Internet but still 
     respected state sovereignty:


1. do no harm; any extension of the moratorium should preserve existing 
                       state and local revenues.

       The original moratorium protected existing state revenues 
     by grandfathering tax laws in place before 1998 and 
     prohibiting only new taxes on Internet access. In contrast, 
     H.R. 49 and S. 150 would cost states much needed revenue by 
     repealing the grandfather clause and expanding the law to 
     prohibit taxes on telecommunications ``used to provide 
     Internet access.'' Stating that the proposed bills would 
     trigger a possible point-of-order under the Unfunded Mandates 
     Reform Act, the Congressional Budget Office (CBO) estimates 
     removing the grandfather provision would cost states between 
     $80 and $120 million annually. The effect of the second 
     provision could be even greater. ``[D]epending on how the 
     language altering the definition of what telecommunications 
     services are taxable is interpreted,'' the CBO said, ``that 
     language also could result in substantial revenue losses for 
     states.'' With state and local governments collecting over 
     $18 billion in telecommunications taxes annually, any 
     significant change in the taxability of telecommunications 
     could cost states billions of dollars. At a time when state 
     and local governments are facing large increases in mandatory 
     spending and stagnant revenue growth, Congress should not 
     exacerbate state fiscal problems by interfering with the 
     collection of existing taxes.


                    2. be clear; definitions matter.

       The original moratorium split the definition of Internet 
     access into two parts: a broad and inclusive description of 
     Internet access and an absolute exclusion of 
     telecommunications services from the moratorium. The 
     definition read:
       ``Internet access means a service that enables users to 
     access content, information, electronic mail, or other 
     services offered over the Internet, and may also include 
     access to proprietary content, information, and other 
     services as part of a package of services offered to users. 
     Such term does not include telecommunications services.''
       The exclusion of telecommunications services protected 
     states by clarifying that Internet access was a separate, 
     distinct and limited service. It also clearly preserved 
     existing state and local taxes on telecommunications services 
     that amounted to over $18 billion in 1999. The definition, 
     however, allowed some jurisdictions to tax the 
     telecommunications component of certain broadband 
     technologies like DSL while others remained tax-free. This 
     perceived inequity led to a push to alter the definition of 
     Internet access in H.R. 49 and S. 150 to make tax free 
     telecommunications services ``used to provide Internet 
     access,'' as a means of making the ITFA technology neutral. 
     This change, however, is too broad. Not only would it 
     prohibit taxes states and localities are collecting on DSL, 
     it would also exempt all telecommunications services used 
     anywhere along the Internet--from the end-user all the way to 
     and including the ``backbone.'' Compared to the original 
     moratorium, which expressly exempted telecommunications from 
     its scope, H.R. 49 and S. 150 could ultimately put at risk 
     most, if not all, state and local telecommunication tax 
     revenue. (See attached chart.)
       H.R. 49 and S. 150 would also intensify a long-standing 
     problem with the original definition: the unlimited ability 
     to bundle together content and ``other services'' into a 
     single offering of tax-free Internet access. Services such as 
     VOIP highlight the risk states face from this broad 
     definition. Unlike traditional telecommunications services, 
     VOIP uses the Internet to transmit voice communications 
     between computers, phones and other communications devices. 
     Industry observers expect 40 percent of all telephone calls 
     in the United States to be Internet based within five years. 
     If VOIP is allowed to be bundled with Internet access into a 
     single tax-free offering, and telecommunications used to 
     deliver that offering are also tax free, states could quickly 
     see their telecommunications tax base erode to nothing. 
     Language in S. 150 as amended and S. 2084 that requires 
     service providers to unbundled taxable services from non-
     taxable Internet access is helpful, but only if the universe 
     of what constitutes Internet access is actually limited.


    3. stay flexible--a temporary solution is better than permanent 
                               confusion.

       Rapid pace innovation in the Internet and 
     telecommunications industries makes it difficult to define 
     accurately these complex and ever-changing services. The 
     original moratorium was made temporary in part for this 
     reason--to provide Congress, industry and state and local 
     governments with the ability to revisit the issue and make 
     adjustments where necessary to accommodate new technologies 
     and market realities. The fact that the courts, the Federal 
     Communications Commission and Congress are all in the process 
     of examining and redefining the core elements of what 
     constitutes telecommunications and Internet access 
     underscores the

[[Page 7651]]

     need for caution. With so much uncertainty, a temporary 
     extension of the moratorium is the best way to avoid 
     unintended consequences from a permanent moratorium.


                               conclusion

       NGA supports S. 2084 because it best reflects a balance 
     between state sovereignty and federal support for the 
     Internet. First, it protects states by drawing a line in the 
     sand to prohibit new taxes on Internet without interfering 
     with existing state laws. Second, by making the connection 
     from a consumer to their Internet access provider tax free, 
     the Alexander-Carper bill actually levels the playing field 
     for competing technologies without overreaching. Third, it 
     gives Congress, industry and states a chance to revisit the 
     Act by making the moratorium expire after two years. For 
     these reasons NGA supports S. 2084 as a true compromise that 
     is fair to industry, respectful of states, and good for 
     consumers.

 STATE AND LOCAL TELECOMMUNICATIONS TAXES POTENTIALLY AT RISK UNDER H.R.
                                49/S. 150
                              [$ millions]
------------------------------------------------------------------------
                                                             Revenues at
                                                Revenues at   risk under
                                                 risk under   S. 150 as
                                                 H.R. 49\1\   amended\2\
------------------------------------------------------------------------
Alabama.......................................         $213         $115
Alaska........................................           18           13
Arizona.......................................          308          146
Arkansas......................................          146          101
California....................................        1,495          836
Colorado......................................          293          169
Connecticut...................................          276          170
Delaware......................................           27           17
District of Columbia..........................          120          116
Florida.......................................        1,490        1,059
Georgia.......................................          344          182
Hawaii........................................           51           48
Idaho.........................................           37            3
Illinois......................................        1,000          807
Indiana.......................................          265          148
Iowa..........................................          137           49
Kansas........................................          172           74
Kentucky......................................          284          192
Louisiana.....................................          207           69
Maine.........................................           67           28
Maryland......................................          369          222
Massachusetts.................................          411          256
Michigan......................................          678          477
Minnesota.....................................          226          135
Mississippi...................................          190           90
Missouri......................................          334          216
Montana.......................................           46            7
Nebraska......................................          101           59
Nevada........................................           52           22
New Hampshire.................................           65           56
New Jersey....................................          699          473
New Mexico....................................          125          101
New York......................................        1,904        1,418
North Carolina................................          308          225
North Dakota..................................           32           22
Ohio..........................................          680          345
Oklahoma......................................          258          166
Oregon........................................          113           63
Pennsylvania..................................          672          547
Rhode Island..................................          100           77
South Carolina................................          196           90
South Dakota..................................           48           25
Tennessee.....................................          348          196
Texas.........................................        1,724        1,213
Utah..........................................          160           89
Vermont.......................................           30           17
Virginia......................................          329          148
Washington....................................          492          331
West Virginia.................................           73           36
Wisconsin.....................................          363          255
Wyoming.......................................           22           13
                                               -------------------------
    Total:....................................       18,098       11,732
------------------------------------------------------------------------
\1\H.R. 49: Figures assume the loss of all state and local
  telecommunications transaction taxes and business taxes as companies
  migrate their telecommunications services to the Internet.
\2\S. 150: Includes all telecommunications taxes except for 911 fees and
  business taxes such as property taxes, capital stock taxes on net
  worth, or sales and use taxes on business inputs.
 
Source: Special Report/Viewpoint ``Telecommunications Taxes: 50-State
  Estimates of Excess State and Local Tax Burden,'' Robert Cline, State
  Tax Notes, June 3, 2002.

  Mr. VOINOVICH. First, they talk about: ``DO NO HARM. Any extension of 
the moratorium should preserve existing state and local revenues.''
  The next point they make is: ``BE CLEAR. Definitions matter.''
  By the way, in the area of ``DO NO HARM,'' they mention the fact:

       With state and local governments collecting over $18 
     billion in telecommunications taxes annually, any significant 
     change in the taxability of telecommunications could cost 
     states billions [billions] of dollars. At a time when state 
     and local governments are facing large increases in mandatory 
     spending and stagnant revenue growth, Congress should not 
     exacerbate state fiscal problems by interfering with the 
     collection of existing taxes.

  In terms of the definitions, they believe that:

       The original moratorium split the definition of Internet 
     access into two parts: a broad and inclusive description of 
     Internet access and an absolute exclusion of 
     telecommunications services from the moratorium. The 
     definition read:
       ``Internet access means a service that enables users to 
     access content, information, electronic mail, or other 
     services offered over the Internet, and may also include 
     access to proprietary content, information, and other 
     services as part of a package of services offered to users. 
     Such term does not include telecommunications services.''
       The exclusion of telecommunications services protected 
     states by clarifying that Internet access was a separate, 
     distinct and limited service.

  They go on to say, under definitions:

       [The House bill] and S. 150 would also intensify a long-
     standing problem with the original definition: the unlimited 
     ability to bundle together content and ``other services'' 
     into a single offering of tax-free Internet access. Services 
     such as VOIP--

  That is being able to use your computer to make telephone calls--

       highlight the risk states face from this broad definition. 
     Unlike traditional telecommunications services, VOIP uses the 
     Internet to transmit voice communications between computers, 
     phones and other communications devices. Industry observers 
     expect 40 percent of all telephone calls in the United States 
     to be Internet based within five years. If VOIP is allowed to 
     be bundled with Internet access into a single tax-free 
     offering, and telecommunications used to deliver that 
     offering are also tax free, states could quickly see their 
     telecommunications tax base erode to nothing [nothing]. 
     Language in S. 150 as amended and S. 2084 that requires 
     service providers to unbundle taxable services from non-
     taxable Internet access is helpful, but only if the universe 
     of what constitutes Internet access is actually limited.

  It also goes on and talks about ``STAY FLEXIBLE. A temporary solution 
is better than permanent confusion.'' Did you hear that? ``A temporary 
solution is better than permanent confusion.''

       Rapid pace innovation in the Internet and 
     telecommunications industries makes it difficult to define 
     accurately these complex and ever-changing services. The 
     original moratorium was made temporary in part for this 
     reason--to provide Congress, industry and state and local 
     governments with the ability to revisit the issue and make 
     adjustments where necessary to accommodate new technologies 
     and market realities. The fact that the courts, the Federal 
     Communications Commission and Congress are all in the process 
     of examining and redefining the core elements of what 
     constitutes telecommunications and Internet access 
     underscores the need for caution.

  We are in an era right now of unbelievable change.

       With so much uncertainty, a temporary extension of the 
     moratorium is the best way to avoid unintended consequences 
     from a permanent moratorium.

  Their final conclusion--and I am sure the Presiding Officer is very 
happy about this--is:

       NGA supports S. 2084 because it best reflects a balance 
     between state sovereignty and federal support for the 
     Internet. First, it protects states by drawing a line in the 
     sand to prohibit new taxes on Internet without interfering 
     with existing state taxes. Second, by making the connection 
     from a consumer to their Internet access provider tax free, 
     the Alexander-Carper bill actually levels the playing field 
     for competing technologies without overreaching.

  That is a point that the Presiding Officer has made several times on 
the floor of the Senate.
  Continuing:

       Third, it gives Congress, industry and states a chance to 
     revisit the Act by making the moratorium expire after two 
     years. For these reasons NGA supports S. 2084 as a true 
     compromise that is fair to industry, respectful of states, 
     and good for consumers.

  Now, I contacted the National Governors Association earlier today.
  I asked them if they could opine on the McCain amendment that was so 
eloquently spoken to by Senator McCain. They worked very quickly and 
came back with a letter to Senator Frist, majority leader, and Senator 
Daschle, Democratic leader. It is signed by Governor Brad Henry, 
Oklahoma, Chair, Committee on Economic Development and Commerce, and 
Governor Michael Rounds, South Dakota, Vice Chairman, Committee on 
Economic Development and Commerce.
  I would like to read from that letter.

       Dear Senator Frist and Senator Daschle:
       The National Governors Association . . . supports an 
     Internet access tax moratorium that benefits consumers, is 
     fair to industry, and does no harm to states. As the Senate 
     once again considers the moratorium, we urge you to oppose 
     efforts that would deprive states of existing tax revenues 
     and to support the compromise proposal to be offered by 
     Senator Alexander and Senator Carper and embodied in S. 2084, 
     the ``Internet Tax Ban Extension and Improvement Act.''
       NGA supports the Alexander/Carper compromise because it 
     best reflects the appropriate balance between state 
     sovereignty and federal support for the Internet. First, it 
     protects states by prohibiting new taxes on Internet access 
     without interfering with existing state revenues. Second, by 
     making the connection from a consumer to their Internet 
     access provider tax free, the compromise language encourages 
     broadband deployment by leveling the playing field for all 
     technologies.

  That is what we are trying to do. The amendment we tried to get in 
last year and which will be offered by the Senator from Tennessee tries 
to level the

[[Page 7652]]

playing field for all of the providers of this access.

       Third, because it is temporary, it gives Congress, 
     industry, consumers, and states a chance to revisit the issue 
     and make adjustments where necessary to accommodate new 
     technologies and market realities.

  Here is the paragraph that I think gets to the heart of the matter:

       The recent proposal by Senator McCain, while an improvement 
     on the bill sponsored by Senator Allen and Senator Wyden . . 
     . does not go far enough to protect states. By adopting the 
     broad definition of tax-free Internet access used in S. 150--

  That is the same definition that is in the Wyden-Allen bill; the same 
definition is in the amendment proposed by Senator McCain--

     and terminating the grandfather protections before the end of 
     the moratorium, the McCain proposal would still deprive state 
     and local governments of existing tax revenues and violate 
     the principle of ``do no harm.''
       The nation's governors call on the U.S. Senate to oppose 
     the McCain amendment and support Senator Alexander and 
     Senator Carper in their efforts to strike a reasonable 
     compromise to extend the Internet access tax moratorium.

  The Senator from Tennessee, Senator Alexander, Senator Carper, and 
Senator Voinovich, who is the third sponsor of S. 2084, should be very 
happy with the support we are getting from the National Governors 
Association. I hope our colleagues take that into consideration.
  In addition to the letter from the National Governors Association, I 
would like to share a letter I recently received from the Ohio 
Department of Taxation. In fact, I have never seen a letter from the 
Department of Taxation of the State of Ohio turned around so quickly in 
my life. We faxed them the McCain proposal. We asked them to give us 
their opinion of the McCain amendment. I suggest to my colleagues that 
before they vote on this legislation, they take it upon themselves--as 
a matter of fact, I think it is an obligation for them--to get in 
contact with their State departments of taxation to get a read from 
them about what impact this amendment would have on their respective 
States. Some of my colleagues, frankly, are supporting this and may not 
want to hear the impact it is having on their State. But I think it is 
incumbent upon them at least to find out what their States think about 
this proposed legislation and the impact it would have on their 
respective States.
  I am going to read a portion of this letter. It reads:

       Dear Senator Voinovich:
       We reviewed the text of the McCain language that you FAXed 
     to us this morning. Our preliminary impression is that this 
     bill is very similar to the version of S. 150 containing the 
     ``managers amendment'' and has roughly the same negative 
     revenue impact on Ohio. Specifically, we think that the bill 
     would cause a state and local revenue loss of about $72 
     million per year. The amount would become larger as more 
     telecommunications services are provided through Internet 
     technology and/or bundled with Internet access, and as 
     broadband Internet access is used by more households. 
     Specifically, the $72 million estimate does not account for 
     state and local revenues lost as more phone services are 
     replaced by VOIP, which we believe the McCain bill will still 
     prohibit the states from taxing (as long as VOIP is bundled 
     with Internet access).

  That is the way they do it. They bundle it together and under their 
definition this would be exempt from taxation.

       As you know, the states objected to S. 150 on several 
     grounds. One of the most important was the language ``the 
     term `Internet access' does not include telecommunications 
     services, except to the extent such services are purchased, 
     used, or sold by a provider of Internet access to provide 
     Internet access.''
       This ``Allen-Wyden'' definition of Internet access is so 
     broad that it essentially can be used to exempt what we have 
     seen referred to as the ``Internet backbone'' 
     telecommunications services, the ``middle mile'' 
     telecommunications services, and the ``last mile'' 
     telecommunications services. This is in contrast to S2084, 
     which you cosponsored, and which would have provided a much 
     more limited exemption for last mile telecommunications 
     services that are used to connect an end-user (e.g. 
     household) to an Internet service provider such as AOL or 
     Earthlink or Comcast.

  That is the thing we don't want. We want people to have to plug into 
that mile, but the thing we are concerned about is they want to go 
beyond that. They want to take in the whole watermelon.

       In Ohio, the impact of the S. 150 moratorium on state and 
     local taxation of all these telecommunications services may 
     not be as damaging as in some other states because Ohio 
     already has a broad exemption for the purchase of property 
     used in providing telecommunications services. Even so, we 
     still estimate that the annual full-year loss to Ohio from 
     the provision would be about $72 million.
       Another notable provision of the McCain bill is the 
     exception of VOIP services from the tax moratorium. To the 
     extent that such service mimics traditional telephone 
     service, we believe that this means that State and local 
     governments would be allowed to tax VOIP services insofar as 
     they mimic traditional telephone services. The so-called VOIP 
     exception to the moratorium actually does nothing for the 
     states' ability to tax that or similar services that may 
     migrate to the Internet. Current Ohio law allows state and 
     local governments to tax VOIP as a telecommunications 
     service, as long as there is no federal preemption.
       The McCain ``exception'' to the federal preemption does not 
     apply to services that are defined as Internet access. This 
     means that the exemption will not apply to voice services 
     that are bundled with Internet access, and since that is how 
     VOIP services are currently sold and probably will continue 
     to be sold, the exception in the McCain bill will in fact 
     provide no protection against states losing revenues as phone 
     services migrate to VOIP.

  The Senator from Tennessee, the Presiding Officer, has made it very 
clear if there was an amendment to that bill that made it very clear 
that could continue to be taxed, that might remedy this whole issue.
  The letter goes on to say:

       We do not know exactly how much revenues will be lost in 
     the future due to the migration of currently taxable phone 
     service to exempt VOIP service, but it could end up being 
     most of Ohio's telecommunications tax revenues.

  I'll read that again:

       We do not know exactly how much revenue will be lost in the 
     future due to the migration of current taxable phone service 
     to exempt VOIP service, but it could end up being most of 
     Ohio's telecommunications tax revenues.

  You know if that happens, the State is either going to reduce 
services or they are going to find something else to tax. That is the 
way this thing operates.
  The letter concludes:

       To put the estimated $72 million loss in context, in fiscal 
     year 2003, Ohio collected about $250 million in sales tax and 
     use tax from telecommunications service providers. The most 
     recent biennial budget bill switched local telephone 
     providers from the old gross receipts tax to the sales tax 
     and use tax, so that now the forecasted full year sales and 
     use tax revenue from all telecommunications providers is 
     about $370 million. This is at a 5 percent state tax rate--we 
     are ignoring the current 6 percent tax rate because it is set 
     to expire. . . .Thus, the estimated revenue loss from the 
     McCain bill (excluding the VOIP loss) is slightly less than 
     20 percent of total estimated Ohio telecommunications sales 
     tax revenues.

  The fact is the McCain amendment is going to have a devastating 
impact on the revenues of our States and goes far beyond the moratorium 
I helped negotiate when I was chairman of the National Governors 
Association, and is something we should all be concerned about.
  I also want to make another couple of points, if I may. I have heard 
so much today already and in the past about the fact that if we don't 
get this done, everything is going to stop and it is going to be a 
terrible thing for farmers and all Americans, and so on. The fact is, 
Internet technology has grown unbelievably over the past year. 
According to a study released by the Pew Internet and American Life 
Project last week, 55 percent of American Internet users have access to 
broadband, either at home or in the workplace. As a matter of fact, it 
is going to keep growing because I think the Senator from Tennessee 
pointed out this afternoon there are some communities that have their 
own electric companies that are giving it away.
  This thing is moving. We don't see anything slowing down. We are 
moving fast. The report also noted home broadband usage is up 60 
percent since March 2003, with half of the growth since November 2003.
  You will recall back when we were debating this last year, the 
allegation was, gee, if we don't get this done, everything is going to 
be taxed, things

[[Page 7653]]

are going to end up in the mud, slowed down, and we are in trouble. 
Since the moratorium ended, half of this growth occurred. So this thing 
is moving. This moratorium--the fact we didn't extend it has not really 
impacted this one iota. DSL technology now has a 42-percent share of 
the home market, which is up 28 percent since March 2003.
  Most of the growth I outlined occurred after the Internet tax 
moratorium expired last November, which refutes the argument S. 150 was 
necessary to help the expansion of broadband services. In addition, 
April 21--a couple days ago--a major telecommunications company 
released their 2004 first quarter earnings. I want to read the first 
two sentences from the company's press release because it illustrates 
how fast this technology is growing. This is from SBC Communications:

       SBC Communications, Inc., today reported first quarter 2004 
     earnings of $1.9 billion, as it delivered strong progress in 
     key growth products. In the quarter SBC added 446,000 DSL 
     lines, the best ever by a U.S. telecom provider.

  Some of these people who are supporting the Wyden-Allen amendment and 
now McCain amendment are companies like this. They are doing well. They 
are moving. They are bragging, ``We are moving ahead.'' We all know the 
Federal Government today subsidizes this telecommunications industry. 
If I remember correctly from a speech the Presiding Officer gave this 
afternoon, it is a $4 billion subsidy from the Federal Government, and 
the States--all of them--have been doing everything they can to 
encourage this industry.
  I don't know of any industry that has been treated better than this 
industry. For the life of me, I cannot understand why it is they insist 
on having us whack out all of the taxes they are paying. I cannot 
understand it.
  I think if this Senate does the right thing, what we are going to 
tell this industry, which does a pretty good job of lobbying around 
here and in the States--I knew it when I was Governor--we will tell 
them: You know what. You are not going to get a complete release of all 
the taxes you pay. It is time for you to sit down, like I did with the 
petroleum industry and the Corn Growers--they came to me and wanted me 
with them on ethanol, and the oil industry--and the Senator from 
Oklahoma knows them well--said you have to be with us. I said, you know 
something, I had Ashland Marathon Oil in Ohio, and I had my Corn 
Growers and I love you both. You ought to get in the room and sit down 
and talk to each other and see if you cannot work something out. Lo and 
behold, after 6 months, they had a big news conference. About 20 
Senators were there, and on that stage were people who, if you talked 
to them 6 months before and said you are going to be on the stage 
together in a compromise, would have said you are crazy. They were on 
that stage and they put a compromise together.
  The problem we have today in the Senate is the fact that the 
telecommunications industry thinks this thing is going to go through 
and they don't have to sit down and talk to State and local government 
officials, or with the Commerce Committee, and work something out. I 
know it can be done. I am prayerful our colleagues today understand 
that and that they will come together and say we have not been able to 
do this, and we will have a continuation of a moratorium. But let's sit 
down and work it out. Probably the best way to do that under the 
circumstances, with the time limitation we have, would probably be to 
pass a 14-or 15-month extension of the current moratorium, while we can 
take it back to the Commerce Committee, where we can get the 
telecommunications industry in, get the Governors and other local 
government officials in, and the FCC, and start to make some sense out 
of this.
  I thank the Senator from Tennessee, Senator Alexander, for the great 
leadership he has provided on this issue. We got together last year, 
and the train was moving and we got in the way of it and caught a lot 
of criticism because they were accusing us of being for taxing e-mail 
and the Internet and all the rest of it. That wasn't it at all. All we 
wanted to do was continue a moratorium but do no harm to our States. We 
probably understand that more than some Members because we are former 
Governors. In my case, I am a former mayor and county commissioner, and 
we also appreciate it because we all worked together for legislation in 
1995--the unfunded mandates relief legislation I worked my heart out to 
get passed. As a matter of fact, the pen President Clinton used to sign 
that legislation is on the wall in my Senate office in the Hart 
Building. The first time I set foot on the floor of the Senate was the 
day the Senate passed the unfunded mandates relief legislation.
  I don't like unfunded mandates. I don't think it is fair. We have 
done it to the States for so many years. We finally got that 
legislation passed. The American people should know this is a big 
unfunded mandate, the way it is put together. We can change it and make 
it fair so they are not going to see the taxes on telecommunications 
disappear and then see taxes increased in some other area.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, the Senator from Ohio and I know something 
about unfunded mandates, as does the Chair. It keeps creeping up, and 
we are making every effort in the committee that I chair and the 
subcommittee the Senator from Ohio chairs to try to resolve that 
problem. I think maybe we will because we have the right people in line 
to do it. I may not agree with the Senator from Ohio on this particular 
issue, but I certainly do on unfunded mandates.
  I just found out that the distinguished Senator from New Mexico, Mr. 
Domenici, has filed an amendment that is a slimmed-down version of the 
Energy bill. I just have to stake out a position early because it is my 
understanding that the safe harbor language that was in H.R. 6 that is 
so fair and so necessary is not a part of the slimmed-down version. If 
it is not in the bill, I am not going to be able to support the bill. I 
will do everything I can for the Senator from New Mexico, but this is 
very serious.
  The bill should permit that manufacturers, producers, marketers, 
traders and distributors of gasoline containing federally approved 
oxygenate MTBE cannot be sued under a claim that it is a defective 
product.
  The Federal Clean Air Act Amendments of 1990 created the reformulated 
gas. The reformulated gas program said they had to use oxygenates. The 
most prevalent oxygenate to be used in these reformulated gases is 
MTBE. In fact, EPA specifically approved MTBE for this purpose.
  Here is the situation we have: We have the Government coming along 
and saying, You are going to have to use MTBE. For all practical 
purposes, they have said this, they have mandated it. Then they turn 
around and say, We are going to let the trial lawyers in to sue you 
because maybe this substance which we approved, which we endorsed, is 
causing harm to someone. It is very important to understand that the 
safe harbor provision is necessary to prevent the trial lawyers from 
using the court system to punish companies for simply complying with 
the Federal law by using a federally approved additive.
  The safe harbor is narrowly targeted and does not affect any claim 
against any person or any company actually responsible for spilling 
gasoline containing MTBE. That is very important because I keep hearing 
on this Senate floor: You let all these people off the hook who are 
spilling and polluting. That is not true at all. It is very narrowly 
defined.
  Since September 30, 2003, in anticipation of the Energy bill, trial 
lawyers, including many known for the work they have done and the 
wealth they have accumulated in asbestos litigation, have as of March 
25 brought over 60 groundwater contamination lawsuits in 17 States 
seeking damages from over 169 different named companies that allegedly 
manufactured, sold, or transported gasoline containing the federally 
approved fuel additive called MTBE.

[[Page 7654]]

  One of those companies is Frontier Oil. They have been sued. They 
have never produced MTBE. They have never used it. They blended MTBE. 
But they are one of the companies being sued. The lawsuits do not 
allege defendants actually leaked or spilled gasoline containing MTBE 
that allegedly contaminated their groundwater. The lawsuits do not even 
name the actual polluters. Instead, the cases target any company that 
at any time may have distributed or sold gasoline containing MTBE or 
even some, as I just cited, that did not.
  Defendants are vigorously defending these cases and will incur 
millions of dollars in legal fees and expenses simply for having made 
or sold gasoline containing a fuel additive specifically approved for 
use by Congress and the EPA.
  I believe it is necessary to stake out this position. I cannot think 
of a fairness issue with which we have dealt that is more significantly 
addressed than this one. Government comes along and says you have to 
use this stuff; then they come along later and say there is something 
wrong with it and we are not going to offer you any defense at all--any 
defense. We are talking about huge multimillion-dollar lawsuits.
  In the event this language does not end up in the legislation of the 
slimmed-down bill, I will have to oppose it. I cannot conscientiously 
support an energy bill that leaves everybody out to dry, particularly 
in the MTBE case.
  That is my position. I think there are many others who share that 
position of fairness in dealing with this bill.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore (Mr. Chambliss). Without objection, 
it is so ordered.


                             cloture motion

  Mr. FRIST. Mr. President, I send a cloture motion to the desk on the 
pending Domenici amendment.
  The ACTING PRESIDENT pro tempore. The cloture motion having been 
presented under rule XXII, the Chair directs the clerk to read the 
motion.
  The legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on the 2nd degree 
     pending amendment to Calendar No. 353, S. 150, a bill to make 
     permanent the moratorium on taxes on Internet access and 
     multiple and discriminatory taxes on electronic commerce 
     imposed by the Internet Tax Freedom Act:
         Bill Frist, John McCain, George Allen, Pete Domenici, 
           Trent Lott, Chuck Hagel, Larry E. Craig, John Ensign, 
           Craig Thomas, Robert F. Bennett, James M. Inhofe, 
           Conrad Burns, Don Nickles, Orrin Hatch, Gordon Smith, 
           Saxby Chambliss, Mitch McConnell.


                             cloture motion

  Mr. FRIST. Mr. President, I send a cloture motion to the desk on the 
pending McCain substitute amendment.
  The ACTING PRESIDENT pro tempore. The cloture motion having been 
presented under rule XXII, the Chair directs the clerk to read the 
motion.
  The legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate to the pending 
     McCain Substitute Amendment No. 3048 to Calendar No. 353, S. 
     150, a bill to make permanent the moratorium on taxes on 
     Internet access and multiple and discriminatory taxes on 
     electronic commerce imposed by the Internet Tax Freedom Act:
         Bill Frist, John McCain, Jon Kyl, Norm Coleman, Jim 
           Bunning, Gordon Smith, Mitch McConnell, Pete Domenici, 
           Conrad Burns, Rick Santorum, Olympia Snowe, Judd Gregg, 
           Wayne Allard, Thad Cochran, Mike Crapo, Larry E. Craig, 
           Ted Stevens, George Allen.

  Mr. FRIST. Mr. President, I ask unanimous consent that the live 
quorum with respect to the three cloture votes be waived.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. FRIST. Mr. President, I am disappointed to have to come to the 
Senate floor and file these cloture motions at this time. Earlier 
today, I had hoped we would finally make progress on the pending 
Internet tax access bill. Last week, I said we would be addressing the 
Internet tax access bill Monday, Tuesday, Wednesday, and Thursday, 
which I and most people felt would be sufficient time to address this 
bill and allow for amendments to be debated and discussed.
  We did debate and vote on a relevant amendment offered by Senator 
Hutchison today. However, at the very first opportunity to offer an 
amendment from the other side of the aisle, they offered a completely 
nongermane amendment, which clearly is going to slow down this 
legislation.
  On Thursday, these cloture motions will be voted on. There will be 
two cloture votes with respect to the energy amendments, but ultimately 
we will have a third cloture vote and that vote will be on the 
underlying substitute relating to the Internet access bill. That is the 
vote that will determine if we will be going forward on this bill at 
that time.
  Again, I scheduled this measure with the hope of taking a few days 
and allowing Senators to have that opportunity to bring their 
amendments to the Senate floor to debate and vote on those amendments. 
I hoped those amendments would be centering on the Internet tax bill, 
the bill under consideration. The latest turn of events today means 
that many Senators who have legitimate and relevant amendments are 
being denied the opportunity to debate and vote on their amendments. 
This is unfortunate.
  That said, I remain committed to finishing the bill in a timely 
fashion, and I hope that we can get back together tomorrow morning and 
make appropriate plans in order to accomplish that over the course of 
the next several days.
  The ACTING PRESIDENT pro tempore. The Senator from Nevada.
  Mr. REID. Mr. President, if the distinguished leader will yield for a 
brief comment, as I said to Senator Domenici this afternoon, this 
scenario that has been set up is going to create some very interesting 
votes because if we move down the road where we come to a McCain 
cloture vote, if cloture is invoked, then Daschle and Domenici fall. At 
least that is my understanding. If that is the case, then that part of 
the Energy bill would be gone. But anyway, that sets up some 
interesting dynamics here.
  We do at least have out here, in addition to the FSC legislation, 
pieces of the original Energy bill. Who knows, we might wind up doing 
something on energy.
  Mr. FRIST. Mr. President, I do hope we will be able to complete the 
Internet access bill and that we can work through the turn of events of 
today. Again, I hope over the course of the evening people will come 
back and lay out a plan to accomplish what is important to the 
technology community and the communications community broadly, and that 
is to be able to allow people to vote on the very important underlying 
bill.

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