[Congressional Record (Bound Edition), Volume 151 (2005), Part 8]
[Senate]
[Pages 11551-11586]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LUGAR (for himself and Mr. Hagel):
  S. 1129. A bill to provide authorizations of appropriations for 
certain development banks, and for other purposes; to the Committee on 
Foreign Relations.
  Mr. LUGAR. Mr. President, I rise today to introduce legislation 
authorizing replenishment of funds to three of the five multilateral 
development banks, as requested by the U.S. Department of the Treasury. 
In addition, this legislation includes a long list of reform measures, 
intended to bring about transparency and accountability at all of the 
MDBs--the World Bank, the African Development Bank, the Asian Bank, the 
Inter-American Bank and the European Bank for Reconstruction and 
Development.
  The World Bank, was the first MDB to be established in 1944, followed 
by the African Development Bank, 1964 and the Asian Development Bank, 
1966. The shared original purpose of the three banks was to encourage 
economic development and reduce poverty in geographic regions impacted 
by the respective institutions.
  I support the original operating purpose of the banks. However, I am 
deeply concerned that massive amounts of funds are not utilized as 
originally intended, due to diversion of those funds.
  In 2003, I received information from credible sources within the MDBs 
alleging corruption on various fronts. As a result, I instructed staff 
of the Senate Foreign Relations Committee to commence collecting 
information on the anti-corruption strategies, and successes of each 
bank.
  Based on the initial findings, I launched an investigation, reviewing 
corruption at the banks and their efforts to combat it. To date, I have 
chaired four hearings and sent letters of inquiry regarding individual 
projects to the bank presidents. Committee staff have interviewed 
scores of NGO representatives, bank insiders, academics and others, and 
have visited problem projects in six countries. Far too often, projects 
intended to boost economic development are derailed, and the poor 
suffer, unable to realize projected benefits in quality health care, 
clean water and education.
  While the United States is one of dozens of donors, the financial 
contribution of American taxpayers over the years to these three 
institutions alone exceeds $30 billion. The Congress has an obligation 
to our own citizens, as well as the intended beneficiaries of MDB 
projects, to press for transparency and accountability in the banks' 
operations.
  Through adoption of the package of reforms I propose, the United 
States would set an example for other donor countries, encouraging 
their officials to also press for transparency and accountability.
  I am pleased there is good news to report. The World Bank has 
embarked on an anti-corruption voluntary cooperation initiative, based 
in part on the Pentagon's anticorruption efforts. In addition, leading 
government officials from Italy, Spain and other countries have 
contacted the Committee, asking for more information about our review, 
and comparing strategies on ways of improving bank transparency. 
Finally, we have witnessed incremental improvements of greater 
transparency among the banks as a result of the Committee's ongoing 
work.
  However, there is more to accomplish. This substantive package of 
reforms is based on our findings to date, and the input of many who 
support the original stated purpose of the multilateral development 
banks.
  The Committee's oversight work continues, with the goal of enduring 
results.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1129

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Development Bank Reform and 
     Authorization Act of 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The United States has strong national security and 
     humanitarian interests in alleviating poverty and promoting 
     development around the world.
       (2) The World Bank, the African Development Bank, the Asian 
     Development Bank, the European Bank for Reconstruction and 
     Development, and the Inter-American Development Bank leverage 
     the resources that the United States and other donors can 
     devote to such goals.
       (3) Contributions from the United States and other donors 
     to the multilateral development banks must be well managed so 
     that the mission of such banks is fully realized and not 
     undermined by corruption. Bribes can influence important bank 
     decisions on projects and contractors and misuse of funds can 
     inflate project costs, cause projects to fail, and undermine 
     development effectiveness.
       (4) Officials of the World Bank have identified corruption 
     as the single greatest obstacle to economic and social 
     development. Corruption undermines development by distorting 
     the rule of law and weakening the institutional foundation on 
     which economic growth depends.
       (5) Officials of the World Bank have determined that the 
     harmful effects of corruption are especially severe on the 
     poor, who are hardest hit by economic decline, are most 
     reliant on the provision of public services, and are least 
     capable of paying the extra costs associated with bribery, 
     fraud, and the misappropriation of economic privileges.
       (6) In hearings before the Foreign Relations Committee of 
     the Senate, it was demonstrated that--
       (A) significant multilateral development bank funding has 
     been lost to corruption and it is difficult to ascertain such 
     amount precisely, in part because the multilateral 
     development banks have not implemented procedures to 
     calculate such amounts, either in the aggregate or on a 
     country basis;
       (B) the multilateral development banks are taking action to 
     address fraud and corruption but additional measures remain 
     to be carried out;
       (C) the capability of anti-corruption mechanisms are not 
     consistent among the multilateral development banks and 
     divergences

[[Page 11552]]

     in anti-corruption policies exist that may hinder 
     coordination on fighting corruption;
       (D) weaknesses in whistleblower policy and practice exist 
     at the multilateral development banks, to varying degree, 
     that impede anti-fraud and anti-corruption efforts;
       (E) greater transparency is necessary to provide effective 
     development aid;
       (F) the Secretary of the Treasury encourages anti-
     corruption efforts at the multilateral development banks and 
     reviews loans made by such banks, however, the United States 
     has limited ability to investigate the misuse of funds from 
     such banks; and
       (G) in some cases, the countries bearing the cost of 
     prosecuting corruption related to the multilateral 
     development banks are the countries that can least afford 
     such costs, for example, the Government of Lesotho incurred 
     considerable expense, despite competing priorities, such as 
     those arising from an HIV/AIDS rate of more than 25 percent 
     in that country, to investigate and prosecute fraud and 
     corruption related to a project that received funding from 
     the World Bank and the World Bank did not contribute money 
     towards the prosecution or investigation.
       (7) The General Accounting Office issued a report in 2001 
     that evaluated the external audit reporting of the African 
     Development Bank, the Asian Development Bank, the European 
     Bank for Reconstruction and Development, and the Inter-
     American Development Bank and a report in 2000 that evaluated 
     the internal controls of the World Bank, and recommended 
     measures to strengthen such audit reporting and controls.
       (8) The International Financial Institutions Advisory 
     Commission (also known as the ``Meltzer Commission'') 
     concluded in 2000, among other things, that--
       (A) pressure to lend for lending's sake is built into the 
     structure of the multilateral development banks;
       (B) although several of the multilateral development banks 
     recognize this problem and have called attention to the need 
     for change, there is, at most, weak counterbalance to the 
     pressure to lend; and
       (C) the multilateral development banks' systems for project 
     evaluation, performance evaluation, and project selection 
     must be improved, and that such evaluation should be a 
     repetitive process spread over time, including many years 
     after final disbursement of funds.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committee 
     on Foreign Relations and the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     International Relations and the Committee on Financial 
     Services of the House of Representatives.
       (2) Group of 7.--The term ``Group of 7'' means Canada, 
     France, Germany, Italy, Japan, the United Kingdom, and the 
     United States.
       (3) Group of 8.--The term ``Group of 8'' means the Group of 
     7 and Russia.
       (4) Multilateral development banks.--The term 
     ``multilateral development banks'' means the African 
     Development Bank, the Asian Development Bank, the European 
     Bank for Reconstruction and Development, the Inter-American 
     Development Bank, the World Bank, and any subsidiary or 
     affiliate of such institutions.
       (5) Person.--The term ``person'' includes a government, a 
     government-controlled entity, a corporation, a company, an 
     association, a firm, a partnership, a society, and a joint 
     stock company, as well as an individual.
       (6) Secretary.--Except as otherwise provided, the term 
     ``Secretary'' means the Secretary of the Treasury.
       (7) World bank.--The term ``World Bank'' means the 
     International Bank for Reconstruction and Development, the 
     International Development Association, the International 
     Finance Corporation, and the Multilateral Investment 
     Guarantee Agency and any subsidiary or affiliate of such 
     institutions.

     SEC. 4. REFORMS.

       (a) Authority.--The Secretary is authorized to seek the 
     creation of a pilot program that establishes an Anti-
     Corruption Trust at the World Bank, as described in this 
     section.
       (b) Purposes.--The purposes of the Anti-Corruption Trust 
     pilot program shall include--
       (1) to assist poor countries in investigations and 
     prosecutions of fraud and corruption related to a loan, 
     grant, or credit of the World Bank; and
       (2) to determine whether such a program should be carried 
     out at other multilateral development banks.
       (c) Repayment of Funds.--If a poor country assesses a fine 
     or receives any renumeration as part of a prosecution paid 
     for with funds from the Anti-Corruption Trust pilot program, 
     such country shall repay the amount received from the Trust 
     until the total amount received by such country is repaid.
       (d) Monitoring.--The Secretary shall be responsible for 
     establishing a system for monitoring the disbursement and use 
     of funds from the Anti-Corruption Trust pilot program and 
     promoting access to such funds by poor countries that are 
     challenged by the high cost of investigating and prosecuting 
     corruption and fraud linked to a loan from, or a project 
     funded by, the World Bank.
       (e) Other Donors.--The Secretary shall encourage other 
     donors to the multilateral development banks to contribute 
     funds to the Anti-Corruption Trust.
       (f) Poor Countries Defined.--In this section, the term 
     ``poor countries'' means countries eligible to borrow from 
     the International Development Association, as such 
     eligibility is determined by gross national product per 
     capita, lack of creditworthiness to borrow on market terms, 
     and good policy performance.
       (g) Reports.--
       (1) Report on implementation.--Not later than September 1, 
     2006, the Secretary shall submit to the appropriate 
     congressional committees a report that describes the actions 
     taken to establish the Anti-Corruption Trust as described in 
     this section.
       (2) Report on evaluation.--Not later than September 1, 
     2007, the Secretary shall submit to the appropriate 
     congressional committees a report that--
       (A) evaluates the effectiveness of the Anti-Corruption 
     Trust pilot program; and
       (B) evaluates the feasibility of establishing similar 
     trusts at other multilateral development banks.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary such sums as may be 
     necessary for contribution on behalf of the United States to 
     an Anti-Corruption Trust if a pilot program establishing such 
     a Trust is established as described in this section.

     SEC. 5. PROMOTION OF POLICY GOALS AT MULTILATERAL DEVELOPMENT 
                   BANKS.

       Title XV of the International Financial Institutions Act 
     (22 U.S.C. 262o) is amended by adding at the end the 
     following:

     ``SEC. 1505. PROMOTION OF POLICY GOALS.

       ``(a) Definitions.--In this section:
       ``(1) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means the Committee on 
     Foreign Relations and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on 
     International Relations and the Committee on Financial 
     Services of the House of Representatives.
       ``(2) Multilateral development banks.--The term 
     `multilateral development banks' means the African 
     Development Bank, the Asian Development Bank, the European 
     Bank for Reconstruction and Development, the Inter-American 
     Development Bank, the World Bank, and any subsidiary or 
     affiliate of such institutions.
       ``(3) Person.--The term `person' includes a government, a 
     government-controlled entity, a corporation, a company, an 
     association, a firm, a partnership, a society, and a joint 
     stock company, as well as an individual.
       ``(4) Secretary.--Except as otherwise provided, the term 
     `Secretary' means the Secretary of the Treasury.
       ``(5) World bank.--The term `World Bank' means the 
     International Bank for Reconstruction and Development, the 
     International Development Association, the International 
     Finance Corporation, and the Multilateral Investment 
     Guarantee Agency, and any subsidiary or affiliate of such 
     institutions.
       ``(b) Transparency.--
       ``(1) Publication of statements.--
       ``(A) In general.--Not later than 60 calendar days after a 
     meeting of the board of directors of a multilateral 
     development bank, the Secretary shall provide for publication 
     on the Internet Web site of the Department of the Treasury 
     of--
       ``(i) the justification for each vote by the United States 
     Executive Director at the multilateral development bank on 
     any matter before the board of directors of the bank; and
       ``(ii) any written statement presented at the meeting by 
     such United States Executive Director at the bank 
     concerning--

       ``(I) a lending, grant, or guarantee operation which would 
     result or be likely to result in significant social or 
     environmental effects;
       ``(II) an institutional policy or strategy of the bank that 
     generates significant public interest, including operational 
     policies and sector or thematic strategies;
       ``(III) a project on which a claim has been made to the 
     inspection mechanism of the bank; or
       ``(IV) a case pending before the inspection mechanism of 
     the bank.

       ``(B) Redacted material.--The Secretary may redact material 
     from the material to be made available under subparagraph (A) 
     if the Secretary determines such material is too sensitive 
     for public distribution.
       ``(2) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of the publication policy 
     described in paragraph (3), and use the voice and vote of the 
     United States to implement such policy.
       ``(3) Publication policy.--
       ``(A) In general.--The publication policy referred to in 
     paragraph (2) is a policy that each multilateral development 
     bank shall--
       ``(i) make available to the public, including on the 
     Internet Web site of such bank, the loan, credit, and grant 
     documents, country assistance strategies, sector strategies, 
     and sector policies prepared by the bank that are to be 
     presented for endorsement or approval

[[Page 11553]]

     by the board of directors of the bank, 15 calendar days prior 
     to the date that such document, strategy, or policy will be 
     considered by the board or, if not available at that time, at 
     the time the documents are distributed to the board;
       ``(ii) make available to the public all draft country 
     strategies 120 calendar days prior to consideration of such 
     strategies by the board of directors of the bank;
       ``(iii) make a concerted effort to distribute paper copies 
     of the material referred to in clauses (i) and (ii) to 
     communities affected by the documents referred to in such 
     clauses;
       ``(iv) make available to the public, including on the 
     Internet Web site of such bank, the minutes of a meeting of 
     the board of directors of the bank, not later than 60 
     calendar days after the date that the bank approves the 
     minutes of the board meeting;
       ``(v) make available to the public, including on the 
     Internet Web site of such bank, a summary of discussion of 
     the meeting of the board of directors of the bank, not later 
     than 90 calendar days after the date of the meeting;
       ``(vi) keep a written transcript or electronic recording of 
     each meeting of its board of directors and preserve the 
     transcript or recording for not less than 10 years after the 
     date of such meeting; and
       ``(vii) make available to the public a written transcript 
     or an electronic recording of a meeting of the board of 
     directors of the bank during the 5-year period beginning on 
     the date that is 5 years after the date of the meeting.
       ``(B) Redacted material.--The president of a multilateral 
     development bank may redact material from the material to be 
     made available under subparagraph (A) if the president of a 
     multilateral development bank determines such material is too 
     sensitive for public distribution.
       ``(c) Strengthening Development Bank Administration.--The 
     Secretary shall instruct the United States Executive Director 
     at each multilateral development bank to inform the bank of, 
     and use the voice and vote of the United States to achieve at 
     the bank, the following United States policy goals:
       ``(1) Each multilateral development bank shall require 
     mandatory financial disclosure of any possible or apparent 
     conflict of interest by each employee of the bank, consultant 
     to the bank, or independent expert to the bank whose duties 
     and responsibilities include, through decision or the 
     exercise of judgment, the taking of any action regarding--
       ``(A) contracting or procurement;
       ``(B) developing, administering, managing, or monitoring 
     loans, grants, programs, projects, subsidies, or other 
     conferred financial or operational benefits provided by the 
     bank; or
       ``(C) evaluating or auditing any project, program or 
     entity.
       ``(2) Each multilateral development bank shall reform the 
     `pressure to lend' incentive structure at such bank by 
     linking project design and implementation to staff 
     performance appraisals and shall require that staff increase 
     its focus on monitoring existing loans.
       ``(3) Each multilateral development bank shall continue 
     strengthening whistleblower policies at the bank to the level 
     of emerging standards for national and international law in 
     the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), the 
     Inspector General Act of 1978 (5 U.S.C. App.), and the model 
     approved for member nations by the Organization of American 
     States to implement the Inter-American Convention Against 
     Corruption, done at Caracas on March 29, 1996.
       ``(4) All loan, credit, guarantee, and grant documents and 
     other agreements with borrowers shall include provisions for 
     the financial resources and conditionality necessary to 
     ensure that a person who obtains financial support from a 
     multilateral development bank complies with applicable bank 
     policies and national and international laws in carrying out 
     the terms and conditions of such documents and agreements, 
     including bank policies and national and international laws 
     pertaining to the comprehensive assessment and transparency 
     of the activities supported, such as those concerning public 
     consultation, access to information, public health, safety, 
     and environmental protection.
       ``(5) Each multilateral development bank shall develop 
     clear procedures setting forth the circumstances under which 
     a person will be barred from receiving a loan, contract, 
     grant, or credit from such bank, shall make such procedures 
     available to the public, and shall make the identities of 
     such person available to the public.
       ``(6) Each multilateral development bank shall coordinate 
     policies across international institutions on issues 
     including debarment, cross-debarment, procurement and 
     consultant guidelines, and fiduciary standards so that a 
     person that is debarred by one multilateral development bank 
     is automatically declared ineligible to conduct business with 
     the other multilateral development banks during the specified 
     ineligibility period.
       ``(d) Anti-Corruption Practices.--
       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of the United States 
     anti-corruption policy described in paragraph (2), and use 
     the voice and vote of the United States to implement such 
     policy at the bank.
       ``(2) Anti-corruption policy.--The anti-corruption policy 
     referred to in paragraph (1) is the United States policy that 
     a person that receives money from a multilateral development 
     bank shall sign a code of conduct that embodies the standards 
     set out in section 104 of the Foreign Corrupt Practices Act 
     of 1977 (15 U.S.C. 78dd-2), and that prohibits such person 
     from corruptly in furtherance of an offer, payment, promise 
     to pay, or authorization of the payment of any money, or 
     offer, gift, promise to give, or authorization of the giving 
     of anything of value to any official for purposes, directly 
     or indirectly--
       ``(A)(i) influencing any act or decision of such official 
     in his or her official capacity;
       ``(ii) supporting any political party, political entity, 
     any official of a political party, or any candidate for 
     political office;
       ``(iii) inducing such official to do or omit to do any act 
     in violation of the lawful duty of such official; or
       ``(iv) securing any improper advantage; or
       ``(B) inducing such official to use the official's 
     influence with a government or instrumentality thereof, to 
     affect or influence any act or decision of such government or 
     instrumentality,
     in order to assist such person in obtaining or retaining 
     business for or with, or directing business to, any other 
     person.
       ``(e) Strengthening Development Bank Auditing.--
       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of, and use the voice and 
     vote of the United States to achieve at the bank, the 
     following United States policy goals:
       ``(A) Each multilateral development bank shall--
       ``(i) establish an independent Office of an Inspector 
     General, establish or strengthen an independent auditing 
     function at the bank, and require that the Inspector General 
     and the auditing function report directly to the board of 
     directors of the bank; and
       ``(ii) adopt and implement an internationally recognized 
     internal controls framework, allocate adequate staffing to 
     auditing and supervision, require external audits of internal 
     controls, and external and forensic audits of loans where 
     fraud is suspected.
       ``(B) Each multilateral development bank shall establish a 
     plan and schedule for conducting regular, independent audits 
     of internal management controls and procedures for meeting 
     operational objectives, complying with the policies of such 
     bank, and preventing fraud, and making reports describing the 
     scope and findings of such audits available to the public.
       ``(C) Each multilateral development bank shall establish 
     effective procedures for the receipt, retention, and 
     treatment of--
       ``(i) complaints received by the bank regarding fraud, 
     accounting, mismanagement, internal accounting controls, or 
     auditing matters; and
       ``(ii) the confidential, anonymous submission, particularly 
     by employees of the bank, of concerns regarding fraud, 
     accounting, mismanagement, internal accounting controls, or 
     auditing matters.
       ``(D) Each multilateral development bank shall post on the 
     Internet Web site of such bank an annual report containing 
     statistical summaries and case studies of the fraud and 
     corruption cases pursued by the bank's investigations unit.
       ``(f) Compensation Packages for People Negatively Affected 
     by Development Bank Projects.--
       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to inform the bank of the United States 
     policy goals related to compensation described in paragraph 
     (2), and use the voice and vote of the United States to 
     implement such policy at the bank.
       ``(2) Compensation policy.--The compensation policy 
     referred to in paragraph (1) is a policy that each 
     multilateral development bank shall, for each project funded 
     by the bank where compensation, including resettlement or 
     rehabilitation assistance, is to be provided to persons 
     adversely impacted by the project, require that an 
     independent mechanism be established for, or included in the 
     design of, the project to receive and adjudicate complaints 
     from a person who is eligible for compensation if such 
     person, not more than 6 years after the date of the 
     completion of the project, finds that the compensation is 
     either inadequate or improperly implemented.
       ``(g) Evaluation.--The Secretary shall instruct the United 
     States Executive Director at each multilateral development 
     bank to inform the bank of, and use the voice and vote of the 
     United States to achieve at the bank, the following goals:
       ``(1) Each multilateral development bank shall make the 
     results of project and non-project operations evaluations 
     available to the public, including through the Internet Web 
     site of the bank and including information on the quantity of 
     projects evaluated per year as a percentage of total projects 
     carried out.
       ``(2) Each multilateral development bank shall require that 
     all loans, grants, credits,

[[Page 11554]]

     policies, and strategies, including budget support, prepared 
     by the bank include specific outcome and output indicators to 
     measure results, and that the indicators and results be 
     published periodically during the execution and at the 
     completion of the appropriate project or program, and at the 
     number of years after such completion determined to be 
     appropriate for such loan, grant, credit, policy, or 
     strategy.
       ``(3) Each multilateral development bank shall promote 
     rigorous evaluation of projects and policies to ensure that 
     the intent of such projects and policies is realized. Such a 
     bank shall favor grants and loans to applicants who agree, in 
     consultation with an independent evaluator or evaluators, to 
     design projects to facilitate the evaluation of outcomes. 
     Rigorous evaluations shall measure the impact on those served 
     by a loan, grant, or credit and shall have a carefully 
     constructed comparison group to help measure the impacts of 
     the loan, grant, or credit.
       ``(h) Qualification Policy.--
       ``(1) Voice and vote.--The Secretary shall instruct the 
     United States Executive Director at each multilateral 
     development bank to encourage the bank to implement the 
     qualification policy for borrowing countries described in 
     paragraph (2), and use the voice and vote of the United 
     States to achieve such policy at each bank.
       ``(2) Qualification policy for borrowing countries.--The 
     qualification policy for borrowing countries referred to in 
     paragraph (1) is a policy that requires, in addition to the 
     standards in effect on the date of the enactment of the 
     Development Bank Reform and Authorization Act of 2005, each 
     multilateral development bank to qualify a country for budget 
     support, adjustment lending, policy lending for non-project 
     loans, grants, or credits, or other loans directed to the 
     country's budget based on transparency in procurement and 
     fiduciary requirements and requiring the borrowing country to 
     make its budget available to the public before funds are 
     disbursed to that country.
       ``(i) Microfinance and Business Development.--The Secretary 
     shall inform the management of each multilateral development 
     bank and the public that it is the policy of the United 
     States to encourage microfinance services for the poor and 
     very poor (as that term is defined in section 259 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2214a)), and micro-
     , small-, and medium-enterprise development programs, 
     particularly in a country where the government of such 
     country ranks poorly in the World Bank Institute's governance 
     indicators.
       ``(j) Resource Dependent Country Revenue Transparency.--
       ``(1) Requirements for resource assistance for a 
     government.--The Secretary shall inform the management of 
     each multilateral development bank and the public that it is 
     the policy of the United States that any assistance provided 
     by a such bank including any investment, loan, credit, grant, 
     or guarantee, to a government of a resource-dependent country 
     or for any project located in a resource-dependent country, 
     other than humanitarian assistance, assistance to address 
     HIV/AIDS, tuberculosis, malaria or food aid, may not be 
     provided unless the government has in place or is taking the 
     necessary steps to establish functioning systems for--
       ``(A) accurately accounting for all revenues received by a 
     borrowing government from a person and all payments to a 
     government in connection with the extraction or export of 
     natural resources, such as gas, oil, oil shale, tar sands, 
     coal, any metal, mineral, or timber;
       ``(B) the independent auditing of such payments and such 
     revenues by a credible, independent auditor, applying 
     international auditing standards, and the widespread regular 
     public dissemination of the auditor's findings, including a 
     reconciliation of aggregate payments and revenues;
       ``(C) verifying such revenues against the records for such 
     payments made by each person, including widespread 
     dissemination of aggregate payment information in a manner 
     that protects proprietary information, that observes the law 
     of the borrowing country, and that the person determines does 
     not cause substantial competitive harm;
       ``(D) making available to the public all contracts between 
     the government of such country or any person owned or 
     controlled by such government, and any person that is engaged 
     in the extraction or export of natural resources through a 
     project or program supported by a bank, unless the person 
     determines such disclosure would cause substantial 
     competitive harm;
       ``(E) applying the revenue transparency approach described 
     in this paragraph equally and fully to all extractive 
     industry companies operating in the country, including state-
     owned entities; and
       ``(F) establishing a legal framework for disclosure of 
     payments from a person or contracts with a person and 
     outlining the level and extent of disclosure or payment 
     information by companies in the extractive industries.
       ``(2) Requirements for other natural resource assistance.--
     The Secretary shall inform the management of each 
     multilateral development bank and the public that it is the 
     policy of the United States that any assistance, including 
     any investment, loan, or guarantee, provided by such a bank 
     to private sector sponsors for the extraction or export of 
     natural resources in a resource-dependent country shall only 
     be provided if the government of the country has in place or 
     is taking necessary steps to establish the functioning 
     systems described in subparagraphs (A) through (F) in 
     paragraph (1) and if the private sector sponsors of such 
     projects publicly disclose revenue payments made to the 
     government of such country, in accordance with the laws of 
     such country regarding the required level and extent of such 
     disclosure.
       ``(3) Compliance with transparency guidelines prior to 
     approval of assistance.--In furtherance of the policy 
     described in paragraph (1), not later than 2 years after the 
     date of the enactment of the Development Bank Reform and 
     Authorization Act of 2005, the Secretary shall inform the 
     management of each multilateral development bank and the 
     public that it is the policy of the United States that any 
     assistance by such a bank, including any investment, loan, 
     credit, grant, or guarantee, other than humanitarian 
     assistance, assistance to address HIV/AIDS, tuberculosis, or 
     malaria or to provide food, to any government of a resource-
     dependent country or for any project located in such country, 
     shall not be provided unless the bank, prior to the approval 
     of such assistance, has--
       ``(A) determined that the government has in place the 
     systems described in subparagraphs (A) through (F) of 
     paragraph (1), based on all information that is relevant, 
     applicable and reasonably available to the bank, including, 
     the views of other international financial institutions 
     active in such country and the views of civil society 
     organizations that are active within and outside such 
     country;
       ``(B) determined that private sector sponsors of projects 
     for the extraction and export of natural resources have 
     agreed to publicly disclose revenue payments to host 
     governments; and
       ``(C) made available to the public the findings and 
     conclusions identifying the information taken into 
     consideration in making such determinations and the reasons 
     for such determinations.
       ``(4) Resource-dependent country defined.--In this 
     subsection, the term `resource-dependent country' means a 
     country that has--
       ``(A) an average share of natural resource-derived fiscal 
     revenues of at least 25 percent of the total fiscal revenues 
     during the preceding 3-year period; or
       ``(B) an average share of natural resource export proceeds 
     of at least 25 percent of the total export proceeds during 
     the preceding 3-year period.''.

     SEC. 6. SENSE OF CONGRESS ON THE EXTRACTIVE INDUSTRY 
                   TRANSPARENCY INITIATIVE AND G-8 AGREEMENTS.

       It is the sense of Congress that--
       (1) the President should continue promoting the Extractive 
     Industry Transparency Initiative as one approach to help 
     ensure that the revenues from extractive industries 
     contribute to sustainable development and poverty reduction, 
     as such Initiative is a voluntary initiative intended--
       (A) to promote greater transparency of developing country 
     government revenues and expenditures, procurement, 
     concession-granting systems; and
       (B) to work to recover stolen assets and enforce 
     antibribery laws;
       (2) the United States should encourage the continued work 
     of the G-8 to promote the Extractive Industries Transparency 
     Initiative; and
       (3) the United States should support and encourage the 
     carrying out of the agreements of the G-8 made at the 2004 
     Summit at Sea Island, Georgia, and at the 2003 Summit at 
     Evian, France, to promote transparency in public budgets, 
     including revenues and expenditures, government procurement, 
     public concessions, the granting of licenses with special 
     emphasis on countries with large extractive industries 
     sectors, including the agreements made at the Summit at Sea 
     Island which specifically--
       (A) support the efforts of the Public Expenditure and 
     Financial Accountability program at the World Bank to help 
     developing countries achieve accountability in public finance 
     and expenditure and to extend harmonized approaches to the 
     assessment and reform of their public financial, 
     accountability, and procurement systems;
       (B) invite developing countries to prepare anticorruption 
     action plans to implement the commitments of such countries 
     in regional and international conventions; and
       (C) achieve agreement on full disclosure of the World Bank 
     International Development Association's Country Policy and 
     Institutional Assessment results, with disclosure to begin 
     with the 2005 ratings.

     SEC. 7. REPORTS FROM THE GOVERNMENT ACCOUNTABILITY OFFICE.

       (a) Sense of Congress on Access to Information.--It is the 
     sense of Congress that--
       (1) to evaluate the compliance of the multilateral 
     development banks with the policies of the United States 
     described in section 1505 of the International Financial 
     Institutions Act, as added by section 5 of this Act, and to 
     prepare the reports required by this section, the Comptroller 
     General of the

[[Page 11555]]

     United States should have full and complete access to 
     financial information relating to the multilateral 
     development banks, including information related to the 
     performance, accountability, oversight, financial 
     transactions, organization, and activities of the 
     multilateral development banks;
       (2) the Secretary should seek to conclude memorandums of 
     understanding with the multilateral development banks to 
     ensure that the United States will have access to documents 
     related to information described in paragraph (1); and
       (3) the Secretary of the Treasury should facilitate access 
     by the Comptroller General of the United States to the 
     financial information described in paragraph (1).
       (b) Report on Effectiveness of Multilateral Development 
     Banks.--Not later than 3 years after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall--
       (1) conduct a review of the effectiveness of each 
     multilateral development bank in achieving the mission of 
     such bank as set out in the articles of agreement of such 
     bank, specifically poverty reduction and economic 
     development; and
       (2) submit to the appropriate congressional committees a 
     report on the findings of the review.
       (c) Report on Consistency of Multilateral Development Bank 
     Practices With Statutory Policies.--Not later than 3 years 
     after the date of the enactment of this Act, the Comptroller 
     General of the United States shall prepare and submit to the 
     appropriate congressional committees a report on the extent 
     to which the practices of the multilateral development banks 
     are consistent with the policies of the United States, as 
     expressly contained in Federal law applicable to the 
     multilateral development banks.
       (d) Report on Reforms at the Multilateral Development 
     Banks.--Not later than 1 year after the date of the enactment 
     of this Act, the Comptroller General of the United States 
     shall prepare and submit to the appropriate congressional 
     committees a report on the extent of the implementation of 
     the reforms called for by the Group of 8 or by the Group of 
     7, starting with the 2000 Okinawa Summit, as delineated in 
     communiques, chairman's statements, and other official 
     communication through the summit or finance ministerial 
     processes of the Group of 8 or the Group of 7.

     SEC. 8. CONTRIBUTIONS TO MULTILATERAL DEVELOPMENT BANKS.

       (a) World Bank.--The International Development Association 
     Act (22 U.S.C. 284 et seq.) is amended by adding at the end 
     the following new section:

     ``SEC. 23. FOURTEENTH REPLENISHMENT.

       ``(a) Contribution Authority.--
       ``(1) In general.--The United States Governor of the 
     Association is authorized to contribute on behalf of the 
     United States $2,850,000,000 to the fourteenth replenishment 
     of the resources of the Association.
       ``(2) Subject to appropriations.--Any commitment to make 
     the contribution authorized by paragraph (1) shall be 
     effective only to such extent or in such amounts as are 
     provided in advance in appropriations Acts.
       ``(b) Authorization of Appropriations.--For the 
     contribution authorized by subsection (a), there are 
     authorized to be appropriated, without fiscal year 
     limitation, $2,850,000,000 for payment by the Secretary of 
     the Treasury.''.
       (b) African Development Bank Fund.--The African Development 
     Fund Act (22 U.S.C. 290g et seq.) is amended by adding at the 
     end the following new section:

     ``SEC. 218. TENTH REPLENISHMENT.

       ``(a) Contribution Authority.--
       ``(1) In general.--The United States Governor of the Fund 
     is authorized to contribute on behalf of the United States 
     $407,000,000 to the tenth replenishment of the resources of 
     the Fund.
       ``(2) Subject to appropriations.--Any commitment to make 
     the contribution authorized by paragraph (1) shall be 
     effective only to such extent or in such amounts as are 
     provided in advance in appropriations Acts.
       ``(b) Authorization of Appropriations.--For the 
     contribution authorized by subsection (a), there are 
     authorized to be appropriated, without fiscal year 
     limitation, $407,000,000 for payment by the Secretary of the 
     Treasury.''.
       (c) Asian Development Fund of the Asian Development Bank.--
     The Asian Development Bank Act (22 U.S.C. 285 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 32. EIGHTH REPLENISHMENT.

       ``(a) Contribution Authority.--
       ``(1) In general.--The United States Governor of the Bank 
     is authorized to contribute on behalf of the United States 
     $461,000,000 to the eighth replenishment of the resources of 
     the Fund.
       ``(2) Subject to appropriations.--Any commitment to make 
     the contribution authorized by paragraph (1) shall be 
     effective only to such extent or in such amounts as are 
     provided in advance in appropriations Acts.
       ``(b) Authorization of Appropriations.--For the 
     contribution authorized by subsection (a), there are 
     authorized to be appropriated, without fiscal year 
     limitation, $461,000,000 for payment by the Secretary of the 
     Treasury.''.

     SEC. 9. ANNUAL REPORTS.

       (a) Initial Report.--Not later than September 1, 2006, the 
     Secretary shall submit a report to the appropriate 
     congressional committees the describes the actions taken by 
     the United States Executive Director at each multilateral 
     development bank to implement the policy goals described in 
     this Act and the amendments made by this Act and any other 
     actions that should be taken to implement such goals.
       (b) Updates.--The Secretary shall submit to the appropriate 
     congressional committees an annual update of the report 
     required by subsection (a) for each of the fiscal years 2007, 
     2008, and 2009.
                                 ______
                                 
      By Mr. CRAIG:
  S. 1131. A bill to authorize the exchange of certain Federal land 
within the State of Idaho, and for other purposes; to the Committee on 
Energy and Natural Resources.
  Mr. CRAIG. Mr. President, I rise today to introduce the Idaho Land 
Enhancement Act of 2005. Simply put, this legislation directs the 
Secretaries of Agriculture and Interior to exchange land with the State 
of Idaho involving key parcels of land from the Boise Foothills to 
North Idaho.
  The proposed exchange is exceptional in many respects. First, the 
concept for the proposed land exchange originated from a local 
conservation effort led by the city of Boise and local conservation 
groups including the Idaho Conservation League. Since the late 1960's 
the issue of conserving the Boise Foothills has been a significant 
concern of the community. Conservation efforts have continued to grow 
in support within the community, culminating in May 2001 with the 
citizens of Boise, in one of the highest voter turnouts in city 
history, electing to tax themselves in order to provide funding to 
secure permanent public open space in the Boise Foothills.
  Next, the collaboration between the city of Boise, the State of 
Idaho, the Forest Service and the Bureau of Land Management has 
produced an agreement that has yielded a proposal benefiting the 
State's endowment beneficiaries while addressing the common threats of 
fire and hazardous fuels, invasive species, habitat fragmentation and 
unmanaged recreation associated with urban interface with Federal 
lands. The proposal uses both Bureau of Land Management and Forest 
Service land to balance an exchange with Idaho State Endowment lands on 
an equal value basis.
  Last, the process has been open, transparent, and has wide support 
throughout the State. The city of Boise has facilitated public 
meetings, provided opportunities for public comment, and has made the 
maps of the exchange available to the public. The City has met with all 
of the affected tribes and counties. In addition, the multi-agency 
group completed evaluations of timber values, minerals, cultural 
resources, water rights, legal access, wildlife, fisheries, vegetation, 
hydrology, wetlands, threatened and endangered species, and specific 
habitat. The evaluations show that no major environmental effect will 
occur as a result of the exchange. In fact, The Nature Conservancy 
independently reviewed the data and compared it to their eco-regional 
planning efforts and concluded that the exchange has ``limited 
potential to impact biodiversity values'' and they support the 
exchange.
  The city of Boise has made a substantial investment of local property 
tax dollars in the facilitation of this land exchange package. This 
exchange will complete a statewide collaborative process that 
represents a legacy of local, State and Federal cooperation benefiting 
land management interests throughout the State.
  This exchange will enhance land in both the northern and southern 
parts of the State. It is an example of how local, State, and Federal 
partners can come together to collaboratively develop an exchange in 
which the public and the land are the ultimate beneficiaries.
                                 ______
                                 
      By Mr. COLEMAN (for himself, Ms. Landrieu, Mr. DeWine, Ms. Snowe, 
        Mr. Cochran, Mr. Vitter, Mr. Bayh, and Mr. Smith):

[[Page 11556]]

  S. 1132. A bill to amend the Public Health Service Act, the Employee 
Retirement Income Security Act of 1974, and the Internal Revenue Code 
of 1986 to require that group and individual health insurance coverage 
and group health plans provide coverage for treatment of a minor 
child's congenital or developmental deformity or disorder due to 
trauma, infection, tumor, or disease; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. COLEMAN. Mr. President, I am pleased today to be introducing the 
bipartisan Treatment of Children's Deformities Act. I am pleased to be 
joined by many of my friends and colleagues, including Senators 
Landrieu, DeWine, Snowe, Cochran, Vitter and Bayh.
  Imagine being a parent with a child who has a cleft lip and palate or 
another more severe congenital facial deformity that requires 
reconstructive surgery to achieve a sense of normalcy and function. Now 
imagine receiving a letter from your insurance carrier that states the 
following:

       The reviewer determined that although the procedures listed 
     above would enhance the appearance of the patient, the 
     procedures listed are not necessary to correct a functional 
     disorder and therefore do not meet the criteria for benefits 
     as outlined in the medical plan.

  Unfortunately, there are numerous examples of children and families 
around the country that have been confronted with this kind of heart 
wrenching situation. Examples of congenital deformities include cleft 
lip, cleft palate, skin lesions, vascular anomalies, malformations of 
the ear, hand, or foot, and other more profound craniofacial 
deformities. It is essential for children with these problems to 
receive timely surgical care in order to have a chance at leading 
normal, healthy, happy lives. And yet, an increasing number of kids go 
without life changing treatment because treatment is regarded as 
``cosmetic'' or ``non-functional.''
  It's unfortunate that legislation is necessary. However, this 
legislation will ensure that children who are born with a congenital 
deformity--whether a cleft lip and palate or a more severe deformity--
receive the reconstructive surgery they need to achieve a sense of 
normalcy and function.
  According to the March of Dimes, 150,000 newborns suffer from birth 
defects each year. Of the 150,000 born, approximately 50,000 require 
reconstructive surgery. Although surgeons are able to correct many of 
these problems, an increasing number of these children are denied 
access to care by the labeling of the procedures as ``cosmetic'' or 
``non-functional'' in nature.
  A common Federal definition of reconstructive surgery, based on the 
American Medical Association's definition, will help clarify coverage 
nationally and reduce the delay for children in need of surgery.
  It is essential for children with these problems to receive timely 
surgical care in order to have a chance at leading normal, healthy, and 
happy lives. Also, many times these surgeries are best performed while 
children are young and their bodies can more readily recover and 
respond to the corrective surgery.
  The Treatment of Children's Deformities Act differentiates between 
cosmetic and reconstructive surgery. The legislation defines 
reconstructive surgery as that being performed on abnormal structures 
of the body, caused by congenital defects, developmental abnormalities, 
trauma, infection, tumors or disease.
  Cosmetic surgery, in contrast, is defined by the American Medical 
Association as being performed to reshape normal structures of the body 
in order to improve the patient's appearance and self-esteem.
  Children born with deformities should receive the help they need and 
this legislation will make it happen. I look forward to working with my 
colleagues to pass this legislation that will improve the quality of 
life for children born with congenital deformities. I urge my 
colleagues to join me in supporting this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1132

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Treatment of Children's 
     Deformities Act of 2005''.

     SEC. 2. COVERAGE OF MINOR CHILD'S CONGENITAL OR DEVELOPMENTAL 
                   DEFORMITY OR DISORDER.

       (a) Group Health Plans.--
       (1) Public health service act amendments.--
       (A) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 2707. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.
       ``(b) Notice.--A group health plan under this part shall 
     comply with the notice requirement under section 714(b) of 
     the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this section as if such 
     section applied to such plan.''.
       (B) Conforming amendment.--Section 2723(c) of the Public 
     Health Service Act (42 U.S.C. 300gg-23(c)) is amended by 
     striking ``section 2704'' and inserting ``sections 2704 and 
     2707''.
       (2) ERISA amendments.--
       (A) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.
       ``(b) Notice Under Group Health Plan.--The imposition of 
     the requirements of this section shall be treated as a 
     material modification in the terms of the plan described in

[[Page 11557]]

     section 102(a)(1), for purposes of assuring notice of such 
     requirements under the plan; except that the summary 
     description required to be provided under the last sentence 
     of section 104(b)(1) with respect to such modification shall 
     be provided by not later than 60 days after the first day of 
     the first plan year in which such requirements apply.''.
       (B) Conforming amendments.--
       (i) Section 731(c) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191(c)) is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (ii) Section 732(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (iii) The table of contents in section 1 of the Employee 
     Retirement Income Security Act of 1974 is amended by 
     inserting after the item relating to section 713 the 
     following:

``Sec. 714. Standards relating to benefits for minor child's congenital 
              or developmental deformity or disorder''.

       (3) Internal revenue code amendments.--Subchapter B of 
     chapter 100 of the Internal Revenue Code of 1986 is amended--
       (A) in the table of sections, by inserting after the item 
     relating to section 9812 the following:

``Sec. 9813. Standards relating to benefits for minor child's 
              congenital or developmental deformity or disorder''; and

       (B) by inserting after section 9812 the following:

     ``SEC. 9813. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.''.
       (b) Individual Health Insurance.--
       (1) In general.--Part B of title XXVII of the Public Health 
     Service Act is amended by inserting after section 2752 the 
     following:

     ``SEC. 2753. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S 
                   CONGENITAL OR DEVELOPMENTAL DEFORMITY OR 
                   DISORDER.

       ``(a) Requirements for Reconstructive Surgery.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     that provides coverage for surgical benefits shall provide 
     coverage for outpatient and inpatient diagnosis and treatment 
     of a minor child's congenital or developmental deformity, 
     disease, or injury. A minor child shall include any 
     individual through 21 years of age.
       ``(2) Requirements.--Any coverage provided under paragraph 
     (1) shall be subject to pre-authorization or pre-
     certification as required by the plan or issuer, and such 
     coverage shall include any surgical treatment which, in the 
     opinion of the treating physician, is medically necessary to 
     approximate a normal appearance.
       ``(3) Treatment defined.--
       ``(A) In general.--In this section, the term `treatment' 
     includes reconstructive surgical procedures (procedures that 
     are generally performed to improve function, but may also be 
     performed to approximate a normal appearance) that are 
     performed on abnormal structures of the body caused by 
     congenital defects, developmental abnormalities, trauma, 
     infection, tumors, or disease, including--
       ``(i) procedures that do not materially affect the function 
     of the body part being treated; and
       ``(ii) procedures for secondary conditions and follow-up 
     treatment.
       ``(B) Exception.--Such term does not include cosmetic 
     surgery performed to reshape normal structures of the body to 
     improve appearance or self-esteem.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 714(b) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements referred to in subsection (a) as 
     if such section applied to such issuer and such issuer were a 
     group health plan.''.
       (2) Conforming amendment.--Section 2762(b)(2) of the Public 
     Health Service Act (42 U.S.C. 300gg-62(b)(2)) is amended by 
     striking ``section 2751'' and inserting ``sections 2751 and 
     2753''.
       (c) Effective Dates.--
       (1) Group health coverage.--The amendments made by 
     subsection (a) shall apply with respect to group health plans 
     for plan years beginning on or after January 1, 2006.
       (2) Individual health coverage.--The amendment made by 
     subsection (b) shall apply with respect to health insurance 
     coverage offered, sold, issued, renewed, in effect, or 
     operated in the individual market on or after such date.
       (d) Coordinated Regulations.--Section 104(1) of Health 
     Insurance Portability and Accountability Act of 1996 (42 
     U.S.C. 300gg-92 note) is amended by striking ``this subtitle 
     (and the amendments made by this subtitle and section 401)'' 
     and inserting ``the provisions of part 7 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974, the provisions of parts A and C of title XXVII of the 
     Public Health Service Act, and chapter 100 of the Internal 
     Revenue Code of 1986''.
                                 ______
                                 
      By Mr. BYRD (for himself, Mr. Rockefeller, and Mr. Specter):
  S. 1133. A bill to authorize the Secretary of Energy to develop and 
implement an accelerated research, development, and demonstration 
program for advanced clean coal technologies for use in coal-based 
generation facilities and to provide financial incentives to encourage 
the early commercial deployment of advanced clean coal technologies 
through the retrofitting, repowering, replacement, and new construction 
of coal-based electricity generating facilities and industrial 
gasification facilities; to the Committee on Energy and Natural 
Resources.
  Mr. BYRD. Mr. President, today I am introducing S. 1133, the Clean 
Coal Research, Development, Demonstration, and Deployment Act of 2005. 
I am proud to have Senators Rockefeller and Specter as cosponsors of my 
bill. This comprehensive clean coal technology legislation will help 
provide for a new era for coal. I have looked into the past; I 
recognize the enormous challenges that are before us; and I see coal's 
future.
  The bill authorizes important programs at the Department of Energy as 
well as provides a major package of targeted federal energy tax 
incentives. It supports a research and development program and tax 
incentives to encourage the use of advanced coal technologies at coal-
fired power plants. The bill also promotes a major investment in a 
national industrial gasification program. It is a balanced and 
financially sound proposal, and it recognizes that there are new 
horizons opening for coal.
  The Byrd-Rockefeller-Specter bill works to balance these ever 
expanding opportunities in a very reasonable and responsible way. We 
must move forward with the development and deployment of advanced power 
generation and carbon capture and sequestration technologies. Coal also 
has a future in producing chemicals, alternative transportation fuels, 
and other important products for use in the economy. My legislation can 
begin to initiate that effort.
  There are those who have wanted to push coal aside like stove wood 
and horse power as novelties from a bygone era. But we cannot ignore 
coal as part of the solution to our future energy challenges. Over the 
past several years, I have been diligently assembling a set of 
proposals that can provide a comprehensive approach for the near- and 
long-term viability for coal, both at home and abroad. It is time that 
we reexamine the opportunities for coal, and let the past be our guide 
to the future.
  Mr. President, I hope other Senators will review S. 1133, and I urge 
them to cosponsor this legislation.
                                 ______
                                 
      By Mr. BENNETT (for himself and Mr. Hatch):
  S. 1135. A bill to authorize the exchange of certain land in Grand 
and Uintah Counties, Utah, and for other purposes; to the Committee on 
Energy and Natural Resources.

[[Page 11558]]


  Mr. BENNETT. Mr. President, I am pleased to be able to re-introduce 
the Utah Recreational Land Exchange Act of 2005, together with my 
colleague Senator Hatch. Legislation was introduced in the previous 
Congress to lay the groundwork for our efforts in the 109th Congress.
  This legislation will ensure the protection of critical lands along 
the Colorado River corridor in southeastern Utah and will help provide 
important funding for Utah's school children. In Utah we treasure the 
education of our children. A key component of our education system is 
the 3.5 million acres of school trust lands scattered throughout the 
State. These lands are dedicated to the support of public education. 
Revenue from Utah school trust lands, whether from grazing, forestry, 
surface leasing or mineral development, is placed in the State School 
Fund. This fund is a permanent income producing endowment created by 
Congress upon statehood to fund public education. Unfortunately, the 
majority of these lands are trapped within federal ownership patterns 
that make it impossible for responsible development. It is critical to 
both the State of Utah and the Bureau of Land Management, BLM, that we 
consolidate their respective lands to ensure that both public agencies 
are permitted to fulfill their mandates.
  The legislation we are introducing today is yet another chapter in 
our State's long history of consolidating these State lands for the 
financial well being of our education system. These efforts serve a 
dual purpose as they help the Federal land management agencies to 
consolidate Federal lands in environmentally sensitive areas that can 
then be reasonably managed. We see this exchange as a win-win solution 
for the State of Utah and its school children, as well as the 
Department of the Interior as the caretaker of our public lands.
  Beginning in 1998 Congress passed the first major Utah school trust 
land exchange which consolidated hundreds of thousands of acres. Again 
in 2000, Congress enacted an exchange consolidating another 100,000 
acres. I was proud to playa role in those efforts, and the bill we are 
introducing today is yet another step in the longjoumey toward giving 
the school children the deal they were promised in 1896 when Utah was 
admitted to the Union.
  The School Trust of Utah currently owns some of the most spectacular 
lands in America, located along the Colorado River in southeastern 
Utah. This legislation will ensure that places like Westwater Canyon of 
the Colorado River, the world famous Kokopelli and Slickrock biking 
trails, some of the largest natural rock arches in the United States, 
wilderness study areas, and viewsheds for Arches National Park will be 
traded into Federal ownership and for the benefit of future 
generations. At the same time, the school children of Utah will receive 
mineral and development lands that are not environmentally sensitive, 
in locations where responsible development makes sense. This will be an 
equal value exchange, with approximately 40,000 acres exchanged on 
either side, with both taxpayers and the school children of Utah 
receiving a fair deal. Moreover, the legislation establishes a 
valuation process that is transparent to the public, yet will ensure 
the exchange process occurs in a timely manner.
  This legislation represents a truly collaborative process. We have 
convened all of the players to give us input into this legislation: 
local government, the State, the recreation community, the 
environmental community and other interested parties. At the same time 
we are working closely with the Department of Interior. We introduced 
this bill in the 108th Congress in order to initiate some discussion of 
moving forward with this exchange proposal. Since that time, some 
changes have been made in an effort to improve this legislation. We 
remain receptive to additional changes that might make further 
improvements. The State has been working with all of these groups over 
the past year at a grass-roots level to address concerns. We look 
forward to working with the appropriate committees and the Department 
of Interior toward a successful resolution of this proposed exchange.
  I urge all of my colleagues to support our efforts to fund the 
education of our children in Utah and to protect some of this Nation's 
truly great lands. I urge support of the Utah Recreational Land 
Exchange Act of 2005.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. McCain, and Mr. Allen):
  S. 1137. A bill to include dehydroepi-
androsterone as an anabolic steroid; to the Committee on the Judiciary.
  Mr. GRASSLEY. Mr. President, recently, the problem of steroid abuse 
has been getting a great deal of media attention. While this publicity 
has helped to raise public awareness about the dangers of illegal 
steroids, recent studies indicate that more and more young people are 
taking these drugs to improve their performance, appearance, or self 
image. In fact, some recent studies indicate that as many as 5 percent 
to 7 percent of students, even as young as middle school, admit to 
using illegal steroids.
  Even more widespread among adolescents, however, is the use of over-
the-counter supplements. Many young people are turning to 
``supplements'' as an alternative to illegal steroids, mistakenly 
believing that because they are sold over the counter, they must be 
safe. However, many of these over the counter ``supplements'' actually 
produce the same dangerous effects on the body as illegal steroids. 
Some, even become steroids in the bloodstream.
  Last year, the President signed into law the Anabolic Steroid Control 
Act of 2004, which added 18 anabolic steroid precursors to the list of 
anabolic steroids that are classified as controlled substances. Yet as 
I speak, on the shelves of health stores across the country, sits one 
anabolic steroid that can be bought by anyone, at any age, without the 
need of a doctor's prescription.
  Dehydroepiandrosterone, or DHEA, is an anabolic steroid that once 
ingested, the body turns into testosterone. DHEA like all other 
steroids, may cause a number of long term physical and psychological 
effects, including: heart disease, cancer, stroke, liver damage, severe 
acne, baldness, dramatic mood swings, aggression, etc. In fact, DHEA is 
already banned by the Olympics, the World Anti-Doping Agency, the 
National Collegiate Athletic Association, the National Football League, 
the National Basketball Association, and Minor League Baseball, yet it 
actually enjoys special protections under the Anabolic Steroid Control 
Act.
  In an effort to keep all potentially dangerous steroids out of the 
hands of unsuspecting consumers and children, I am pleased to introduce 
legislation today that would add DHEA to the list of controlled 
substances under the Anabolic Steroid Control Act. This legislation 
will eliminate the special exemption granted to DHEA, thereby treating 
it as every other substance in the steroid family.
  With the dramatic rise in the use of steroids among our nation's 
youth, now is the time to act to curb this increasingly growing 
problem. Just like all other anabolic steroids, DHEA should not be 
available over the counter, but only under a doctor's supervision. I 
encourage my colleagues to join in support of this legislation.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1137

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

     SECTION 1. INCLUSION OF DEHYDROEPIAN-
                   DROSTERONE.

       Section 102(41)(A) of the Controlled Substances Act (21 
     U.S.C. 802(41)(A)) is amended--
       (1) in the matter preceding clause (i), by striking 
     ``corticosteroids, and dehydroepi-
     androsterone'' and inserting ``and corticosteroids'';
       (2) by redesignating clauses (x) through (xlx) as clauses 
     (xi) through (xlxi), respectively; and
       (3) by inserting after clause (ix) the following:
       ``(x) dehydroepiandrosterone (androst-5-en-3b-ol-17-
     one);''.

[[Page 11559]]


                                 ______
                                 
      By Mr. SANTORUM:
  S. 1139. A bill to amend the Animal Welfare Act to strengthen the 
ability of the Secretary of Agriculture to regulate the pet industry; 
to the Committee on Agriculture, Nutrition, and Forestry.
  Mr. SANTORUM. Mr. President, I rise today to introduce the Pet Animal 
Welfare Statute of 2005 (PAWS). The introduction of this important 
animal welfare legislation demonstrates my continued interest in humane 
treatment of animals. As the proud owner of a German Shepherd, it is 
disturbing to see the number of high volume breeders who are careless 
and disregard their responsibilities to care properly for their 
animals.
  Across the United States, there are more than 3,000 commercial dog-
breeding facilities that are licensed to operate by the United States 
Department of Agriculture (USDA). Owners of these facilities are 
required to comply with the rules and regulations of the Animal Welfare 
Act (AWA), which sets forth standards for humane handling and 
treatment. USDA inspections are also required to ensure compliance with 
AWA standards.
  Unfortunately, enforcement of AWA has not effectively stopped the 
inhumane treatment of animals within the pet industry. Because the AWA 
only covers breeders and others who sell at wholesale, many puppy mill 
owners have successfully avoided AWA requirements by selling directly 
to the public. The ability to use the Internet as a marketing tool for 
direct sales has only made selling directly to the public more 
prevalent and popular. Because USDA can only regulate wholesalers under 
the AWA, it has very limited authority to oversee the care and 
conditions of animals in these facilities.
  PAWS addresses this growing problem. PAWS would regulate breeders who 
raise seven or more litters of dogs or cats each year. This threshold 
test would differentiate those breeders who raise animals in mass 
numbers from those who are hobby breeders.
  In addition, this broad ranging legislation would cover importers and 
other non-breeder dealers who sell more than 25 dogs or cats per year, 
strengthen USDA's enforcement authority, and assure USDA access to 
source records of persons who acquire dogs for resale. Finally, PAWS 
expands the USDA's authority to seek injunctions against unlicensed dog 
and cat dealers.
  The term ``puppy mill'' is not new to many people, be it pet owners, 
consumers, animal welfare advocates, inspectors or just casual 
observers. Puppy mills are large breeding operations that mass-produce 
puppies for commercial sale with little regard for the humane handling 
and treatment of the dogs. Breeding and raising dogs without respect to 
the animal's welfare guarantees bad results for the unknowing owner, 
and for the health of the dog and her puppies. For dogs, puppy mill 
conditions can mean overcrowded cages, lack of protection from weather 
conditions, and an overall lack of veterinary care.
  The benefits of regulating commercial breeders and sellers are 
obvious. PAWS addresses the commerce in pets from many different 
angles, including imports, large direct sellers, Internet sellers, 
enforcement tools, and source records. As a member of the Senate 
Agriculture Committee and Chairman of the Subcommittee on Research, 
Nutrition and General Legislation, the subcommittee with jurisdiction, 
I am prepared to work aggressively to advance this legislation. I urge 
my colleagues to join Senator Durbin and me in supporting this 
legislation.
  Mr. DURBIN. Mr. President, I rise today to introduce the Pet Animal 
Welfare Statute, PAWS, along with my colleague, Senator Santorum.
  For more than three decades, Congress has given the responsibility of 
ensuring minimum standards of humane care and treatment of animals to 
the U.S. Department of Agriculture, USDA, under the Animal Welfare Act, 
AWA.
  The current guidelines within the AWA do not go far enough to protect 
puppies at large breeding facilities; they merely ensure the provision 
of water and food, and that is inadequate. The AWA has been largely 
ineffective because of weak enforcement procedures and limited 
resources. Another severe limitation of the current AWA is that it does 
not regulate overseas breeders who submit their animals to deplorable 
conditions before exporting them to the United States, leaving many 
imported animals with diseases and behavioral disorders. PAWS 
strengthens the AWA to better control the practices of puppy breeding 
in large facilities, addresses cruel puppy treatment and places 
stricter regulations on overseas breeders.
  In large breeding facilities, puppies are often kept in cramped, 
dirty cages; sometimes stacked on top of each other; exposed to the 
elements in extreme cold and heat; forced to breed too frequently; and 
deprived of adequate food, water, veterinary care, and any semblance of 
loving contact. In fact, current law allows many of these breeders to 
evade all federal oversight.
  This inhumane treatment has a direct bearing on the physical and 
mental health of dogs in these facilities. Often, after these puppies 
join a family, they turn out to have serious health and behavioral 
problems that cause them pain, cause their owners great distress, and 
require expensive medical care.
  I believe PAWS will address these problems by filling gaps in the 
current law and encouraging stronger enforcement by USDA to crack down 
on chronic violators. The bill also applies to cats.
  PAWS requires that any commercial hreeder who sells seven or more 
litters of dogs or cats directly to the public in a year must be 
licensed by the USDA. The statute also allows the USDA to obtain the 
identity of breeders, a measure that would help the USDA to address 
inhumane treatment. PAWS extends the suspension period for facilities 
with AWA violations from 21 days to 60 days and provides the USDA with 
direct authority to apply for injunctions.
  I've heard from many of my constituents in Illinois who are deeply 
concerned about the puppy mill problem and want this legislation 
enacted. PAWS is supported by national organizations, including the 
Humane Society of the United States, the American Kennel Club, Doris 
Day Animal League, and the Animal Welfare Institute.
  I am pleased that we have obtained additional funds for USDA to 
improve its enforcement of the AWA. This piece of legislation will 
complement those ongoing efforts by strengthening USDA's authority to 
crack down on the bad actors.
  PAWS will ensure that any commercial dog breeder licensed by the 
Federal Government is meeting basic humane standards of care. We owe at 
least this much to the animals that have earned the title ``man's best 
friend.'' This safety net for dogs and cats will protect pets and the 
consumers who care about them against the poor treatment practices of 
the worst dealers: the ones who provide no interaction; the ones who 
violate industry norms against over-breeding; the ones who repeatedly 
violate the law governing humane care. The good dealers, however, 
should be recognized for the value they bring to pet lovers everywhere.
  Currently, the good dealers suffer at the hands of the bad ones, the 
ones who give the industry a bad reputation. This bill will help draw a 
clear distinction in favor of the good dealers. I thank my colleagues 
for their attention to this issue, and I urge their support for the Pet 
Animal Welfare Statute.
                                 ______
                                 
      By Mr. COCHRAN (for himself, Mr. Pryor, Mr. Chambliss, and Mr. 
        Roberts):
  S. 1141. A bill to authorize the Secretary of Homeland Security to 
regulate ammonium nitrate; to the Committee on Homeland Security and 
Governmental Affairs.
  Mr. COCHRAN. Mr. President, fertilizers provide essential nutrients 
to the food we eat. Without fertilizer, roughly one-third of the 
world's people would go hungry. Ammonium nitrate fertilizer is an 
effective source of nitrogen that all crops need to grow. Thousands of 
American farmers value its

[[Page 11560]]

use in certain applications including cool weather fertilization and 
other low-till cropping systems. Thus, the continued availability of 
ammonium nitrate fertilizer to U.S. farmers has economic, agronomic and 
environmental benefits to farmers and society as a whole.
  At the same time, the April 1995 attack on the Alfred P. Murrah 
Federal Building in Oklahoma City showed America that this highly 
valuable fertilizer can be subject to adulteration and misuse by 
criminals intent on engaging in acts of terror.
  After the Oklahoma City tragedy, Congress enacted legislation calling 
for a study on the feasibility and practicability of imposing controls 
on certain precursor chemicals, including ammonium nitrate. Congress 
recognized that it is simply not possible for the agriculture community 
to guarantee against the criminal misuse of ammonium nitrate or for any 
community to guarantee that the thousands of everyday products that can 
be converted to criminal use will not be misused by those with the 
intent and capability to do so.
  Over the past 10 years, the security landscape has continued to 
change. The agriculture community and the fertilizer industry recognize 
that more needs to be done to strengthen the controls regarding the 
handling and purchase of ammonium nitrate fertilizer in order to ensure 
American farmers continue to have access to this valued input. Today, 
with my colleague from Arkansas Mr. Pryor, my colleague from Georgia 
Mr. Chambliss, and my colleague from Kansas Mr. Roberts, I am pleased 
to introduce legislation that provides a practical and workable 
solution to enhance the secure handling of ammonium nitrate ensuring 
that ammonium nitrate remains available for agricultural use.
  The legislation is entitled ``The Secure Handling of Ammonium Nitrate 
Act of 2005.'' It calls for Federal and State cooperation to secure 
ammonium nitrate fertilizer. It requires any person who produces, 
stores, sells, or distributes ammonium nitrate to register their 
facility with their State department of agriculture and to maintain 
records of sales or distribution of the product. Additionally, it 
requires all purchasers of ammonium nitrate to register with their 
State department of agriculture.
  We believe these requirements are necessary measures to help provide 
additional security for ammonium nitrate fertilizer and will not unduly 
burden agriculture professionals or farmers who use ammonium nitrate. 
Furthermore, we believe this important legislation will effectively 
enhance ongoing security measures and help to keep ammonium nitrate out 
of the hands of those who wish to harm our Nation.
  I urge Senators to support this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1141

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Secure Handling of Ammonium 
     Nitrate Act of 2005''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) ammonium nitrate is an important fertilizer used to 
     produce a reliable and affordable food supply for the United 
     States and the world;
       (2) in the wrong hands, ammonium nitrate may be used for 
     illegal activities;
       (3) the production, importation, storage, sale, and 
     distribution of ammonium nitrate affects interstate and 
     intrastate commerce; and
       (4) it is necessary to regulate the production, storage, 
     sale, and distribution of ammonium nitrate.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Ammonium nitrate.--The term ``ammonium nitrate'' means 
     solid ammonium nitrate that is chiefly the ammonium salt of 
     nitric acid and contains not less than 33 percent nitrogen, 
     of which--
       (A) 50 percent is in ammonium form; and
       (B) 50 percent is in nitrate form.
       (2) Facility.--
       (A) In general.--The term ``facility'' means any site where 
     ammonium nitrate is produced, stored, or held for 
     distribution, sale, or use.
       (B) Inclusions.--The term ``facility'' includes--
       (i) all buildings or structures used to produce, store, or 
     hold ammonium nitrate for distribution, sale, or use at a 
     single site; and
       (ii) multiple sites described in clause (i), if the sites 
     are--

       (I) contiguous or adjacent; and
       (II) owned or operated by the same person.

       (3) Handle.--The term ``handle'' means to produce, store, 
     sell, or distribute ammonium nitrate.
       (4) Handler.--The term ``handler'' means any person that 
     produces, stores, sells, or distributes ammonium nitrate.
       (5) Purchaser.--The term ``purchaser'' means any person 
     that purchases ammonium nitrate.
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of Homeland Security.

     SEC. 4. REGULATION OF HANDLING AND PURCHASE OF AMMONIUM 
                   NITRATE.

       (a) In General.--The Secretary may regulate the handling 
     and purchase of ammonium nitrate to prevent the 
     misappropriation or use of ammonium nitrate in violation of 
     law.
       (b) Regulations.--The Secretary may promulgate regulations 
     that require--
       (1) handlers--
       (A) to register facilities;
       (B) to sell or distribute ammonium nitrate only to handlers 
     and purchasers registered under this Act; and
       (C) to maintain records of sale or distribution that 
     include the name, address, telephone number, and registration 
     number of the immediate subsequent purchaser of ammonium 
     nitrate; and
       (2) purchasers to be registered.
       (c) Use of Previously Submitted Information.--Prior to 
     requiring a facility or handler to submit new information for 
     registration under this section, the Secretary shall--
       (1) request from the Attorney General, and the Attorney 
     General shall provide, any information previously submitted 
     to the Attorney General by the facility or handler under 
     section 843 of title 18, United States Code; and
       (2) at the election of the facility or handler--
       (A) use the license issued under that section in lieu of 
     requiring new information for registration under this 
     section; and
       (B) consider the license to fully comply with the 
     requirement for registration under this section.
       (d) Consultation.--In promulgating regulations under this 
     section, the Secretary shall consult with the Secretary to 
     Agriculture to ensure that the access of agricultural 
     producers to ammonium nitrate is not unduly burdened.
       (e) Data Confidentiality.--
       (1) In general.--Notwithstanding section 552 of title 5, 
     United States Code, or the USA PATRIOT ACT (Public Law 107-
     56; 115 Stat. 272) or an amendment made by that Act, except 
     as provided in paragraph (2), the Secretary may not disclose 
     to any person any information obtained from any facility, 
     handler, or purchaser--
       (A) regarding any action taken, or to be taken, at the 
     facility or by the handler or purchaser to ensure the secure 
     handling of ammonium nitrate; or
       (B) that would disclose--
       (i) the identity or address of any purchase of ammonium 
     nitrate;
       (ii) the quantity of ammonium nitrate purchased; or
       (iii) the details of the purchase transaction.
       (2) Exceptions.--The Secretary may disclose any information 
     described in paragraph (1)--
       (A) to an officer or employee of the United States, or a 
     person that has entered into a contract with the United 
     States, who needs to know the information to perform the 
     duties of the officer, employee, or person, or to a State 
     agency pursuant to an arrangement under section 6, under 
     appropriate arrangements to ensure the protection of the 
     information;
       (B) to the public, to the extent the Secretary specifically 
     finds that disclosure of particular information is required 
     in the public interest; or
       (C) to the extent required by order of a Federal court in a 
     proceeding in which the Secretary is a party, under such 
     protective measures as the court may prescribe.

     SEC. 5. ENFORCEMENT.

       (a) Inspections.--The Secretary, without a warrant, may 
     enter any place during business hours that the Secretary 
     believes may handle ammonium nitrate to determine whether the 
     handling is being conducted in accordance with this Act, 
     including regulations promulgated under this Act.
       (b) Prevention of Sale or Distribution Order.--In any case 
     in which the Secretary has reason to believe that ammonium 
     nitrate has been handled other than in accordance with this 
     Act, including regulations promulgated under this Act, the 
     Secretary may issue a written order preventing any person 
     that owns, controls, or has custody of the ammonium nitrate 
     from selling or distributing the ammonium nitrate.
       (c) Appeal Procedures.--

[[Page 11561]]

       (1) In general.--A person subject to an order under 
     subsection (b) may request a hearing to contest the order, 
     under such administrative adjudication procedures as the 
     Secretary may establish.
       (2) Rescission.--If an appeal under paragraph (1) is 
     successful, the Secretary shall rescind the order.
       (d) In Rem Proceedings.--The Secretary may institute in rem 
     proceedings in the United States district court for the 
     district in which the ammonium nitrate is located to seize 
     and confiscate ammonium nitrate that has been handled in 
     violation of this Act, including regulations promulgated 
     under this Act.

     SEC. 6. ADMINISTRATIVE PROVISIONS.

       (a) Cooperative Agreements.--The Secretary may enter into a 
     cooperative agreement with the Secretary of Agriculture, or 
     the head of any State department of agriculture or other 
     State agency that regulates plant nutrients, to carry out 
     this Act, including cooperating in the enforcement of this 
     Act through the use of personnel or facilities.
       (b) Delegation.--
       (1) In general.--The Secretary may delegate to a State the 
     authority to assist the Secretary in the administration and 
     enforcement of this Act, including regulations promulgated 
     under this Act.
       (2) Delegation required.--On the request of a Governor of a 
     State, the Secretary shall delegate to the State the 
     authority to carry out section 4 or 5, on a determination by 
     the Secretary that the State is capable of satisfactorily 
     carrying out that section.
       (3) Funding.--If the Secretary enters into an agreement 
     with a State under this subsection to delegate functions to 
     the State, the Secretary shall provide to the State adequate 
     funds to enable the State to carry out the functions.
       (4) Inapplicability.--Notwithstanding any other provision 
     of this subsection, this subsection does not authorize a 
     State to carry out a function under section 4 or 5 relating 
     to a facility or handler in the State that makes the election 
     described in section 4(c)(2).

     SEC. 7. CIVIL LIABILITY.

       (a) Unlawful Acts.--It is unlawful for any person--
       (1) to fail to perform any duty required by this Act, 
     including regulations promulgated under this Act;
       (2) to violate the terms of registration under this Act;
       (3) to fail to keep any record, make any report, or allow 
     any inspection required by this Act; or
       (4) to violate any sale or distribution order issued under 
     this Act.
       (b) Penalties.--
       (1) In general.--A person that violates this Act (including 
     a regulation promulgated under this Act) may only be assessed 
     a civil penalty by the Secretary of not more than $50,000 per 
     violation.
       (2) Notice and opportunity for a hearing.--No civil penalty 
     shall be assessed under this Act unless the person charged 
     has been given notice and opportunity for a hearing on the 
     charge in the county, parish, or incorporated city of 
     residence of the person charged.
       (c) Jurisdiction Over Actions for Civil Damages.--The 
     district courts of the United States shall have exclusive 
     jurisdiction over any action for civil damages against a 
     handler for any harm or damage that is alleged to have 
     resulted from the use of ammonium nitrate in violation of law 
     that occurred on or after the date of enactment of this Act.

     SEC. 8. STATE LAW PREEMPTION.

       This Act preempts any State law (including a regulation) 
     that regulates the handling of ammonium nitrate to prevent 
     the misappropriation or use of ammonium nitrate in violation 
     of law.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.

  Mr. PRYOR. Mr. President, I stand today in support of legislation 
that will better protect our homeland by securing the trade and 
handling of ammonium nitrate. While ammonium nitrate is well known in 
the agriculture community to be an important fertilizer, it has also 
become a common ingredient in creating highly explosive bombs like the 
one used in the unforgettable April 1995 bombing attack of the Alfred 
P. Murrah Federal Building in Oklahoma City, Oklahoma. A little more 
than a month ago, we reflected on the tenth anniversary of this tragic 
moment in our nation's history. Despite the enormous potential for 
misuse if in the wrong hands, the purchase and use of ammonium nitrate 
is still largely unregulated by the federal government. It is our hope 
that we can reduce this potential for misuse. By better securing the 
trade and handling of this chemical, we will make it more difficult for 
individuals and groups to misuse the chemical and threaten the lives of 
Americans. The purpose of our legislation is to protect our homeland 
from future threats and attacks that may be similar in nature to that 
of the Oklahoma City Bombing while still ensuring that law abiding 
citizens can use this valuable fertilizer for agricultural activities.
  Fertilizer provides essential nutrients to the food we eat by 
providing an effective source of nitrogen that all crops need to grow. 
I recognize the importance of fertilizer to our Nation's farming 
community, and that is why I believe that we must continue the 
availability of ammonium nitrate fertilizer to farmers in order to 
maintain the economic, agronomic and environmental benefits that this 
product provides. I also understand the negative impact of that 
fertilizer can have on our people if misused by criminals intent on 
engaging in acts of terror.
  Since the 1995 Oklahoma City tragedy, many studies have been 
conducted by the Federal Government to determine the feasibility and 
practicability of imposing controls on certain precursor chemicals, 
including ammonium nitrate. In addition, the fertilizer industry and 
the Bureau of Alcohol Tobacco and Firearms (ATF) created the 
``America's Security Begins with You'' ammonium nitrate security 
campaign in 1995 as an effort to minimize possible misuse of ammonium 
nitrate fertilizer. These studies and campaigns have both led to show 
that it is impossible for the agricultural community to guarantee 
against the criminal misuse of ammonium nitrate under current laws and 
regulations and that more can and should be done to protect against 
this threat.
  The agricultural community and the fertilizer industry both recognize 
that more can and should be done to strengthen the controls regarding 
the handling and purchase of ammonium nitrate fertilizer in order to 
ensure American farmers continue to have access to this valued input. I 
believe that the Federal government must do its part in helping to 
assure that ammonium nitrate fertilizer stays in the hands of 
agricultural professionals and encourage all who handle this chemical 
to protect their community and America by establishing effective 
security measures.
  I am proud to join my colleague from Mississippi, Senator Cochran, in 
introducing this legislation along with Senator Chambliss and Senator 
Roberts. I believe it provides a very practical and workable solution 
to enhance the secure handling of ammonium nitrate and ensure that 
ammonium nitrate remains available for agricultural use. ``The Secure 
Handling of Ammonium Nitrate Act of 2005'' calls for a federal and 
state cooperation to secure ammonium nitrate fertilizer. It requires 
the Department of Homeland Security to enter into cooperative 
agreements with state departments of agriculture to ensure that any 
person who produces, stores, sells, or distributes ammonium nitrate 
registers their facility and maintains records of sales or distribution 
of the product. As such, purchasers of ammonium nitrate would also be 
required to register with their state's department of agriculture.
  My colleagues and I agree that these requirements are necessary 
measures that provide additional security for ammonium nitrate 
fertilizer and will not unduly burden agriculture professionals or 
farmers who use this product. Furthermore, we firmly believe that this 
legislation will effectively enhance ongoing security measures by 
helping to keep ammonium nitrate out of the hands of those who wish to 
harm our Nation.
  I thank the Chairman of the Appropriations Committee, as well as the 
Chairmen of the Agriculture and Intelligence Committees for their 
leadership on this issue, and I urge my colleagues in the Senate to 
support this important legislation.
  Mr. CHAMBLISS. Mr. President, I would like to echo the comments of 
the senior Senator from Mississippi regarding the ``Secure Handling of 
Ammonium Nitrate Act of 2005.'' The importance of ammonium nitrate 
fertilizer to the agricultural industry cannot be understated. However, 
its use in acts of terror has led the industry and public alike 
searching for a way to further secure the handling and use of ammonium 
nitrate. I believe this legislation

[[Page 11562]]

accomplishes that goal. If passed, this bill will help us to track both 
where this fertilizer is, and who is in possession of it. The answers 
to both of these very important questions will further ongoing efforts 
to keep our Nation safe from people who may wish to do it harm. I feel 
this legislation provides additional security for ammonium nitrate 
while maintaining its viability as an agricultural fertilizer.
  I urge my colleagues to support this important legislation.
                                 ______
                                 
      By Ms. LANDRIEU (for herself, Mr. Graham, Mr. Allen, Mr. Durbin, 
        and Mr. Lautenberg):
  S. 1142. A bill to provide pay protection for members of the Reserve 
and the National Guard, and for other purposes; to the Committee on 
Finance.
  Ms. LANDRIEU. Mr. President, over 50 years ago, Sir Winston Churchill 
uttered the immortal words, ``never in the field of human conflict has 
so much been owed by so many to so few.'' Although Prime Minister 
Churchill was referring to the selfless and courageous effort of the 
Royal Air Force in their defeat of the Germans in World War II, I would 
like to argue that these words apply equally to the men and women 
fighting to preserve democracy in Iraq and Afghanistan. These men and 
women are not only making it possible for each and every one of us to 
go about our daily lives under the blanket of safety and freedom to 
which Americans have become accustomed, but they are also striving to 
bring these benefits to people who have never had them before.
  If you have had the opportunity to spend time with these men and 
women, as I have, you quickly observe that they embody everything good 
about America. Their patriotism, their unyielding commitment to serve 
their country, their selflessness and their sacrifice should serve as 
examples to us all. Perhaps what amazes me most, is that although these 
men and women are prepared to make the ultimate sacrifice for their 
country, they ask for little in return from it. It is therefore 
incumbent on us to recognize the debt we owe to them, and honor it.
  Today there are 80,000 members of the National Guard and our Reserve 
armed forces serving bravely in the war on terror. In addition, close 
to 89,000 members of the Guard and Reserve have been activated in 
anticipation of being sent to Iraq, Afghanistan, or any other place 
their country calls on them to serve. While deployed, these citizen 
soldiers are asked, in a moment's notice, to leave their families, 
their jobs, and their communities behind, causing tremendous stress on 
the home front and in the workplace.
  While having a loved one in harm's way is reason for stress alone, 
many of the families of these men and women have the added stress of 
trying to fill the void left. Many families have lost the main bread 
winner when a Guardsmen or Reservist gets deployed. As a result, they 
have trouble paying bills, the rent, the mortgage, or medicine for 
their children.
  The primary reason these families cannot make ends meet is because 
for Guardsmen and Reservists military pay is often less than civilian 
pay. We call that the ``pay gap.'' According to the most recent Status 
of Forces Survey of Reserve Components, 51 percent of our citizen 
soldiers take a pay cut when they get deployed and 11 percent of them 
lose more than $2,500 per month.
  We ask these men and women to make so many sacrifices on our behalf. 
I think that it is time that we be willing to make one in return. The 
least we can do is to help these families find relief from the 
financial woes caused by this gap. To help do this, my colleagues 
Senator Graham, Senator Allen, Senator Durbin, and myself are pleased 
to introduce the Helping Our Patriotic Employers at Helping our 
Military Employees Act of 2005. We call the bill by its nickname: HOPE 
at HOME. Our guard and reserve families have enough to worry about when 
a loved one gets called away, the least we can do is relieve some of 
the financial worry by encouraging employers to make up the pay gap. 
Let me describe for my colleagues how this legislation works.
  HOPE at HOME will give a 50 percent tax credit to the thousands of 
employers around the country who have taken the patriotic step of 
continuing to pay the salary of their guard and reservists employees 
who have been called to active duty. There are literally thousands of 
employers out there who already take this noble step--they do it 
voluntarily, selflessly and at great sacrifice. The HOPE at HOME Act 
honors that sacrifice.
  HOPE at HOME will also encourage companies that cannot afford to make 
up the pay-gap an incentive to do it. One survey found that only 173 of 
the Fortune 500 companies make up the pay gap. If the wealthiest 
companies cannot afford to help their active duty employees, imagine 
how difficult this is for smaller companies. HOPE at HOME will allow 
companies large and small to do the patriotic thing and reward those 
employees who are serving to keep us all free.
  HOPE at HOME will also give small patriotic employers additional tax 
relief if they need to hire a worker to temporarily replace the active 
duty Guardsmen or Reservist. In addition, the bill clarifies the tax 
treatment of any pay-gap payments to make income tax filing easier for 
our Guard and Reservists.
  A moment ago, I mentioned that thousands of employers make up the 
pay-gap for their employees. There is one employer, however, and it 
happens to be the Nation's largest, that does not make up the pay gap: 
Uncle Sam. The Federal Government, which should set the bar for 
patriotism in our country, does not do its part to help citizen 
soldiers. Senator Durbin has been a leader in this area, so our bill 
includes language that he has been fighting to require the Federal 
Government to make up the pay gap. We cannot ask the private sector to 
do more than they are doing if the Federal Government is not willing to 
step up and do its part for our military men and women.
  This is not only the right thing to do, it is the smart thing to do. 
Today our Nation relies on the Guard and Reserve to meet our armed 
forces needs more than at any other time in our history. At times in 
the war on terror, forty-percent of our troops in Iraq and Afghanistan 
were citizen soldiers. Many of them performed multiple tours of duty or 
found their duties extended.
  All of the experts tell us that our need for our Guard and Reserve 
troops will only get greater. In the post-Cold War world, we have 
drastically reduced our standing Army from 800,000 in 1989 to 
approximately 482,000 today, a 40 percent decrease. The number of 
deployments has increased by over 300 percent. The Guard and Reserve 
have made it possible to meet these challenges. We still find ourselves 
stretched thin, but without the Guard and Reserve we would never be 
able to meet our obligation as guardians of freedom in the World.
  But this over-reliance on the Guard and Reserve is starting to have a 
toll on our ability to recruit and retain these men and women. The 
percentage of Army Reserve personnel who plan to remain in the military 
after their tour of duty ends fell from 73 percent to 66 percent over 
2004. The top reasons for leaving the Guard and Reserve, according to 
the Status of Forces Survey of Reserve Components, are family stress, 
the number and lengths of deployments, income loss, and conflict with 
civilian employment.
  We are beginning to have recruitment problems as well for our 
standing military. Back in February, the Army and the National Guard 
and Reserve recruited 3,824 soldiers, but this was only 69 percent of 
their monthly goal. The numbers went up in March, but still fell short 
by 12 percent of the goal.
  HOPE at HOME recognizes that a soldier who is worrying about how his 
or her family is paying the bills is not focusing on the mission at 
hand. A soldier who is worrying about whether the family is paying the 
rent, is not going to reenlist. And every time one of our soldiers 
leaves, our Nation loses the experience and service of a highly 
trained, capable professional. We need to make every effort to keep our 
citizen soldiers in service to their country. HOPE at HOME is a first 
step to addressing our military's larger recruitment and retention 
issues.

[[Page 11563]]

  During the Cold War we built our strength on having the biggest, best 
equipped standing army in the World. Now our military gathers its 
strength from a large reserve of qualified men and women in the Guard 
and Reserve who are ready to fight at a moment's call. We will lose 
that strength if we do not give our Guardsmen and Reservists and their 
families HOPE at HOME.
  I hope my colleagues will join Senators Allen, Graham, Durbin and 
myself in supporting the HOPE at HOME Act.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1142

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Helping Our Patriotic 
     Employers at Helping Our Military Employees Act of 2005'' or 
     the ``HOPE at HOME Act of 2005''.

     SEC. 2. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS 
                   PERFORMING ACTIVE SERVICE IN THE UNIFORMED 
                   SERVICES.

       (a) In General.--Subchapter IV of chapter 55 of title 5, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 5538. Nonreduction in pay while serving in the 
       uniformed services

       ``(a) An employee who is absent from a position of 
     employment with the Federal Government in order to perform 
     service in the uniformed services for a period of more than 
     90 days shall be entitled to receive, for each pay period 
     described in subsection (b), an amount equal to the amount by 
     which--
       ``(1) the amount of basic pay which would otherwise have 
     been payable to such employee for such pay period if such 
     employee's civilian employment with the Government had not 
     been interrupted by that service, exceeds (if at all)
       ``(2) the amount of pay and allowances which (as determined 
     under subsection (d))--
       ``(A) is payable to such employee for that service; and
       ``(B) is allocable to such pay period.
       ``(b)(1) Amounts under this section shall be payable with 
     respect to each pay period (which would otherwise apply if 
     the employee's civilian employment had not been 
     interrupted)--
       ``(A) during which such employee is entitled to 
     reemployment rights under chapter 43 of title 38 with respect 
     to the position from which such employee is absent (as 
     referred to in subsection (a)); and
       ``(B) for which such employee does not otherwise receive 
     basic pay (including by taking any annual, military, or other 
     paid leave) to which such employee is entitled by virtue of 
     such employee's civilian employment with the Government.
       ``(2) For purposes of this section, the period during which 
     an employee is entitled to reemployment rights under chapter 
     43 of title 38--
       ``(A) shall be determined disregarding the provisions of 
     section 4312(d) of title 38; and
       ``(B) shall include any period of time specified in section 
     4312(e) of title 38 within which an employee may report or 
     apply for employment or reemployment following completion of 
     service in the uniformed services.
       ``(c) Any amount payable under this section to an employee 
     shall be paid--
       ``(1) by such employee's employing agency;
       ``(2) from the appropriation or fund which would be used to 
     pay the employee if such employee were in a pay status; and
       ``(3) to the extent practicable, at the same time and in 
     the same manner as would basic pay if such employee's 
     civilian employment had not been interrupted.
       ``(d) The Office of Personnel Management shall, in 
     consultation with Secretary of Defense, prescribe any 
     regulations necessary to carry out the preceding provisions 
     of this section.
       ``(e)(1) The head of each agency referred to in section 
     2302(a)(2)(C)(ii) shall, in consultation with the Office, 
     prescribe procedures to ensure that the rights under this 
     section apply to the employees of such agency.
       ``(2) The Administrator of the Federal Aviation 
     Administration shall, in consultation with the Office, 
     prescribe procedures to ensure that the rights under this 
     section apply to the employees of that agency.
       ``(f) For purposes of this section--
       ``(1) the terms `employee', `Federal Government', and 
     `uniformed services' have the same respective meanings as 
     given in section 4303 of title 38;
       ``(2) the term `service in the uniformed services' has the 
     meaning given that term in section 4303 of title 38 and 
     includes duty performed by a member of the National Guard 
     under section 502(f) of title 32 at the direction of the 
     Secretary of the Army or Secretary of the Air Force;
       ``(3) the term `employing agency', as used with respect to 
     an employee entitled to any payments under this section, 
     means the agency or other entity of the Government (including 
     an agency referred to in section 2302(a)(2)(C)(ii)) with 
     respect to which such employee has reemployment rights under 
     chapter 43 of title 38; and
       ``(4) the term `basic pay' includes any amount payable 
     under section 5304.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     55 of title 5, United States Code, is amended by inserting 
     after the item relating to section 5537 the following:

``5538. Nonreduction in pay while serving in the uniformed services or 
              National Guard''.


       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to pay periods (as described in 
     section 5538(b) of title 5, United States Code, as added by 
     this section) beginning on or after September 11, 2001.

     SEC. 3. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT ADDED TO 
                   GENERAL BUSINESS CREDIT.

       (a) Ready Reserve-National Guard Credit.--Subpart D of part 
     IV of subchapter A of chapter 1 of the Internal Revenue Code 
     of 1986 (relating to business-related credits) is amended by 
     adding at the end the following:

     ``SEC. 45J. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT.

       ``(a) General Rule.--For purposes of section 38, the Ready 
     Reserve-National Guard employee credit determined under this 
     section for any taxable year is an amount equal to 50 percent 
     of the actual compensation amount for such taxable year.
       ``(b) Definition of Actual Compensation Amount.--For 
     purposes of this section, the term `actual compensation 
     amount' means the amount of compensation paid or incurred by 
     an employer with respect to a Ready Reserve-National Guard 
     employee on any day during a taxable year when the employee 
     was absent from employment for the purpose of performing 
     qualified active duty.
       ``(c) Limitation.--No credit shall be allowed with respect 
     to a Ready Reserve-National Guard employee who performs 
     qualified active duty on any day on which the employee was 
     not scheduled to work (for reason other than to participate 
     in qualified active duty).
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified active duty.--The term `qualified active 
     duty' means--
       ``(A) active duty, other than the training duty specified 
     in section 10147 of title 10, United States Code (relating to 
     training requirements for the Ready Reserve), or section 
     502(a) of title 32, United States Code (relating to required 
     drills and field exercises for the National Guard), in 
     connection with which an employee is entitled to reemployment 
     rights and other benefits or to a leave of absence from 
     employment under chapter 43 of title 38, United States Code, 
     and
       ``(B) hospitalization incident to such duty.
       ``(2) Compensation.--The term `compensation' means any 
     remuneration for employment, whether in cash or in kind, 
     which is paid or incurred by a taxpayer and which is 
     deductible from the taxpayer's gross income under section 
     162(a)(1).
       ``(3) Ready reserve-national guard employee.--The term 
     `Ready Reserve-National Guard employee' means an employee who 
     is a member of the Ready Reserve of a reserve component of an 
     Armed Force of the United States as described in sections 
     10142 and 10101 of title 10, United States Code.
       ``(4) Certain rules to apply.--Rules similar to the rules 
     of section 52 shall apply.
       ``(e) Portion of Credit Made Refundable.--
       ``(1) In general.--In the case of an eligible employer of a 
     Ready Reserve-National Guard employee, the aggregate credits 
     allowed to a taxpayer under subpart C shall be increased by 
     the lesser of--
       ``(A) the credit which would be allowed under this section 
     without regard to this subsection and the limitation under 
     section 38(c), or
       ``(B) the amount by which the aggregate amount of credits 
     allowed by this subpart (determined without regard to this 
     subsection) would increase if the limitation imposed by 
     section 38(c) for any taxable year were increased by the 
     amount of employer payroll taxes imposed on the taxpayer 
     during the calendar year in which the taxable year begins.

     The amount of the credit allowed under this subsection shall 
     not be treated as a credit allowed under this subpart and 
     shall reduce the amount of the credit otherwise allowable 
     under subsection (a) without regard to section 38(c).
       ``(2) Eligible employer.--For purposes of this subsection, 
     the term `eligible employer' means an employer which is a 
     State or local government or subdivision thereof.
       ``(3) Employer payroll taxes.--For purposes of this 
     subsection--
       ``(A) In general.--The term `employer payroll taxes' means 
     the taxes imposed by--
       ``(i) section 3111(b), and
       ``(ii) sections 3211(a) and 3221(a) (determined at a rate 
     equal to the rate under section 3111(b)).
       ``(B) Special rule.--A rule similar to the rule of section 
     24(d)(2)(C) shall apply for purposes of subparagraph (A).''.
       (b) Credit To Be Part of General Business Credit.--
     Subsection (b) of section 38 of

[[Page 11564]]

      such Code (relating to general business credit) is amended 
     by striking ``plus'' at the end of paragraph (18), by 
     striking the period at the end of paragraph (19) and 
     inserting ``, plus'', and by adding at the end the following:
       ``(20) the Ready Reserve-National Guard employee credit 
     determined under section 45J(a).''.
       (c) Denial of Double Benefit.--Section 280C(a) (relating to 
     rule for employment credits) is amended by inserting 
     ``45J(a),'' after ``45A(a),''.
       (d) Conforming Amendment.--The table of sections for 
     subpart D of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 45I the following:

``Sec. 45J. Ready Reserve-National Guard employee credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 4. READY RESERVE-NATIONAL GUARD REPLACEMENT EMPLOYEE 
                   CREDIT.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     foreign tax credit, etc.) is amended by adding after section 
     30A the following new section:

     ``SEC. 30B. READY RESERVE-NATIONAL GUARD REPLACEMENT EMPLOYEE 
                   CREDIT.

       ``(a) Allowance of Credit.--
       ``(1) In general.--In the case of an eligible taxpayer, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year the sum of the employment 
     credits for each qualified replacement employee under this 
     section.
       ``(2) Employment credit.--The employment credit with 
     respect to a qualified replacement employee of the taxpayer 
     for any taxable year is equal to 50 percent of the lesser 
     of--
       ``(A) the individual's qualified compensation attributable 
     to service rendered as a qualified replacement employee, or
       ``(B) $12,000.
       ``(b) Qualified Compensation.--The term `qualified 
     compensation' means--
       ``(1) compensation which is normally contingent on the 
     qualified replacement employee's presence for work and which 
     is deductible from the taxpayer's gross income under section 
     162(a)(1),
       ``(2) compensation which is not characterized by the 
     taxpayer as vacation or holiday pay, or as sick leave or pay, 
     or as any other form of pay for a nonspecific leave of 
     absence, and
       ``(3) group health plan costs (if any) with respect to the 
     qualified replacement employee.
       ``(c) Qualified Replacement Employee.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified replacement 
     employee' means an individual who is hired to replace a Ready 
     Reserve-National Guard employee or a Ready Reserve-National 
     Guard self-employed taxpayer, but only with respect to the 
     period during which--
       ``(A) such Ready Reserve-National Guard employee is 
     receiving an actual compensation amount (as defined in 
     section 45J(b)) from the employee's employer and is 
     participating in qualified active duty, including time spent 
     in travel status, or
       ``(B) such Ready Reserve-National Guard self-employed 
     taxpayer is participating in such qualified active duty.
       ``(2) Ready reserve-national guard employee.--The term 
     `Ready Reserve-National Guard employee' has the meaning given 
     such term by section 45J(d)(3).
       ``(3) Ready reserve-national guard self-employed 
     taxpayer.--The term `Ready Reserve-National Guard self-
     employed taxpayer' means a taxpayer who--
       ``(A) has net earnings from self-employment (as defined in 
     section 1402(a)) for the taxable year, and
       ``(B) is a member of the Ready Reserve of a reserve 
     component of an Armed Force of the United States as described 
     in section 10142 and 10101 of title 10, United States Code.
       ``(d) Coordination With Other Credits.--The amount of 
     credit otherwise allowable under sections 51(a) and 1396(a) 
     with respect to any employee shall be reduced by the credit 
     allowed by this section with respect to such employee.
       ``(e) Limitations.--
       ``(1) Application with other credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(A) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(B) the tentative minimum tax for the taxable year.
       ``(2) Disallowance for failure to comply with employment or 
     reemployment rights of members of the reserve components of 
     the armed forces of the united states.--No credit shall be 
     allowed under subsection (a) to a taxpayer for--
       ``(A) any taxable year, beginning after the date of the 
     enactment of this section, in which the taxpayer is under a 
     final order, judgment, or other process issued or required by 
     a district court of the United States under section 4323 of 
     title 38 of the United States Code with respect to a 
     violation of chapter 43 of such title, and
       ``(B) the 2 succeeding taxable years.
       ``(f) General Definitions and Special Rules.--For purposes 
     of this section--
       ``(1) Eligible taxpayer.--The term `eligible taxpayer' 
     means a small business employer or a Ready Reserve-National 
     Guard self-employed taxpayer.
       ``(2) Small business employer.--
       ``(A) In general.--The term `small business employer' 
     means, with respect to any taxable year, any employer who 
     employed an average of 50 or fewer employees on business days 
     during such taxable year.
       ``(B) Controlled groups.--For purposes of subparagraph (A), 
     all persons treated as a single employer under subsection 
     (b), (c), (m), or (o) of section 414 shall be treated as a 
     single employer.
       ``(3) Qualified active duty.--The term `qualified active 
     duty' has the meaning given such term by section 45J(d)(1).
       ``(4) Special rules for certain manufacturers.--
       ``(A) In general.--In the case of any qualified 
     manufacturer--
       ``(i) subsection (a)(2)(B) shall be applied by substituting 
     `$20,000' for `$12,000', and
       ``(ii) paragraph (2)(A) of this subsection shall be applied 
     by substituting `100' for `50'.
       ``(B) Qualified manufacturer.--For purposes of this 
     paragraph, the term `qualified manufacturer' means any person 
     if--
       ``(i) the primary business of such person is classified in 
     sector 31, 32, or 33 of the North American Industrial 
     Classification System, and
       ``(ii) all of such person's facilities which are used for 
     production in such business are located in the United States.
       ``(5) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit allowable under subsection 
     (a) for a taxable year exceeds the amount of the limitation 
     under subsection (e)(1) for such taxable year (in this 
     paragraph referred to as the `unused credit year'), such 
     excess shall be a credit carryback to each of the 3 taxable 
     years preceding the unused credit year and a credit 
     carryforward to each of the 20 taxable years following the 
     unused credit year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(6) Certain rules to apply.--Rules similar to the rules 
     of subsections (c), (d), and (e) of section 52 shall 
     apply.''.
       (b) No Deduction for Compensation Taken Into Account for 
     Credit.--Section 280C(a) of the Internal Revenue Code of 1986 
     (relating to rule for employment credits), as amended by this 
     Act, is amended--
       (1) by inserting ``or compensation'' after ``salaries'', 
     and
       (2) by inserting ``30B,'' before ``45A(a),''.
       (c) Conforming Amendment.--Section 55(c)(2) of the Internal 
     Revenue Code of 1986 is amended by inserting ``30B(e)(1),'' 
     after ``30(b)(3),''.
       (d) Clerical Amendment.--The table of sections for subpart 
     B of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding after the item 
     relating to section 30A the following new item:

``Sec. 30B. Credit for replacement of activated military reservists.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 5. INCOME TAX WITHHOLDING ON DIFFERENTIAL WAGE PAYMENTS.

       (a) In General.--Section 3401 of the Internal Revenue Code 
     of 1986 (relating to definitions) is amended by adding at the 
     end the following new subsection:
       ``(i) Differential Wage Payments to Active Duty Members of 
     the Uniformed Services.--
       ``(1) In general.--For purposes of subsection (a), any 
     differential wage payment shall be treated as a payment of 
     wages by the employer to the employee.
       ``(2) Differential wage payment.--For purposes of paragraph 
     (1), the term `differential wage payment' means any payment 
     which--
       ``(A) is made by an employer to an individual with respect 
     to any period during which the individual is performing 
     service in the uniformed services while on active duty for a 
     period of more than 30 days, and
       ``(B) represents all or a portion of the wages the 
     individual would have received from the employer if the 
     individual were performing service for the employer.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to remuneration paid after December 31, 2004.

     SEC. 6. TREATMENT OF DIFFERENTIAL WAGE PAYMENTS FOR 
                   RETIREMENT PLAN PURPOSES.

       (a) Pension Plans.--
       (1) In general.--Section 414(u) of the Internal Revenue 
     Code of 1986 (relating to special rules relating to veterans' 
     reemployment rights under USERRA) is amended by adding at the 
     end the following new paragraph:
       ``(11) Treatment of differential wage payments.--

[[Page 11565]]

       ``(A) In general.--Except as provided in this paragraph, 
     for purposes of applying this title to a retirement plan to 
     which this subsection applies--
       ``(i) an individual receiving a differential wage payment 
     shall be treated as an employee of the employer making the 
     payment,
       ``(ii) the differential wage payment shall be treated as 
     compensation, and
       ``(iii) the plan shall not be treated as failing to meet 
     the requirements of any provision described in paragraph 
     (1)(C) by reason of any contribution which is based on the 
     differential wage payment.
       ``(B) Special rule for distributions.--
       ``(i) In general.--Notwithstanding subparagraph (A)(i), for 
     purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 
     403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be 
     treated as having been severed from employment during any 
     period the individual is performing service in the uniformed 
     services described in section 3401(i)(2)(A).
       ``(ii) Limitation.--If an individual elects to receive a 
     distribution by reason of clause (i), the plan shall provide 
     that the individual may not make an elective deferral or 
     employee contribution during the 6-month period beginning on 
     the date of the distribution.
       ``(C) Nondiscrimination requirement.--Subparagraph (A)(iii) 
     shall apply only if all employees of an employer performing 
     service in the uniformed services described in section 
     3401(i)(2)(A) are entitled to receive differential wage 
     payments on reasonably equivalent terms and, if eligible to 
     participate in a retirement plan maintained by the employer, 
     to make contributions based on the payments. For purposes of 
     applying this subparagraph, the provisions of paragraphs (3), 
     (4), and (5), of section 410(b) shall apply.
       ``(D) Differential wage payment.--For purposes of this 
     paragraph, the term `differential wage payment' has the 
     meaning given such term by section 3401(i)(2).''.
       (2) Conforming amendment.--The heading for section 414(u) 
     of such Code is amended by inserting ``and to Differential 
     Wage Payments to Members on Active Duty'' after ``USERRA''.
       (b) Differential Wage Payments Treated as Compensation for 
     Individual Retirement Plans.--Section 219(f)(1) of the 
     Internal Revenue Code of 1986 (defining compensation) is 
     amended by adding at the end the following new sentence: 
     ``The term `compensation' includes any differential wage 
     payment (as defined in section 3401(i)(2)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2004.
       (d) Provisions Relating to Plan Amendments.--
       (1) In general.--If this subsection applies to any plan or 
     annuity contract amendment--
       (A) such plan or contract shall be treated as being 
     operated in accordance with the terms of the plan or contract 
     during the period described in paragraph (2)(B)(i), and
       (B) except as provided by the Secretary of the Treasury, 
     such plan shall not fail to meet the requirements of the 
     Internal Revenue Code of 1986 or the Employee Retirement 
     Income Security Act of 1974 by reason of such amendment.
       (2) Amendments to which section applies.--
       (A) In general.--This subsection shall apply to any 
     amendment to any plan or annuity contract which is made--
       (i) pursuant to any amendment made by this section, and
       (ii) on or before the last day of the first plan year 
     beginning on or after January 1, 2007.
       (B) Conditions.--This subsection shall not apply to any 
     plan or annuity contract amendment unless--
       (i) during the period beginning on the date the amendment 
     described in subparagraph (A)(i) takes effect and ending on 
     the date described in subparagraph (A)(ii) (or, if earlier, 
     the date the plan or contract amendment is adopted), the plan 
     or contract is operated as if such plan or contract amendment 
     were in effect, and
       (ii) such plan or contract amendment applies retroactively 
     for such period.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Specter, Mr. Smith, Mr. Leahy, 
        Ms. Collins, Mr. Lieberman, Ms. Snowe, Mr. Wyden, Mr. Jeffords, 
        Mr. Schumer, Mr. Chafee, Mr. Akaka, Mr. Ensign, Mr. Bayh, Mr. 
        Biden, Mr. Bingaman, Mrs. Boxer, Ms. Cantwell, Mrs. Clinton, 
        Mr. Coleman, Mr. Corzine, Mr. Dayton, Mr. Dodd, Mr. Durbin, 
        Mrs. Feinstein, Mr. Harkin, Mr. Inouye, Mr. Johnson, Mr. Kerry, 
        Ms. Landrieu, Mr. Levin, Mrs. Lincoln, Ms. Mikulski, Mrs. 
        Murray, Mr. Nelson of Nebraska, Mr. Nelson of Florida, Mr. 
        Obama, Mr. Reed, Mr. Salazar, Mr. Sarbanes, Ms. Stabenow, Mr. 
        Lautenberg, Mr. Pryor, and Mr. Rockefeller):
  S. 1145. A bill to provide Federal assistance to States and local 
jurisdictions to prosecute hate crimes; to the Committee on the 
Judiciary.
  Mr. KENNEDY. Mr. President, hate crimes are a violation of everything 
our country stands for. They send the poisonous message that some 
Americans deserve to be victimized solely because of who they are. 
They're basically acts of domestic terrorism. Hate crimes have an 
impact far greater than the impact on their individual victim. They're 
crimes against entire communities, against the whole Nation, and 
against the fundamental ideals on which America was founded.
  The vast majority of Congress agrees. Last year, Senator Smith and I 
offered the same measure. The Senate passed it as an amendment to the 
Defense Authorization Bill by a nearly 2-1 bi-partisan vote of 65-33. 
By a vote of 213-186, the House instructed its conferees to support it 
in the conference report on the bill. Unfortunately, House leaders 
insisted that the provision be dropped in conference. This week, 
Senator Smith and I are introducing the identical bill.
  The provision is supported by a broad coalition of law enforcement 
and civil rights groups, including the National Sheriff's Association, 
the International Association of Chiefs of Police, the Anti-Defamation 
League, and the National Center for Victims of Crime, and I'm 
optimistic the bill would have the same broad support it did before. 
Those who commit hate crimes prey on the vulnerable and terrorize them, 
because they can't protect themselves. If our Nation stands for 
anything, it's to protect the vulnerable.
  We know that hate crimes are a serious problem that continues to 
plague us. According to FBI statistics, over 9,000 people were victims 
of hate crimes reported in the United States in 2003. That's almost 25 
people victimized a day, every day, based on their race, religion, 
sexual orientation, ethnic background, or disability. Sadly, these 
F.B.I. statistics show only part of the problem, because many hate 
crimes go unreported. The Southern Poverty Law Center, a nonprofit 
organization that monitors hate groups and extremist activity, 
estimates that the actual number of hate crimes committed in the United 
States each year is closer to 50,000.
  Congress can't ignore the problem. Our bill will strengthen the 
ability of Federal, State, and local governments to investigate and 
prosecute these vicious and senseless crimes. Current Federal law, 
obviously isn't adequate to protect our citizens.
  It contains excessive restrictions requiring proof that victims were 
attacked because they were engaged in certain ``federally protected 
activities.'' It doesn't include violence committed because of person's 
sexual orientation, gender, or disability. It covers only hate crimes 
based on race, religion, or ethnic background.
  The federally protected activity requirement is outdated, unwise, and 
unnecessary. In June 2003, three men saw 6 Latino teenagers in a family 
restaurant on Long Island. The teenagers, 3 boys and 3 girls, between 
13-15 years old, knew each other from church and baseball teams. They 
were there together to celebrate the birthday of one of the girls, 
whose parents made her take her 13 year old sister along as 
``chaperone.'' A parent dropped them all off in his mini-van and 
promised to pick them up after dinner and a movie. But, moments after 
leaving, he received a panicked phone call from one of the children, 
telling him they'd been attacked.
  As the group entered the restaurant, three men were leaving the bar, 
after drinking there for hours. For no apparent reason, they assaulted 
the teenagers, pummeling one boy and severing a tendon in his hand with 
a sharp weapon. During the attack, the men screamed racial slurs and 
one identified himself as a skinhead. The children, who had never 
experienced anything like this, have been traumatized ever since.
  Two of the defendants were tried under current Federal law for 
committing a hate crime and were acquitted. The Jurors said they 
acquitted them because the government had not proved

[[Page 11566]]

the attack took place because the victims were engaged in a federally 
protected activity--using the restaurant.
  The bill we introduce today eliminates the federally protected 
activity requirement. Under this bill, these defendants who walked out 
of the front door of the courthouse free that day would almost 
certainly have left in handcuffs through a different door.
  The bill also recognizes that hate crimes are committed against 
people because of their sexual orientation, their gender, and their 
disability. Current Federal law didn't protect gay campers in Honolulu 
from attempted murder when their tents were doused with a flammable 
liquid and set on fire because they were gay.
  It didn't protect Brandon Teena, in Humboldt, NE who was raped and 
beaten by two male friends when they discovered that he was living as a 
male but was anatomically female. The local sheriff refused to arrest 
the offenders, and they later shot and stabbed Brandon to death.
  Current law did not protect a 23-year-old mentally disabled man in 
Port Monmouth, New Jersey who was kidnapped by 9 men and women and 
tortured for three hours before being dumped in the woods because he 
was disabled.
  Our bill will close all these flagrant loopholes. In addition to 
removing the federally protected activity requirement and expanding the 
class of protected people:
  The bill protects State interests with a strict certification 
procedure that requires the Federal Government to consult with local 
officials before bringing a Federal case.
  It offers Federal assistance to help State and local law enforcement 
investigate and prosecute hate crimes in any of the categories.
  It offers training grants for local law enforcement.
  It amends the Federal Hate Crime Statistics Act to add gender to the 
existing categories of race, religion, ethnic background, sexual 
orientation, and disability.
  A strong Federal role in prosecuting hate crimes is essential for 
practical and symbolic reasons. In practical terms, the bill will have 
a real world impact on actual criminal investigations and prosecutions 
by State and Federal officials.
  The presence or absence of the ``federally protected activity'' 
requirement frequently determines whether state and local resources 
must be used to prosecute these crimes or whether the Federal 
Government can bring its full weight to bear on the case.
  Hate crime investigations tend to be expensive, requiring 
considerable law enforcement legwork and extensive use of investigative 
grand juries. State officials regularly seek federal assistance in 
bringing hate crime offenders to justice under current law. This bill 
expands the opportunity for the Justice Department to provide that 
support.
  Our bill fully respects the primary role of State and local law 
enforcement in responding to violent crime. The vast majority of hate 
crimes will continue to be prosecuted at the state and local level. The 
bill authorizes the Justice Department to assist state and local 
authorities in hate crimes cases, it authorizes Federal prosecutions 
only when a State does not have jurisdiction, or when it asks the 
Federal Government to take jurisdiction, or when it fails to act 
against hate-motivated violence.
  In other words, the bill establishes an appropriate back-up for State 
and local law enforcement to deal with hate crimes in cases where 
states request assistance, or cases that would not otherwise be 
effectively investigated and prosecuted.
  The symbolic value of the bill is equally important. Hate crimes 
target whole communities, not just individuals. They are intended to 
send messages of fear that extend beyond the moment and beyond the 
individual victim of the attack. Attacking people because they are gay, 
or African-American, or Jewish, or any other criteria in the bill is 
bigotry at its worst. Hate crimes are designed to de-humanize and 
diminish, and we must say loud and clear to those inclined to commit 
them that they'll go to prison if they do.
  The vast majority of us in Congress recognized the importance of 
making that statement last year. This year, we can make the statement 
even louder, by turning this bill into law.
  Mr. SMITH. Mr. President, as I have done so many times before, I rise 
today to speak about the need for hate crimes legislation and to 
introduce the Local Law Enforcement Enhancement Act of 2005. I first 
sponsored this bill with my colleague, Senator Kennedy, in 1999 and 
again in 2001 and 2003.
  In the Senate, this legislation passed as an amendment to the 
Commerce, Justice, State appropriations bill in 1999 and the Defense 
Department authorization bill in 2000 and 2004, but removed in 
conference in each case. In 2003, it was introduced as an amendment to 
the Foreign Relations Authorization Act, but did not pass due to a 
procedural vote. Clearly, hate crimes legislation has strong support in 
the Senate.
  Senator Kennedy and I are reintroducing this bill again today because 
the need for Federal hate crimes legislation is greater than ever. The 
high prevalence of hate crimes is staggering. Every day there is 
another America that is attacked or even murdered in an act solely 
motivated by hate.
  Hate crimes tear at the very fabric of our Nation by intimidating 
entire groups of Americans and creating fear across communities. No one 
in America should be victimized because of who they are, how they look, 
or what religion they worship. And the Federal Government should be 
able to come to the aid of those who have been wronged and protect 
victims.
  Since 1969, Federal law has permitted prosecution of hate crimes 
motivated by race, religion, national origin, or color, if the victim 
was engaging in one of six ``Federally protected'' activities. It has 
become clear that the statue needs to be amended--and that is what our 
legislation does. Our legislation would expand on current laws to 
encompass sexual orientation, gender and disability. It would enable 
Federal prosecutors to pursue hate crimes cases where local authorities 
often lack the resources or the ability to prosecute such crimes.
  Nobel laureate Eli Wiesel once said: ``To hate is to deny another 
person's humanity.'' As a Nation that serves as the beacon of justice, 
freedom and liberty everywhere, we simply cannot tolerate violence 
against our own citizens based on their race, color, religion, or 
national origin. No matter how far the United States has come and the 
progress we have made in protecting American's civil rights, much work 
remains. We cannot fight terror abroad and bow down to terror at home.
  This legislation is a symbol that can become substance. As I have 
often said, the law is a teacher, and we should teach our fellow 
Americans that bigotry will not be tolerated. Our government must have 
the ability to persuade, to pursue, and to prosecute when hate is the 
motive of violence against another American, no matter their race, 
sexual orientation, religion, disability, or gender. By changing the 
law, I truly believe we can change hearts and minds as well.
  I urge my colleagues to help me to change the hearts and minds and to 
make it widely known that we live in a society and a country that does 
not tolerate those who impose on the civil rights of others simply 
because they are different.
  This year, Congress needs to act. I look forward to President Bush 
signing this legislation into law.
                                 ______
                                 
      By Mrs. BOXER:
  S. 1146. A bill to require the Federal Trade Commission to monitor 
and investigate gasoline prices under certain circumstances; to the 
Committee on Commerce, Science, and Transportation.
  Mrs. BOXER. Mr. President, in March 2000, I introduced legislation to 
deal with the high price of gasoline. At the time, the price of 
gasoline had reached a startlingly high $2.15 per gallon in California. 
Today, gasoline prices on average in California are $2.43 per gallon, 
13 percent higher. The problem is getting worse, not better, and so

[[Page 11567]]

today I am reintroducing my bill to control the manipulation of 
gasoline prices.
  We have heard that higher gasoline prices are due solely to higher 
crude oil prices. I just do not buy it.
  According to the U.S. Energy Information Administration, from January 
17 through April 11, the cost of crude oil rose 10.8 percent. During 
the same time period, the average retail price of gasoline in the 
United States rose 24.9 percent. Something is not right.
  Look at the profits that are being pocketed by the big oil companies. 
Compared to the same time last year, oil companies' first-quarter 
profits are dramatically higher.
  Look at the number of mergers and acquisitions in the industry over 
the past several months. The continued consolidation only reduces 
competition and increases energy costs.
  Look at the refiners that may be taking plants off-line at will for 
``routine maintenance,'' which is reminiscent of the electricity crisis 
when generators took their plants off-line for ``routine maintenance'' 
in order to artificially increase prices.
  My legislation will shed light on manipulation and hopefully curtail 
it.
  The bill requires the Federal Trade Commission to automatically 
investigate the gasoline market for manipulation anytime average 
gasoline prices increase in any State by 20 percent in a period of 3 
months or less and remain at that level for 7 days or more.
  Market manipulation would include, but it is not limited to, 
collusion or the creation of artificial shortages such as unnecessarily 
taking refineries off-line. In determining the trigger, the gasoline 
price used would be the Energy Information Agency's weekly pricing of 
regular grade gasoline. A report on the FTC's investigation would be 
due to Congress 14 days after the price trigger.
  Under the bill, the FTC would be required within 2 weeks of issuing 
the report to hold a public meeting to discuss the findings. If the 
finings indicate that there is market manipulation, then the FTC would 
work with the State's attorney general to determine the penalties.
  If the findings indicate that there is no market manipulation, then 
the U.S. Department of Energy must officially decide, within 2 weeks, 
the Strategic Petroleum Reserve should be used in order to ease prices 
and stabilize supply.
  We need to deter market manipulation. Otherwise, we risk serious 
price gouging with no accountability to consumers. My legislation 
offers a reasonable standard for an investigation and a reasonable time 
frame in which to complete that investigation. I believe the threat of 
these investigations and the public light that would be shed on the 
system will keep gasoline prices down.
  I urge my colleagues to cosponsor this bill.
                                 ______
                                 
      By Mr. ROCKEFELLER (for himself, Ms. Snowe, Mr. Baucus, Mr. 
        Burns, Mr. Schumer,  Mr. Bunning, and Ms. Cantwell):
  S. 1147. A bill to amend the Internal Revenue Code of 1986 to provide 
for the expensing of broadband Internet access expenditures, and for 
other purposes; to the Committee on Finance.
  Mr. ROCKEFELLER. Mr. President, I am introducing legislation that 
would accelerate the deployment of advanced broadband internet access 
technologies in rural and underserved regions. This bipartisan 
legislation is very similar to bills that I have introduced in the last 
several Congresses. I want to thank Senators Snowe, Baucus, Burns, 
Schumer, Cantwell, and Bunning for co-sponsoring this bill.
  The convergence of computing and communications has fundamentally and 
forever changed the way Americans live and work. Individuals, 
businesses, schools, libraries, hospitals, and many others share 
information through computer networks. We shop online. Some of us work 
at home, or in other locations, using networked computers to interact 
with our colleagues and associates. Distance learning and telemedicine 
provide important services in remote locations. In our personal lives 
we look to our networked computers for entertainment and to communicate 
with family and friends. These trends are accelerating dramatically.
  A decade ago, telephone-based low-bandwidth services met most of our 
limited data communications needs. Today this technology is obsolete. 
Most businesses and many individuals find that they require the ability 
to transmit information much faster, using what is commonly known as 
broadband communications. Several technologies compete to provide 
customers with broadband communications. Among the most prominent are 
optical fiber, wireless, digital-subscriber lines, cable modems, power 
line transmission, and satellites.
  Indeed, as the need for faster services compounds, the technologies 
must be improved and even the definition of broadband communications 
must be revised and updated. The now-obsolete telephone-based systems 
transmit data at up to 56 thousand bits per second. Today, internet 
service providers commonly install first generation broadband systems 
that transmit data at rates between 256 thousand bits per second and 4 
million bits per second. But we can now see clearly that these current-
generation systems will be superseded by second-generation systems, 
already being installed in a few areas, which operate at data rates of 
up to 30 million bits per second. In other countries, services that 
transmit and receive data at 100 million bits per second are already 
available to individuals. Some industry experts predict that within 5 
to 10 years there will be a substantial demand for systems that operate 
at 1 billion bits per second.
  Despite the industry downturn over the past few years, America's 
telecommunications providers are working to make higher speed 
communications more widely available. Progress is fastest, and the 
business case for investment is most attractive, in affluent urban and 
suburban areas, especially newly developing areas. Rural areas are less 
fortunate. Low population densities, rugged terrain, and other factors 
make these areas difficult and expensive to serve. Similarly, the 
business case for providers to invest in underserved areas, mostly low 
income areas, is generally weak.
  As was the case with electric power and telephone systems in the 20th 
century, financial incentives will be necessary to assure the extension 
of broadband communications infrastructure into rural and underserved 
regions. These incentives will also provide a substantial benefit to 
the American economy. In the same way that extending electric power 
systems into rural areas stimulated a new demand for electric 
appliances and other products, the wider availability of broadband 
communications will stimulate electronic commerce and new commercial 
services.
  For my State of West Virginia, and other rural and low income States, 
the availability of advanced communications systems will allow 
residents to participate in the 21st century economy and have access to 
the economic and cultural benefits of urban living while retaining 
their cherished rural values and lifestyles.
  The consequences of failing to act are serious. Businesses in 
infrastructure-rich regions will prosper at the expense of those in 
rural and underserved regions. New businesses will locate where the 
information infrastructure is strong. The migration of jobs to urban 
and affluent areas will accelerate and tax revenue in rural and 
underserved areas will continue to decline. Residents of West Virginia 
and other rural states will continue to be at an economic and 
educational disadvantage. The ``digital divide'' will widen and the gap 
between ``have'' and ``have-not'' regions will expand.
  Decisions on how this country chooses to deploy information 
technology have the power to fundamentally transform the future of 
rural America. I firmly believe, and I am sure this view is shared by 
many of my colleagues, that rural communities deserve the same 
opportunities as their wealthier urban and suburban counterparts. We 
must make a commitment to them now, while there is still time, that 
their communications infrastructure will not always be a generation or

[[Page 11568]]

more behind that of urban and suburban areas.
  My bill would provide incentives for broadband deployment by allowing 
providers, under certain conditions, to treat their investments in 
broadband technologies as current-tax-year expenses. Under my 
legislation, the incentives provided by this bill would be 
differentiated to favor investments in technologies that will continue 
to meet communications needs further into the future.
  Half of investments in systems that permit data to be received at 
rates of 1.0 million bits per second and transmitted at rates of 128 
thousand bits per second would qualify. This is a substantial incentive 
to provide residents of rural and underserved areas the capabilities 
already enjoyed by individuals and businesses in urban and suburban 
areas.
  Investments in systems that permit data to be received at 22 million 
bits per second and transmitted at 5 million bits per second would 
fully qualify. This more powerful incentive challenges internet service 
providers to provide the capabilities that they have already begun to 
introduce in urban and suburban areas. Forward-looking providers will 
use this opportunity to invest in technologies that can be upgraded 
further as the demand grows.
  Americans believe strongly in equal opportunity. This bill is just 
one part of an effort to make sure that all Americans have equal access 
to modern communications systems and the opportunities that those 
systems are bringing in the 21st century.
  I hope that the Members of this body will support this important 
legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1147

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

     SECTION 1. EXPENSING OF BROADBAND INTERNET ACCESS 
                   EXPENDITURES.

       (a) In General.--Part VI of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to itemized 
     deductions for individuals and corporations) is amended by 
     inserting after section 190 the following new section:

     ``SEC. 191. BROADBAND EXPENDITURES.

       ``(a) Treatment of Expenditures.--
       ``(1) In general.--A taxpayer may elect to treat any 
     qualified broadband expenditure which is paid or incurred by 
     the taxpayer as an expense which is not chargeable to capital 
     account. Any expenditure which is so treated shall be allowed 
     as a deduction.
       ``(2) Election.--An election under paragraph (1) shall be 
     made at such time and in such manner as the Secretary may 
     prescribe by regulation.
       ``(b) Qualified Broadband Expenditures.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified broadband 
     expenditure' means, with respect to any taxable year, any 
     direct or indirect costs incurred after the date of the 
     enactment of this Act and before the date which is 10 years 
     after such date and properly taken into account with respect 
     to--
       ``(A) the purchase or installation of qualified equipment 
     (including any upgrades thereto), and
       ``(B) the connection of such qualified equipment to any 
     qualified subscriber.
       ``(2) Certain satellite expenditures excluded.--Such term 
     shall not include any costs incurred with respect to the 
     launching of any satellite equipment.
       ``(3) Leased equipment.--Such term shall include so much of 
     the purchase price paid by the lessor of qualified equipment 
     subject to a lease described in subsection (c)(2)(B) as is 
     attributable to expenditures incurred by the lessee which 
     would otherwise be described in paragraph (1).
       ``(4) Limitation with regard to current generation 
     broadband services.--Only 50 percent of the amounts taken 
     into account under paragraph (1) with respect to qualified 
     equipment through which current generation broadband services 
     are provided shall be treated as qualified broadband 
     expenditures.
       ``(c) When Expenditures Taken Into Account.--For purposes 
     of this section--
       ``(1) In general.--Qualified broadband expenditures with 
     respect to qualified equipment shall be taken into account 
     with respect to the first taxable year in which--
       ``(A) current generation broadband services are provided 
     through such equipment to qualified subscribers, or
       ``(B) next generation broadband services are provided 
     through such equipment to qualified subscribers.
       ``(2) Limitation.--
       ``(A) In general.--Qualified expenditures shall be taken 
     into account under paragraph (1) only with respect to 
     qualified equipment--
       ``(i) the original use of which commences with the 
     taxpayer, and
       ``(ii) which is placed in service, after the date of the 
     enactment of this Act.
       ``(B) Sale-leasebacks.--For purposes of subparagraph (A), 
     if property--
       ``(i) is originally placed in service after the date of the 
     enactment of this Act by any person, and
       ``(ii) sold and leased back by such person within 3 months 
     after the date such property was originally placed in 
     service,

     such property shall be treated as originally placed in 
     service not earlier than the date on which such property is 
     used under the leaseback referred to in clause (ii).
       ``(d) Special Allocation Rules.--
       ``(1) Current generation broadband services.--For purposes 
     of determining the amount of qualified broadband expenditures 
     under subsection (a)(1) with respect to qualified equipment 
     through which current generation broadband services are 
     provided, if the qualified equipment is capable of serving 
     both qualified subscribers and other subscribers, the 
     qualified broadband expenditures shall be multiplied by a 
     fraction--
       ``(A) the numerator of which is the sum of the number of 
     potential qualified subscribers within the rural areas and 
     the underserved areas which the equipment is capable of 
     serving with current generation broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving with current generation broadband 
     services.
       ``(2) Next generation broadband services.--For purposes of 
     determining the amount of qualified broadband expenditures 
     under subsection (a)(1) with respect to qualified equipment 
     through which next generation broadband services are 
     provided, if the qualified equipment is capable of serving 
     both qualified subscribers and other subscribers, the 
     qualified expenditures shall be multiplied by a fraction--
       ``(A) the numerator of which is the sum of--
       ``(i) the number of potential qualified subscribers within 
     the rural areas and underserved areas, plus
       ``(ii) the number of potential qualified subscribers within 
     the area consisting only of residential subscribers not 
     described in clause (i),

     which the equipment is capable of serving with next 
     generation broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving with next generation broadband services.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Antenna.--The term `antenna' means any device used to 
     transmit or receive signals through the electromagnetic 
     spectrum, including satellite equipment.
       ``(2) Cable operator.--The term `cable operator' has the 
     meaning given such term by section 602(5) of the 
     Communications Act of 1934 (47 U.S.C. 522(5)).
       ``(3) Commercial mobile service carrier.--The term 
     `commercial mobile service carrier' means any person 
     authorized to provide commercial mobile radio service as 
     defined in section 20.3 of title 47, Code of Federal 
     Regulations.
       ``(4) Current generation broadband service.--The term 
     `current generation broadband service' means the transmission 
     of signals at a rate of at least 1,000,000 bits per second to 
     the subscriber and at least 128,000 bits per second from the 
     subscriber.
       ``(5) Multiplexing or demultiplexing.--The term 
     `multiplexing' means the transmission of 2 or more signals 
     over a single channel, and the term `demultiplexing' means 
     the separation of 2 or more signals previously combined by 
     compatible multiplexing equipment.
       ``(6) Next generation broadband service.--The term `next 
     generation broadband service' means the transmission of 
     signals at a rate of at least 22,000,000 bits per second to 
     the subscriber and at least 5,000,000 bits per second from 
     the subscriber.
       ``(7) Nonresidential subscriber.--The term `nonresidential 
     subscriber' means any person who purchases broadband services 
     which are delivered to the permanent place of business of 
     such person.
       ``(8) Open video system operator.--The term `open video 
     system operator' means any person authorized to provide 
     service under section 653 of the Communications Act of 1934 
     (47 U.S.C. 573).
       ``(9) Other wireless carrier.--The term `other wireless 
     carrier' means any person (other than a telecommunications 
     carrier, commercial mobile service carrier, cable operator, 
     open video system operator, or satellite carrier) providing 
     current generation broadband services or next generation 
     broadband service to subscribers through the radio 
     transmission of energy.
       ``(10) Packet switching.--The term `packet switching' means 
     controlling or routing the path of any digitized transmission 
     signal which is assembled into packets or cells.
       ``(11) Provider.--The term `provider' means, with respect 
     to any qualified equipment--

[[Page 11569]]

       ``(A) a cable operator,
       ``(B) a commercial mobile service carrier,
       ``(C) an open video system operator,
       ``(D) a satellite carrier,
       ``(E) a telecommunications carrier, or
       ``(F) any other wireless carrier,

     providing current generation broadband services or next 
     generation broadband services to subscribers through such 
     qualified equipment.
       ``(12) Provision of services.--A provider shall be treated 
     as providing services to 1 or more subscribers if--
       ``(A) such a subscriber has been passed by the provider's 
     equipment and can be connected to such equipment for a 
     standard connection fee,
       ``(B) the provider is physically able to deliver current 
     generation broadband services or next generation broadband 
     services, as applicable, to such a subscriber without making 
     more than an insignificant investment with respect to such 
     subscriber,
       ``(C) the provider has made reasonable efforts to make such 
     subscribers aware of the availability of such services,
       ``(D) such services have been purchased by 1 or more such 
     subscribers, and
       ``(E) such services are made available to such subscribers 
     at average prices comparable to those at which the provider 
     makes available similar services in any areas in which the 
     provider makes available such services.
       ``(13) Qualified equipment.--
       ``(A) In general.--The term `qualified equipment' means 
     equipment which provides current generation broadband 
     services or next generation broadband services--
       ``(i) at least a majority of the time during periods of 
     maximum demand to each subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no deduction is allowed under 
     subsection (a)(1).
       ``(B) Only certain investment taken into account.--Except 
     as provided in subparagraph (C) or (D), equipment shall be 
     taken into account under subparagraph (A) only to the extent 
     it--
       ``(i) extends from the last point of switching to the 
     outside of the unit, building, dwelling, or office owned or 
     leased by a subscriber in the case of a telecommunications 
     carrier,
       ``(ii) extends from the customer side of the mobile 
     telephone switching office to a transmission/receive antenna 
     (including such antenna) owned or leased by a subscriber in 
     the case of a commercial mobile service carrier,
       ``(iii) extends from the customer side of the headend to 
     the outside of the unit, building, dwelling, or office owned 
     or leased by a subscriber in the case of a cable operator or 
     open video system operator, or
       ``(iv) extends from a transmission/receive antenna 
     (including such antenna) which transmits and receives signals 
     to or from multiple subscribers, to a transmission/receive 
     antenna (including such antenna) on the outside of the unit, 
     building, dwelling, or office owned or leased by a subscriber 
     in the case of a satellite carrier or other wireless carrier, 
     unless such other wireless carrier is also a 
     telecommunications carrier.
       ``(C) Packet switching equipment.--Packet switching 
     equipment, regardless of location, shall be taken into 
     account under subparagraph (A) only if it is deployed in 
     connection with equipment described in subparagraph (B) and 
     is uniquely designed to perform the function of packet 
     switching for current generation broadband services or next 
     generation broadband services, but only if such packet 
     switching is the last in a series of such functions performed 
     in the transmission of a signal to a subscriber or the first 
     in a series of such functions performed in the transmission 
     of a signal from a subscriber.
       ``(D) Multiplexing and demultiplexing equipment.--
     Multiplexing and demultiplexing equipment shall be taken into 
     account under subparagraph (A) only to the extent it is 
     deployed in connection with equipment described in 
     subparagraph (B) and is uniquely designed to perform the 
     function of multiplexing and demultiplexing packets or cells 
     of data and making associated application adaptions, but only 
     if such multiplexing or demultiplexing equipment is located 
     between packet switching equipment described in subparagraph 
     (C) and the subscriber's premises.
       ``(14) Qualified subscriber.--The term `qualified 
     subscriber' means--
       ``(A) with respect to the provision of current generation 
     broadband services--
       ``(i) any nonresidential subscriber maintaining a permanent 
     place of business in a rural area or underserved area, or
       ``(ii) any residential subscriber residing in a dwelling 
     located in a rural area or underserved area which is not a 
     saturated market, and
       ``(B) with respect to the provision of next generation 
     broadband services--
       ``(i) any nonresidential subscriber maintaining a permanent 
     place of business in a rural area or underserved area, or
       ``(ii) any residential subscriber.
       ``(15) Residential subscriber.--The term `residential 
     subscriber' means any individual who purchases broadband 
     services which are delivered to such individual's dwelling.
       ``(16) Rural area.--The term `rural area' means any census 
     tract which--
       ``(A) is not within 10 miles of any incorporated or census 
     designated place containing more than 25,000 people, and
       ``(B) is not within a county or county equivalent which has 
     an overall population density of more than 500 people per 
     square mile of land.
       ``(17) Rural subscriber.--The term `rural subscriber' means 
     any residential subscriber residing in a dwelling located in 
     a rural area or nonresidential subscriber maintaining a 
     permanent place of business located in a rural area.
       ``(18) Satellite carrier.--The term `satellite carrier' 
     means any person using the facilities of a satellite or 
     satellite service licensed by the Federal Communications 
     Commission and operating in the Fixed-Satellite Service under 
     part 25 of title 47 of the Code of Federal Regulations or the 
     Direct Broadcast Satellite Service under part 100 of title 47 
     of such Code to establish and operate a channel of 
     communications for distribution of signals, and owning or 
     leasing a capacity or service on a satellite in order to 
     provide such point-to-multipoint distribution.
       ``(19) Saturated market.--The term `saturated market' means 
     any census tract in which, as of the date of the enactment of 
     this section--
       ``(A) current generation broadband services have been 
     provided by a single provider to 85 percent or more of the 
     total number of potential residential subscribers residing in 
     dwellings located within such census tract, and
       ``(B) such services can be utilized--
       ``(i) at least a majority of the time during periods of 
     maximum demand by each such subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no deduction is allowed under 
     subsection (a)(1).
       ``(20) Subscriber.--The term `subscriber' means any person 
     who purchases current generation broadband services or next 
     generation broadband services.
       ``(21) Telecommunications carrier.--The term 
     `telecommunications carrier' has the meaning given such term 
     by section 3(44) of the Communications Act of 1934 (47 U.S.C. 
     153(44)), but--
       ``(A) includes all members of an affiliated group of which 
     a telecommunications carrier is a member, and
       ``(B) does not include a commercial mobile service carrier.
       ``(22) Total potential subscriber population.--The term 
     `total potential subscriber population' means, with respect 
     to any area and based on the most recent census data, the 
     total number of potential residential subscribers residing in 
     dwellings located in such area and potential nonresidential 
     subscribers maintaining permanent places of business located 
     in such area.
       ``(23) Underserved area.--The term `underserved area' 
     means--
       ``(A) any census tract which is located in--
       ``(i) an empowerment zone or enterprise community 
     designated under section 1391, or
       ``(ii) the District of Columbia Enterprise Zone established 
     under section 1400, or
       ``(B) any census tract--
       ``(i) the poverty level of which is at least 30 percent 
     (based on the most recent census data), and
       ``(ii) the median family income of which does not exceed--

       ``(I) in the case of a census tract located in a 
     metropolitan statistical area, 70 percent of the greater of 
     the metropolitan area median family income or the statewide 
     median family income, and
       ``(II) in the case of a census tract located in a 
     nonmetropolitan statistical area, 70 percent of the 
     nonmetropolitan statewide median family income.

       ``(24) Underserved subscriber.--The term `underserved 
     subscriber' means any residential subscriber residing in a 
     dwelling located in an underserved area or nonresidential 
     subscriber maintaining a permanent place of business located 
     in an underserved area.
       ``(f) Special Rules.--
       ``(1) Property used outside the united states, etc., not 
     qualified.--No expenditures shall be taken into account under 
     subsection (a)(1) with respect to the portion of the cost of 
     any property referred to in section 50(b) or with respect to 
     the portion of the cost of any property specified in an 
     election under section 179.
       ``(2) Basis reduction.--
       ``(A) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the portion of the cost of 
     such property taken into account under subsection (a)(1).
       ``(B) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a)(1) with respect to any property which is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.
       ``(3) Coordination with section 38.--No credit shall be 
     allowed under section 38 with respect to any amount for which 
     a deduction is allowed under subsection (a)(1).''.
       (b) Special Rule for Mutual or Cooperative Telephone 
     Companies.--Section 512(b)

[[Page 11570]]

     of the Internal Revenue Code of 1986 (relating to 
     modifications) is amended by adding at the end the following 
     new paragraph:
       ``(18) Special rule for mutual or cooperative telephone 
     companies.--A mutual or cooperative telephone company which 
     for the taxable year satisfies the requirements of section 
     501(c)(12)(A) may elect to reduce its unrelated business 
     taxable income for such year, if any, by an amount that does 
     not exceed the qualified broadband expenditures which would 
     be taken into account under section 191 for such year by such 
     company if such company was not exempt from taxation. Any 
     amount which is allowed as a deduction under this paragraph 
     shall not be allowed as a deduction under section 191 and the 
     basis of any property to which this paragraph applies shall 
     be reduced under section 1016(a)(32).''.
       (c) Conforming Amendments.--
       (1) Section 263(a)(1) of the Internal Revenue Code of 1986 
     (relating to capital expenditures) is amended by striking 
     ``or'' at the end of subparagraph (H), by striking the period 
     at the end of subparagraph (I) and inserting ``, or'', and by 
     adding at the end the following new subparagraph:
       ``(J) expenditures for which a deduction is allowed under 
     section 191.''.
       (2) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (30), by striking the period 
     at the end of paragraph (31) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(32) to the extent provided in section 191(f)(2).''.
       (3) The table of sections for part VI of subchapter A of 
     chapter 1 of such Code is amended by inserting after the item 
     relating to section 190 the following new item:

``Sec. 191. Broadband expenditures.''.

       (d) Designation of Census Tracts.--
       (1) In general.--The Secretary of the Treasury shall, not 
     later than 90 days after the date of the enactment of this 
     Act, designate and publish those census tracts meeting the 
     criteria described in paragraphs (16), (22), and (23) of 
     section 191(e) of the Internal Revenue Code of 1986 (as added 
     by this section). In making such designations, the Secretary 
     of the Treasury shall consult with such other departments and 
     agencies as the Secretary determines appropriate.
       (2) Saturated market.--
       (A) In general.--For purposes of designating and publishing 
     those census tracts meeting the criteria described in 
     subsection (e)(19) of such section 191--
       (i) the Secretary of the Treasury shall prescribe not later 
     than 30 days after the date of the enactment of this Act the 
     form upon which any provider which takes the position that it 
     meets such criteria with respect to any census tract shall 
     submit a list of such census tracts (and any other 
     information required by the Secretary) not later than 60 days 
     after the date of the publication of such form, and
       (ii) the Secretary of the Treasury shall publish an 
     aggregate list of such census tracts and the applicable 
     providers not later than 30 days after the last date such 
     submissions are allowed under clause (i).
       (B) No subsequent lists required.--The Secretary of the 
     Treasury shall not be required to publish any list of census 
     tracts meeting such criteria subsequent to the list described 
     in subparagraph (A)(ii).
       (e) Other Regulatory Matters.--
       (1) Prohibition.--No Federal or State agency or 
     instrumentality shall adopt regulations or ratemaking 
     procedures that would have the effect of eliminating or 
     reducing any deduction or portion thereof allowed under 
     section 191 of the Internal Revenue Code of 1986 (as added by 
     this section) or otherwise subverting the purpose of this 
     section.
       (2) Treasury regulatory authority.--It is the intent of 
     Congress in providing the election to deduct qualified 
     broadband expenditures under section 191 of the Internal 
     Revenue Code of 1986 (as added by this section) to provide 
     incentives for the purchase, installation, and connection of 
     equipment and facilities offering expanded broadband access 
     to the Internet for users in certain low income and rural 
     areas of the United States, as well as to residential users 
     nationwide, in a manner that maintains competitive neutrality 
     among the various classes of providers of broadband services. 
     Accordingly, the Secretary of the Treasury shall prescribe 
     such regulations as may be necessary or appropriate to carry 
     out the purposes of section 191 of such Code, including--
       (A) regulations to determine how and when a taxpayer that 
     incurs qualified broadband expenditures satisfies the 
     requirements of section 191 of such Code to provide broadband 
     services, and
       (B) regulations describing the information, records, and 
     data taxpayers are required to provide the Secretary to 
     substantiate compliance with the requirements of section 191 
     of such Code.
       (f) Effective Date.--The amendments made by this section 
     shall apply to expenditures incurred after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Ms. MIKULSKI (for herself, Ms. Stabenow, Mr. Bingaman, Mrs. 
        Murray, Mr. Corzine, Mr. Johnson, and Mr. Inouye):
  S. 1148. A bill to amend title XVIII of the Social Security Act to 
permit direct payment under the medicare program for clinical social 
worker services provided to residents of skilled nursing facilities; to 
the Committee on Finance.
  Ms. MIKULSKI. Mr. President, in honor of Older Americans' Mental 
Health Week, I rise today to introduce the Clinical Social Work 
Medicare Equity Act of 2005. I am proud to sponsor this legislation 
that will ensure that clinical social workers can receive Medicare 
reimbursements for the mental health services they provide in skilled 
nursing facilities. Under the current system, social workers may not be 
paid for services they provide. Psychologists and psychiatrists, who 
provide similar counseling, are able to separately bill Medicare for 
their services. Congressmen Stark and Leach are introducing a companion 
bill today in the House of Representatives.
  Since my first days in Congress, I have been fighting to protect and 
strengthen the safety of our Nation's seniors. Making sure that seniors 
have access to quality, affordable mental health care is an important 
part of this fight. I know that millions of seniors do not have access 
to, or are not receiving, the mental health services they urgently 
need. Nearly 6 million seniors are affected by depression, but only 
one-tenth ever gets treated. According to the American Psychiatric 
Association, up to 25 percent of the elderly population in the United 
States suffers from significant symptoms of mental illness and among 
nursing home residents the prevalence is as high as 80 percent. These 
mental disorders, which include severe depression and debilitating 
anxiety, interfere with the person's ability to carryout activities of 
daily living and adversely affect their quality of life. Furthermore, 
older people have a 20 percent suicide rate, the highest of any age 
group. Every year nearly 6,000 older Americans kill themselves. This is 
unacceptable and must be addressed.
  As a former social worker, I understand the role that social workers 
play in the overall care of patients and seniors. This bill protects 
patients across the country and ensures that seniors living in 
underserved urban and rural areas, where clinical social workers are 
often the only available option for mental health care, continue to 
receive the treatment they need. Clinical social workers, much like 
psychologists and psychiatrists, treat and diagnose mental illnesses. 
In fact, clinical social workers are the primary mental health 
providers for nursing home residents and also seniors residing in rural 
environments. But unlike other mental health providers, clinical social 
workers cannot bill directly for the important services they provide to 
their patients. Protecting seniors' access to clinical social workers 
can help make sure that our most vulnerable citizens get the quality, 
affordable mental health care they need and deserve. This bill will 
correct this inequity and make sure clinical social workers get the 
payments and respect they deserve.
  Before the Balanced Budget Act of 1997, clinical social workers 
billed Medicare Part B directly for mental health services provided in 
nursing facilities to each patient they served. Under the Prospective 
Payment System, services provided by clinical social workers are 
lumped, or ``bundled,'' along with the services of other health care 
providers for the purposes of billing and payments. Psychologists and 
psychiatrists, who provide similar counseling, were exempted from this 
system and continue to bill Medicare directly. This bill would exempt 
clinical social workers, like their mental health colleagues, from the 
prospective payment system, and would make sure that clinical social 
workers are paid for the services they provide to patients in skilled 
nursing facilities. The Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act addressed some of these concerns, but 
this legislation would remove the final barrier to ensuring that 
clinical social workers are treated fairly and equitably for the care 
they provide.
  This bill is about more than paperwork and payment procedures. This

[[Page 11571]]

bill is about equal access to Medicare payments for the equal and 
important work done by clinical social workers. It is about making sure 
our Nation's most vulnerable citizens have access to quality, 
affordable mental health care. The overarching goal we should be 
striving to achieve for our seniors is an overall improved quality of 
life. Without clinical social workers, many nursing home residents may 
never get the counseling they need when faced with a life threatening 
illness or the loss of a loved one. I think we can do better by our 
Nation's seniors, and I'm fighting to make sure we do.
  The Clinical Social Work Medicare Equity Act of 2005 is strongly 
supported by the National Association of Social Workers and the 
Association for Geriatric Psychiatry. I also want to thank Senators 
Stabenow, Bingaman, Murray, Corzine, Johnson, and Inouye for their 
cosponsorship of this bill. I look forward to working with my 
colleagues to enact this important legislation.
  Mr. President, I ask unanimous consent that the text of the bill and 
letters of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         National Association of Social Workers--Political Action 
           for Candidate Election,
                                     Washington, DC, May 25, 2005.
     Senator Barbara Mikulski,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Mikulski: I am writing on behalf of the 
     National Association of Social Workers (NASW), the largest 
     professional social work organization with over 153,000 
     members nationwide. NASW promotes, develops, and protects the 
     affective practice of social work and social workers. NASW 
     also seeks to enhance the well being of individuals, 
     families, and communities through its work, service, and 
     advocacy.
       NASW strongly supports the Clinical Social Work Medicare 
     Equity Act of 2005, which will end the unfair treatment of 
     clinical social workers under the Medicare Part B Prospective 
     Payment System (PPS) for Skilled Nursing Facilities (SNFs).
       Section 4432 of the Balanced Budget Act of 1997 authorized 
     the creation of the PPS, under which the cost of a variety of 
     daily services provided to SNF patients is bundled into a 
     single amount. Prior to PPS, a separate Medicare Part B claim 
     was filed by the provider for each individual service 
     rendered to a patient. Congress made this change in an 
     attempt to capitate the rapidly rising costs of additional 
     patient services delivered by Medicare providers to SNF 
     patients, with the precise target being physical, 
     occupational, and speech-language therapy services. However, 
     Congress recognized that some services, such as mental health 
     and anesthesia, are best provided on an individual basis 
     rather than as part of the bundle of services. Thus, the 
     following types of providers are specifically excluded from 
     the PPS: physicians, clinical psychologists, certified nurse-
     midwives, and certified registered nurse anesthetists. 
     Unfortunately, due to an unintentional oversight during the 
     drafting process, clinical social workers were not listed 
     among the aforementioned providers in the legislation.
       In 1996, Department of Health and Human Services Inspector 
     General June Gibbs Brown published a report entitled ``Mental 
     Health Services in Nursing Facilities''. The purpose of the 
     report was to describe the types of mental health services 
     provided in nursing facilities and identify potential 
     vulnerabilities in the mental health services covered by 
     Medicare. One critical finding of the report was 70% of 
     nursing home respondents stated that permitting clinical 
     social workers and clinical psychologists to bill 
     independently had a beneficial effect on the provision of 
     mental health services in nursing facilities. The Clinical 
     Social Work Medicare Equity will maintain this beneficial 
     effect on SNF patients by ensuring the continuation of direct 
     Medicare billing by clinical social workers for mental health 
     services rendered to SNF patients.
       Your efforts on behalf of mental health patients and 
     professional social workers nationwide are greatly 
     appreciated by our members. We thank you for your strong 
     interest in and commitment to this important issue as 
     demonstrated by your sponsorship of the Clinical Social Work 
     Medicare Equity Act. NASW looks forward to working with you 
     on this and future issues of mutual concern.
           Sincerely,
                                                    David Dempsey,
     Manager, Government Relations and PACE.
                                  ____

                                          American Association for


                                         Geriatric Psychiatry,

                                       Bethesda, MD, May 25, 2005.
     Hon. Barbara Mikulski, 
     U.S. Senate,
     Washington, DC.
       Dear Senator Mikulski: On behalf of the American 
     Association for Geriatric Psychiatry (AAGP), I am writing to 
     endorse the ``Clinical Social Work Medicare Equity Act of 
     2005.''
       AAGP is a professional membership organization dedicated to 
     promoting the mental health and well-being of older people 
     and improving the care of those with late-life mental 
     disorders. AAGP's membership consists of 2,000 geriatric 
     psychiatrists, as well as other health professionals who 
     focus on the mental health problems faced by senior citizens.
       This legislation would permit direct payment under the 
     Medicare program for clinical social worker services provided 
     to residents of skilled nursing facilities. The numbers of 
     mental health professionals available to treat older adults, 
     including residents of nursing homes, are already inadequate, 
     and as the baby boom generation ages, the needs will only 
     increase. Clinical social workers constitute a crucial 
     component of the team of mental health professionals who are 
     able to deliver this care, and assuring that they are able to 
     bill for their services in the same way as psychiatrists and 
     psychologists is not only fair but also necessary if nursing 
     home residents are to have access to the mental health care 
     they need.
       AAGP commends you for your introduction of this important 
     legislation, and we look forward to working with you towards 
     its enactment.
           Sincerely,
                                            Christine M. de Vries,
                                               Executive Director.

                                S. 1148

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Clinical Social Work 
     Medicare Equity Act of 2005''.

     SEC. 2. PERMITTING DIRECT PAYMENT UNDER THE MEDICARE PROGRAM 
                   FOR CLINICAL SOCIAL WORKER SERVICES PROVIDED TO 
                   RESIDENTS OF SKILLED NURSING FACILITIES.

       (a) In General.--Section 1888(e)(2)(A)(ii) of the Social 
     Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by 
     inserting ``clinical social worker services,'' after 
     ``qualified psychologist services,''.
       (b) Conforming Amendment.--Section 1861(hh)(2) of the 
     Social Security Act (42 U.S.C. 1395x(hh)(2)) is amended by 
     striking ``and other than services furnished to an inpatient 
     of a skilled nursing facility which the facility is required 
     to provide as a requirement for participation''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to items and services furnished on or after the 
     date that regulations relating to payment for physicians' 
     services for calendar year 2005 take effect, but in no case 
     later than the first day of the third month beginning after 
     the date of the enactment of this Act.
                                 ______
                                 
      By Mr. ISAKSON (for himself and Mr. Kennedy):
  S. 1149. A bill to amend the Federal Employees' Compensation Act to 
cover services provided to injured Federal workers by physician 
assistants and nurse practitioners, and for other purposes; to the 
Committee on Homeland Security and Governmental Affairs.
  Mr. ISAKSON. Mr. President, I am pleased to rise and join Senator 
Kennedy in introducing the Improving Access to Workers' Compensation 
for Injured Federal Workers Act.
  One of Congress's biggest challenges year in and year out is 
providing access to affordable quality healthcare for the American 
people. Today, I am pleased to announce that Senator Kennedy and I have 
found an opportunity to provide injured Federal workers with a better 
system of reimbursable healthcare for their workers compensation 
claims.
  Physicians assistants and nurse practitioners are vital contributors 
to our healthcare system. Together, they provide economical quality 
medical care to the American people. Unfortunately, however, they are 
currently not recognized in the current FECA statute. When Federal 
workers' compensation claims are signed by NPs or PAs, the Federal 
Government denies these claims. With the introduction of this bill, 
Senator Kennedy and I want to correct this hurdle to economical medical 
care.
  The need for this straightforward legislation is clear. In some rural 
area health clinics, NPs and PAs are the only full-time providers of 
medical care. Likewise, NPs and PAs may be the only healthcare 
professionals on-site after hours at local clinics.
  These professions are regulated by all States and are covered 
providers within Medicare, Tri-Care, and nearly all private insurance 
plans. Indeed, many Federal workers already regularly receive medical 
care from NPs and PAs

[[Page 11572]]

through their Federal Employee Health Benefits Plan. NPs and PAs are 
also employed by the Federal Government, including the Department of 
Veterans Affairs, Department of State, Department of Defense, and the 
Public and Indian Health Services. In fact, most State workers' 
compensation programs cover NPs and PAs as reimbursable providers.
  Again, I thank Senator Kennedy for his cooperation in ensuring cost-
effective quality medical care is available to injured Federal workers.
  Mr. KENNEDY. Mr. President, today, with my distinguished colleague 
Senator Isakson, I am pleased to introduce the Improving Access to 
Workers' Compensation for Injured Federal Workers Act.
  Our federal employees serve the American public. Day in and day out, 
they keep our homeland secure, protect our environment, and oversee and 
care for those in need. They ensure the safety of our food and our 
medicines, deliver our daily mail, and undertake countless other duties 
that, while they sometimes go unnoticed, should never be taken for 
granted.
  More than two-and-a-half million of these workers are covered by the 
Federal Employees' Compensation Act (FECA). In addition to compensating 
workers for lost wages, FECA provides medical treatment to Federal 
workers injured on the job, to help them return to health and to work 
quickly.
  FECA is an effective and fair compensation system. This bill will 
make it even better by expanding it to cover services provided by nurse 
practitioners and physician assistants. This will protect many workers 
who are now without access to needed care when a job-related injury 
strikes.
  Nurse practitioners and physicians' assistants play growing role in 
medical care, with more than 100,000 nurse practitioners and 46,000 
physicians' assistants across the country. They provide crucial 
services--diagnosing and treating illnesses, ordering and interpreting 
diagnostic and laboratory tests and educating and counseling patients 
and families. In many States they can also prescribe medications.
  Nurse practitioners and physicians' assistants provide these top 
quality services in a cost-effective way. The Department of Health and 
Human Services reports that an office visit to see a nurse practitioner 
costs 10 percent to 40 percent less than comparable services from a 
physician, and the Bureau of Labor Statistics calls physicians' 
assistants ``cost-effective and productive members of the healthcare 
team.''
  While their impact is felt throughout our nation, these care 
providers play a particularly important role in rural and low-income 
urban areas, which are often underserved by doctors. In fact, in some 
rural areas, an injured Federal worker may be required to travel more 
than one-hundred miles to see a physician and receive care that is 
covered under FECA. This bill would expand Federal workers' service 
options to include physicians' assistants or nurse practitioners who 
are more likely to be located nearby.
  I urge my colleagues to join me in supporting this bill and 
recognizing the invaluable work done by our Federal employees and the 
high-quality cost-effective care provided by nurse practitioners and 
physicians' assistants.
                                 ______
                                 
      By Mrs. CLINTON:
  S. 1150. A bill to increase the security of radiation sources, and 
for other purposes; to the Committee on Environment and Public Works.
  Mrs. CLINTON. Mr. President, I rise to discuss the Dirty Bomb 
Prevention Act of 2005, which I am introducing today in the Senate, and 
Congressman Markey is introducing in the House.
  Since September 11, we have increased our focus on dirty bombs, and 
rightly so.
  Most Americans are not aware of how common this radioactive material 
is in our country. Often we think of warheads or rods used in nuclear 
reactors. However, we use less radioactive materials in positive ways 
in our hospitals, research laboratories, food irradiation plants, oil 
drilling facilities, airport runway lighting, and even in smoke 
detectors.
  And although these materials have beneficial uses, the fact is that 
some of them, in the hands of a terrorist, could be used to make a 
dirty bomb that could be used to contaminate a wide area in New York 
City or in many other places across the country.
  According to the Federation of American Scientists, ``material that 
could easily be lost or stolen from U.S. research institutions and 
commercial sites could contaminate tens of city blocks at a level that 
would require prompt evacuation . . . Areas as large as tens of square 
miles could be contaminated at levels that exceed recommended civilian 
exposure limits.''
  Even if such contamination caused by a dirty bomb did not pose severe 
health threats, efforts to determine the extent of contamination and 
clean it up would be both expensive and disruptive.
  And we know that radiation sources are numerous in the United States. 
The Nuclear Regulatory Commission (NRC) reports that about 157,000 
general and specific licenses have been issued authorizing the use of 
radioactive materials for industrial, medical, and other uses. About 
1.8 million devices containing radioactive sources have been 
distributed under these licenses.
  And we know that some of these sources get lost or stolen. A 2003 GAO 
report found that since 1998, there have been more than 1,300 incidents 
where radiation sources were lost, stolen or abandoned.
  While not all of these sources and incidents present potential dirty 
bomb threats, it's clear that we need to do a better job.
  This legislation fills in remaining gaps to enable the U.S. to more 
effectively control radiation sources.
  First, the bill would give the Nuclear Regulatory Commission the 
authority and the mandate to control Radium-226 and other naturally 
occurring radioactive materials that for historical reasons have 
remained outside of federal control.
  Radium-226 is of particular concern, as it is on the list of 
radiation sources that the United States has agreed to control as part 
of adhering to the International Atomic Energy Agency Code of Conduct 
on the Safety and Security of Radioactive Sources.
  Radium-226 was used in medicine, starting early in the 20th century. 
Its use increased until the 1950s, when there were more than 5,000 
radium users in the U.S. Since then, its use declined, and we don't 
have a good handle on what is left out there. Because it is naturally 
occurring, it has stayed out federal regulatory net. So we need to give 
the NRC the authority to go out and get control of it.
  Second, the bill requires the NRC to develop within 6 months of 
enactment a ``cradle-to-grave'' tracking system to ensure that we know 
where radiation sources of concern are at all times. That's just common 
sense, and if FedEx can do it, I think we ought to be able to do it for 
materials that could be used in a dirty bomb.
  Third, the bill requires the establishment of import and export 
controls for radiation sources. This is obvious--we need to know what's 
coming and going as part of our efforts to control these materials.
  These 3 provisions are fundamental steps that we know we need to take 
today to reduce the risk that radioactive materials will fall into the 
wrong hands.
  But the bill also looks forward in several ways.
  First, the bill requires an inter-agency task force on radiation 
source protection to make periodic recommendations to Congress and the 
NRC about the safety and security of radiation sources. That way we 
will know how we're doing, and what we need to do in the future.
  Second, the bill requires a National Academy of Sciences study of 
whether some current industrial uses of radiation sources could be 
replaced with non-radioactive or less dangerous radioactive materials. 
As I stated early on, there are many beneficial and necessary uses of 
radioactive materials, such as in medicine.
  But there are some cases where use of radioactive materials can be 
replaced with newer technologies. Just to

[[Page 11573]]

give one example, some steel mills have been replacing nuclear process 
gauges with other technologies.
  By exploring other opportunities to reduce the use of radioactive 
materials where possible and appropriate, we can shrink the pool of 
radioactive materials that are available to make a dirty bomb in the 
future.
  So I hope we can take action on this legislation soon. Here in the 
Senate I will be working with my colleagues to see whether we can 
include this legislation in a nuclear plant security bill that the 
committee will be marking up in June.
  I ask unanimous consent that the text of bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1150

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Dirty Bomb Prevention Act''.

     SEC. 2. RADIATION SOURCE PROTECTION.

       (a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 
     (42 U.S.C. 2201 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 170C. RADIATION SOURCE PROTECTION.

       ``a. Nuclear Regulatory Commission Approval.--Not later 
     than 180 days after the date of enactment of this section, 
     the Nuclear Regulatory Commission shall issue regulations 
     prohibiting a person from--
       ``(1) exporting a radiation source unless the Nuclear 
     Regulatory Commission has specifically found, with respect to 
     that export, that--
       ``(A) the appropriate regulatory agency in the recipient 
     country--
       ``(i) has been informed of the proposed export; and
       ``(ii) has determined that the proposed export will be made 
     in accordance with the recipient nation's laws and 
     regulations;
       ``(B) the recipient nation has the appropriate technical 
     and administrative capability, resources, and regulatory 
     structure to ensure that the radiation source will be managed 
     in a safe and secure manner; and
       ``(C) the person exporting the radiation source has made 
     arrangements to retake possession of it when the recipient is 
     no longer using it;
       ``(2) importing a radiation source unless the Nuclear 
     Regulatory Commission has specifically found, with respect to 
     that import, that--
       ``(A) the proposed recipient is authorized under law to 
     receive the shipment; and
       ``(B) the shipment will be made in accordance with all 
     applicable Federal and State laws and regulations; and
       ``(3) selling or otherwise transferring ownership of a 
     radiation source unless the Nuclear Regulatory Commission has 
     specifically found, with respect to that sale or transfer, 
     that--
       ``(A) the proposed recipient is authorized under law to 
     receive the radiation source; and
       ``(B) the transfer will be made in accordance with all 
     applicable Federal and State laws and regulations.
       ``b. Tracking System.--Not later than 180 days after the 
     date of enactment of this section, the Nuclear Regulatory 
     Commission shall issue regulations establishing a mandatory 
     tracking system for all radiation sources in the United 
     States. Such system shall--
       ``(1) enable the identification of each radiation source by 
     serial number or other unique identifier;
       ``(2) require reporting within 24 hours of any change of 
     geographic location or ownership of a radiation source, 
     including any change of geographic location that occurs while 
     the radiation source is being transported;
       ``(3) require reporting within 24 hours of any loss of 
     control of or accountability for a radiation source; and
       ``(4) provide for reporting through a secure Internet 
     connection.
       ``c. Penalty.--Each violation of regulations issued under 
     subsection a. or b. shall be punishable by a civil penalty of 
     up to $1,000,000.
       ``d. National Academy of Sciences Study.--Not later than 60 
     days after the date of enactment of this section, the Nuclear 
     Regulatory Commission shall enter into an arrangement with 
     the National Academy of Sciences for a study of industrial, 
     research, and commercial uses for radiation sources. The 
     study shall review the current uses for radiation sources, 
     identifying industrial or other processes that utilize 
     radiation sources that could be replaced with economically 
     and technically equivalent (or improved) processes that do 
     not require the use of radiation sources, or that can be used 
     with radiation sources that would pose a lesser risk to 
     public health and safety in the event of an accident or 
     attack involving the radiation source. The Nuclear Regulatory 
     Commission shall transmit the results of the study to 
     Congress not later than 24 months after the date of enactment 
     of this section.
       ``e. Commission Actions.--Not later than 60 days after 
     receipt by Congress and the President of a report required 
     under subsection f.(3)(B), the Nuclear Regulatory Commission, 
     in accordance with the recommendations of the task force, 
     shall take any appropriate actions, including commencing 
     revision of its system for licensing radiation sources, and 
     shall take necessary steps to ensure that States that have 
     entered into an agreement under section 274 b. establish 
     compatible programs in a timely manner.
       ``f. Task Force on Radiation Source Protection and 
     Security.--
       ``(1) Establishment.--There is hereby established a task 
     force on radiation source protection and security.
       ``(2) Membership.--The task force shall be headed by the 
     Chairman of the Nuclear Regulatory Commission or the 
     Chairman's designee. Its members shall be the following:
       ``(A) The Secretary of Homeland Security or the Secretary's 
     designee.
       ``(B) The Secretary of Defense or the Secretary's designee.
       ``(C) The Secretary of Energy or the Secretary's designee.
       ``(D) The Secretary of Transportation or the Secretary's 
     designee.
       ``(E) The Attorney General or the Attorney General's 
     designee.
       ``(F) The Secretary of State or the Secretary's designee.
       ``(G) The Director of National Intelligence or the 
     Director's designee.
       ``(H) The Director of the Central Intelligence Agency or 
     the Director's designee.
       ``(I) The Director of the Federal Emergency Management 
     Agency or the Director's designee.
       ``(J) The Director of the Federal Bureau of Investigation 
     or the Director's designee.
       ``(3) Duties.--
       ``(A) In general.--The task force, in consultation with 
     other State, Federal, and local agencies and appropriate 
     members of the public, after public notice and an opportunity 
     for public comment, shall evaluate and provide 
     recommendations to ensure the security of radiation sources 
     from potential terrorist threats, including acts of sabotage, 
     theft, or use of such radiation sources in a radiological 
     dispersal device.
       ``(B) Recommendations to congress and the president.--Not 
     later than 1 year after the date of enactment of this 
     section, and not less than once every 3 years thereafter, the 
     task force shall submit a report to Congress and to the 
     President, in unclassified form with a classified annex if 
     necessary, providing recommendations, including 
     recommendations for appropriate regulatory and legislative 
     changes, for--
       ``(i) a list of additional radiation sources that should be 
     required to be secured under this Act, based on their 
     potential attractiveness to terrorists and the extent of the 
     threat to public health and safety, taking into account 
     radiation source radioactivity levels, dispersability, 
     chemical and material form, and, for radiopharmaceuticals, 
     the availability of these substances to physicians and 
     patients whose medical treatments relies on them, and other 
     factors as appropriate;
       ``(ii) the establishment of or modifications to a national 
     system for recovery of radiation sources that have been lost 
     or stolen;
       ``(iii) the storage of radiation sources not currently in 
     use in a safe and secure manner;
       ``(iv) modification to the national tracking system for 
     radiation sources;
       ``(v) the establishment of or modifications to a national 
     system to impose fees to be collected from users of radiation 
     sources, to be refunded when the radiation sources are 
     properly disposed of, or any other method to ensure the 
     proper disposal of radiation sources;
       ``(vi) any modifications to export controls on radiation 
     sources necessary to ensure that foreign recipients of 
     radiation sources are able and willing to control United 
     States-origin radiation sources in the same manner as United 
     States recipients;
       ``(vii) whether alternative technologies are available that 
     can perform some or all of the functions currently performed 
     by devices or processes that employ radiation sources, and if 
     so, the establishment of appropriate regulations and 
     incentives for the replacement of such devices or processes 
     with alternative technologies in order to reduce the number 
     of radiation sources in the United States, or with radiation 
     sources that would pose a lesser risk to public health and 
     safety in the event of an accident or attack involving the 
     radiation source; and
       ``(viii) the creation of or modifications to procedures for 
     improving the security of radiation sources in use, 
     transportation, and storage, which may include periodic 
     Nuclear Regulatory Commission audits or inspections to ensure 
     that radiation sources are properly secured and can be fully 
     accounted for, Nuclear Regulatory Commission evaluation of 
     security measures, increased fines for violations of Nuclear 
     Regulatory Commission regulations relating to security and 
     safety measures applicable to licensees who possess radiation 
     sources, criminal and security background checks for certain 
     individuals with access to radiation sources (including 
     individuals involved with transporting

[[Page 11574]]

     radiation sources), assurances of the physical security of 
     facilities that contain radiation sources (including 
     facilities used to temporarily store radiation sources being 
     transported), requirements and a mechanism for effective and 
     timely exchanges of information regarding the results of such 
     criminal and security background checks between the Nuclear 
     Regulatory Commission and States with which the Commission 
     has entered into an agreement under section 274 b., and the 
     screening of shipments to facilities particularly at risk for 
     sabotage of radiation sources to ensure that they do not 
     contain explosives.
       ``g. Definition.--For purposes of this section, the term 
     `radiation source' means any sealed or unsealed source whose 
     activity levels are within Category 1, Category 2, or 
     Category 3 as defined under the Code of Conduct on the Safety 
     and Security of Radioactive Sources, approved by the Board of 
     Governors of the International Atomic Energy Agency on 
     September 8, 2003.''.
       (b) Table of Sections Amendment.--The table of sections of 
     the Atomic Energy Act of 1954 is amended by adding at the end 
     of the items relating to chapter 14 the following new items:

``Sec. 170B. Uranium supply
``Sec. 170C. Radiation source protection''.

     SEC. 3. TREATMENT OF ACCELERATOR-PRODUCED AND OTHER 
                   RADIOACTIVE MATERIAL AS BY-PRODUCT MATERIAL.

       (a) Definition of Byproduct Material.--Section 11 e. of the 
     Atomic Energy Act of 1954 (42 U.S.C. 2014(e)) is amended--
       (1) by striking ``means (1) any radioactive'' and inserting 
     ``means--
       ``(1) any radioactive'';
       (2) by striking ``material, and (2) the tailings'' and 
     inserting ``material;
       ``(2) the tailings''; and
       (3) by striking ``content.'' and inserting ``content;
       ``(3)(A) any discrete source of radium that is produced, 
     extracted, or converted after extraction, before, on, or 
     after the date of enactment of this paragraph for use in 
     commercial, medical, or research activity; or
       ``(B) any material that--
       ``(i) has been made radioactive by use of a particle 
     accelerator; and
       ``(ii) is produced, extracted, or converted after 
     extraction, before, on, or after the date of enactment of 
     this paragraph for use in commercial, medical, or research 
     activity; and
       ``(4) any discrete source of naturally occurring 
     radioactive material, other than source material, that--
       ``(A) has been removed from the natural environment and has 
     been concentrated to levels greater than that found in the 
     natural environment due to human activities; and
       ``(B) before, on, or after the date of enactment of this 
     paragraph, is extracted or converted after extraction for use 
     in commercial, medical, or research activity.''.
       (b) Agreements.--Section 274 b. of the Atomic Energy Act of 
     1954 (42 U.S.C. 2021(b)) is amended--
       (1) by amending paragraph (1) to read as follows:
       ``(1) byproduct materials (as defined in section 11 e.);'';
       (2) by striking paragraph (2); and
       (3) by redesignating paragraphs (3) and (4) as paragraphs 
     (2) and (3), respectively.
       (c) Regulations.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Nuclear Regulatory Commission, 
     after consultation with States and other stakeholders, shall 
     promulgate final regulations as the Commission considers 
     necessary to implement this Act and the amendments made by 
     this Act. Such regulations shall include a definition of the 
     term ``discrete'' for purposes of paragraphs (3) and (4) of 
     section 11 e. of the Atomic Energy Act of 1954 (as added by 
     subsection (a)) that is designed to ensure that byproduct 
     material is controlled in a manner consistent with other 
     materials that pose the same threat to public health and 
     safety and the common defense and security.
       (2) Cooperation.--The Commission shall cooperate with the 
     States in formulating the regulations under paragraph (1), 
     and to the extent practicable shall use existing State 
     consensus standards.
       (3) Transition.--To ensure an orderly transition of 
     regulatory authority with respect to byproduct material as 
     defined in paragraphs (3) and (4) of section 11 e. of the 
     Atomic Energy Act of 1954 (as added by subsection (a)), the 
     regulations promulgated under paragraph (1) shall include a 
     transition plan, developed in coordination with States, for--
       (A) States that have not, before such plan is issued, 
     entered into an agreement with the Commission under section 
     274 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2021(b)); 
     and
       (B) States that have entered into such an agreement with 
     the Commission, including, in the case of a State that has 
     entered into such an agreement and has certified that it has 
     an existing State program for licensing of the byproduct 
     material defined in paragraphs (3) and (4) of section 11 e. 
     of the Atomic Energy Act of 1954 (as added by subsection (a)) 
     that is adequate to protect public health and safety, 
     provision for assumption by the State of regulatory 
     responsibility for such byproduct material through an 
     administrative process that--
       (i) provides interim provisional recognition of an existing 
     State program for licensing the byproduct material until 
     adoption of an amended agreement under section 274 b.; and
       (ii) requires that the byproduct material is included in 
     the periodic reviews of the State programs for adequacy and 
     compatibility required under section 274 j.(1).
       (4) Availability of radiopharmaceuticals.--In its 
     promulgation of final rules under paragraph (1), the 
     Commission shall consider the impact on the availability of 
     radiopharmaceuticals to the physicians and patients whose 
     medical treatment relies on them.
       (d) Waste Disposal.--
       (1) In general.--Section 81 of the Atomic Energy Act of 
     1954 (42 U.S.C. 2111) is amended by adding at the end the 
     following: ``Byproduct material may only be transferred to 
     and disposed of in a disposal facility licensed by the 
     Commission, if the disposal facility meets the licensing 
     requirements of the Commission and is adequate to protect 
     public health and safety, or a disposal facility licensed by 
     a State that has entered into an agreement with the 
     Commission under section 274 b., if the disposal facility 
     meets requirements of the State that are compatible with the 
     licensing requirements of the Commission and is adequate to 
     protect public health and safety.''.
       (2) Byproduct material not considered low-level radioactive 
     waste.--Section 2(9) of the Low-Level Radioactive Waste 
     Policy Act (42 U.S.C. 2021b(9)) is amended by adding after 
     subparagraph (B) the following:
     ``Such term shall not include byproduct material as defined 
     in paragraphs (3) and (4) of section 11 e. of the Atomic 
     Energy Act of 1954.''.
       (e) Effective Date.--Subsections (a), (b), and (d) shall 
     take effect 1 year after the date of enactment of this Act.

     SEC. 4. RADIATION SOURCES CONTROLLED BY DEPARTMENT OF ENERGY.

       (a) Nuclear Fuel.--
       (1) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary of Energy shall transmit 
     to Congress a report accounting for the location and status 
     of all nuclear fuel that has been exported by the Federal 
     Government.
       (2) Reacquisition.--
       (A) In general.--The Secretary of Energy shall, to the 
     maximum extent practicable, reacquire nuclear fuel described 
     in paragraph (1) for disposal, giving highest priority to 
     nuclear fuel that is--
       (i) in a location that is not secure; or
       (ii) in a country that does not have sufficient resources 
     to either properly dispose of the nuclear fuel or return the 
     nuclear fuel to the United States for disposal.
       (B) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy $50,000,000 for 
     each of the fiscal years 2006 through 2010 for carrying out 
     subparagraph (A).
       (b) Radiation Sources and Sealed Sources of Plutonium.--
       (1) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary of Energy shall transmit 
     to Congress a report accounting for the location and status 
     of all radiation sources (as defined in section 170C(g) of 
     the Atomic Energy Act of 1954, as added by section 1 of this 
     Act) and sealed sources of plutonium weighing more than 1 
     gram that have been exported by the Federal Government.
       (2) Reacquisition.--
       (A) In general.--The Secretary of Energy shall, to the 
     maximum extent practicable, reacquire radiation sources and 
     sealed sources of plutonium described in paragraph (1) for 
     disposal that are--
       (i) in a location that is not secure; or
       (ii) in a country that does not have sufficient resources 
     to either properly dispose of the radiation sources and 
     sealed sources of plutonium or return the radiation sources 
     and sealed sources of plutonium to the United States for 
     disposal.
       (B) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy $30,000,000 for 
     each of the fiscal years 2006 through 2010 for carrying out 
     subparagraph (A).
                                 ______
                                 
      By Mr. McCAIN (for himself and Mr. Lieberman):
  S. 1151. A bill to provide for a program to accelerate the reduction 
of greenhouse gas emissions in the United States by establishing a 
market-driven system of greenhouse gas tradeable allowances, to limit 
greenhouse gas emissions in the United States and reduce dependence 
upon foreign oil, to support the deployment of new climate change-
related technologies, and ensure benefits to consumers; to the 
Committee on Environment and Public Works.
  Mr. McCAIN. Mr. President, I am pleased to join with Senator 
Lieberman today in introducing an amended version of the Climate 
Stewardship Act, which we introduced in February.

[[Page 11575]]

  The legislation we submit today incorporates the provisions of S. 
342, the Climate Stewardship Act of 2005, in its entirety, along with a 
new comprehensive title regarding the development and deployment of 
climate change reduction technologies. This new title, when combined 
with the ``cap and trade'' provisions of the previously introduced 
bill, will promote the commercialization of technologies that can 
significantly reduce greenhouse gas emissions, mitigate the impacts of 
climate change, and increase the Nation's energy independence. And, it 
will help to keep America at the cutting edge of innovation where the 
jobs and trade opportunities of the new economy are to be found.
  In fact, the ``cap and trade'' provisions and the new technology 
title are complementary parts of a comprehensive program that will 
allow us to usher in an new energy era, an era of responsible and 
innovative energy production and use that will yield enormous 
environmental, economic, and diplomatic benefits. The ``cap and trade'' 
portion provides the economic driver for existing and new technologies 
capable of supplying reliable and clean energy and making the best use 
of America's available energy resources. Because of the multiple 
benefits promised by this comprehensive program, we expect that the new 
bill will attract additional support for the vital purposes of the 
Climate Stewardship Act. We simply need the political will to match the 
public's concern about climate change, the economic interests of 
business and consumers, and American technological ingenuity and 
expertise.
  Our comprehensive bill sets forth a sound course toward a productive, 
secure, and clean energy future. Its provisions are based on the 
important efforts undertaken by academia, Government, and business over 
the past decade to determine the best ways and means towards This 
energy future. Most of these studies have shared two common findings. 
First, significant reductions in greenhouse gases--well beyond the 
modest goals of our bill--are feasible over the next 10 to 20 years 
using technologies available today. Second, the most important 
technological deployment opportunities to reduce emissions over the 
next two decades lie with energy efficient technologies and renewable 
energy sources, including solar, wind, and biofuels. For example, in 
the electric power sector, which accounts for one-third of U.S. 
emissions, major pollution reductions can be achieved by improving the 
efficiency of existing fossil fuel plants, adding new reactors designs 
for nuclear power, expanding use of renewable power sources, and 
significantly reducing electricity demand with the use of energy-saving 
technologies currently available to residential and commercial 
consumers. These clean technologies need to be promoted and that is 
what spurs our action today.
  Before describing the details of this legislation, I think it is 
important to talk about what has occurred since the Senate vote on this 
issue in October 2003. For example, the scientific evidence of human-
induced climate change has grown even more abundant. But just since 
February of this year, when I highlighted the results of the Arctic 
Climate Impact Assessment, even more startling evidence about the 
Arctic region has been revealed. In a recent Congressional briefing, 
Dr. Robert Corell, chair of Arctic Climate Impact Assessment, presented 
recent data indicating that climate change in the Arctic is occurring 
more rapidly than previously thought. Annual average arctic 
temperatures have increased at twice the rate of global temperatures 
over the past several decades, with some regions increasing by five to 
ten times the global average.
  The latest observations show Alaska's 2004 June-July-August mean 
temperature to be nearly 5 degrees Fahrenheit, 2.8 degrees Celsius, 
above the 1971-2000 historic mean, and permafrost temperature 
increasing enough to cause it to start melting. Dr. Corell said the 
Greenland ice sheet is melting more rapidly than thought even 5 years 
ago, and that the climate models indicate that warming over Greenland 
is likely to be up to three times the global average, with warming 
projected to be in the range of 5 to 11 degrees Fahrenheit, 3 to 6 
degrees Celsius, which will most certainly lead to sea-level rise. 
These are remarkable new scientific findings.
  It isn't surprising that just this past Tuesday, indigenous leaders 
from Arctic regions called on the European Union to do more to fight 
global warming and to consider giving aid to their peoples, saying 
their way of life is at risk. Global warming is said to be causing the 
arrival in the far north of mosquitoes bearing infectious diseases. And 
in Scandinavia, more frequent rains in the winter are causing sheets of 
ice to develop on top of snow, causing animals to die of hunger because 
they cannot reach the grass underneath.

       We are not asking for sympathy, said Larisa Abrutina of the 
     Russian Association of Indigenous Peoples of the North. We 
     are asking each country in the world to examine if it is 
     truly doing its part to slow climate change.

  The efforts taking place globally to address climate change have 
gained even greater prominence. For example, British Prime Minister 
Tony Blair has made climate change one of his top two issues during his 
Presidency of the G8. Mr. Blair's commitment to addressing climate 
change should be commended. He has chosen to take action and not to 
hide behind the uncertainties that the science community will soon 
resolve. The Prime Minister made it clear in a January speech at World 
Economic Forum in Davos as to his intentions when he said:

     . . . if America wants the rest of the world to be a part of 
     the agenda it has set, it must be a part of their agenda too.

  The top two issues that Prime Minister Blair has chosen to deal with 
are climate change and poverty in Africa. It is interesting to note 
that a recent article in the New York Times highlighted the connection 
between the two issues. The article highlights that a 50-year-long 
drying trend is likely to continue and appears to be tightly linked to 
substantial warming of the Indian Ocean. According to Dr. James 
Hurrell, a scientist at the National Center for Atmospheric Research:

     . . . the Indian Oceans shows very clear and dramatic warming 
     into the future, which means more and more drought for 
     southern Africa. It is consistent with what we would expect 
     from an increase in greenhouse gases.

  It appears that Mr. Blair's two priorities are quickly becoming one 
enormous challenge.
  In its September 2004 issue, The National Geographic devotes 74 pages 
laying out in great detail the necessity of tackling our planet's 
problem of global warming. In an introductory piece, Editor-in-Chief 
Bill Allen described just how important he thinks this particular 
series of articles is:

       Why would I publish articles that make people angry enough 
     to stop subscribing? That's easy. These three stories cover 
     subjects that are too important to ignore. From Antarctica to 
     Alaska to Bangladesh, a global warming trend is altering 
     habitats, with devastating ecological and economic effects. . 
     . This isn't science fiction or a Hollywood movie. We're not 
     going to show you waves swamping the Statue of Liberty. But 
     we are going to take you all over the world to show you the 
     hard truth as scientists see it. I can live with some 
     canceled memberships. I'd have a harder time looking at 
     myself in the mirror if I didn't bring you the biggest story 
     in geography today.

  The articles highlight many interesting facts. Dr. Lonnie Thompson of 
Ohio State University collects ice cores from glaciers around the 
world, including the famed snows of Kilimanjaro, which could vanish in 
15 years. According to Dr. Thompson, ``What glaciers are telling us, is 
that it is now warmer than it has been in the past 2,000 years over 
vast areas of the planet.'' Many of the ice cores he has in his freezer 
may soon contain the only remains of the glaciers from which they came 
from.
  Highlighted quotes from the articles include: Things that normally 
happen in geologic time are happening during the span of a human 
lifetime. The future breakdown of the thermohaline circulation remains 
a disturbing possibility. More than a hundred million people worldwide 
live within 3 feet of mean sea level. At some point, as temperatures 
continue to rise, species will

[[Page 11576]]

have no room to run. The natural cycles of interdependent creatures may 
fall out of sync. We will have a better idea of the actual changes in 
30 years. But it is going to be a very different world.
  Global warming demands urgent action on all fronts, and we have an 
obligation to promote the technologies that can help us meet the 
challenge. Our aim has never been simply to introduce climate 
stewardship legislation. Rather our purpose is to have legislation 
enacted to begin to address the urgent global warming crisis that is 
upon us. This effort cannot be about political expediency. It must be 
about practical realities and addressing the most pressing issue facing 
not only our nation, but the world. We believe that our legislation 
offers practical and effective solutions and we urge each members 
careful consideration and support.
  I will include for the Record a more detailed description of the 
various components of the new technology title. However, I do want to 
describe some of the key provisions designed to enhance innovation and 
commercialization in key areas. These include zero and low greenhouse 
gas emitting power generation, such as nuclear, coal gasification, 
solar and other renewables, geological carbon sequestration, and 
biofuels:
  The bill directs the Secretary of Commerce, through the former 
Technology Administration, which would be renamed the Innovation 
Administration, to develop and implement new policies that foster 
technological innovation to address global warming. These new 
directives include: developing and implementing strategic plans to 
promote technological innovation; identifying and removing barriers to 
the research, development, and commercialization of key technologies; 
prioritizing and maximizing key federal R&D programs to aid innovation; 
(establishing public/private partnerships to meet vital innovation 
goals; and promoting national infrastructure and educational 
initiatives that support innovation objectives.
  It also authorizes the Secretary of Energy to establish public/
private partnerships to promote the commercialization of climate change 
technologies by working with industry to advance the design and 
demonstration of zero and low emission technologies in the 
transportation and electric generation sectors. Specifically, the 
Secretary would be authorized to partner with industry to share the 
cost, 50/50, of ``first-of-a-kind'' designs for advanced coal, nuclear 
energy, solar and biofuels. Moreover, each time that a utility builds a 
plant based on the ``first-of-a-kind engineering'' design authorized by 
this bill, a ``royalty'' type payment will be paid by the utility to 
reimburse the original amount provided by the Government.
  After the detail design phase is complete, the Secretary would be 
able to provide loans or loan guarantees, Up to 80 percent, for the 
construction of these new designs including three nuclear plant designs 
certified by the NRC that would produce zero greenhouse gas emissions; 
three advanced coal gasification plants with carbon capture and storage 
that make use of our abundant coal resources while storing carbon 
emissions underground; three large scale solar energy plants to begin 
to tap the enormous potential of this completely clean energy source; 
and three large scale facilities to produce the clean, efficient, and 
plentiful biofuel of the future--cellulosic ethanol.
  The loan program will be administered by a Climate Technology 
Financing Board, whose membership will include the Secretary of Energy, 
a representative from the Climate Change Credit Corporation, as would 
be created in the bill, and others with pertinent expertise. Once each 
plant is operational, the private partner will be obligated to pay back 
these loans from the government, as is the case with any construction 
loan.
  I think it is important to be very clear about this ambitious, but 
necessary, technology title. We intend that much, if not all, of the 
costs of the demonstration initiatives, along with the loan program, 
will be financed by the early sale of emission allowances through the 
Climate Change Credit Corporation under the cap and trade program, so 
that industry and the market will foot much of the bill, not the 
taxpayers. And, as I already mentioned, the bill requires that any 
Federal money used to build plants will be repaid by the utility when 
the plant becomes operational.
  Finally, the bill contains a mechanism requiring utilities to pay 
reimbursement ``royalties'' as they build plants based on zero and low 
emission designs created with Federal assistance. These funding 
provisions are more fair and certain than requiring taxpayers to cover 
the entire costs of these programs and depending upon future 
appropriations. But there will be some costs involved. That is why it 
is important to weigh these expenditures against the staggering cost of 
inaction on global warming. I think we will find more than a justified 
cost-benefit outcome.
  In addition to promoting new or underutilized technologies, the bill 
also includes a provision to aid in the deployment of available and 
efficient energy technologies. This would be accomplished through a 
``reverse auction'' provision, which would establish a cost effective 
and proven mechanism for Federal procurement and incentives. Providers' 
``bids'' would be evaluated by the Secretary on their ability to 
reduce, eliminate, or sequester greenhouse gas emissions.
  The ``reverse auction'' program would be funded initially by the 
taxpayers but eventually would be funded by the proceeds from the 
annual auction of tradeable allowances conducted by the Climate Change 
Credit Corporation under the cap and trade program.
  I want to clarify that this bill doesn't propose to dictate to 
industry what is economically prudent for their particular operations. 
Rather, it provides a basis for the selection and implementation of 
their own market-based solutions, using a flexible emissions trading 
system model that has successfully reduced acid rain pollution under 
the Clean Air Act at a fraction of anticipated costs--less than 10 
percent of the costs that some had predicted when the legislation was 
enacted. That successful model can and must be used to address this 
urgent and growing global warming crisis.
  The ``cap and trade'' approach to emission management is a method 
endorsed by Congress and free-market proponents for over 15 years after 
it was first applied to sulfur dioxide pollution. Applying the same 
model to carbon dioxide and other greenhouse gases is a matter of good 
policy and simple, common sense. It is an approach endorsed by industry 
leaders such as Jeffrey Immelt, CEO of General Electric, one of the 
largest companies in the U.S.
  Moreover, using the proven market principles that underlie cap and 
trade will harness American ingenuity and innovation and do more to 
spur the innovation and commercialization of advanced environmental 
technologies than any system of previous energy-bill style subsidies 
that Congress can devise.
  Three decades of assorted energy bills prove that while subsidies to 
promote alternative energy technologies may sometimes help, alone they 
are not transformational. In the 1970s, Americans were waiting in line 
for limited supplies of high priced gasoline. We created a Department 
of Energy to help us find a better way. Yet today, 30 years later, we 
remain wedded to fossil fuels, economically beholden to the Middle East 
and we continue to alter the makeup of the upper atmosphere with the 
ever-increasing volume of greenhouse gas emissions. Our dividend is 
continued energy dependence and global warming that places our nation 
and the globe at enormous environmental and economic risk. Not a very 
good deal.
  Cap and trade is the transformational mechanism for reducing carbon 
dioxide emissions, protecting the global environment, diversifying the 
Nation's energy mix, advancing our economy, and spurring the 
development and deployment of new and improved technologies that can do 
the job. It is indispensable to the task before us.

[[Page 11577]]

  The Climate Stewardship and Innovation Act does not prescribe the 
exact formula by which allowances will be allocated under a cap and 
trade system. This should be determined administratively through a 
process developed with great care to achieve the principles and 
purposes of the Act. This includes assuring that high emitting 
utilities have ample incentives to clean up and can make emission 
reductions economically and that low emitting utilities are treated 
justly and recognized for their efficiency. Getting this balance right 
will not be easy, but it can and must be done.
  The fact remains that, if enacted, the bill's emission cap will not 
go into effect for another 5 years. In the interim there is much that 
the country can and should do to promote the most environmentally and 
economically promising technologies. This includes removing unnecessary 
barriers to commercialization of new technologies so that new plants, 
products, and processes can move more efficiently from design and 
development, to demonstration and, ultimately, to the marketplace. 
Again, without cap and trade, these efforts will pale, but the new 
technology title we propose will work hand in glove with the emission 
cap and trade system to meet our objectives.
  As I mentioned, the new title contains a host of measures to promote 
the commercialization of zero and low-emission electric generation 
technologies, including nuclear, clean coal, solar and other renewable 
energies, and biofuels.
  I want to take some time to address the bill's nuclear provisions. 
Although these provisions are only part of the comprehensive technology 
package, I am sure they will be the focus of much attention.
  I know that some of our friends in the environmental community 
maintain strong objections to nuclear energy, even though it supplies 
nearly 20 percent of the electricity generated in the U.S. and much 
higher proportions in places such as France, Belgium, Sweden and 
Switzerland--countries that aren't exactly known for their 
environmental disregard. But the fact is, nuclear is clean, producing 
zero emissions, while the burning of fossil fuels to generate 
electricity produces approximately 33 percent of the greenhouse gases 
accumulating in the atmosphere, and is a major contributor to air 
pollution affecting our communities.
  The idea that nuclear power should play no role in our energy mix is 
an unsustainable position, particularly given the urgency and magnitude 
of the threat posed by global warming which most regard as the greatest 
environmental threat to the planet.
  The International Energy Agency estimates that the world's energy 
consumption is expected to rise over 65 percent within the next 15 
years. If the demand for electricity is met using traditional coal-
fired power plants, not only will we fail to reduce carbon emissions as 
necessary, the level of carbon in the atmosphere will skyrocket, 
intensifying the greenhouse effect and the global warming it produces.
  As nuclear plants are decommissioned, the percentage of U.S. 
electricity produced by this zero emission technology will actually 
decline. Therefore, at a minimum, we must make efforts to maintain 
nuclear energy's level of contribution, so that this capacity is not 
replaced with higher emitting alternatives. I, for one, believe it can 
and should play an even greater role, not because I have some 
inordinate love affair with splitting the atom, but for the very simple 
reason that we must support sustainable, zero-emission alternatives 
such as nuclear if we are serious about addressing the problem of 
global warming.
  I would like to submit for the record a piece written by Nicholas 
Kristof of the New York Times. Mr. Kristof made the following 
observation: ``It's increasingly clear that the biggest environmental 
threat we face is actually global warming and that leads to a 
corollary: nuclear energy is green.'' He goes on to quote James 
Lovelock, a British scientist who created the Gaia principle that holds 
the earth is a self-regulating organism. He quoted Mr. Lovelock as 
follows:

       I am a Green, and I entreat my friends in the movement to 
     drop their wrongheaded objection to nuclear energy. Every 
     year that we continue burning carbon makes it worse for our 
     descendents. Only one immediately available source does not 
     cause global warming, and that is nuclear energy.

  I have always been and will remain a committed supporter of solar and 
renewable energy. Renewables hold great promise, and, indeed, the 
technology title contains equally strong incentives in their favor. But 
today solar and renewables account for only about 3 percent our energy 
mix. We have a long way to go, and that is one of the objectives of 
this legislation--to help promote these energy technologies.
  I want to stress nothing in this title alters, in any way, the 
responsibilities and authorities of the Nuclear Regulatory Commission. 
Safety and security will remain, as they should, paramount in the 
citing, design, construction and operation of nuclear power plants. And 
the winnowing effect of the free market, as it should, will still 
determine which technologies succeed or fail in the market place. But 
the idea that a zero-emission technology such as nuclear has little or 
no place in our energy mix is just as antiquated, out-of-step and 
counter-productive as our continued dependence on fossil fuels. Should 
it prevail, our climate stewardship and clean air goals will be 
virtually impossible to meet.
  The environmental benefit of nuclear energy is exactly why during his 
tenure, my friend, Morris Udall, one of the greatest environmental 
champions the United States has ever known, sponsored legislation in 
the House, as I did in the Senate, to develop a standardized nuclear 
reactor that would maximize safety, security, and efficiency. The 
Department of Energy has done much of the work called for by that 
legislation. Now it is time for the logical next steps. The new title 
of this legislation promotes these steps by authorizing Federal 
partnership to develop first of a kind engineering for the latest 
reactor designs, and then to construct three demonstration plants. Once 
the demonstration has been made, free-market competition will take it 
from there. And the bill provides similar partnership mechanisms for 
the other clean technologies, so we are in no way favoring one 
technology over another.
  No doubt, some people will object to the idea of the Federal 
Government playing any role in helping demonstrate and commercialize 
new and beneficial nuclear designs. I have spent 20 years in this body 
fighting for the responsible use of taxpayer dollars and against 
porkbarrel spending and corporate welfare. I will continue to do so.
  The fact remains that fossil fuels have been subsidized for many 
decades at levels that can scarcely be calculated. The enormous 
economic costs of damage caused by air pollution and greenhouse gas 
emissions to the environment and human health are not factored into the 
price of power produced by fossil-fueled technologies. Yet it is a cost 
that we all bear, too often in terms of ill-health and diminished 
quality of life. That is simply a matter of fact.
  It is also inescapable that the ability to ``externalize'' these 
costs places clean competitors at a great disadvantage. Based on that 
fact, and in light of the enormous environmental and economic risk 
posed by global warming, I believe that providing zero and low emission 
technologies such as nuclear a boost into the market place where they 
can compete, and either sink or swim, is responsible public policy, and 
a matter of simple public necessity, particularly, as we enact a cap on 
carbon emissions.
  The Navy has operated nuclear powered submarine for more than 50 
years and has an impressive safety and performance record. The Naval 
Reactors program has demonstrated that nuclear power can be done 
safely. One of the underpinning of its safety record is the approach 
used in its reactor designs, which is to learn and build upon previous 
designs. Unfortunately for the commercial nuclear industry, they have 
not had the opportunity to use such an approach since the industry has 
not been able to build a reactor in

[[Page 11578]]

over the past 25 years. This lapse in construction has led us to where 
we are today with the industry's aging infrastructure. As we have 
learned from other industries, this in itself represents a great risk 
to public safety.
  I want to close my comments on the nuclear provisions with two 
thoughts. A recent article in Technology Review seems particularly 
pertinent to those with reservations about nuclear power. It stated:

       The best way for doubters to control a new technology is to 
     embrace it, lest it remain in the hands of the enthusiasts.

  This is particularly sage advice because, frankly, the facts make it 
inescapably clear--those who are serious about the problem of global 
warming are serious about finding a solution. And the rule of nuclear 
energy which has no emissions has to be given due consideration.
  Mr. President, don't simply take my word regarding the magnitude of 
the global warming problem. Consider the National Academy of Sciences 
which reported in 2001 that:

       Greenhouse gases are accumulating in the Earth's atmosphere 
     as a result of human activities, causing surface air 
     temperatures and subsurface ocean temperatures to rise. 
     Temperatures are, in fact, rising. The changes observed over 
     the last several decades are likely mostly due to human 
     activities. . . .

  Also consider the warning on NASA's website which states:

       With the possible exception of another world war, a giant 
     asteroid, or an incurable plague, global warming may be the 
     single largest threat to our planet.

  Consider the words of the EPA that

       Rising global temperatures are expected to raise sea level, 
     and change precipitation and other local climate conditions. 
     Changing regional climate could alter forest, crop yields and 
     water supplies. . . .

  And, let's consider the views of President Bush's Science Advisor, 
Dr. John Marburger who says that,

       Global warming exists, an we have to do something about it, 
     and what we have to do about it is reduce carbon dioxide.

  Again, the chief science advisor to the President of the United 
States says that global warming exists, and what we have to do about it 
is to reduce carbon dioxide.
  The road ahead on climate change is a difficult and challenging one. 
However, with the appropriate investments in technology and the 
innovation process, we can and will prevail. Innovation and technology 
have helped us face many of our national challenges in the past, and 
can be equally important in this latest global challenge.
  Advocates of the status quo seem to suggest that we do nothing, or 
next to nothing, about global warming because we don't know how bad the 
problem might become, and many of the worst effects of climate change 
are expected to occur in the future. This attitude reflects a selfish, 
live-for-today attitude unworthy of a great nation, and thankfully, not 
one practiced by preceding generations of Americans who devoted 
themselves to securing a bright and prosperous tomorrow for future 
generations, not just their own.
  When looking back at Earth from space, the astronauts of Apollo 11 
could see features such as the Great Wall of China and forest fires 
dotting the globe. They were moved by how small, solitary and fragile 
the earth looked from space. Our small, solitary and fragile planet is 
the only one we have and the United States of America is privileged to 
lead in all areas bearing on the advance of mankind. And lead again, we 
must, Mr. President. It is our privilege and sacred obligation as 
Americans.
  I ask unanimous consent an editorial from the New York Times be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Apr. 12, 2005]

           Nuclear Power Has Become a Green Source of Energy

                         (By Nicholas Kristof)

       If only one thing used to be crystal clear to any 
     environmentalist, it was that nuclear energy was the 
     deadliest threat this planet faced. That's why Dick Gregory 
     pledged at a huge antinuke demonstration in 1979 that he 
     would eat no solid food until all U.S. nuclear plants were 
     shut down.
       Gregory may be getting hungry.
       But it's time for the rest of us to drop that hostility to 
     nuclear power. It's increasingly clear that the biggest 
     environmental threat we face is actually global warming, and 
     that leads to a corollary: Nuclear energy is green.
       Nuclear power, in contrast to other sources, produces no 
     greenhouse gases. President Bush's overall environmental 
     policy gives me the shivers, but he's right to push ahead for 
     nuclear energy. There haven't been any successful orders for 
     new nuclear plants since 1973, but several proposals for new 
     plants are now moving ahead--and that's good for the world we 
     live in.
       Global energy demand will rise 60 percent during the next 
     25 years, according to the International Energy Agency, and 
     nuclear power is the cleanest and best bet to fill that gap.
       Solar power is a disappointment, still accounting for only 
     about one-fifth of 1 percent of the nation's electricity and 
     costing about five times as much as other sources. Wind is 
     promising because its costs have fallen 80 percent, but it 
     suffers from one big problem: Wind doesn't blow all the time. 
     It's difficult to rely on a source that comes and goes.
       In contrast, nuclear energy already makes up 20 percent of 
     America's power, not to mention 75 percent of France's. A 
     sensible energy plan must encourage conservation--far more 
     than Bush's plans do--and promote things like hybrid vehicles 
     and hydrogen fuel cells. But for now, nuclear power is the 
     only source that doesn't contribute to global warming and 
     that can quickly become a mainstay of the grid.
       Is it safe? No, not entirely. Three Mile Island and 
     Chernobyl demonstrated that, and there are also risks from 
     terrorists.
       Then again, the world now has a half-century of experience 
     with nuclear power plants, 440 of them around the world, and 
     they have proved safer so far than the alternatives. 
     America's biggest power source is now coal, which kills about 
     25,000 people a year through soot in the air.
       To put it another way, nuclear energy seems much safer than 
     our dependency on coal, which kills more than 60 people every 
     day.
       Moreover, nuclear technology has become far safer through 
     the years. The future may belong to pebble-bed reactors, a 
     new design that promises to be both highly efficient and 
     incapable of a meltdown.
       Radioactive wastes are a challenge. But burdening future 
     generations with nuclear wastes in deep shafts is probably 
     more reasonable than burdening them with a warmer world in 
     which Manhattan is under water.
       Right now, the only significant U.S. source of electricity 
     that does not involve carbon emissions is hydropower. But 
     salmon runs have declined so much that we should be ripping 
     out dams, not adding more.
       What killed nuclear power in the past was cold economics. 
     Major studies at MIT and elsewhere show that nuclear power is 
     still a bit more expensive than new coal or natural gas 
     plants, but in the same ballpark if fossil fuel prices rise. 
     And if a $200-per-ton tax were imposed on carbon emissions, 
     nuclear energy would become cheaper than coal from new 
     plants.
       So it's time to welcome nuclear energy as green (though not 
     to subsidize it with direct handouts, as the nuclear industry 
     would like). Indeed, some environmentalists are already 
     climbing onboard. For example, the National Commission on 
     Energy Policy, a privately financed effort involving 
     environmentalists, academics and industry representatives, 
     issued a report in December that favors new nuclear plants.
       One of the most eloquent advocates of nuclear energy is 
     James Lovelock, the British scientist who created the Gaia 
     hypothesis, which holds that Earth is, in effect, a self-
     regulating organism.
       ``I am a Green, and I entreat my friends in the movement to 
     drop their wrongheaded objection to nuclear energy,'' 
     Lovelock writes, adding: ``Every year that we continue 
     burning carbon makes it worse for our descendents. Only one 
     immediately available source does not cause global warming, 
     and that is nuclear energy.''

  Mr. LIEBERMAN. Mr. President, I rise today with my friend and 
colleague Senator John McCain to introduce a second version of our 
Climate Stewardship Act with improvements--the Climate Stewardship and 
Innovation Act (CSIA).
  In the computer age, we might call this Climate Stewardship 2.0. In 
this new version we take the time-tested strengths of the Climate 
Stewardship Act--like the emissions cap and trade program--and add new 
features to spur innovation and lead us into a 21st Century energy 
economy that prizes zero- or low-carbon emission technologies.
  And we do all this with market-driven programs that will promote a 
competition for efficient technologies and that don't drain the federal 
budget.
  Let me start with the basics.
  Climate change is real and its costs to the economy will be 
devastating if we don't act.
  Consider this very real example: 184 Alaskan coastal villages already 
need

[[Page 11579]]

to be relocated because their land and infrastructure are being 
destroyed by advancing seas and warmer temperatures that are melting 
the permafrost.
  It will cost more than $100 million to relocate just one of these 
towns.
  What would be the price if we needed to do the same for New Orleans, 
Miami, or Santa Cruz, California?
  SwissRe, North America's leading reinsurer, projects that climate 
driven disasters could cost global financial centers more than $150 
billion per year within the next ten years.
  The original Climate Stewardship Act asked the American people and 
businesses to reduce their carbon emissions to 2000 levels--which were 
quite close to today's levels by the end of the decade.
  All we are saying is ``Don't make the problem worse! Do no further 
harm.''
  Our proposal--then and now--will reduce carbon emissions by putting a 
price on them with a cap and trade policy similar to the one used so 
successfully in the Clean Air Act of 1990 which reduced acid rain.
  Simply put, a business that doesn't reach its emissions target can 
buy emissions credits from those under the target.
  And, by the way, at the time we debated the acid rain program, 
industry estimated it would cost $1,000 a ton to comply and would ruin 
the economy. Today those emissions credits sell for between $100 and 
$200 a ton.
  America's innovators found a way to make it work for the economy and 
the environment--twin challenges that can and must move together in 
concert, not conflict.
  Because ``cap-and-trade'' creates a price for greenhouse emissions, 
it exposes the true cost of burning fossil fuels and will drive 
investment toward lower-emitting technologies.
  If we are going to meet the challenge of climate change, while making 
sure that our economy remains strong, we need a program that gives 
business and industry both a push and pull.
  The push will come from requiring business and industry to cut their 
greenhouse gas pollution; the pull from giving them incentives to 
innovate, along with financial support for bringing the best 
innovations forward.
  There are many actions we can take today to meet the targets set in 
our original bill, ranging from increasing the efficiency of our 
operations, to boosting the use of renewable energy, for which so many 
states are now admirably pushing. But to advance beyond this goal and 
maintain emissions reductions in the future with a growing economy, we 
will need to push both innovation and the deployment of climate 
friendly technologies that already exist.
  While we're on the subject of technology and investment, I want to be 
sure that everybody sees that our emissions trading market itself will 
unleash a multi-billion dollar flow of capital into technology and 
innovation. Our opponents insist that everybody see the emissions 
reduction requirements of this bill as costs. The truth is that these 
so-called costs are vital investment flows necessary to bring about 
innovation, invention and technological change in an era where our 
climate, our economy and even our national security depend on our 
ability to wean ourselves from our dependence on oil, so much of which 
is imported from unstable regions in the world.
  Because technological change and innovation are so important for both 
climate change and energy independence, our bill creates a dedicated 
public sector mechanism for ensuring that some of that investment flow 
is directed at the technologies we need--including, for example, 
biofuels and clean ways of burning coal, to name just two examples from 
a potentially open-ended menu of climate-friendly technology choices.
  The new bill we are introducing today helps assure that the most 
important and efficient technological alternatives are supported. We do 
not pick winners or losers. That's for the market to do. Our bill is 
technology neutral, but does make sure that if there are barriers to 
developing or using new technologies, the resources are available to 
knock those barriers down.
  This bill provides support for first-of-its-kind innovation or early-
adoption of new energy technologies with minimal cost to the federal 
budget.
  Instead of turning to the taxpayer, our bill uses a self-funding 
mechanism by empowering the Secretary of Energy to use some of the 
money generated through the purchase of emissions credits, funneled 
through a new public corporation our bill creates, to help bring 
innovations to market. And this is not small change. It is a 
substantial multibillion dollar contribution every year.
  Mr. President, this kind of public sector support has many 
encouraging precedents.
  From the telegraph to the Internet, it was the timely intervention of 
the federal government that helped bring new technologies to market.
  And, if we don't help bring these new low-carbon or zero-carbon 
technologies to market, we will be buying them from the nations that 
do.
  We only need look at the popular hybrid cars--low-emitting vehicles 
that consumers have shown they want by the long waiting lists that 
exist to buy them. And then remember that American manufacturers must 
license this technology from Japan.
  Our bill also ensures that assistance is provided to help with the 
transition to new technology and energy production with programs to 
reduce consumer costs, to help dislocated workers and communities, and 
to substantially support the deployment of climate friendly technology 
and energy production.
  We also know that some regions--like my State of Connecticut--and 
businesses like DuPont, BP, and Kodak have already acted pro actively 
and are working to reduce emissions on their own. We commend these 
actions. Even more important, our bill ensures that credit will be 
given to them for their good work.
  Just a few months ago, the head of the international panel on climate 
change, Dr. R. Pachauri, said that ``we are already at a dangerous 
point when it comes to global warming. . . . Immediate and very deep 
cuts in greenhouse gases are needed if humanity is to survive.''
  Let me repeat those last words, ``If humanity is to survive.''
  When I quoted Dr. Pachauri on this floor in February, I reminded the 
Senate that the Bush Administration lobbied heavily for Dr. Pachauri's 
appointment to the IPCC leadership because it considered him a more 
cautious and pragmatic scientist.
  I quote him today because his warning words are so clear and strong.
  Global warming is truly one of the great challenges of our age--a 
challenge where the Heavens and the Earth meet.
  It is a challenge of Biblical proportions--to meet God's call in 
Corinthians to be ``stewards'' of His mysteries--and in Genesis to go 
forth and ``replenish the earth'' to both work and guard the garden.
  If we don't take these simple steps now--steps that are well within 
both our technological and financial grasp--the generations to come 
will rightfully look back at us with scorn and ask why we acted so 
selfishly . . . why we cared only for our own short-term profits and 
comforts . . . and why we left them a world environment in danger. We 
must act on our vision of a better future, a future that is most 
definitely within our reach.
  That is what Senator McCain and I are convinced our CSIA will do.
  We put forth this innovation and technology proposal to start a 
conversation here in the Senate with colleagues whose support we need 
to get to a majority, and to provide some ideas for how to accelerate 
and build a climate friendly future. We hope that our colleagues will 
join us in this conversation so we can put forth--and pass--the best 
proposal possible.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Kerry, Mr. Smith, and Ms. 
        Collins):
  S. 1152. A bill to amend title XVIII of the Social Security Act to 
eliminate discriminatory copayment rates for outpatient psychiatric 
services under the Medicare Program; to the Committee on Finance.

[[Page 11580]]


  Ms. SNOWE. Mr. President, I rise today to introduce the Medicare 
Mental Health Copayment Equity Act of 2005 with my colleagues, Senator 
John Kerry, Senator Gordon Smith, and Senator Susan Collins.
  Briefly, our bill would correct a serious disparity in Medicare 
payment policy for mental health treatment. Medicare beneficiaries 
typically pay 20 percent of the cost of covered outpatient services, 
including doctor's visits, as a ``copayment'' or coinsurance, and 
Medicare pays the remaining 80 percent. But Medicare law imposes a 
special limitation for outpatient mental health services which requires 
patients to pay a much higher copayment, 50 percent. As a result, 
Medicare beneficiaries pay two and a half times as much--50 percent 
coinsurance--for treatment of any mental disorders.
  Our bill will eliminate the disparity in payment by reducing this 
discriminatory copayment over a 6-year period, starting in 2006, from 
the current 50 percent to the standard 20 percent. This means that, in 
2012, patients seeking outpatient treatment for mental illness will pay 
the same 20 percent copayment that is required of Medicare patients 
today who receive outpatient treatment for other illnesses. The goal of 
our bill is ultimately to achieve ``copayment equity'' for Medicare 
mental health services.
  Let me give an example of the current disparity in copayments. If a 
Medicare patient sees a doctor in an office for treatment of cancer, 
heart disease, or the flu, the patient must pay 20 percent of the fee 
for the visit. But if a Medicare patient sees a psychiatrist, 
psychologist, social worker, or other professional in an office for 
treatment of depression, schizophrenia, or any other type of mental 
illness, the patient must pay 50 percent of the fee. What sense does 
this make?
  Indeed, our bill has a larger purpose, to help end an outdated 
distinction--between treatment of physical and mental disorders--and to 
ensure that Medicare beneficiaries have equal access to treatment for 
all their health conditions. Perhaps this disparity would not matter so 
much if mental disorders were less prevalent. But the Surgeon General 
has told us otherwise.
  A landmark report of the Surgeon General in 1999 emphasized the 
importance of access to treatment for mental disorders. The Surgeon 
General found that mental illness was a leading cause--second only to 
cardiovascular diseases--of otherwise healthy years of life lost to 
premature death or disability. The Surgeon General found that the 
occurrence of mental illness among older adults is widespread, with a 
substantial portion of the population aged 55 and older--almost 20 
percent--experiencing specific disorders that are not a part of 
``normal'' aging.
  Older Americans also have the highest rate of suicide in the country, 
and the risk of suicide increases with age. In fact, in the State of 
Maine, the suicide rate for seniors is three times as high as the rate 
for adolescents. It is not surprising, therefore, to find that 
untreated depression among the elderly has substantially increased 
their risk of death by suicide.
  Another sad irony involves individuals with disabilities. Medicare is 
often viewed as health insurance for people over age 65 but it also 
provides health insurance for those with severe disabilities. The 
single most frequent cause of disability for both Social Security and 
Medicare benefits is mental disorders--affecting almost 1.4 million of 
6 million Americans who receive Social Security disability benefits. 
Yet, Medicare pays far less for the critical mental health services 
needed by these beneficiaries than it does for medical treatment for 
their physical disabilities.
  However, the good news is that, today, there are increasingly 
effective treatments for mental illness. The majority of people with 
mental disorders who receive proper treatment can lead productive 
lives. Congress should remove disincentives that inhibit access to 
mental health services so that those seeking treatment for these 
disorders do not have to face financial barriers to care. It is time to 
remove stigmas and overcome the lack of understanding of mental 
disorders by equalizing Medicare copayment requirements for mental 
health services.
  I urge my colleagues to join with me and bring Medicare payment 
policy into the 21st century.
  I would also like to submit letters from the American Psychiatric 
Association and the Mental Health Liaison Group, 36 national 
organizations supporting this legislation, and I ask unanimous consent 
that these letters of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                             American Psychiatric Association,

                                      Arlington, VA, May 26, 2005.
     Hon. Olympia Snowe,
     U.S. Senate,
     Washington, DC.
     Hon. John Kerry,
     U.S. Senate,
     Washington, DC.
       Dear Senator Snowe and Senator Kerry: Later today you will 
     receive a letter, initiated by the American Psychiatric 
     Association, from some 35 members of the Mental Health 
     Liaison Group (MHLG) thanking you for your leadership in 
     again introducing legislation to phase out Medicare's 
     discriminatory 50 percent coinsurance.
       We are of course a cosigner of the MHLG letter, but I 
     wanted to add my own personal thanks for your tireless 
     efforts to end 40 years of discrimination against patients 
     seeking outpatient mental health services under Medicare Part 
     B. It should be simply unacceptable to compel such patients 
     to pay 50 percent of the cost of their care out of their own 
     pockets. The real ``winners'' under your legislation are 
     patients.
       I also wish to specifically acknowledge the hard work and 
     dedication of Sue Walden, Heather Mizeur, and Aaron Jenkins 
     of your staffs. You are each extremely well served by their 
     efforts.
           Sincerely,
                                             James H. Scully, Jr.,
     Medical Director.
                                  ____



                                  Mental Health Liaison Group,

                                     Washington, DC, May 26, 2005.
     Hon. Olympia Snowe,
     Russell Senate Office Building,
     Washington, DC.
     Hon. John Kerry,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senators Snowe and Kerry: The undersigned 
     organizations in the Mental Health Liaison Group, 
     representing patients, health professionals and family 
     members, are pleased to support your legislation, the 
     Medicare Mental Health Copayment Equity Act. Under your 
     legislation, Medicare's historic discriminatory 50 percent 
     coinsurance for outpatient mental health care would be 
     reduced over six years to 20 percent, bringing the 
     coinsurance into line with that required of Medicare 
     beneficiaries for other Part B services.
       Simply put, current law discriminates against Medicare 
     beneficiaries who seek treatment for mental illness. This 
     affects elderly and non-elderly Medicare beneficiaries alike 
     when they seek mental health care. According to the 1999 U.S. 
     Surgeon General's report on mental health, almost 20 percent 
     of elderly individuals have some type of mental disorder 
     uncommon in typical aging. In addition, elderly individuals 
     have the highest rate of suicide in the U.S., often the 
     result of depression. The Surgeon General's report states, 
     ``Late-life depression is particularly costly because of the 
     excess disability that it causes and its deleterious 
     interaction with physical health. Older primary care patients 
     with depression visit the doctor and emergency rooms more 
     often, use more medication, incur higher outpatient charges, 
     and stay longer at the hospital.''
       The 50 percent coinsurance requirement also is unfair to 
     the non-elderly disabled Medicare population. Because many of 
     these individuals have severe mental illnesses combined with 
     low incomes and high medical expenses, a 50 percent 
     coinsurance obligation is a serious patient burden. For 
     elderly and non-elderly Medicare beneficiaries alike, 
     Medicare is a critical source of care. Your legislation to 
     ensure that Medicare beneficiaries needing mental health care 
     incur only the same cost-sharing obligations as required of 
     all other Medicare patients would end the statutory 
     discrimination against Medicare beneficiaries seeking 
     treatment for mental disorders.
       Thank you for your leadership in addressing this important 
     issue for the nation's 40 million Medicare patients.
           Sincerely,
       Alliance for Children and Families; American Academy of 
     Child and Adolescent Psychiatry; American Association for 
     Geriatric Psychiatry; American Association of Children's 
     Residential Centers; American Association of Pastoral 
     Counselors; American Association of Practicing Psychiatrists; 
     American Group Psychotherapy Association; American Managed 
     Behavioral Healthcare Association; American Mental Health 
     Counselors Association; American Occupational Therapy 
     Association; American Psychiatric Association; American 
     Psychiatric Nurses Association.
       American Psychoanalytic Association; American Psychological 
     Association; American Psychotherapy Association; Anxiety

[[Page 11581]]

     Disorders Association of America; Association for the 
     Advancement of Psychology; Association for Ambulatory 
     Behavioral Healthcare; Bazelon Center for Mental Health Law; 
     Children and Adults with Attention-Deficit/Hyperactivity 
     Disorder; Clinical Social Work Federation; Clinical Social 
     Work Guild; Depression and Bipolar Support Alliance; Eating 
     Disorders Coalition for Research, Policy & Action.
       Ensuring Solutions to Alcohol Problems; International 
     Society of Psychiatric-Mental Health Nurses; NAADAC, The 
     Association for Addiction Professionals; National Alliance 
     for the Mentally Ill; National Association for Children's 
     Behavioral Health; National Association for Rural Mental 
     Health; National Association of Anorexia Nervosa and 
     Associated Disorders (ANAD); National Association of Mental 
     Health Planning & Advisory Councils; National Association of 
     Protection and Advocacy Systems; National Association of 
     Psychiatric Health Systems; National Mental Health 
     Association; and Suicide Prevention Action Network USA.
                                 ______
                                 
      By Ms. COLLINS (for herself and Ms. Snowe):
  S. 1154. A bill to extend the Acadia National Park Advisory 
Commission, to provide improved visitor services at the park, and for 
other purposes; to the Committee on Energy and Natural Resources.
  Ms. COLLINS. Mr. President, I rise today to introduce the Acadia 
National Park Improvement Act of 2005. This legislation takes important 
steps to ensure the long-term health of one of America's most beloved 
national parks. It would increase the land acquisition ceiling at 
Acadia by $10 million; facilitate an off-site intermodal transportation 
center for the Island Explorer bus system; and extend the Acadia 
National Park Advisory Commission.
  In 1986, Congress enacted legislation designating the boundary of 
Acadia National Park. However, many private lands were contained within 
the permanent authorized boundary. Congress authorized the Park to 
spend $9.1 million to acquire those lands from willing sellers only. 
While all of that money has now been spent, rising land prices have 
prevented the money from going as far as Congress originally intended.
  There are over 100 private tracts left within the official park 
boundary. Nearly 20 of these tracts are currently available from 
willing sellers, but the park does not have the funds to purchase them. 
My legislation would authorize an additional $10 million to help 
acquire these lands. Since these lands already fall within the 
congressionally authorized boundary, this effort would ``fill in the 
holes'' at Acadia, rather than enlarging the park.
  My legislation will also facilitate the development of an intermodal 
transportation center as part of the Island Explorer bus system. The 
Island Explorer has been extremely successful over its first 5 years. 
These low-emission propane-powered vehicles have carried more than 1.5 
million riders since 1999. In doing so, they removed 424,000 vehicles 
from the park and reduced pollution by 24 tons.
  Unfortunately, the system lacks a central parking and bus boarding 
area. As a result, day use visitors do not have ready access to the 
Island Explorer. My legislation would authorize the Secretary of the 
Interior to provide assistance in the planning, construction, and 
operation of an intermodal transportation center in Trenton, ME. This 
center will include parking for day users, a visitor orientation 
facility highlighting park and regional points of interest, a bus 
boarding area, and a bus maintenance garage. This center, which will be 
built in partnership with the Federal Highway Administration, U.S. 
Department of Transportation, Maine Department of Transportation, and 
other partners, will reduce traffic congestion, preserve park resources 
and the visitor experience, and ensure a vibrant tourist economy.
  Finally, my legislation would extend the 16-member Acadia National 
Park Advisory Commission for an additional 20-year period. This 
commission was created by Congress in 1986 and is currently due to 
expire in 2006. That would be a mistake. The commission consists of 
three Federal representatives, three State representatives, four 
representatives from local towns on Mount Desert Island, three from 
adjacent mainland communities, and three from adjacent offshore 
islands. These representatives have provided invaluable advice relating 
to the management and development of the Park. The commission has 
proven its worth many times over and deserves to be extended for an 
additional 20 years.
  Acadia National Park is a true gem of the Maine coastline. The park 
is one of Maine's most popular tourist destinations, with nearly 3 
million visitors every year. While unsurpassed in beauty, the park's 
ecosystem is also very fragile. Unless we are careful, we risk 
substantial harm to the very place that Mainers and Americans hold so 
dear.
  In 11 years, Acadia will be 100 years old. Age has brought both 
increasing popularity and greater pressures. By providing an extra $10 
million to protect sensitive lands, expanding the highly successful 
Island Explorer transportation system, and extending the Acadia 
National Park Advisory Commission, this legislation will help make the 
park stronger and healthier than ever on the occasion of its centennial 
anniversary.
  Ms. SNOWE. Mr. President, I rise today to offer my cosponsorship to 
the Acadia National Park Improvement Act of 2005. For those of you who 
have not had the good fortune to visit one of the crown jewels in the 
National Park system, Acadia National Park, the first national park 
established east of the Mississippi, is located on the rugged coast of 
Maine, encompassing over 47,000 acres that follow the shoreline, go up 
mountains of sheer granite, dotted with numerous lakes and ponds, 
diverse habitats that create striking scenery and make the park a haven 
for wildlife and plants. This past Earth Day was celebrated by one of 
my staff members along with devotees of the Park on the South Ridge 
Trail of Cadillac Mountain, the highest point on the U.S. Atlantic 
coast, on the same ground where the Wabanaki Indians walked over 6,000 
years ago. They called the surrounding Mount Desert Island Pemetic, 
``the sloping land''.
  Acadia National Park certainly covers a land of contrast and 
diversity, with a variety of freshwater, estuarine, forest and 
intertidal resources and is one of the most visited Parks in the 
national park system, and rightfully so, as it offers magnificent views 
from Cadillac Mountain that sweep down 1,530 feet to the rocky coast 
and ocean below. Besides its natural beauty, the Park brings in $130 
million a year into the State's economy.
  It is because of the great beauty of the Park and its scenic views 
that I have continued my efforts to achieve cleaner air for the area 
and for the entire State. The pristine Park is, unfortunately, a good 
example of how the State is affected by dirty air that blows in from 
away, estimated to be around 80 percent, that is affecting both the air 
we breathe and our ability to enjoy the natural beauty of the 47,000 
acres of the Park.
  I am a devoted fan of the Island Explorer bus system, whose clean 
propane-powered vehicles offer visitors and residents free 
transportation to hiking trails, the unique carriage roads, the island 
beaches and for in-town shopping. It is estimated that the Island 
Explorer buses took the place of an estimated 300,000 vehicles during 
the last four years, and prevented the release of 24 tons of nitrogen 
oxide and volatile organic compounds from car exhaust. I understand 
that other national parks are considering using the positive benefits 
of the Island Explorer system as a transportation model for parks all 
around the country. A great deal of thanks should go to the surrounding 
towns and to L.L. Bean for financing this successful system that helps 
to make the air cleaner and adds to our enjoyment of the activities the 
Park provides.
  The legislation introduced today will help the Park in three specific 
areas; one, it will help the Park by extending the Acadia National Park 
Advisory Commission for 20 years giving local residents the opportunity 
for input into the management of the Park; two, it will increase the 
authorized ceiling for land acquisition funding by $10 million to $28 
million to realize the sharp rise in real estate prices so that 
properties from willing sellers within the Park's boundaries can be 
included into

[[Page 11582]]

the Park; and, three, the legislation will allow the Park to locate an 
intermodal center outside of park boundaries off of Mt. Desert Island 
to give even more assistance to the one road entering and exiting the 
Park by alleviating auto traffic to and on the island and to achieve 
cleaner air.
  I will continue to take actions for additions within the Park 
boundaries, for local input into the management process, for a better 
public transportation system for the Island that will create a 
healthier environment, and better support the Park's ecological 
protections. I look forward to continue working with the people of Mt. 
Desert Island, the Park's Supervisor, and the Friends of Acadia, a 
devoted, independent philanthropy that has raised $15 million in 
private endowments for the Park, on issues important to all of us for 
the preservation of the beautiful landscape, the ocean's coastline, and 
for environmental improvements in Acadia National Park, the very place 
where the first light of day shines on our glorious Nation.
                                 ______
                                 
      By Mr. BROWNBACK (for himself, Mr. Alexander, Mr. Allard, Mr. 
        Bunning, Mr. Chambliss, Mr. Coburn, Mr. Cornyn, Mr. Craig, Mr. 
        Crapo, Mr. DeMint, Mr. Ensign, Mr. Enzi, Mr. Graham, Mrs. 
        Hutchison, Mr. Inhofe, Mr. Isakson, Mr. McCain, Mr. Santorum, 
        Mr. Sessions, Mr. Sununu, Mr. Talent and Mr. Thune):
  S. 1155. A bill to establish a commission to conduct a comprehensive 
review of Federal agencies and programs and to recommend the 
elimination or realignment of duplicative, wasteful, or outdated 
functions, and for other purposes; to the Committee on Homeland 
Security and Governmental Affairs.
  Mr. BROWNBACK. Mr. President, I rise today to introduce the 
Commission on the Accountability and Review of Federal Agencies, CARFA, 
Act with over 20 original cosponsors.
  This is an important measure that I have been developing and 
advocating over the past few years. CARFA's premise is simple: Members 
of Congress need a tool that will help them use taxpayer dollars more 
efficiently.
  Members of Congress need a tool like CARFA because the special 
interest in keeping a program alive is almost always more powerful than 
the general interest to realign or even end a Federal program.
  A good example of this is tobacco. While there is a general interest 
in discouraging smoking--and while we spend many taxpayer dollars to 
this end--there is also strong special interest pressure to keep 
taxpayer tobacco subsidies alive. Thus, the Federal Government both 
subsidizes and discourages tobacco.
  CARFA is the tool that would give members a chance to advance the 
general interest. CARFA would take all Federal Government agencies and 
programs--both discretionary and entitlement--and put them under the 
review of a bipartisan commission. Members of the commission would be 
appointed by both majority and minority leaders in both House of 
Congress and by the President.
  The commission would review Federal agencies and programs in order to 
present draft legislation to the Congress that would realign or 
eliminate duplicative, wasteful, inefficient, outdated, irrelevant, or 
failed agencies and programs.
  Each House of Congress would get one vote on the draft legislation--
up or down--without amendment.
  CARFA would create a new approach to increase the efficiency of the 
Federal Government by giving the general interest a stronger voice in 
the system. For example, there might be a program that is important to 
my home State of Kansas that would be cut by the proposed legislation, 
but I only get one vote and there are a variety of other programs that 
I really do think need to be eliminated.
  Since I only have one vote, I can justify voting for the measure when 
I go back home by showing to my constituents that there were a number 
of other programs that needed to be realigned or cut. Thus, CARFA makes 
the overall goal of balancing the Federal budget more achievable.
  We need CARFA now more than ever. The Federal Government spends 
$2,292,000,000 per year on discretionary and mandatory spending. That 
is a lot of money. My Kansas constituents often say: ``I don't mind 
paying my taxes, but make sure my hard-earned money is well spent.'' At 
a time when Federal spending is at an all time high, topping $20,000 
per household, we owe our constituents the accountability that would 
result from CARFA.
  Last year, we had a bipartisan hearing on CARFA, at which all 
witnesses supported the CARFA concept. We have incorporated some of the 
suggestions made at that hearing, and I believe this year's version of 
CARFA is even better.
  I am pleased that the Senate is already on record supporting the 
CARFA concept through Section 502 of this year's budget resolution, and 
it is my hope that we will be able to work with leadership to see CARFA 
become a reality this year.
                                 ______
                                 
      By Mr. HATCH:
  S. 1156. A bill to amend the Internal Revenue Code of 1986 to extend 
the credit period for electricity produced from renewable resources at 
certain facilities, to extend the credit for electricity produced from 
certain renewable resources, and for other purposes; to the Committee 
on Finance.
  Mr. HATCH. Mr. President, I rise today to introduce a bill, S. 1156, 
to extend and enhance a provision in the Internal Revenue Code that 
gives tax incentives for the production of electricity from renewable 
resources.
  The legislation I am introducing today is central to our Nation's 
goal of achieving energy independence, which is at the heart of the 
energy bill that will soon be considered by the Senate. The Committee 
on Energy and Natural Resources has included in its energy bill a 
renewable energy title that directs the Federal Government ``to the 
extent economically feasible and technically practicable'' to implement 
programs that will produce at least 7.5 percent of the electricity from 
renewable sources by 2013.
  The Senate Committee on Finance, on which I serve, will soon consider 
an energy tax bill to complement the bill from the Energy and Natural 
Resources Committee. The legislation I am introducing today is designed 
to provide incentives to help us reach this level of renewable energy 
production.
  Specifically, my bill would amend the Internal Revenue Code to extend 
the Section 45 production tax credit for electricity produced from 
renewable resources for facilities placed in service before January 1, 
2011, pursuant to a written binding contract in effect on December 31, 
2007. This extension is designed to take into account the extended 
length of time it takes for many renewable energy facilities, 
particularly geothermal facilities, to be built.
  In addition, my bill would provide for a 10-year credit period for 
all renewable energy sources covered by this tax credit. Current law 
allows a 10-year credit period for certain renewable sources, such as 
wind, but only a 5-year credit period for other renewable sources, such 
as geothermal. This results in an uneven playing field under current 
law that tilts investors toward certain renewable energy resources over 
others. This represents poor energy policy and it represents poor tax 
policy.
  I believe this disparity in credit periods undermines the development 
of all of our renewable energy resources and thereby inhibits our goal 
of energy independence. This legislation would equalize the tax credit 
period for all renewable resources and even up the playing field.
  I would like my colleagues to know more about the importance of our 
Nation's vast supply of geothermal energy resources. Geothermal is a 
clean, renewable energy resource that presently contributes over 2,718 
megawatts to the U.S. energy supply. Renewable energy, excluding 
hydroelectric, makes up 2 percent of U.S. energy consumption; of that 2 
percent, geothermal energy accounts for .44 percent, solar .06 percent

[[Page 11583]]

and wind 1 percent. Geothermal technology is used in commercial, 
industrial and residential application in 26 States.
  However, geothermal energy generation has not been fully exploited. 
According to the U.S. Department of Energy, there is almost 25,000 
megawatts of undeveloped geothermal energy production potential in the 
United States. This is enough power to serve more than 22 million 
homes. Furthermore, this is an energy source that is not subject to the 
price and supply volatility of fossil fuels. Our energy policy should 
not overlook this potential or sell short its potential.
  My home State of Utah has an abundance of high and low temperature 
geothermal resources that this bill would allow to be economically 
developed. For example, a new 36 megawatt geothermal plant near Cove 
Fort, UT, is scheduled to be under construction by the spring of 2006 
with completion expected by the end of 2007. Without this legislation, 
it is unlikely that this plant, as well as others around the Nation, 
would be able to be built. That would be very unfortunate.
  The area around Cove Fort has one of the largest, proven geothermal 
resources in the Nation. There are 3,000 contiguous acres of leased 
land associated with the project now on the drawing boards. At 2,000 
feet underground, the geothermal resource there is relatively shallow 
and is considered by most geologic experts to be one of the largest 
underground hot water reservoirs in North America. A leading geothermal 
engineering company recently issued a report indicating that the Cove 
Fort hot water resource can support and sustain power production in 
excess of 100 megawatts.
  Utah is but one State with geothermal resources that can help lead 
our Nation toward energy independence. Other States with considerable 
geothermal resources include Nevada, California, Montana, Washington, 
Oregon, Idaho, Wyoming, Colorado, North Dakota, South Dakota, Nebraska, 
Arizona, New Mexico, Texas, Pennsylvania, West Virginia, Louisiana, 
Hawaii, and Kansas. We need to get the process of developing these 
resources started, and the bill I am introducing today would make sure 
that happens.
  This legislation would provide the necessary boost to the development 
of our geothermal energy resources as well as all other renewable 
energy resources available to our Nation. I urge my colleagues to join 
me by cosponsoring this bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1156

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

     SECTION 1. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING 
                   ELECTRICITY FROM RENEWABLE RESOURCES.

       (a) Extension of Credit Period for Electricity Produced at 
     Certain Facilities.--Subparagraph (B) of section 45(b)(4) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(B) Credit period.--In the case of any facility described 
     in subsection (d)(3)(A)(ii) placed in service before October 
     22, 2004, the 5-year period beginning on October 22, 2004, 
     shall be substituted for the 10-year period in subsection 
     (a)(2)(A)(ii).''.
       (b) Extension of Credit.--Subsection (d) of section 45 of 
     the Internal Revenue Code of 1986 (relating to qualified 
     facilities) is amended by striking ``January 1, 2006'' each 
     place it appears and inserting ``January 1, 2008''.
       (c) Binding Contracts for Facilities.--Subsection (d) of 
     section 45 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:
     ``For purposes of this subsection, a facility shall be 
     treated as placed in service before January 1, 2008, if such 
     facility is placed in service before January 1, 2011, 
     pursuant to a written binding contract in effect on December 
     31, 2007, and at all times thereafter before such facility is 
     placed in service.''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to electricity 
     produced and sold after the date of the enactment of this 
     Act, in taxable years ending after such date.
       (2) Subsection (a).--The amendment made by subsection (a) 
     shall apply to electricity produced and sold after December 
     31, 2004, in taxable years ending after such date.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Akaka, and Mr. Lautenberg):
  S. 1158. A bill to impose a 6-month moratorium on terminations of 
certain plans instituted under section 4042 of the Employee Retirement 
Income Security Act of 1974 in cases in which reorganization of 
contributing sponsors is sought in bankruptcy or insolvency 
proceedings; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. KENNEDY. Mr. President, the bill we are introducing today is 
urgently needed to protect the pension benefits of workers across 
America.
  A decent retirement in today's world depends on Social Security, 
private pensions, and private savings. But today's working families 
find their retirement severely threatened. President Bush wants to 
privatize Social Security. Private savings are at an all-time low, and 
now private pensions are in great jeopardy, too.
  This challenge has been brought home all too clearly by United 
Airlines' recent announcement that it intends to end its pension plans 
and turn them over to the Pension Benefit Guaranty Corporation. The 
pensions of over 120,000 workers are at stake. Over $3 billion in their 
benefits are not guaranteed by the corporation, and the future pensions 
they have been promised will be lost as well.
  These hard-working Americans include thousands of flight attendants 
like Patrice Anderson, who have made only a modest wage throughout 
their working lives and for whom ``the possible loss of hundreds of 
dollars a month in old age changes a dignified retirement into a 
subsistence-level retirement.''
  The loss is particularly painful because so many of the employees 
have accepted lower pay or given back wages and other benefits in order 
to keep their pension plans. Marilyn King of California worked for 
United for 25 years. She says: ``I used to be proud of working for 
United. Now, I am embarrassed and angry. I am angry that we took 25 
percent in pay cuts, that we gave other concessions; and then our COO 
and CEO get their bonuses and perks.''
  We have heard from families and workers across the country. In 
Massachusetts, Kevin Creighan and his wife Cathy Hampton in Lynn have 
spent a lifetime with United, ``working hard, earning a living, and all 
along expecting a pension.'' They hoped to retire in 7 years, with a 
combined 70 years of loyal service between them. Now, if they want the 
retirement they were promised by the United Airlines pension plan, they 
will have to work for an additional 15 years.
  George Raymond of Arizona retired at the age of 60 after 38 years. He 
writes that because of this pension termination, he will not be able to 
afford his medical bills. Richard Myer of California retired after 32 
years as a United pilot, and now he has to go back to work and sell his 
home to support his children and his elderly father-in-law.
  Americans who work hard and play by the rules should not be 
victimized by these broken promises. No wonder they feel betrayed. They 
share the view of Robert Lamica of Virginia, who says, ``I kept my 
promise to United for 36 years by working in rain, snow, heat, and 
whatever else nature would throw our way . . . My back and knees have 
been destroyed along with my ability to get another job . . . We need 
not be left on the curb just because United can.''
  These loyal men and women cannot turn back the clock and make 
different decisions. But Congress can stop that clock and reach a fair 
solution.
  This legislation we are introducing will prevent bankrupt companies 
from abandoning their pension plans for the next 6 months.
  Our action will also ease the growing threat to all defined benefit 
pension plans. The Pension Benefit Guaranty Corporation estimates that 
if it takes over the remaining airline defined benefit pension plans, 
90 percent of the

[[Page 11584]]

claims it must cover will come from airline companies or steel 
companies, even though such plans include only 5 percent of the 
employees covered by the corporation. The legislation will buy time for 
us to develop real solutions for the serious problems of these ailing 
industries.
  I urge my colleagues to join me in support of this bill. We owe it to 
all these hard working Americans whose retirement has been put at risk.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Baucus, Mr. Smith, Mr. Schumer, 
        Mr. Crapo, Mr. Lott, Mr. Kyl, and Mrs. Lincoln):
  S. 1159. A bill to amend the Internal Revenue Code of 1986 to 
permanently extend the subpart F exemption for active financing; to the 
Committee on Finance.
  Mr. HATCH. Mr. President, I rise today to introduce a bill, S. 1159, 
to make permanent a provision under subpart F of the Internal Revenue 
Code regarding active financial services income earned abroad. I am 
joined in this effort by my colleagues Senators Baucus, Smith, Schumer, 
Crapo, Lott, Kyl, and Lincoln. Under current law, the provision will 
expire at the end of next year.
  This legislation would ensure that U.S. financial services firms and 
U.S. manufacturing companies with financial services operations are 
subject to U.S. tax on income from their active overseas financial 
services operations only when such earnings are sent home to the U.S. 
parent company. As my colleagues know, this is the treatment provided 
under the U.S. tax law for other active business income earned 
overseas. Our legislation simply extends, on a permanent basis, the 
expiring provision that ensures this same treatment for the financial 
services industry.
  The permanent extension of this provision is critically important in 
today's global marketplace. Over the last few years, the financial 
services industry has seen technological and global changes that have 
altered the very nature of the way these corporations do business, both 
here and abroad. The U.S. financial industry is a worldwide leader that 
plays a pivotal role in maintaining confidence in the international 
marketplace and positively contributes to the U.S. international trade 
balance. We believe it is essential that our tax laws not impose anti-
competitive burdens on this important U.S. industry.
  If we allow the active financial services provision to lapse, U.S. 
companies would have to pay both local tax and current U.S. tax on the 
financial services income they generate overseas. While some of this 
double taxation is often alleviated by the foreign tax credit, we all 
know that this system works imperfectly. The result is that U.S. firms 
end up with a cost that is not borne by their European and Asian 
competitors, because companies based in these areas do not face current 
home country taxation on financial services income. In an industry 
where companies compete on price and a few basis points can mean the 
difference between getting the business or losing it to a competitor, 
the imposition of this additional tax cost on U.S.-based companies 
would translate into a competitive disadvantage for U.S. companies and 
a competitive advantage for their foreign counterparts. Given the 
thousands of U.S. jobs at stake, many of them in Utah, we do not 
believe our tax policy should allow this to happen.
  While this provision may seem far removed from the average Utahn or 
the average American, I can assure you that this is not true. For 
example, the Salt Lake City area serves as the headquarters location 
for the banking operations of American Express Centurion Bank and 
American Express Bank, FSB, which are important parts of the worldwide 
American Express Card system. Salt Lake City is also the headquarters 
of American Express Travelers Cheques, with its Utah facility servicing 
Travelers Cheques clients on a worldwide basis. Thousands of Utahns are 
employed by these companies.
  These businesses are tied to the international marketplace through 
the competitive strength of the American Express global franchise. For 
American Express and other U.S. companies to compete on par with their 
foreign competitors, the U.S. tax rules need to provide fair and 
equitable treatment of their overseas operations. To the extent foreign 
competitors can take business away from U.S. firms because of an uneven 
playing field, U.S. jobs are at risk.
  The bill we are introducing today would provide equitable and 
consistent tax treatment for this important component of our economy. 
Making this provision permanent would provide American companies much-
needed stability. The current provision has been renewed several times, 
most recently for 5 years in the Job Creation and Worker Assistance Act 
of 2002. Our ``on-again, off-again'' habit of extensions prevents U.S.-
based firms from competing fully in the global marketplace by 
interfering with their ability to make business decisions and plan on a 
long-term basis. The permanent extension of this subpart F provision 
would ensure that the U.S. financial services industry is on a 
competitive footing with their foreign-based competitors and would 
provide tax treatment that is consistent with the tax treatment 
accorded other U.S. businesses.
  The Congress and the administration took an important step toward 
modernizing our international tax rules with the enactment of the 
American Jobs Creation Act of 2004. The legislation we introduce today 
furthers that act's goals of ensuring that American firms can compete 
in the 21st century economy.
  I urge my colleagues to support this important bill and ask that the 
text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1159

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

     SECTION 1. PERMANENT EXTENSION OF SUBPART F EXEMPTION FOR 
                   ACTIVE FINANCING.

       (a) In General.--Section 954(h)(9) of the Internal Revenue 
     Code of 1986 is amended by striking ``and before January 1, 
     2007,''.
       (b) Conforming Amendments.--Section 953(e)(10) of the 
     Internal Revenue Code of 1986 is amended--
       (1) by striking ``and before January 1, 2007,'', and
       (2) by striking the second sentence thereof.

  Mr. BAUCUS. Mr. President, today I am pleased to join my friend and 
colleague, Senator Hatch, in introducing legislation to make permanent 
the subpart F provision for active financial serviced income earned 
abroad.
  The legislation we are filing today is identical to a bill we filed 
in the 107th Congress. Since then, this exemption has been temporarily 
extended but that will expire at the end of next year. This exemption 
ensures that the active financial services income earned abroad by U.S. 
financial services companies, or U.S. manufacturing firms with a 
financial service operation, is not subject to U.S. tax until that 
income is brought home to the U.S. parent company.
  By making this provision permanent, our legislation will put the U.S. 
financial services industry on an equal footing with its foreign-based 
competitors, which do not face current home country taxation on active 
financial services income. I will tell my colleagues that this bill is 
about jobs in Montana, and in each of our States. In fact, one of these 
competitive U.S. financial services companies employs hundreds of 
Montanans in Great Falls alone, so the health of that company is 
critically important to my constituents.
  American financial services companies successfully compete in world 
financial markets. We need to make sure, however, that the U.S. tax 
rules do not change that situation and make them less competitive in 
the world arena. This legislation will extend a provision that I 
believe preserves the international competitiveness of U.S.-based 
financial service companies, including finance and credit companies, 
commercial banks, securities firms, and insurance companies. This 
provision also contains appropriate safeguards to ensure that only 
truly active businesses benefit.

[[Page 11585]]

  As my colleagues have heard year after year, the active financial 
services provision is critically important in today's global economy. 
Our U.S. financial services industry is a global leader playing a 
pivotal role in maintaining confidence in the international 
marketplace. It is a fiercely competitive business. And U.S.-based 
companies would surely be disadvantaged with an additional tax burden 
if we allow this exemption to lapse. Through our network of trade 
treaties, we have made tremendous progress in gaining access to new 
foreign markets for this industry in recent years. Our tax laws should 
complement, rather than undermine, this effort.
  The temporary nature of the active financial services provision, like 
other expiring provisions, denies U.S. companies the stability enjoyed 
by their foreign competitors. It is time to make permanent this subpart 
F active financial services provision in order to allow U.S. business 
companies to make business decisions on a long-term basis. I ask my 
colleagues to join us in supporting this legislation, providing 
consistent, equitable, and stable tax treatment for the U.S. financial 
services industry.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Sununu):
  S. 1128. A bill to amend title XIX of the Social Security Act to 
provide for increased rebates under the medicaid program for 
prescription drugs that are directly advertised to consumers, to 
require other Federal programs purchasing or reimbursing for such drugs 
to establish payment and reimbursement mechanisms that reduce the costs 
of those drugs, and for other purposes; to the Committee on Finance.
  Mr. WYDEN. Madam President, the cost of medicine is a matter of 
concern to every Senator. Today, Senator Sununu and I have introduced 
legislation to take a fresh approach to holding down the cost of 
medicines in our country. Under our bipartisan legislation, the Federal 
Government would pay less for pharmaceuticals that are advertise when 
the Federal Government buys those medicines for Medicaid, the Veterans' 
Administration, the Department of Defense, and the Public Health 
Service.
  One can barely turn on the television or open a magazine these days 
without getting the hard sale on a hot new medicine. There is no doubt 
that medical science is making miracles for our citizens who need help 
with their health. For that, we are, of course, grateful. But the 
advent of advertising for prescription drugs presents pitfalls as well, 
not just for patients but for every American taxpayer.
  Senator Sununu and I introduced our legislation today because as the 
marketing gets savvier, the Federal Government needs to get smarter and 
contain costs wherever possible for these popular and expensive drugs. 
The fresh approach that Senator Sununu and I unveil today will amp up 
the Government's purchasing power on prescription drugs that are 
advertised directly to consumers. The Pharmaceutical Advertising and 
Prudent Purchasing Act will reduce drug costs for the beneficiaries of 
Medicaid and other Federal programs. It will ease the burden on States 
struggling to stretch their health care dollars through Medicaid, and 
it will lower the overall costs for taxpayers footing the bill for 
these advertised drugs.
  When a drug company figures the price of a pill, it passes along the 
advertising costs to consumers. Right now, Medicare and Medicaid pay 
that cost like any other consumer. But it is time to take the 
advertising costs out of the equation for taxpayer funded programs. The 
Federal Government, of course, gives drug companies a tax break for 
advertising which, of course, every other American company gets for its 
business expenses. There is no need for a double subsidy. There is a 
need for more prudent purchasing of prescription drugs by the Federal 
Government. If that is going to happen, the changes in the 
pharmaceutical market that have been caused by the explosion of 
advertising cannot be ignored any longer.
  I do not have to tell our colleagues that drug advertising in the 
United States is an immense and growing industry. The Wall Street 
Journal reported last week that the pharmaceutical industry spent 
nearly $4.5 billion on advertising to consumers. The penetration of 
this advertising may be more than most people realize. A recent Kaiser 
Family Foundation poll found that 90 percent of Americans had seen or 
heard an advertisement for prescription drugs. Today, more and more 
Americans can go to their doctor and ask to have a medication they have 
seen advertised on TV, in a magazine, on the radio or on the Internet. 
Of course, that is what is happening.
  There is a proven direct connection between the advertising of drugs 
and a big uptick in the rate of prescriptions written for them. Take a 
look at the 10 most advertised drugs in the United States. That is 
2003, and I would guess that few Americans would say they have not 
heard of any of these drugs.
  On each of these drugs, at least $100 million was spent in 2003 alone 
on direct consumer advertising. The advertising works. A study 
published in the April issue of the Journal of the American Medical 
Association demonstrates the link. Researchers sent actors to doctors' 
offices to complain of mild depression. Those who mentioned seeing an 
ad were five times more likely to get a prescription for an 
antidepressant as those who simply described their supposed symptoms 
without talking about a drug ad they had seen. It is no wonder the 
heavily advertised drugs make up most of the top 10 medicines 
prescribed under Federal health programs like Medicare, Medicaid, and 
others. Take a look.
  These are the 10 drugs on which Medicare spends the most total money 
for outpatient care. Nine are advised directly to consumers.
  Here are the 10 drugs on which Medicaid spends the most money. Four 
of the ten are advised directly to consumers. The next 4 drugs, Nos. 11 
through 14, are advertised as well. It is the view of Senator Sununu 
and I that the Federal Government is one consumer that does not need to 
receive advertising from the drug companies.
  The Federal Government is buying medicine for a lot of people with a 
limited pool of funds. It is vital to get a handle now on the 
connection between advertising and increased sales and to insist on 
more prudent purchasing.
  Our legislation does just that. It makes the Government a more 
prudent purchaser in a straightforward way. It will require Medicaid 
and other vital programs under Health and Human Services and the 
Veterans' Administration to get a discount that cuts out the 
advertising costs figured in each pill. In Medicaid, this would be done 
by adjustments in the Medicaid rebate program. That is an existing 
program that requires a pricing agreement between drug manufacturers 
and the Federal Government for any drug to be sold through the Medicaid 
program.
  The Health and Human Services Secretary and the VA Secretary will 
also be able to negotiate reduced prices for other Federal programs 
such as the Public Health Service, programs administered by the Indian 
Health Service, the Department of Veterans Affairs, the Department of 
Defense and the Defense Health Program.
  This is smart and effective spending. It ends the spending of 
taxpayer dollars to fund advertising that has already received a tax 
break. It is a commonsense step, the kind of common sense that is all 
too uncommon when the Federal Government buys drugs.
  Our legislation will address another issue that speaks both to the 
taxpayers' interests and the health of patients in these programs. When 
advertised drugs are purchased, it is not enough to make sure the price 
is right, although that is important. It is vital the drug is right for 
the patient's particular problem. Taxpayer dollars should buy drugs 
that will work best for patients by a doctor's best judgment. Just 
because a patient recognizes a drug's name enough to request it from 
their provider does not mean it is the best medicine.
  More and more drug companies are treating doctors as a middleman they 
wish to skip. They make a lot more money if patients, without medical 
degrees, are encouraged to start writing

[[Page 11586]]

their own prescriptions, whether the drug is the right one or not. 
Medicare, Medicaid, and other Federal programs have a charge to keep 
for their patients and a trust to maintain with American taxpayers. 
They should not be exploited financially by the pharmaceutical ``flavor 
of the month.''
  I close by expressing my thanks to the Senator from New Hampshire. 
This is a bipartisan approach that is going to hold down the cost of 
medicine for taxpayers in our country. It will be a benefit to 
beneficiaries certainly at a time when the Medicaid Commission is 
trying to find responsible savings. We ensure that we take the time to 
study how this approach would work for other programs such as Medicare. 
And because I see my friend in the Chamber, I will wrap up simply by 
saying that it is time to take out a sharp pencil and eliminate the 
hidden costs for taxpayers from advertised drugs.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. SUNUNU. Madam President, I am pleased to join Senator Wyden in 
the introduction of this legislation, which is a good-faith effort to 
try to find that fresh approach Senator Wyden talked about, a fresh 
approach to deal with costs in health care, specifically in those areas 
where the Federal Government is directly purchasing pharmaceuticals: in 
the VA, where we have a very large direct purchase program that exists 
today, and within Medicaid, where both the Federal Government and the 
States are directly involved in purchasing and negotiating the pricing 
of drugs.
  We are focusing on direct-to-consumer advertising. This is an area 
where activity and cost have exploded over the last 6 or 7 years. Since 
1997, when the Federal Government changed the regulations associated 
with direct-to-consumer advertising, we have seen advertising outlays 
for pharmaceuticals go from a little bit over $1 billion to nearly $5 
billion per year this year. Those costs, as any costs would be, are 
passed on to consumers. In the case of these programs where the Federal 
Government is purchasing the pharmaceuticals in the VA and in Medicaid, 
that means that the cost, the impact, is disproportionately felt by the 
taxpayer.
  This is an effort to try to find a way to reduce those costs, to give 
the Federal Government the power to make a distinction, as they 
negotiate prices--to make a distinction between those drugs that are 
advertised directly to consumers or marketed directly to consumers and 
those that are not, and to provide discounts to those companies or 
those drugs that avoid the additional costs of advertising.
  This advertising, as I say, is expensive. The cost is passed on to 
taxpayers in these particular programs. I think there are also a lot of 
questions about the value that a flood of advertising might provide.
  We have all been inundated by different types of advertisement, on TV 
or in magazines. It is costly, as I mentioned, but it also carries with 
it some risk of overutilization; of, in some cases, encouraging or 
leading consumers to believe that they need or would benefit by a 
particular medicine when it is not necessarily the best approach for 
them.
  In some cases it is clear this advertising has been used to drive 
consumers away from lower priced generic drugs. I think this is one of 
the most problematic areas, and that has been seen and discussed at 
some length in the States, in their Medicaid programs.
  This legislation presents an opportunity to get our hands around the 
cost issue, to fund some important studies, to take a closer look at 
questions of overutilization and the substitution I described. It 
represents a good start, I think, opening the debate with this 
discussion about dealing directly with health care costs in areas of 
the Federal Government as the principal purchaser.
  There may be other options. In fact, Senator Wyden and I talked about 
a few other approaches that are not included in this legislation. I 
think I can speak for the Senator from Oregon when I say we look 
forward to talking to our colleagues about other ideas that might be 
out there. We look forward to sharing ideas and information with 
producers themselves who, I hope, are willing to look at ways to help 
save the consumers money, help save taxpayers money, and help deal with 
direct-to-consumer advertising in a more responsible way.
  We are going to do a Medicaid bill this year in the Senate. While we 
also deal with some issues at HHS and the VA in this bill, certainly 
the costs associated with Medicaid and our recommendations with regard 
to Medicaid are a central part of the bill. I will work with Senator 
Wyden and any of my interested colleagues to try to include and capture 
some of these ideas in Medicaid legislation this year.
  It is a great opportunity to look at the issue of health costs and 
drug costs in a fresh way, in a different way. I very much appreciate 
the work Senator Wyden has done in helping to craft this legislation 
and his willingness to lend his strong support, as a longstanding and 
more senior Member than I, as a member of the Senate Finance Committee, 
and as a Member of the Senate on the other side of the aisle.

                          ____________________