[Congressional Record (Bound Edition), Volume 154 (2008), Part 6]
[Senate]
[Pages 7617-7636]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CRAIG (for himself, Mr. Warner, and Mr. Inhofe):
  S. 2953. A bill to provide for the development and inventory of 
certain outer Continental Shelf resources, to suspend petroleum 
acquisition for the Strategic Petroleum Reserve, and for other 
purposes; to the Committee on Energy and Natural Resources.
  Mr. CRAIG. Mr. President, during consideration of the reauthorization 
of the FAA, a great deal of conversation has gone on on this floor 
about energy and the cost of energy. It is appropriate that we talk 
about it at a time when our airlines are struggling and we are 
attempting to reauthorize FAA. Part of the reason our airlines are 
struggling is the unprecedented aviation fuel prices. It is only one of 
the many reasons they are having difficulty today, but clearly the 
doubling of their costs are putting at risk their corporate structure 
and their ability to serve an American public.
  But it is not just the airlines that are at risk. Every American 
consumer and every business is finding the tremendous increase in the 
cost of energy a significant problem. For example, just a few minutes 
ago, my BlackBerry buzzed. My wife Suzanne is out in Boise, ID. I got 
an e-mail about the temperature, which is 31 degrees in Boise this 
morning. At the bottom of the e-mail, she said regular gas just hit 
$3.53 a gallon. That is a lot of money. Now, that is not as much as 
others are paying across our Nation, but when an Idahoan fills their 
tank and they go from community to community, oftentimes they drive 
hundreds of miles--not just a few miles but literally hundreds of 
miles. Idaho is a great big Western State. Our distance is oftentimes a 
significant part of our commerce and our ability to conduct economic 
activity, and fuel prices have always been significant and important.
  Idaho is also a large agricultural State. The cost of the production 
of foods today has gone up dramatically because of the cost of diesel, 
if you will, the cost of fertilizer, and all of those components that 
go into the production of food and the transporting of the food.
  Part of the reason food is going up on the retail shelf of the 
supermarket today is the cost of getting it there, let alone the cost 
of producing and refining it. Many truckers are saying that just to 
fill up their truck now can be as much as $1,000. They are not able to 
change their freight rates to adjust as quickly to the high cost of 
energy, and they simply have to--this is the term--``eat it.'' Well, 
they cannot afford to eat it. Oftentimes, those trucks are simply 
turning off their motors and sitting idle.
  So the impact of energy costs on our economy can be dramatic. I came 
to the floor yesterday to talk about it and to say that, in large part, 
the American consumer, in their frustration, is saying: Whom do we 
blame? I don't think they have to look any further than the U.S. 
Congress and the failure of this Congress--the House and Senate--over 
the last 20 years to do the things that were necessary to continue 
production, to ensure refinery capacity, to ensure exploration and the 
development of reserves, while we were doing all of the other things in 
conservation, in CAFE standards, assuring that we had a new form of 
transportation energy. But, no, we have failed to do the right things, 
and as a result of that, the American consumer is, in fact, paying a 
great deal for our failure.
  What do we do to change that? Instead of just wringing our hands, 
there are all kinds of ideas out there about changing it.
  Some would suggest that you just tax the big oil companies; if you 
just tax those big oil companies and put that money somewhere else, 
that will solve the problem. There is an old adage in economics that is 
quite simple: You usually get less of that which you tax. In other 
words, the higher you tax something, the less you are going to get from 
it. Do you want to, by taxation, nationalize America's independent oil 
companies? Is that a way to get production and more oil and gas at the 
pump? Remember, there are not any gas lines out there today. There 
aren't the kinds of lines we saw in the 1970s during the last energy 
crisis. There is supply. It is the cost of supply that we are 
frustrated about and the impact that cost is having on our economy.
  Here is one of the problems we have. I talked about a Congress that 
failed, a public policy that failed, a policy that failed to continue 
to produce as demand went dramatically up--not just in this country but 
around the world.
  The blue line on this chart is the supply line. As you can see, in 
the 1990s it peaked and it began to drop. That is, of course, U.S. 
production versus U.S. consumption. In other words, as a nation we 
began to produce less and less crude oil into our refineries.
  Today, we are near 60 percent dependent upon other sources of energy, 
from outside our country, to come into our refineries and to go out of 
the gas pump to the consumer. In fact, you can see that the red line--
demand--has gone up dramatically as our economy continued to grow over 
the years, as more people were driving cars, and as more cars consumed 
more gas.
  The only way you are going to keep price down is when the supply line 
and the demand line are somewhat in concert, somewhat tracking each 
other. That simply stopped in the 1950s, as we began to grow 
increasingly dependent upon foreign nations.
  We passed the Energy Policy Act of 2005, but it wasn't really 
directed at transportation fuels. Last year, we added to that and we 
began to address transportation fuels. We brought ethanol into the 
market by subsidizing that and allowing our farmers, and those who take 
corn from them, to produce ethanol to become increasingly effective in 
the market. That is working to some degree. In fact, it is estimated 
today that 20 cents would be put on the price of gas at the pump if it 
wasn't for national and rural ethanol production. Now, it has caused 
other problems. Some would argue that it has caused problems in the 
food chain, and it probably has. I think the marketplace will work that 
out. So there are things we have been doing.
  But I think, most importantly, it is the things we have not done. It 
is the failure of our country to recognize the increased dependency we 
were developing from other countries around the world. I think that has 
become one of our greater frustrations. While you have some on the 
campaign trail today talking about taxing the big oil companies, the 
big oil companies don't own the oil. It is the cartels. It is the 
nations. It is not oil companies, it is oil countries that we have to 
worry about today.
  I didn't coin the phrase, but I use the phrase quite often, ``petro-
nationalism.'' If I am a country and I am small but I am sitting on a 
pool of oil, I become rich overnight. The reason I become rich 
overnight is because Americans will come and buy my oil. If I want to 
form a cartel and I want to control the supply of that oil, then they 
will pay even more for it because Americans quit producing for 
themselves.
  Here is a statistic that I find fascinating, and some have said that 
if we don't stop this in the near future, we will spend our Nation into 
poverty as we spend all of this money on oil. We are now spending well 
over $1 billion a day outside our country to buy oil. That is a 
phenomenal figure. Our neighbors to the north, we send them $280 
million a day; to Saudi Arabia, we send $190 million a day; to 
Venezuela and Dictator Chavez, we send $160 million; to Nigeria, we 
send $140 million; to Algeria, we send $70 million. Do

[[Page 7618]]

Venezuela and Nigeria and Algeria have our best interests in mind? I 
don't believe so. They have their own interests in mind. We are 
literally making them wealthy because we are buying their oil.
  Many of us talk about energy independence, and last year when we 
passed that legislation I was talking about, the Energy Independence 
and Security Act of 2007, we did some very good things in it. As I 
said, we looked at increasing production by conservation, by CAFE 
standards, and by renewable fuels standards. We said to the automobile 
industry: You have to design cars that burn less, and in doing that, we 
will improve our overall position on dependency by dropping it 
significantly by 2030. But it takes a long time to redesign a car, make 
it efficient, produce it, and then sell it into the market.
  Those are the realities of a problem where you cannot just fix this 
tomorrow. We cannot just change the price of gas at the pump tomorrow 
because we cannot fix the underlying problems instantly. But as I said 
earlier, if Congress is at fault, the problem in this, then Congress 
ought to be doing more about it. And it is not just wringing your hands 
and wanting to tax. It is doing things that get us back into production 
while we learn to conserve, while we have cleaner automobiles, while we 
look at alternative fuel sources, while we get more hybrid cars and 
electric plug-in cars in the market. That is all coming, but that is 10 
years, 15 years, and 20 years out.
  What do we do in the interim? I believe there is something we can do, 
and we ought to do. In America today and in our territorial waters we 
are sitting still on a lot of oil, a dramatic amount of oil. Some would 
argue under old U.S. Geological Survey analysis that we are sitting on 
at least 100 billion barrels of oil. If we are sitting on it, why 
aren't we using it? Once again, the politics of Congress and the 
politics of States enter into the debate.
  A couple of years ago, I began to talk about an issue I called the no 
zone. What was I talking about at the time? I was talking about that 
area of the United States and Outer Continental Shelf of waters that we 
knew had large volumes of oil. But California said no. We said no in 
Alaska. We have said no off the east coast. We have said no around 
Florida. Because we have said no, the American consumer today is paying 
the highest price for gasoline ever. That is a fact. It is a simple 
reality. Our dependency on foreign nations grew. As I just expressed, 
over 60 percent of our oil is coming from outside the continental 
United States when we know there is a significant amount of oil outside 
the continent.
  When I introduced this chart a couple of years ago and I began to 
talk about the no zone and there were a few folks wringing their hands, 
we went to work. We went to work and we looked at oil sales in the gulf 
and the development in the Outer Continental Shelf in the deep waters 
of the Gulf of Mexico.
  Thanks to our effort, we did something. The American consumer needs 
to know we went into lease sale 181 off the coast of Florida. We looked 
at and found a tremendous amount of capability there and we began to 
develop it and we are developing it today. We have allowed other lease 
sales to occur. That is tremendously important. We are beginning to tap 
some of that oil supply that we know is out there and about which we 
ought to be doing more. That is what I think is important, and that is 
on what I think we ought to be focused.
  To sit and wring our hands and tell the American people there is 
nothing we can do, and all we are going to do is go out and tax and 
tax, which will not produce--we ought to be talking about production. 
The legislation I have introduced today talks about production. It 
talks about production in a positive way.
  I mentioned a few moments ago the action we took last year in lease 
sale 181. We were successful in bringing Florida along in their 
cooperation and understanding, which was phenomenally important.
  We know there are millions of barrels of oil and trillions of cubic 
feet of gas out there. What is most significant about oil development 
in this region is that the infrastructure is in place. What do I mean? 
Refineries, pipelines, capacity. We don't have to wait 5, 6, and 7 
years just to build the infrastructure. It is there, and the oil is 
under it. That is why we did lease sale 181. But there is a lot more we 
can and should do. That is why the legislation I have introduced today 
does just that. It doesn't start drilling, but it says a couple of 
things that are quite simple.
  As we have heard others talk about the fact we are putting money into 
the Strategic Petroleum Reserve at this time, we are buying oil off the 
market and putting it underground in the salt domes in the South for a 
time of necessity, I suggest we stop doing that for the time being, and 
I suggest we take that money we are using for those purposes and we 
modernize our inventory of our known reserves, our unknown reserves, 
and our capacity because the true SPR--SPR means Strategic Petroleum 
Reserve--the greatest reserve in the world is to know what we have, 
where it is, and how we can access it. That is one of the most 
important things we can do for the consumers of America today.
  I know it frustrated some of my Floridian friends when I talked about 
our inability because of policy to allow our companies to go in to the 
northern area off Cuba and drill because Cuba was allowing other 
countries to come in and develop. Just 90 miles--45 miles until you hit 
the zone--90 miles off our coast on the extreme of the Florida Keys 
there are foreign nations drilling oil today. India is there, and India 
has now discovered oil. China is there, and China has now discovered 
oil. We are not there today because our policy is 45 years old and 
still says: No, no, Americans cannot get involved with Cuba, even 
though we believe Cuba has phenomenal potential oil reserves. Shame on 
us.
  America, listen up: It is Government policy today in large part that 
has caused you the pain at the pump, and it is very important that 
Government act today to reduce that pain.
  The legislation I am offering would create an inventory that would do 
just that. It would allow us to know what our reserves are.
  We have moratoriums off the coast of Florida, and yet we know there 
are huge oil reserves out there. Why are we not doing something about 
it? Well, it is local politics. It is national politics. It is green 
politics. It is politics. That is why we have the price of oil we have 
today, nothing more and nothing less but politics, and our economy is 
growing more fragile by the moment because of it.
  Is it demagogic to say that? I don't think so. I don't think so at 
all. I pulled out the sign, the no zone. The no is a result of 
politics, whether it is the politics of the State of Florida or the 
politics of the State of California or whether it is the national 
politics of this Senate that will not allow for us to drill for the 
reserves in what is known as ANWR, the Alaskan national wildlife area, 
where we know there is phenomenal abundance.
  It was all done, all of this no, this political no was all done in 
the name of the environment. There was some reason at the time these 
old ideas were put in place. We had the oil spills off the coast of 
Santa Barbara, and as a result of that, Americans were concerned. So 
California said no more drilling there, and then we followed up.
  A few years ago, we had a great national tragedy in the gulf area of 
our country. That tragedy was called Katrina. She came rolling up and 
through the gulf. We know what she did in New Orleans. She did 
something else nobody wants to talk about today. She knocked offline 
hundreds of oil wells that were producing out in the gulf--knocked them 
off. She even set some of the drilling rigs adrift. But not a drop of 
oil was spilled. Why? Because modern technology today and American 
know-how and a concern for protecting our environment has produced one 
of the cleanest deepwater oil drilling industries in the world. We are 
producing in this area of the gulf off the coast of Texas, off the 
coast of Louisiana, off the coast of Mississippi, and with 181, we just 
brought into or soon

[[Page 7619]]

will be bringing into production off the coast of Alabama. Why not off 
the coast of Florida? Why not off the coast of California? Why not off 
the coast of the Carolinas, Virginia, and on up where we believe there 
is significant gas and oil reserves?
  It is old politics of the past that is caught in the ghosts of Santa 
Barbara of decades ago. Yet our technology today will take us there, 
but our politics will not take us there. That is why I have introduced 
the legislation I have. The least we can do is inventory with modern 
technology to know where our oil is.
  I notice the president of Shell said in a press release the other 
day: If Americans sent a message to the world that we were going to 
start drilling our own reserves and bringing them into production, the 
price of gas at the pump would drop dramatically, 25 or 30 cents a 
gallon or more. That is significant stuff, both short term and long 
term, to the economy of this country.
  I say to my colleagues, I say to our country, and I say to our 
consumers: Is it a time to act? You bet it is a time to act. While some 
suggest we tax the big boys out of existence, we do not produce 
anything by doing that, while we can create all kinds of other 
structures. Do we produce more, do we build refinery capacity, and do 
we assure the American public while we are transitioning into hybrid 
cars and electric cars and hydrogen cars and all of those kinds of 
activities that we support and are doing research and development on 
today that they will still have an abundant supply of energy? That is 
our job. That is the job we failed in doing over the last good number 
of years, and that is the job we ought to stop and start over and do it 
right and reward the States that are the boundary States to the 
production of the Outer Continental Shelf.
  We have huge oil reserves in this country, and yet we are letting the 
rest of the world have our wealth. Why not keep our wealth in this 
country by the development of these reserves?
  The first step is the legislation I have introduced today. Let's at 
least in the next few years do the inventory, the modern, sophisticated 
seismographic inventory that USGS can do to let us know how much is out 
there because what we know today is simply old stuff. Those efforts 
were done years ago. Already out at the edge of this green line in the 
deepest waters in the gulf under the newest drilling technologies, we 
are finding phenomenal oil that just a few years ago we did not even 
know we could get to. We are getting to it. We are producing it. It is 
clean, and it is environmentally sound. We ought to be doing that 
everywhere else.
  I have joined my colleague from Louisiana who just came to the floor, 
who introduced legislation that says when oil gets to $125 a barrel, we 
ought to give the States the option to allow the development of the 
Outer Continental Shelf off their State. You darn bet we ought to, and 
those States ought to be rewarded for it.
  There is so much this country can continue to do instead of standing 
still and wringing our hands and trying to blame somebody else for our 
failure over the last 20 years to continue to allow this great country 
to produce for its consumers.
  Mr. WARNER. Mr. President, will the Senator yield for 10 seconds?
  Mr. CRAIG. I will be happy to yield to the senior Senator from 
Virginia.
  Mr. WARNER. Mr. President, I commend him for this initiative, but I 
hope he says ``oil and gas'' because off the east coast there is an 
abundance of gas, as shown by the previous studies. As he says, they 
have to be brought up to date. Do let us invoke gas because along the 
beaches--and I, as the Senator knows, twice tried to get legislation 
through, and a collection of Senators--and I say this in a lighthearted 
way; I call them the beach boys--will not permit this for fear that 
pollution could emanate from the drilling process onto their beaches.
  I suggest let's start with gas. There would not be any potential for 
the erosion of beaches as a consequence of an accidental spill. I do 
hope the Senator puts in the word ``gas.''
  Mr. CRAIG. Mr. President, I thank the senior Senator from Virginia. 
He is absolutely right. When I think oil, I think gas because, 
obviously, in lease sale 181 and in other areas where there is gas, 
there is oftentimes oil, and oftentimes where there is gas, there is no 
oil. We believe that to be the case off the coast of Virginia.
  The Senator from Virginia has been a leader, without doubt, in that 
very kind of effort to allow at least the seismographic effort, the 
exploration that would determine for us the kinds of reserves we have 
and may have for the future.
  I thank the Senator from Virginia for his leadership in this area.
  Mr. WARNER. Mr. President, I thank my good friend from Idaho. I also 
emphasize that the technology to do it safely and not be the victim of 
a disruption by Mother Nature is there.
  Mr. CRAIG. Without question it is there today, and we know that. We 
are the leaders of clean drilling in deep water for the world, no 
question.
  Mr. WARNER. I thank the Senator. I wish him well. He has my support.
  Mr. NELSON of Florida. Mr. President, will the Senator further yield?
  Mr. CRAIG. I will be happy to yield to the Senator from Florida.
  Mr. NELSON of Florida. Would the Senator mind putting up his map with 
the State of Florida on it?
  Mr. CRAIG. I am more than happy to.
  Mr. NELSON of Florida. Would the Senator recognize that the area in 
yellow there on the west coast of Florida that he indicates for future 
drilling--would he recognize almost that entire area is the largest 
testing and training area for the U.S. military in the world? The 
military is on record at all levels, of all generals and admirals, that 
drilling should not be done in that area to compromise our training and 
testing mission for the U.S. military.
  Mr. CRAIG. I do recognize that. I do appreciate what our military has 
said.
  I also understand a few years ago we took offline a naval training 
area in Vieques. Why? It was no longer a popular thing to do.
  If there is oil under this area--and we believe there is--and it is a 
training area, why couldn't we train here? Or why couldn't we train 
over here? The reality is, what is at this time more valuable?
  It is very easy to say don't do it. Or is it possible to say can we 
do both? There are a good many experts and professionals in the field 
who said that. We can have a military training area, and guess what we 
also can do. We can pull the oil out from under. How do you do it? 
Quite simply. You put a location, a location and you slant drill 
thousands of feet and you do not have to pepper the area with all kinds 
of drilling rigs.
  Today's technology is amazing. It is politically comfortable, I 
appreciate that, and I understand the State's politics and I do not 
deny that--but this is not the oil of the State of Florida. This is the 
oil of the citizens of our country. It is the politics of Florida today 
that deny us the oil, not the politics of America. So it is a simple 
question: Should we inventory it? Should we know what it is? And should 
we, under modern technology, reward the State of Florida for the 
potential benefit?
  It is ironic we did not move at all to stop drilling 45 miles off the 
Florida coast. We could even take a 45-mile zone here, or more, 
consistent with what is going on in Florida today and still protect 
this.
  But the Senator is right. It is a military area. Guess what. I am 
kind of a modern guy. I believe in technology taking us where we can go 
and having the best of both worlds. But right now the American consumer 
has the worst of the world we have created for them--a scarcity of a 
supply that is driving costs and impacting our economy in a significant 
way.
  I suggest the legislation I have introduced, while it will not impact 
the State of Florida, will give us a base and an understanding and 
knowledge of what we have as a reserve. We are spending millions of 
dollars a day to buy oil and put it in the ground when, in fact, we 
ought to spend a few million dollars and find out about all the oil we 
already have.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. Coleman, and Mr. Obama):

[[Page 7620]]

  S. 2956. A bill to ensure that persons who form corporations in the 
United States disclose the beneficial owners of those corporations, in 
order to prevent wrongdoers from exploiting United States corporations 
for criminal gain, to assist law enforcement in detecting, preventing, 
and punishing terrorism, money laundering, and other misconduct 
involving United States corporations, and for other purposes; to the 
Committee on Homeland Security and Governmental Affairs.
  Mr. LEVIN. Mr. President, I am introducing today, with my colleagues 
Senator Coleman and Senator Obama, the Incorporation Transparency and 
Law Enforcement Assistance Act. This bill tackles a longstanding 
homeland security problem involving inadequate State incorporation 
practices that leave this country unnecessarily vulnerable to 
terrorists, criminals, and other wrongdoers, hinder law enforcement, 
and damage the international stature of the U.S.
  The problem is straightforward. Each year, the States allow persons 
to form nearly 2 million corporations and limited liability companies 
in this country without knowing--or even asking--who the beneficial 
owners are behind those corporations. Right now, a person forming a 
U.S. corporation or limited liability company, LLC, provides less 
information to the State than is required to open a bank account or 
obtain a driver's license. Instead, States routinely permit persons to 
form corporations and LLCs under State laws without disclosing the 
names of any of the people who will control or benefit from them.
  It is a fact that criminals are exploiting this weakness in our State 
incorporation practices. They are forming new U.S. corporations and 
LLCs, and using these entities to commit crimes ranging from terrorism 
to drug trafficking, money laundering, tax evasion, financial fraud, 
and corruption. Law enforcement authorities investigating these crimes 
have complained loudly for years about the lack of beneficial ownership 
information.
  Last year, for example, the U.S. Department of the Treasury sent a 
letter to the States stating: ``the lack of transparency with respect 
to the individuals who control privately held for-profit legal entities 
created in the U.S. continues to represent a substantial vulnerability 
in the U.S. anti-money laundering/counter terrorist financing, AML/CFT, 
regime. . . . [T]he use of U.S. companies to mask the identity of 
criminals presents an ongoing and substantial problem . . . for U.S. 
and global law enforcement authorities.''
  Last month, Secretary Michael Chertoff, head of the U.S. Department 
of Homeland Security, wrote the following: ``In countless 
investigations, where the criminal targets utilize shell corporations, 
the lack of law enforcement's ability to gain access to true beneficial 
ownership information slows, confuses or impedes the efforts by 
investigators to follow criminal proceeds. This is the case in 
financial fraud, terrorist financing and money laundering 
investigations. . . . It is imperative that States maintain beneficial 
ownership information while the company is active and to have a set 
time frame for preserving those records. . . . Shell companies can be 
sold and resold to several beneficial owners in the course of a year or 
less. . . . By maintaining records not only of the initial beneficial 
ownership but of the subsequent beneficial owners, States will provide 
law enforcement the tools necessary to clearly identify the individuals 
who utilized the company at any given period of time.''
  These types of complaints by U.S. law enforcement, their pleas for 
assistance, and their warnings about the dangers of anonymous U.S. 
corporations operating here and abroad are catalogued in a stack of 
reports and hearing testimony from the Department of Justice, the 
Department of Homeland Security, the Financial Crimes Enforcement 
Network of the Department of the Treasury, the Internal Revenue 
Service, and others.
  To add insult to injury, our law enforcement officials have too often 
had to stand silent when asked by their counterparts in other countries 
for information about who owns a U.S. corporation committing crimes in 
their jurisdictions. The reality is that the United States is as bad as 
any offshore jurisdiction when it comes to responding to those 
requests--we can't answer them because we don't have the information.
  In 2006, the leading international anti-money laundering body in the 
world, the Financial Action Task Force on Money Laundering--known as 
FATF--issued a report criticizing the U.S. for its failure to comply 
with a FATF standard requiring countries to obtain beneficial ownership 
information for the corporations formed under their laws. This standard 
is one of 40 FATF standards that this country has publicly committed 
itself to implementing as part of its efforts to promote strong anti-
money laundering laws around the world.
  FATF gave the U.S. 2 years, until July 2008, to make progress toward 
coming into compliance with the FATF standard on beneficial ownership 
information. That deadline is right around the comer, but we have yet 
to make any real progress. That is another reason why we are 
introducing this bill today. Enacting the bill would bring the U.S. 
into compliance with the FATF standard by requiring the States to 
obtain beneficial ownership information for the corporations formed 
under their laws. It would ensure that the U.S. met its international 
commitment to comply with FATF anti-money laundering standards.
  The bill being introduced today is the product of years of work by 
the U.S. Senate Permanent Subcommittee on Investigations, on which I, 
Senator Coleman, and Senator Obama serve together. As long ago as 2000, 
the Government Accountability Office, GAO, at my request, conducted an 
investigation and released a report entitled, Suspicious Banking 
Activities: Possible Money Laundering by U.S. Corporations Formed for 
Russian Entities. This report revealed that one person was able to set 
up more than 2,000 Delaware shell corporations and, without disclosing 
the identity of the beneficial owners, open U.S. bank accounts for 
those corporations, which then collectively moved about $1.4 billion 
through the accounts. It is one of the earliest Government reports to 
give some sense of the law enforcement problems caused by U.S. 
corporations with unknown owners. It sounded the alarm sounded 8 years 
ago, but to little effect.
  In April 2006, in response to a Levin-Coleman request, GAO released a 
report entitled, Company Formations: Minimal Ownership Information Is 
Collected and Available, which reviewed the corporate formation laws in 
all 50 States. GAO disclosed that the vast majority of the States don't 
collect any information at all on the beneficial owners of the 
corporations and LLCs formed under their laws. The report also found 
that many States have established automated procedures that allow a 
person to form a new corporation or LLC within the State within 24 
hours of filing an online application without any prior review of that 
application by a State official. In exchange for a substantial fee, two 
States will even form a corporation or LLC within one hour of a 
request. After examining these State incorporation practices, the GAO 
report described the problems that the lack of beneficial ownership 
information has caused for a range of law enforcement investigations.
  In November 2006, our Subcommittee held a hearing further exploring 
this issue. At that hearing, representatives of the U.S. Department of 
Justice, DOJ, the Internal Revenue Service, and the Department of 
Treasury's Financial Crimes Enforcement Network, FinCEN, testified that 
the failure of States to collect adequate information on the beneficial 
owners of the legal entities they form has impeded Federal efforts to 
investigate and prosecute criminal acts such as terrorism, money 
laundering, securities fraud, and tax evasion. At the hearing, DOJ 
testified: ``We had allegations of corrupt foreign officials using 
these [U.S.] shell accounts to launder money, but were unable--due to 
lack of identifying information in the corporate records--to fully 
investigate this area.'' The IRS

[[Page 7621]]

testified: ``Within our own borders, the laws of some states regarding 
the formation of legal entities have significant transparency gaps 
which may even rival the secrecy afforded in the most attractive tax 
havens.'' FinCEN identified 768 incidents of suspicious international 
wire transfer activity involving U.S. shell companies.
  In addition, last year, when listing the ``Dirty Dozen'' tax scams 
for 2007, the IRS highlighted shell companies with unknown owners as 
number four on the list, as follows:

       ``4. Disguised Corporate Ownership: Domestic shell 
     corporations and other entities are being formed and operated 
     in certain states for the purpose of disguising the ownership 
     of the business or financial activity. Once formed, these 
     anonymous entities can be, and are being, used to facilitate 
     underreporting of income, non-filing of tax returns, listed 
     transactions, money laundering, financial crimes and possibly 
     terrorist financing. The IRS is working with state 
     authorities to identify these entities and to bring their 
     owners into compliance.''

  That is not all. Dozens of Internet websites advertising corporate 
formation services highlight the fact that some of our States allow 
corporations to be formed under their laws without asking for the 
identity of the beneficial owners. These websites explicitly point to 
anonymous ownership as a reason to incorporate within the U.S., and 
often list certain States alongside notorious offshore jurisdictions as 
preferred locations for the formation of new corporations, essentially 
providing an open invitation for wrongdoers to form entities within the 
U.S.
  One website, for example, set up by an international incorporation 
firm, advocates setting up companies in Delaware by saying: 
``DELAWARE--An Offshore Tax Haven for Non US Residents.'' It cites as 
one of Delaware's advantages that: ``Owners' names are not disclosed to 
the state.'' Another website, from a U.K. firm called ``formacompany-
offshore.com,'' lists the advantages to incorporating in Nevada. Those 
advantages include: ``No I.R.S. Information Sharing Agreement'' and 
``Stockholders are not on Public Record allowing complete anonymity.''
  Despite this type of advertising, years of law enforcement 
complaints, and mounting evidence of abuse, many of our States are 
reluctant to admit there is a problem with establishing U.S. 
corporations and LLCs with unknown owners. Too many of our States are 
eager to explain how quick and easy it is to set up corporations within 
their borders, without acknowledging that those same quick and easy 
procedures enable wrongdoers to utilize U.S. corporations in a variety 
of crimes and tax dodges both here and abroad.
  Since 2006, the Subcommittee has worked with the States to encourage 
them to recognize the homeland security problem they've created and to 
come up with their own solution. After the Subcommittee's hearing on 
this issue, for example, the National Association of Secretaries of 
State, NASS, convened a 2007 task force to examine State incorporation 
practices. At the request of NASS and several States, I delayed 
introducing legislation while they worked on a proposal to require the 
collection of beneficial ownership information. My Subcommittee staff 
participated in multiple conferences, telephone calls, and meetings; 
suggested key principles; and provided comments to the Task Force.
  In July 2007, the NASS task force issued a proposal. Rather than cure 
the problem, however, the proposal was full of deficiencies, leading 
the Treasury Department to state in a letter that the NASS proposal 
``falls short'' and ``does not fully address the problem of legal 
entities masking the identity of criminals.''
  Among other shortcomings, the NASS proposal does not require States 
to obtain the names of the natural individuals who would be the 
beneficial owners of a U.S. corporation or LLC. Instead, it would allow 
States to obtain a list of a company's ``owners of record'' who can be, 
and often are, offshore corporations or trusts. The NASS proposal also 
doesn't require the States themselves to maintain the beneficial 
ownership information, or to supply it to law enforcement upon receipt 
of a subpoena or summons. The proposal also fails to require the 
beneficial ownership information to be updated over time. These and 
other flaws in the proposal have been identified by the Treasury 
Department, the Department of Justice, myself, and others, but NASS has 
given no indication that the flaws will be corrected.
  It is deeply disappointing that the States, despite the passage of 
more than one year, have been unable to devise an effective proposal. 
Part of the difficulty is that the States have a wide range of 
practices, differ on the extent to which they rely on incorporation 
fees as a major source of revenue, and differ on the extent to which 
they attract non-U.S. persons as incorporators. In addition, the States 
are competing against each other to attract persons who want to set up 
U.S. corporations, and that competition creates pressure for each 
individual State to favor procedures that allow quick and easy 
incorporations. It is a classic case of competition causing a race to 
the bottom, making it difficult for any one State to do the right thing 
and request the names of the beneficial owners.
  That is why we are introducing Federal legislation today. Federal 
legislation is needed to level the playing field among the States, set 
minimum standards for obtaining beneficial ownership information, put 
an end to the practice of States forming millions of legal entities 
each year without knowing who is behind them, and bring the U.S. into 
compliance with its international commitments.
  The bill's provisions would require the States to obtain a list of 
the beneficial owners of each corporation or LLC formed under their 
laws, to maintain this information for 5 years after the corporation is 
terminated, and to provide the information to law enforcement upon 
receipt of a subpoena or summons. If enacted, this bill would ensure, 
for the first time, that law enforcement seeking beneficial ownership 
information from a State about one of its corporations or LLCs would 
not be turned away empty-handed.
  The bill would also require corporations and LLCs to update their 
beneficial ownership information in an annual filing with the State of 
incorporation. If a State did not require an annual filing, the 
information would have to be updated each time the beneficial ownership 
changed.
  In the special case of U.S. corporations formed by non-U.S. persons, 
the bill would go farther. Following the lead of the Patriot Act which 
imposed additional due diligence requirements on certain financial 
accounts opened by non-U.S. persons, our bill would require additional 
due diligence for corporations beneficially owned by non-U.S. persons. 
This added due diligence would have to be performed--not by the 
States--but by the persons seeking to establish the corporations. These 
incorporators would have to file with the State a written certification 
from a corporate formation agent residing within the State attesting to 
the fact that the agent had verified the identity of the non-U.S. 
beneficial owners of the corporation by obtaining their names, 
addresses, and passport photographs. The formation agent would be 
required to retain this information for a specified period of time and 
produce it upon request.
  The bill would not require the States to verify the ownership 
information provided to them by a formation agent, corporation, LLC, or 
other person filing an incorporation application. Instead, the bill 
would establish Federal civil and criminal penalties for anyone who 
knowingly provided a State with false beneficial ownership information 
or intentionally failed to provide the State with the information 
requested.
  The bill would also exempt certain corporations from the disclosure 
obligation. For example, it would exempt all publicly-traded 
corporations and the entities they form, since these corporations are 
already overseen by the Security and Exchange Commission SEC. It would 
also allow the States, with the written concurrence of the Homeland 
Security Secretary and the U.S. Attorney General, to identify certain 
corporations, either individually or as a class, that would not have to

[[Page 7622]]

list their beneficial owners, if requiring such ownership information 
would not serve the public interest or assist law enforcement in their 
investigations. These exemptions are expected to be narrowly drafted 
and rarely granted, but are intended to provide the States and Federal 
law enforcement added flexibility to fine-tune the disclosure 
obligation and focus it where it is most needed to stop crime, tax 
evasion, and other wrongdoing.
  Another area of flexibility in the bill involves privacy issues. The 
bill deliberately does not take a position on the issue of whether the 
States should make the beneficial ownership information they receive 
available to the public. Instead, the bill leaves it entirely up to the 
States to decide whether and under what circumstances to make 
beneficial ownership information available to the public. The bill 
explicitly permits the States to place restrictions on providing 
beneficial ownership information to persons other than government 
officials. The bill focuses instead only on ensuring that law 
enforcement and Congress, when equipped with a subpoena or summons, are 
given ready access to the beneficial ownership information collected by 
the States.
  To ensure that the States have the funds needed to meet the new 
beneficial ownership information requirements, the bill makes it clear 
that States can use their DHS State grant funds for this purpose. Every 
State is guaranteed a minimum amount of DHS grant funds every year and 
may receive funds substantially above that minimum. Every State will be 
able to use all or a portion of these funds to modify their 
incorporation practices to meet the requirements in the Act. The bill 
also authorizes DHS to use appropriated funds to carry out its 
responsibilities under the Act. These provisions will ensure that the 
States have the funds needed for the modest compliance costs involved 
with amending their incorporation forms to request the names of 
beneficial owners.
  It is common for bills establishing Federal standards to seek to 
ensure State action by making some Federal funding dependent upon a 
State's meeting the specified standards. This bill, however, states 
explicitly that nothing in the bill authorizes DHS to withhold funds 
from a State for failing to modify its incorporation practices to meet 
the beneficial ownership information requirements in the Act. Instead, 
the bill simply calls for a GAO report in 2012 to identify which 
States, if any, have failed to strengthen their incorporation practices 
as required by the Act. After getting this status report, a future 
Congress can decide what steps to take, including whether to reduce any 
DHS funding going to the noncompliant States.
  Finally, the bill would require the U.S. Department of the Treasury 
to issue a rule requiring formation agents to establish anti-money 
laundering programs to ensure they are not forming U.S. corporations or 
LLCs for criminals or other wrongdoers. GAO would also be asked to 
conduct a study of existing State formation procedures for partnerships 
and trusts.
  We have worked hard to craft a bill that would address, in a fair and 
reasonable way, the homeland security problem created by States 
allowing the formation of millions of U.S. corporations and LLCs with 
unknown owners. What the bill comes down to is a simple requirement 
that States change their incorporation applications to add a question 
requesting the names and addresses of the prospective beneficial 
owners. That is not too much to ask to protect this country and the 
international community from U.S. corporations engaged in wrongdoing 
and to help law enforcement track down the wrongdoers.
  For those who say that, if the United States tightens its 
incorporation rules, new companies will be formed elsewhere, it is 
appropriate to ask exactly where they will go? Every country in the 
European Union is already required to get beneficial information for 
the corporations formed under their laws. Most offshore jurisdictions 
already request this information as well, including the Bahamas, Cayman 
Islands, Jersey, and the Island of Man. Our States should be asking for 
the same ownership information, but they don't, and there is no 
indication that they will any time in the near future, unless required 
to do so.
  I wish Federal legislation weren't necessary. I wish the States could 
solve this homeland security problem on their own, but ongoing 
competitive pressures make it unlikely that the States will reach 
agreement. We have waited more than a year already with no real 
progress to show for it, despite repeated pleas from law enforcement.
  Federal legislation is necessary to reduce the vulnerability of the 
United States to wrongdoing by U.S. corporations with unknown owners, 
to protect interstate and international commerce from criminals 
misusing U.S. corporations, to strengthen the ability of law 
enforcement to investigate suspect U.S. corporations, to level the 
playing field among the States, and to bring the U.S. into compliance 
with its international anti-money laundering obligations.
  There is also an issue of consistency. For years, I have been 
fighting offshore corporate secrecy laws and practices that enable 
wrongdoers to secretly control offshore corporations involved in money 
laundering, tax evasion, and other misconduct. I have pointed out on 
more than one occasion that corporations were not created to hide 
ownership, but to shield owners from personal liability for corporate 
acts. Unfortunately, today, the corporate form has too often been 
corrupted into serving those wishing to conceal their identities and 
commit crimes or dodge taxes without alerting authorities. It is past 
time to stop this misuse of the corporate form. But if we want to stop 
inappropriate corporate secrecy offshore, we need to stop it here at 
home as well.
  For these reasons, I urge my colleagues to support this legislation 
and put an end to incorporation practices that promote corporate 
secrecy and render the United States and other countries vulnerable to 
abuse by U.S. corporations with unknown owners.
  Mr. President, I ask unanimous consent that the text of the bill and 
a bill summary be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows.

                                S. 2956

       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 ``Incorporation Transparency 
     and Law Enforcement Assistance Act''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Nearly 2,000,000 corporations and limited liability 
     companies are being formed under the laws of the States each 
     year.
       (2) Very few States obtain meaningful information about the 
     beneficial owners of the corporations and limited liability 
     companies formed under their laws.
       (3) A person forming a corporation or limited liability 
     company within the United States typically provides less 
     information to the State of incorporation than is needed to 
     obtain a bank account or driver's license and typically does 
     not name a single beneficial owner.
       (4) Criminals have exploited the weaknesses in State 
     formation procedures to conceal their identities when forming 
     corporations or limited liability companies in the United 
     States, and have then used the newly created entities to 
     commit crimes affecting interstate and international commerce 
     such as terrorism, drug trafficking, money laundering, tax 
     evasion, securities fraud, financial fraud, and acts of 
     foreign corruption.
       (5) Law enforcement efforts to investigate corporations and 
     limited liability companies suspected of committing crimes 
     have been impeded by the lack of available beneficial 
     ownership information, as documented in reports and testimony 
     by officials from the Department of Justice, the Department 
     of Homeland Security, the Financial Crimes Enforcement 
     Network of the Department of the Treasury, the Internal 
     Revenue Service, and the Government Accountability Office, 
     and others.
       (6) In July 2006, a leading international anti-money 
     laundering organization, the Financial Action Task Force on 
     Money Laundering (in this section referred to as the 
     ``FATF''), of which the United States is a member, issued a 
     report that criticizes the United States for failing to 
     comply with a FATF standard on the need to collect beneficial 
     ownership information and urged the United States to correct 
     this deficiency by July 2008.
       (7) In response to the FATF report, the United States has 
     repeatedly urged the

[[Page 7623]]

     States to strengthen their incorporation practices by 
     obtaining beneficial ownership information for the 
     corporations and limited liability companies formed under the 
     laws of such States.
       (8) Many States have established automated procedures that 
     allow a person to form a new corporation or limited liability 
     company within the State within 24 hours of filing an online 
     application, without any prior review of the application by a 
     State official. In exchange for a substantial fee, 2 States 
     will form a corporation within 1 hour of a request.
       (9) Dozens of Internet websites highlight the anonymity of 
     beneficial owners allowed under the incorporation practices 
     of some States, point to those practices as a reason to 
     incorporate in those States, and list those States together 
     with offshore jurisdictions as preferred locations for the 
     formation of new corporations, essentially providing an open 
     invitation to criminals and other wrongdoers to form entities 
     within the United States.
       (10) In contrast to practices in the United States, all 
     countries in the European Union are required to identify the 
     beneficial owners of the corporations they form.
       (11) To reduce the vulnerability of the United States to 
     wrongdoing by United States corporations and limited 
     liability companies with unknown owners, to protect 
     interstate and international commerce from criminals misusing 
     United States corporations and limited liability companies, 
     to strengthen law enforcement investigations of suspect 
     corporations and limited liability companies, to set minimum 
     standards for and level the playing field among State 
     incorporation practices, and to bring the United States into 
     compliance with its international anti-money laundering 
     obligations, Federal legislation is needed to require the 
     States to obtain beneficial ownership information for the 
     corporations and limited liability companies formed under the 
     laws of such States.

     SEC. 3. TRANSPARENT INCORPORATION PRACTICES.

       (a) Transparent Incorporation Practices.--
       (1) In general.--Subtitle A of title XX of the Homeland 
     Security Act of 2002 (6 U.S.C. 601 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 2009. TRANSPARENT INCORPORATION PRACTICES.

       ``(a) Incorporation Systems.--
       ``(1) In general.--To protect the security of the United 
     States, each State that receives funding from the Department 
     under section 2004 shall, not later than the beginning of 
     fiscal year 2011, use an incorporation system that meets the 
     following requirements:
       ``(A) Each applicant to form a corporation or limited 
     liability company under the laws of the State is required to 
     provide to the State during the formation process a list of 
     the beneficial owners of the corporation or limited liability 
     company that--
       ``(i) identifies each beneficial owner by name and current 
     address; and
       ``(ii) if any beneficial owner exercises control over the 
     corporation or limited liability company through another 
     legal entity, such as a corporation, partnership, or trust, 
     identifies each such legal entity and each such beneficial 
     owner who will use that entity to exercise control over the 
     corporation or limited liability company.
       ``(B) Each corporation or limited liability company formed 
     under the laws of the State is required by the State to 
     update the list of the beneficial owners of the corporation 
     or limited liability company by providing the information 
     described in subparagraph (A)--
       ``(i) in an annual filing with the State; or
       ``(ii) if no annual filing is required under the law of 
     that State, each time a change is made in the beneficial 
     ownership of the corporation or limited liability company.
       ``(C) Beneficial ownership information relating to each 
     corporation or limited liability company formed under the 
     laws of the State is required to be maintained by the State 
     until the end of the 5-year period beginning on the date that 
     the corporation or limited liability company terminates under 
     the laws of the State.
       ``(D) Beneficial ownership information relating to each 
     corporation or limited liability company formed under the 
     laws of the State shall be provided by the State upon receipt 
     of--
       ``(i) a civil or criminal subpoena or summons from a State 
     agency, Federal agency, or congressional committee or 
     subcommittee requesting such information; or
       ``(ii) a written request made by a Federal agency on behalf 
     of another country under an international treaty, agreement, 
     or convention, or section 1782 of title 28, United States 
     Code.
       ``(2) Non-united states beneficial owners.--To further 
     protect the security of the United States, each State that 
     accepts funding from the Department under section 2004 shall, 
     not later than the beginning of fiscal year 2011, require 
     that, if any beneficial owner of a corporation or limited 
     liability company formed under the laws of the State is not a 
     United States citizen or a lawful permanent resident of the 
     United States, each application described in paragraph (1)(A) 
     and each update described in paragraph (1)(B) shall include a 
     written certification by a formation agent residing in the 
     State that the formation agent--
       ``(A) has verified the name, address, and identity of each 
     beneficial owner that is not a United States citizen or a 
     lawful permanent resident of the United States;
       ``(B) has obtained for each beneficial owner that is not a 
     United States citizen or a lawful permanent resident of the 
     United States a copy of the page of the government-issued 
     passport on which a photograph of the beneficial owner 
     appears;
       ``(C) will provide proof of the verification described in 
     subparagraph (A) and the photograph described in subparagraph 
     (B) upon request; and
       ``(D) will retain information and documents relating to the 
     verification described in subparagraph (A) and the photograph 
     described in subparagraph (B) until the end of the 5-year 
     period beginning on the date that the corporation or limited 
     liability company terminates, under the laws of the State.
       ``(b) Penalties for False Beneficial Ownership 
     Information.--In addition to any civil or criminal penalty 
     that may be imposed by a State, any person who affects 
     interstate or foreign commerce by knowingly providing, or 
     attempting to provide, false beneficial ownership information 
     to a State, by intentionally failing to provide beneficial 
     ownership information to a State upon request, or by 
     intentionally failing to provide updated beneficial ownership 
     information to a State--
       ``(1) shall be liable to the United States for a civil 
     penalty of not more than $10,000; and
       ``(2) may be fined under title 18, United States Code, 
     imprisoned for not more than 3 years, or both.
       ``(c) Funding Authorization.--To carry out this section--
       ``(1) a State may use all or a portion of the funds made 
     available to the State under section 2004; and
       ``(2) the Administrator may use funds appropriated to carry 
     out this title, including unobligated or reprogrammed funds, 
     to enable a State to obtain and manage beneficial ownership 
     information for the corporations and limited liability 
     companies formed under the laws of the State, including by 
     funding measures to assess, plan, develop, test, or implement 
     relevant policies, procedures, or system modifications.
       ``(d) State Compliance Report.--Nothing in this section 
     authorizes the Administrator to withhold from a State any 
     funding otherwise available to the State under section 2004 
     because of a failure by that State to comply with this 
     section. Not later than June 1, 2012, the Comptroller General 
     of the United States shall submit to the Committee on 
     Homeland Security and Governmental Affairs of the Senate and 
     the Committee on Homeland Security of the House of 
     Representatives a report identifying which States are in 
     compliance with this section and, for any State not in 
     compliance, what measures must be taken by that State to 
     achieve compliance with this section.
       ``(e) Definitions.--In this section:
       ``(1) Beneficial owner.--The term `beneficial owner' means 
     an individual who has a level of control over, or entitlement 
     to, the funds or assets of a corporation or limited liability 
     company that, as a practical matter, enables the individual, 
     directly or indirectly, to control, manage, or direct the 
     corporation or limited liability company.
       ``(2) Corporation; limited liability company.--The terms 
     `corporation' and `limited liability company'--
       ``(A) have the meanings given such terms under the laws of 
     the applicable State;
       ``(B) do not include any business concern that is an issuer 
     of a class of securities registered under section 12 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 781) or that is 
     required to file reports under section 15(d) of that Act (15 
     U.S.C. 78o(d)), or any corporation or limited liability 
     company formed by such a business concern;
       ``(C) do not include any business concern formed by a 
     State, a political subdivision of a State, under an 
     interstate compact between 2 or more States, by a department 
     or agency of the United States, or under the laws of the 
     United States; and
       ``(D) do not include any individual business concern or 
     class of business concerns which a State, after obtaining the 
     written concurrence of the Administrator and the Attorney 
     General of the United States, has determined in writing 
     should be exempt from the requirements of subsection (a), 
     because requiring beneficial ownership information from the 
     business concern would not serve the public interest and 
     would not assist law enforcement efforts to detect, prevent, 
     or punish terrorism, money laundering, tax evasion, or other 
     misconduct.
       ``(3) Formation agent.--The term `formation agent' means a 
     person who, for compensation, acts on behalf of another 
     person to assist in the formation of a corporation or limited 
     liability company under the laws of a State.''.
       (2) Table of contents.--The table of contents in section 1 
     of the Homeland Security Act of 2002 (6 U.S.C. 101 et seq.) 
     is amended by inserting after the item relating to section 
     2008 the following:

``Sec. 2009. Transparent incorporation practices.''.


[[Page 7624]]


       (b) Effect on State Law.--
       (1) In general.--This Act and the amendments made by this 
     Act do not supersede, alter, or affect any statute, 
     regulation, order, or interpretation in effect in any State, 
     except where a State has elected to receive funding from the 
     Department of Homeland Security under section 2004 of the 
     Homeland Security Act of 2002 (6 U.S.C. 605), and then only 
     to the extent that such State statute, regulation, order, or 
     interpretation is inconsistent with this Act or an amendment 
     made by this Act.
       (2) Not inconsistent.--A State statute, regulation, order, 
     or interpretation is not inconsistent with this Act or an 
     amendment made by this Act if such statute, regulation, 
     order, or interpretation--
       (A) requires additional information, more frequently 
     updated information, or additional measures to verify 
     information related to a corporation, limited liability 
     company, or beneficial owner, than is specified under this 
     Act or an amendment made by this Act; or
       (B) imposes additional limits on public access to the 
     beneficial ownership information obtained by the State than 
     is specified under this Act or an amendment made by this Act.

     SEC. 4. ANTI-MONEY LAUNDERING OBLIGATIONS OF FORMATION 
                   AGENTS.

       (a) Anti-Money Laundering Obligations of Formation 
     Agents.--Section 5312(a)(2) of title 31, United States Code, 
     is amended--
       (1) in subparagraph (Y), by striking ``or'' at the end;
       (2) by redesignating subparagraph (Z) as subparagraph (AA); 
     and
       (3) by inserting after subparagraph (Y) the following:
       ``(Z) any person involved in forming a corporation, limited 
     liability company, partnership, trust, or other legal entity; 
     or''.
       (b) Deadline for Anti-Money Laundering Rule for Formation 
     Agents.--
       (1) Proposed rule.--Not later than 90 days after the date 
     of enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Attorney General of the United States, 
     the Secretary of Homeland Security, and the Commissioner of 
     the Internal Revenue Service, shall publish a proposed rule 
     in the Federal Register requiring persons described in 
     section 5312(a)(2)(Z) of title 31, United States Code, as 
     amended by this section, to establish anti-money laundering 
     programs under subsection (h) of section 5318 of that title.
       (2) Final rule.--Not later than 270 days after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     publish the rule described in this subsection in final form 
     in the Federal Register.

     SEC. 5. STUDY AND REPORT BY GOVERNMENT ACCOUNTABILITY OFFICE.

       Not later than 1 year after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     conduct a study and submit to the Committee on Homeland 
     Security and Governmental Affairs of the Senate and the 
     Committee on Homeland Security of the House of 
     Representatives a report--
       (1) identifying each State that has procedures that enable 
     persons to form or register under the laws of the State 
     partnerships, trusts, or other legal entities, and the nature 
     of those procedures;
       (2) identifying each State that requires persons seeking to 
     form or register partnerships, trusts, or other legal 
     entities under the laws of the State to provide information 
     about the beneficial owners (as that term is defined in 
     section 2009 of the Homeland Security Act of 2002, as added 
     by this Act) or beneficiaries of such entities, and the 
     nature of the required information;
       (3) evaluating whether the lack of available beneficial 
     ownership information for partnerships, trusts, or other 
     legal entities--
       (A) raises concerns about the involvement of such entities 
     in terrorism, money laundering, tax evasion, securities 
     fraud, or other misconduct; and
       (B) has impeded investigations into entities suspected of 
     such misconduct; and
       (4) evaluating whether the failure of the United States to 
     require beneficial ownership information for partnerships and 
     trusts formed or registered in the United States has elicited 
     international criticism and what steps, if any, the United 
     States has taken or is planning to take in response.
                                  ____


 Summary of Incorporation Transparency and Law Enforcement Assistance 
                            Act, May 1, 2008

       To protect the United States from U.S. corporations being 
     misused to commit terrorism, money laundering, tax evasion, 
     or other misconduct, the Incorporation Transparency and Law 
     Enforcement Assistance Act would:
       Beneficial Ownership Information. Require the States to 
     obtain a list of the beneficial owners of each corporation or 
     limited liability company (LLC) formed under their laws, 
     ensure this information is updated annually, and provide the 
     information to civil or criminal law enforcement upon receipt 
     of a subpoena or summons.
       Non-U.S. Beneficial Owners. Require corporations and LLCs 
     with non-U.S. beneficial owners to provide a certification 
     from an in-State formation agent that the agent has verified 
     the identity of those owners.
       Penalties for False Information. Establish civil and 
     criminal penalties under federal law for persons who 
     knowingly provide false beneficial ownership information or 
     intentionally fail to provide required beneficial ownership 
     information to a State.
       Exemptions. Provide exemptions for certain corporations, 
     including publicly traded corporations and the corporations 
     and LLCs they form, since the Securities and Exchange 
     Commission already oversees them; and corporations which a 
     State has determined, with concurrence from the Homeland 
     Security and Justice Departments, should be exempt because 
     requiring beneficial ownership information from them would 
     not serve the public interest or assist law enforcement.
       Funding. Authorize States to use an existing DHS grant 
     program, and authorize DHS to use already appropriated funds, 
     to meet the requirements of this Act.
       State Compliance Report. Clarify that nothing in the Act 
     authorizes DHS to withhold funds from a State for failing to 
     comply with the beneficial ownership requirements. Require a 
     GAO report by 2012 identifying which States are not in 
     compliance so that a future Congress can determine at that 
     time what steps to take.
       Transition Period. Give the States until October 2011 to 
     require beneficial ownership information for the corporations 
     and LLCs formed under their laws.
       Anti-Money Laundering Rule. Require the Treasury Secretary 
     to issue a rule requiring formation agents to establish anti-
     money laundering programs to ensure they are not forming U.S. 
     corporations or other entities for criminals or other suspect 
     persons.
       GAO Study. Require GAO to complete a study of State 
     beneficial ownership information requirements for in-state 
     partnerships and trusts.
                                 ______
                                 
  By Mr. LIEBERMAN:
  S. 2957. A bill to modernize credit union net worth standards, 
advance credit union efforts to promote economic growth, and modify 
credit union regularity standards and reduce burdens, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. LIEBERMAN. Mr. President today more than ever, credit unions are 
a critical component of our nation's financial landscape. At a time 
when most financial institutions are retreating from the credit 
markets, credit unions are among the few lenders in the financial 
industry demonstrating resiliency and strength. For example, while many 
mortgage lenders are struggling to stay afloat, the delinquency rate on 
mortgages issued by credit unions is less than one percent, and credit 
unions are still lending. Nonetheless, certain outdated regulatory 
rules impede the ability of credit unions to effectively carry out 
their role as savings and lending institutions for local communities 
and small businesses. Because I believe that credit unions are a 
stabilizing force in the domestic economy and play an important role in 
providing financial services to local community and underserved groups, 
I am introducing the Credit Union Regulatory Improvements Act of 2008, 
CURIA.
  The health of credit unions in today's turbulent economy is 
attributable to a business model that differs significantly from that 
of other financial institutions. Similar to banks and thrifts, credit 
unions act as intermediaries in the market for consumer finance. Credit 
unions, however, are governed by certain rules that take into account 
their position as cooperative lenders. Notably, credit unions operate 
as tax-exempt, nonprofit institutions. All credit union earnings are 
retained as capital or returned to members in the form of higher 
interest rates on savings accounts, lower interest rates on loans, and 
other financial benefits. Second, credit unions are member-owned with 
each member entitled to one vote in selecting board members and other 
decisions. Third, credit unions do not issue capital stock. Rather, 
credit unions create capital by retaining earnings. Fourth, credit 
unions rely on volunteer, generally unpaid boards of directors elected 
from the membership. Lastly, credit unions are limited to accepting 
members identified in a credit union's articulated field of 
membership--usually reflecting occupational, associational, or 
geographical links or affinity.
  In short, through a cooperative ownership structure, credit unions 
offer access to financial services to millions of Americans. As a 
result of strong ties to their communities, credit unions help meet 
local needs, and in the process, encourage economic growth, job 
creation, savings, and opportunities for

[[Page 7625]]

small business owners. At the end of 2007, over 88 million individuals 
were members of state or federally charted credit unions in the United 
States, including close to a million individuals in the State of 
Connecticut.
  The legislation I am introducing will help modernize the Federal 
Credit Union Act, bringing antiquated rules into the era of twenty-
first century consumer finance. CURIA would remove several instances of 
statutory micromanagement that place unreasonable constraints on the 
ability of credit unions and their boards to function efficiently and 
in the best interests of their members. The first title would update 
current capital requirements by implementing recommendations from the 
National Credit Union Administration, NCUA, the Federal regulatory body 
that oversees credit unions. For purposes of setting capital 
requirements, CURIA would implement a rigorous, two-part net worth test 
that would more closely track an institution's actual asset risk. The 
second title would promote community development and local economic 
growth by providing for modest expansion in credit union business 
lending. The title also includes provisions that would permit credit 
unions to extend services to areas with high unemployment and low 
incomes. The third title would provide credit unions with relief from 
outdated regulatory burdens by authorizing the NCUA to increase maximum 
loan terms and raise interest rate ceilings in response to sustained 
increases in prevailing market interest rate levels. The title would 
further allow greater credit union investment in credit union service 
organizations, allow limited investments in securities, and update 
credit union governance rules.
  Vigorous competition among financial service providers, new 
technology, and globalization have resulted in a financial marketplace 
where the products and actors are evolving at a much more rapid rate 
than the statutes and regulations that govern them. While recent events 
demonstrate that we must be prudent in our approach to financial 
regulation, we must not allow our rules to unjustifiably constrain 
those actors, such as credit unions, that contribute to financial 
stability, community development, and long-term growth. The Credit 
Union Regulatory Improvements Act is an important step toward 
modernizing and calibrating our financial regulatory rules, I encourage 
my colleagues to support it.
  Mr. President, I ask unanimous consent a section-by-section analysis 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

          The Credit Union Regulatory Improvements Act of 2008


                      Section-by-Section Analysis

     Section 1. Short title
       Section 1 would establish the short title of the bill as 
     the Credit Union Regulatory Improvements Act of 2008.


                        Title I: Capital Reform

     Section 101. Amendments to net worth categories
       The Federal Credit Union Act presently specifies the amount 
     of capital credit unions must hold in order to protect their 
     safety and soundness and the solvency of the National Credit 
     Union Share Insurance Fund (``Insurance Fund''). Many 
     experts, however, have noted that this capital allocation 
     system is inefficient and does not appropriately account for 
     risk. Section 101 incorporates recent recommendations of the 
     National Credit Union Administration, NCUA, to provide a two-
     tier capital and Prompt Corrective Action, PCA, system for 
     federally insured credit unions involving complementary 
     leverage and risk-based minimum capital requirements. Under 
     the proposed system, a well capitalized credit union must 
     maintain a leverage net worth ratio of 5.25% and a minimum 
     risk-based ratio of 10%. When a credit union's capital 
     deposit to the Insurance Fund (equal to 1% of insured 
     deposits) is added, a credit union's total net worth would 
     equal or exceed the capital requirements for FDIC-insured 
     banks and thrifts.
     Section 102. Amendments relating to risk-based net worth 
         categories
       Currently, only federally insured credit unions that are 
     considered ``complex'' must meet a risk-based net worth 
     requirement under the Federal Credit Union Act. Section 102 
     would instead require all federally insured credit unions to 
     meet a risk-based net worth requirement, and it directs the 
     Board to take into account comparable risk standards for 
     FDIC-insured institutions when designing the risk-based 
     requirements appropriate to credit unions.
     Section 103. Treatment based on other criteria
       Section 103 would permit the NCUA Board to delegate to 
     regional directors the authority to lower by one level a 
     credit union's net worth category for reasons related to 
     interest-rate risk not captured in the risk-based ratios, 
     with any regional action subject to Board review.
     Section 104. Definitions relating to net worth
       Net worth, for purposes of prompt corrective action, is 
     currently defined as a credit union's retained earnings 
     balance under generally accepted accounting principles. 
     Section 104 would make three important revisions to this 
     definition. First, it clarifies that credit union net worth 
     ratios must be calculated without a credit union's capital 
     deposit with the Insurance Fund. Second, it provides a new 
     definition for ``risk-based net worth ratio'' as the ratio of 
     the net worth of the credit union to the risk assets of the 
     credit union. Third, it would permit the NCUA to impose 
     additional limitations on the secondary capital accounts used 
     to determine net worth for low-income community credit unions 
     where necessary to address safety and soundness concerns.

    Section 105. Amendments relating to net worth restoration Plans

       Section 105 would provide the NCUA Board with authority to 
     waive temporarily the requirement to implement a net worth 
     restoration plan for a credit union that becomes 
     undercapitalized due to disruption of its operations by a 
     natural disaster or a terrorist act. It would further permit 
     the Board to require any credit union that is no longer well 
     capitalized to implement a net worth restoration plan if it 
     determines the loss of capital is due to safety and soundness 
     concerns and those concerns remain unresolved by the credit 
     union.
       This section would also modify the required actions of the 
     Board in the case of critically undercapitalized credit 
     unions in several ways. First, it would authorize the Board 
     to issue an order to a critically undercapitalized credit 
     union. Second, the timing of the period before appointment of 
     a liquidating agent could be shortened. Third, the section 
     would clarify the coordination requirement with state 
     officials in the case of state-chartered credit unions.


                       Title II: Economic Growth

     Section 201. Limits on member business loans
       Section 201 would increase the current arbitrary asset 
     limit on credit union member business loans from the lesser 
     of 1.75 times actual net worth or 1.75 percent times net 
     worth for a well-capitalized credit union (12.25% of total 
     assets) to a flat limit of 20% of the total assets of a 
     credit union. This update would facilitate added member 
     business lending without jeopardizing safety and soundness at 
     participating credit unions, as the 20% cap would still be 
     equal to or stricter than business lending caps imposed on 
     other depository institutions.
     Section 202. Definition of member business loans
       Section 202 would give NCUA the authority to exclude loans 
     of $100,000 or less as de minimis, rather than the current 
     $50,000 exclusion, from calculation of the 20% cap on member 
     business loans. This change would thus facilitate the ability 
     of credit unions to make additional loans and encourage them 
     to make very small business loans. It also builds upon the 
     findings in a 2001 study by the Treasury Department that 
     found that ``. . . credit union member business loans share 
     many characteristics of consumer loans'' and that ``. . . 
     these loans are generally smaller and fully collateralized, 
     and borrower risk profiles are more easily determined.''
     Section 203. Restrictions on member business loans
       Section 203 would modify language in the Federal Credit 
     Union Act that currently prohibits a credit union from making 
     any new member business loans if its net worth falls below 6 
     percent. This change would permit the NCUA to determine if 
     such a policy is appropriate and to oversee all member 
     business loans granted by an undercapitalized institution.
     Section 204. Member business loan exclusion for loans to non-
         profit religious organizations
       To facilitate the ability of credit unions to support the 
     community development activities of non-profit religious 
     institutions, Section 204 would exclude loans or loan 
     participations by credit unions to non-profit religious 
     organizations from the member business loan limits contained 
     in the Federal Credit Union Act.
     Section 205. Credit unions authorized to lease space in 
         buildings in underserved areas
       In order to enhance the ability of federal credit unions to 
     assist underserved communities with their economic 
     revitalization efforts, Section 205 would allow a credit 
     union to lease space in a building or on property on which it 
     maintains a physical presence in an underserved area to other 
     parties on a more

[[Page 7626]]

     permanent basis. It would also permit a federal credit union 
     to acquire, construct, or refurbish a building in an 
     underserved community, then lease out excess space in that 
     building.
     Section 206. Amendments relating to credit union service to 
         underserved areas
       Section 206 would revise a provision of the 1998 Credit 
     Union Membership Access Act that has been incorrectly 
     interpreted as permitting only federal credit unions with 
     multiple common bond charters to expand services to 
     individuals and groups living or working in areas of high 
     unemployment and below median incomes that typically are 
     underserved by other depository institutions. The change 
     would reestablish prior NCUA policy of permitting all federal 
     credit unions, regardless of charter type, to expand services 
     to eligible communities that the Treasury Department 
     determines meet income, unemployment and other distress 
     criteria.
     Section 207. Underserved areas defined
       Section 207 would expand the criteria for determining 
     whether a community or rural area qualifies as an underserved 
     area. The definition of a qualified underserved area includes 
     not only areas currently eligible as ``investment areas'' 
     under the Treasury Department's Community Development 
     Financial Institutions (CDFI) program, but also census tracts 
     qualifying as ``low income areas'' under the New Markets Tax 
     Credit targeting formula adopted by Congress in 2000.


                  Title III: Regulatory Modernization

     Section 301. Investments in securities by federal credit 
         unions
       The Federal Credit Union Act presently limits the 
     investment authority of federal credit unions to loans, 
     government securities, deposits in other financial 
     institutions, and certain other limited investments. Section 
     301 would provide additional investment authority to allow 
     credit unions to purchase for the credit union's own account 
     certain investment grade securities. The total amount of the 
     investment securities of any one obligor or maker could not 
     exceed 10% of the credit union's net worth and total 
     investments could not exceed 10% of total assets.
     Section 302. Authority of NCUA to establish longer maturities 
         for certain credit union loans
       The Federal Credit Union Act was amended in 2006 to allow 
     the NCUA Board to increase the 12-year maturity limit on non-
     real estate secured loans to 15 years. Section 302 would 
     further provide the Board with additional flexibility to 
     issue regulations providing for loan terms exceeding 15 years 
     for specific types of loans.
     Section 303. Increase in 1 percent investment and loan limits 
         in credit union service organizations
       The Federal Credit Union Act authorizes federal credit 
     unions to invest in organizations providing services to 
     credit unions and credit union members. Currently, an 
     individual federal credit union may invest in aggregate no 
     more than one percent of its unimpaired capital and surplus 
     in these organizations, commonly known as credit union 
     service organizations or CUSOs. Credit unions also are 
     limited in the amount they may loan to all CUSOs to one 
     percent of unimpaired capital and surplus. Section 303 would 
     double the amount a credit union may invest in all CUSOs, and 
     the aggregate amount it may lend to CUSOs, to two percent of 
     credit union unimpaired capital and surplus.
     Section 304. Voluntary mergers involving multiple common bond 
         credit unions
       NCUA has identified ambiguous language in the 1998 Credit 
     Union Membership Access Act as creating uncertainty for 
     certain voluntary credit union mergers by requiring that 
     groups of more than 3,000 members be required to start a new 
     credit union rather than be incorporated as a new group 
     within a multiple common-bond credit union. Section 304 would 
     clarify that this numerical limitation would not apply to bar 
     groups of more than 3,000 members that are transferred 
     between two existing credit unions as part of a voluntary 
     merger.
     Section 305. Conversions involving certain credit unions to a 
         community charter
       In cases when a single or multiple common-bond federal 
     credit union converts to a community credit union charter, 
     there may be groups within the credit union's existing 
     membership that are located outside the new community 
     charter's geographic boundaries, but which desire to remain 
     part of the credit union and can be adequately served by the 
     credit union. Section 305 would require NCUA to establish the 
     criteria whereby it may determine that a member group or 
     other portion of a credit union's existing membership, 
     located outside of the community, can be satisfactorily 
     served and remain within the credit union's field of 
     membership.
     Section 306. Credit union governance
       Section 306 would provide federal credit union boards the 
     flexibility to expel a member, based on just cause, who is 
     disruptive to the operations of the credit union, including 
     harassing personnel and creating safety concerns, without the 
     need for a two-thirds vote of the membership present at a 
     special meeting as required by current law. The section would 
     also permit federal credit unions to limit the length of 
     service of their boards of directors to ensure broader 
     representation from the membership.
     Section 307. Providing the National Credit Union 
         Administration with greater flexibility in responding to 
         market conditions
       Currently, the NCUA Board may raise the usury interest rate 
     ceiling on loans by federal credit unions whenever it 
     determines that money market rates have increased over the 
     preceding six-month period and prevailing interest rates 
     threaten the safety and soundness of individual credit 
     unions. Section 307 would give the Board greater flexibility 
     to make such determinations based either on sustained 
     increases in money market interest rates or prevailing market 
     interest rate levels.
     Section 308. Credit union conversion voting requirements
       Section 308 includes several changes to current law 
     pertaining to credit union conversions to mutual thrift 
     institutions. It would increase the minimum member 
     participation requirement in any vote to approve a conversion 
     to 30% of the credit union's membership. It would require the 
     board of directors of a credit union considering conversion 
     to hold a general membership meeting one month prior to 
     sending out any notices about a conversion vote that contain 
     a voting ballot. It would also prohibit use of raffles, 
     contest, or any other promotions to encourage member voting 
     in a conversion vote.
     Section 309. Exemption from pre-merger notification 
         requirement of the Clayton Act
       Section 309 would give all federally insured credit unions 
     the same exemption that banks and thrift institutions already 
     have from pre-merger notification requirements and fees for 
     purposes of antitrust review by the Federal Trade Commission 
     under the Clayton Act.
                                 ______
                                 
      By Mr. DOMENICI (for himself, Mr. Bunning, Mr. Sessions, Mrs. 
        Hutchison, Mr. Bond, Mr. Inhofe, Ms. Murkowski, Mr. Barrasso, 
        Mr. Bennett, Mr. Wicker, Mr. Chambliss, Mr. Stevens, Mr. 
        Cornyn, Mr. Enzi, Mr. Isakson, Mr. Thune, Mr.  Voinovich, Mr. 
        Allard, and Mr. McConnell).
  S. 2958. A bill to promote the energy security of the United States, 
and for other purposes; to the Committee on Energy and Natural 
Resources.

  Mr. DOMENICI. Mr. President, I have a few remarks about the energy 
situation I would like to share with the Senate. Two months ago, I came 
to the floor to deliver a series of speeches on the State of our 
Nation's energy security. I said then, unequivocally, that our Nation's 
economic strength had been put in great peril by our growing dependence 
on foreign oil.
  I have been a member of the Energy Committee for 30 years and have 
served as chairman of that committee, as well as the Budget Committee, 
for a long period during that time. I have seen my share of serious 
debate on energy and the economy, and I recognize how vital these 
issues are to our Nation's well-being.
  Unfortunately, in these times of high gas prices and an approaching 
election, I have also seen my share of not-so-serious debate. The 
American people deserve better than false promises of short-term fixes, 
driving season gimmicks, and empty threats to the Middle East.
  I said in February--and I say it again today--the American people 
deserve serious, thoughtful, long-term solutions to our ever-growing 
energy crisis. If there are short-term solutions, or short-term aids, 
we ought to share those, too, and get on with adopting them.
  Investigating, taxing, and threatening our American oil and gas 
companies will do nothing to reduce the stranglehold foreign oil 
dependence has put on our economic strength, national security, and 
foreign policy agenda.
  To blame either side of the aisle for the trouble this Nation is in 
misses the point. The American people did not send us here to cast 
blame on one side or the other, and they certainly didn't send us here 
to put bandaids on serious illnesses that threaten our Nation.
  My first year in the Senate was during a Republican administration, 
when a President set out an aggressive agenda to reduce our Nation's 
oil imports.

[[Page 7627]]

  At that time, we were importing 6 million barrels of oil a day, which 
represented 35 percent of our total oil consumption.
  Fast forward 36 years to today. The aggressive agenda through several 
administrations and Congresses under the control of both parties has 
failed time and again. Today, we are more than 60 percent dependent on 
foreign oil which comes from some of the most hostile regimes in the 
world. Over time, our consumption has grown at a moderate rate, but our 
imports have more than doubled to 13.4 million barrels per day. The 
result is a rising cost of energy, a rising threat of disruption in our 
energy supply, and a rising anger among our already burdened 
constituents.
  As I said today, the average price of gasoline is $3.62 a gallon, an 
alltime high for the 17th straight day. Crude oil closed above $113 per 
barrel last night. The average approval rating of Congress has 
plummeted to 22 percent, and yet we continue to point fingers back and 
forth.
  In the past few years, Congress has achieved significant success in 
addressing long-term energy security. We passed a 2005 bill that will 
bring us a nuclear renaissance, a 2006 bill that will bring us greater 
domestic oil and gas production in the Gulf of Mexico, and a 2007 bill 
that will bring us increased fuel efficiency. That is a dramatic change 
in the CAFE standards. These were not little things, and they were hard 
to do. They were done without finger-pointing and with bipartisan 
support.
  To face this new challenge, however, we must do even more. Debate 
about energy, oil, and the environment has reached a fever pitch. The 
challenge of our time will be how we meet a rising demand for energy 
from the literally billions of new consumers who wish to share in the 
benefits of a global economy. I think we all know what that means. That 
means India, China, and other countries are adding to the demand part 
of the supply-and-demand cycles in mammoth ways. Already, China is 
moving ahead as one of the largest importers of oil and users of oil in 
the whole world. Just 10 years ago, or 12, they were hardly on the map. 
For our Nation's future energy security and the world's, we will need 
to ensure our supply of energy is reliable, affordable, and abundant.
  Today, I introduced the Domestic Energy Production Act of 2008. I ask 
unanimous consent that title be changed to the American Energy 
Production Act of 2008.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. DOMENICI. I ask that the clerk so change the bill, if they can. 
If not, the Senator from New Mexico asks for the right to change it.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. DOMENICI. Madam President, the policies set forth in this bill 
will begin to move us in the right direction. I urge my colleagues to 
support its passage and to look at it seriously.
  First, the bill allows for States on the Atlantic and Pacific coasts 
to petition the Federal Government to opt out of the broad moratorium 
that for two decades has locked up America's assets and forced us to 
turn toward unstable foreign nations to power our lives. I believe it 
is time that we ask the Atlantic and Pacific coastal States to take a 
real look at whether we could drill distances from their shores without 
doing any harm and adding substantially to the American supply for all 
our citizens, not just the coastal citizens. I believe the time is 
ripe. I believe right-headed people will consider that might be a 
reality. If we were to do it, we were told just that contains literally 
millions of barrels of crude oil and billions of cubic feet of natural 
gas for the American energy future.
  First, this bill allows these Atlantic and Pacific coasts to petition 
their Government to opt out, as I said, and these are large quantities 
of assets that are American. Together, the Atlantic and Pacific Oceans 
contain oil reserves, and here are the numbers, what we know without 
doing a detailed reconnaissance. There are reserves of up to 14 billion 
barrels and natural gas reserves totaling 55 trillion cubic feet. Those 
are big enough for the American people to demand that everyone who 
represents States in this Senate look at this, whether they are coastal 
State Senators or not. America needs an honest evaluation because with 
these States, if there was no damage--and I believe we can drill 
without any damage today--we might move in a direction, an honest 
direction, of reducing dramatically what we must import overseas.
  Opening them to leasing would literally bring billions of dollars to 
the Federal Treasury and billions of dollars to the coastal States 
because they would share in it 37 percent, as we did with the coastal 
States of Louisiana, Mississippi, and Texas when we, 2 years ago, did 
the same thing for Gulf States and opened those areas for drilling. 
Those States abutting were positively impressed and helped by it 
because they wanted development and they also wanted to share in the 
royalties. The new way we build platforms and drill is a far cry from 
20 years ago when coastal States were so worried. Actually, we can do 
it with little or no footprint, little or no seepage or damage, there 
is no question about it.
  Next, the bill opens 2,000 acres of the 19 million acres of the 
Arctic plain, or ANWR, for oil and gas leasing. In 1995, President 
Clinton vetoed an ANWR bill, and the price of oil was $19 a barrel. As 
a result, 1 million barrels of oil continue to sit beneath our ground 
each day instead of in our gas tanks. I believe the ultimate find, if 
we are permitted to drill, would be much more than the million barrels, 
without a question. The footprint is so small, the new directional 
drilling is so accurate that I believe it deserves an opportunity for 
the Senate to look again and think again and for the American people to 
look again and think again with us on what should be done. The price of 
oil is now $113 a barrel. When we last voted, the price was somewhere 
above $50 but certainly nothing like this.
  Yesterday, I heard a colleague on the other side of the aisle urge 
OPEC nations to release 500,000 barrels of oil to the global market. 
Today, in introducing this bill, I respond to my colleagues to release 
more than 1 million barrels to that supply, from our own lands, by 
supporting my bill. We don't know how much more we will get if the 
coastal States join in and begin lifting the moratorium. We may be able 
to send a message that more than the 500,000 barrels my colleague on 
the other side sought and far more than the 1 million we would get from 
Alaska would be released into the American market.
  This bill provides for a consolidated permitting process to ease 
constraints on building refineries in this country. While we improved 
the capacity over years, we consistently hear the criticism that no new 
refinery has been built in our country for over 30 years. Our Nation 
cannot afford to go 30 more years without building additional 
refineries.
  The bill also provides a small measure of relief by suspending 
delivery to the Strategic Petroleum Reserve. I ask my colleagues to 
consider their views on certain issues. I remind them that this issue I 
have reconsidered on my own. I believe it is appropriate in this 
pricing environment that we stop filling the SPR for up to 6 months, 
thus providing 70,000 additional barrels of light sweet crude per day. 
That might have an effect. Although it will be minor, it might be 
recognizable on the price of oil. I think it is time to do that.
  I told the chairman of the Subcommittee on Energy and Water 
Development, with whom I serve and was the principal sponsor of this, 
that I would join him in this when he was ready to move on the Senate 
floor.
  By its very nature, this is just a fraction of the oil that will be 
gained through OCS production. OCS is what I am talking about in the 
bill I introduced today, and ANWR, oil shale production, and coal-to-
liquid production are in this bill. In today's environment, any small 
amount helps the people of this country.
  In the area of alternative resources, this bill requires studies on 
ethanol to

[[Page 7628]]

help ensure that smart decisions are made as we move toward cellulosic 
and other advanced biofuels. This bill provides incentives for the 
advancement of breakthrough energy technologies, such as battery-
powered vehicles. That is important. It is obvious to everyone that we 
have not moved ahead as rapidly as we should in battery development, 
and we ought to push hard with our greatest scientists because a change 
in the right direction there would be a dramatic change in the right 
direction for automobiles that would be electric-motored and that would 
be good for our country.
  Our Nation is often called the Saudi Arabia of coal, and we should 
use that domestic resource to help reduce our dependence on foreign 
oil. This bill creates a mandate for up to 3 billion gallons of clean 
coal-derived fuels over the next decade and 6 billion gallons over the 
next 14 years. This will provide diesel and jet fuel to help power our 
economy and create jobs throughout our coal-producing States.
  Additionally, this provision requires that the mandated fuels have 
life-cycle greenhouse gas emissions no greater than conventional 
gasoline.
  This is a win-win for our economy and our environment. I don't know 
why it is so violently opposed by some in America. I think they just 
don't want us to use our own if it means we are going to use it in 
automobiles, diesel trucks, or the like. I don't understand. If we 
don't do it, we will be using foreign oil unless and until we find a 
total new substitute, which will be years from now.
  This bill also allows for the long-term procurement of synthetic 
fuels by the Department of Defense and repeals section 526 of last 
year's Energy bill. That provision ties greenhouse gas emission 
requirements to the types of fuels our Air Force can purchase. The 
practical translation is that in a time of war, this policy would 
direct our military to purchase oil from the sands of the Middle East 
rather than the oil sands of Canada.
  While this bill takes many steps to strengthen our Nation's energy 
security, it also repeals several provisions in last year's 
appropriations bills that threaten to damage our Nation's energy 
security. At this point, most everyone knows what they are. I will 
merely mention one of those that is big, and that is a mandate that was 
imposed on oil shale development in America.
  Somebody in conference--I think we know which one but need not say 
since it is not certain--put a rider on that bill that said the final 
regulations for shale development have a moratorium imposed. That comes 
at a time when Shell Oil and others are exploring the great potential 
of shale converted to oil. I don't see why we should do this. I believe 
we should take that off and let them proceed. They will be bound by the 
laws of our land, and obviously, with the high price of crude oil, it 
is clear to me that they are going to find a way to make oil shale 
equal to conventional oil and thus usable by Americans as American-
produced oil. We should let that happen as rapidly as possible and not 
deter it. I know some will not agree, but I would think that debate, 
carried to the American people, would be voted overwhelmingly in favor 
of letting it happen. That is why we put it in this bill.
  Finally, this bill repeals a $4,000 fee for drilling permits. These 
costs, slipped into a large Omnibus measure without notice or debate, 
hit the smallest oil and gas companies in our States. Making it more 
difficult to produce domestic energy for domestic use will only serve 
to further increase the prices we pay at the pump.
  As I complete my final year in the Senate, I look back on the many 
accomplishments this body has achieved for the American people. This 
great work has often been done when Members reached across the aisle 
after thoughtful deliberation, serious debate, and reasoned judgment. I 
hope, as the Congress makes a serious effort to tackle the energy 
challenges of our time, that we will address these challenges in the 
same spirit.
  As I said a few months ago on this floor that America faces a serious 
energy crisis with vital implications for our national security, 
economic strength, and foreign policy. The American people deserve a 
serious debate, for our present challenge will require thoughtfulness, 
vision, and judgment--not just today, but when the cameras are off, the 
elections are far away, and gas prices subside.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Ms.Klobuchar, Mr. Tester, and Mr. 
        Harkin):
  S. 2959. A bill to amend the Help America Vote Act of 2002 to require 
States to provide for election day registration; to the Committee on 
Rules and Administration.
  Mr. FEINGOLD. Mr. President, today I will introduce, along with 
Senators Klobuchar, Tester, and Harkin, the Election Day Registration 
Act of 2008, which would significantly increase voter participation by 
allowing all eligible citizens to register to vote in Federal elections 
on Election Day.
  In many ways, the machinery of our democracy needs significant 
repair. We live in an age of low turnout and high cynicism. The 
American people have lost faith in our election system, in part because 
they are not confident that their votes will be counted or that the 
ballot box is accessible to each and every voter regardless of ability, 
race, or means.
  What we see instead are long lines at polling places; faulty voting 
machines; under-trained, under-paid, over-worked poll workers; partisan 
election administrators; suspect vote tallies; caging lists; 
intimidation at the polling place; misleading flyers; illegal voter-
file purges; and now, the Supreme Court approving discriminatory voter 
ID laws. If people cannot trust their elections, why should they trust 
their elected officials?
  Two years ago, Professor Dan Tokaji, a leading election law expert, 
called for a ``moneyball approach to election reform.'' Named after 
Michael Lewis's book about the Oakland A's data-driven hiring system, 
Tokaji's approach is quintessentially progressive, as that term was 
understood at the turn of the century. ``I mean to suggest a research-
driven inquiry,'' Tokaji wrote, ``in place of the anecdotal approach 
that has too often dominated election reform conversations. While 
anecdotes and intuition have their place, they're no substitute for 
hard data and rigorous analysis.''
  This bill embodies the moneyball approach to election reform. In 
stark contrast to many so-called election reform proposals, this bill 
addresses a real problem--low voter turnout--it targets a major cause 
of the problem--archaic registration laws--and it offers a proven 
solution--Election Day registration.
  The bill is very simple: it amends the Help America Vote Act to 
require every State to allow eligible citizens to register and vote in 
a Federal election on the day of the election. Voters may register 
using any form that satisfies the requirements of the National Voter 
Registration Act, including the Federal mail-in voter registration form 
and any state's standard registration form. North Dakota, which does 
not have voter registration, is exempted from the bill's requirements.
  The bill itself is simple, but it addresses a significant problem: 
the low voter turnout that has plagued this country for the last 40 
years. We live in a participatory democracy, where our Government 
derives its power from the consent of the governed, a consent embodied 
in the people's exercise of their fundamental right to vote. It is self 
evident that a participatory democracy depends on participation.
  This may be a government of the people, but the people are not 
voting. Since 1968, American political participation has hovered around 
50 percent for Presidential elections and 40 percent for congressional 
elections. Even in 2004, a record-breaking year, turnout was only 55 
percent of the voting age population. The U.S. may be the only 
established democracy where the fact that a little under half of the 
electorate stayed home is considered cause for celebration.
  In fact, our predecessors in the Senate would be surprised to find us 
celebrating such low turnout: a 1974 report

[[Page 7629]]

by the Senate Committee on the Post Office and Civil Service bemoaned 
the ``shocking'' drop in turnout in the 1972 election. And what was the 
number that so troubled the Committee--55 percent.
  The report went on: ``[i]t is the Committee's conviction that our 
disquieting record of voter participation is in large part due to the 
hodgepodge of registration barriers put in the way of the voter. Such 
obstacles have little, if anything, to recommend them. At best, current 
registration laws in the various states are outmoded and simply 
inappropriate for a highly mobile population. At worst, registration 
laws can be construed as a deliberate effort to disenfranchise voters 
who desperately need entry into the decision-making processes of our 
country.''
  What a shame, that the Committee's findings are still valid. Our 
archaic registration laws have been reformed, but they are still 
archaic. We have passed a number of important bills designed to combat 
low turnout, but turnout is still low. America is even more mobile than 
it was in 1974, and yet our registration laws are still out of touch 
with the reality that more than 40 million Americans move every year. 
Worst of all, our registration laws still fall especially hard on the 
young, the old, and the poor.
  We have long known that complicated voter registration requirements 
constitute one of the major barriers to voting. In fact, many States 
adopted voter registration in order to prevent certain segments of the 
population from voting. Alexander Keyssar, the preeminent scholar on 
the history of the right to vote in this country, writes that although 
``[r]egistration laws emerged in the nineteenth century as a means of 
keeping track of voters and preventing fraud; they also served--and 
were intended to serve--as a means of keeping African-American, 
working-class, immigrant, and poor voters from the polls.''
  It is time for a fundamental change. A large body of research tells 
us that unnecessarily burdensome voter registration requirements are 
the single largest factor in preventing people from voting. Simply put, 
voter registration restrictions should not keep eligible Americans from 
exercising their right to vote. The solution to this problem is 
Election Day registration.
  Decades of empirical research confirm Election Day registration's 
positive impact on turnout. As one academic paper states, ``the 
evidence on whether EDR augments the electorate is remarkably clear and 
consistent. Studies finding positive and significant turnout impacts 
are too numerous to list.'' Studies indicate that Election Day 
registration alone increases turnout by roughly 5 to 10 percentage 
points.
  In general, States with Election Day registration boast voter turnout 
that is 10-12 percentage points higher than States that require voters 
to register before Election Day. Turnout in Minnesota and Wisconsin, 
which implemented Election Day registration over 35 years ago, has been 
especially high: in 2004, for example, 78 percent of eligible 
Minnesotans and 75 percent of eligible Wisconsinites went to the polls. 
The last time national voter turnout was above 70 percent, it was 1896, 
there were only 45 States, and the gold standard was the dominant 
campaign issue.
  Critics might worry about the possibility of fraud, but Election Day 
registration actually makes the registration process more secure. 
Voters registering on Election Day do so in the presence of an 
elections official who verifies the voter's residency and identity on 
the spot. Mark Ritchie, Minnesota's Secretary of State, points out that 
Election Day registration ``is much more secure because you have the 
person right in front of you--not a postcard in the mail. That is a no-
brainer. We have 33 years of experience with this.''
  In contrast to most election reforms, the cost of Election Day 
registration is negligible. A recent survey of 26 local elections 
officials in six EDR States found that ``officials agreed that 
incidental expense of administering EDR is minimal.'' In fact, Election 
Day registration may actually result in a net savings because it 
significantly reduces the use of provisional ballots. Provisional 
ballots, which are required by the Help America Vote Act, are expensive 
to administer. The Congressional Budget Office estimates that 
provisional ballots cost State and local governments about $25 million 
a year.
  In some states the number of provisional ballots cast is surprisingly 
large. For example, in 2004, more than 4 percent of California's 
registered voters cast provisional ballots--that's 644,642 provisional 
ballots. In Ohio, 157,714 provisional ballots were cast, about 2 
percent of all registered voters.
  In contrast, in 2004 only 0.03 percent of voters in EDR States cast a 
provisional ballot. In Wisconsin, only 374 provisional ballots were 
cast. In Maine, only 95 provisional ballots were cast. In fact, only 
952 provisional ballots were cast in all the EDR States combined in 
2004. To be sure, this bill is no cure-all: it does not address long 
lines, deceptive flyers, and faulty voting machines. Other bills, good 
bills, address those issues.
  The bottom line is this: the Election Day Registration Act would 
substantially increase civic participation, improve the integrity of 
the electoral process, reduce election administration costs, and 
reaffirm that voting is a fundamental right. It has been proven 
effective by more than 30 years of successful implementation in 
Minnesota and Wisconsin and decades of empirical research. Election Day 
registration is good for voters, good for taxpayers, and good for 
democracy.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2959

       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 ``Election Day Registration 
     Act''.

     SEC. 2. ELECTION DAY REGISTRATION.

       (a) In General.--Title III of the Help America Vote Act of 
     2002 (42 U.S.C. 15481 et seq.) is amended--
       (1) by redesignating sections 304 and 305 as sections 305 
     and 306, respectively; and
       (2) by inserting after section 303 the following new 
     section:

     ``SEC. 304. ELECTION DAY REGISTRATION.

       ``(a) In General.--
       ``(1) Registration.--Notwithstanding section 8(a)(1)(D) of 
     the National Voter Registration Act of 1993 (42 U.S.C. 
     1973gg-6), each State shall permit any eligible individual on 
     the day of a Federal election--
       ``(A) to register to vote in such election at the polling 
     place using a form that meets the requirements under section 
     9(b) of the National Voter Registration Act of 1993; and
       ``(B) to cast a vote in such election.
       ``(2) Exception.--The requirements under paragraph (1) 
     shall not apply to a State in which, under a State law in 
     effect continuously on and after the date of the enactment of 
     this section, there is no voter registration requirement for 
     individuals in the State with respect to elections for 
     Federal office.
       ``(b) Eligible Individual.--For purposes of this section, 
     the term `eligible individual' means any individual who is 
     otherwise qualified to vote in a Federal election in such 
     State.
       ``(c) Effective Date.--Each State shall be required to 
     comply with the requirements of subsection (a) for the 
     regularly scheduled general election for Federal office 
     occurring in November 2008 and for any subsequent election 
     for Federal office.''.
       (b) Conforming Amendments.--
       (1) Section 401 of such Act (42 U.S.C. 15511) is amended by 
     striking ``and 303'' and inserting ``303, and 304''.
       (2) The table of contents of such Act is amended--
       (A) by redesignating the items relating to sections 304 and 
     305 as relating to sections 305 and 306, respectively; and
       (B) by inserting after the item relating to section 303 the 
     following new item:

``Sec. 304. Election day registration.''.

  Ms. KLOBUCHAR. Mr. President, I come to the floor today to speak 
about a fundamental right in this country: the right to vote. Although 
it is one of the greatest rights we have built this government on, we 
have states across the country that still limit that right by not 
allowing people to vote if they have not met an arbitrary registration 
deadline. A deadline that is sometimes set months in advance of 
Election Day. Since 1973, Minnesota has allowed citizens in the state 
to register to vote on the same day as the election, and, not

[[Page 7630]]

coincidentally, year after year, my state has the highest voter turnout 
in the country.
  As the Presidential election is fast approaching, we need to ensure 
that people across the country have the ability to vote when November 
4th, 2008, rolls around. This is why, Mr. President, I am happy that 
this afternoon, Senator Feingold and I introduced legislation that 
enables voters in every state to register on Election Day for Federal 
elections. My colleague's home state of Wisconsin, like Minnesota, has 
put a high price on voter registration, and has allowed Election Day 
Registration for over 30 years with great success. I am also pleased 
that we are joined on this bill by Senator Harkin from Iowa and Senator 
Tester from Montana. Both Iowa and Montana recently enacted same-day 
voter registration laws--significantly improving voter turnout 
throughout the state.
  This legislation comes at a critical time--it is on the heels of a 
Supreme Court decision that tightens the ability of Indiana citizens to 
vote by requiring valid photo identification at the polling booth. And 
just this last week, several election registration volunteers in 
Florida stopped their registration work for fear that they would be 
fined upwards of $1000 if they made a mistake.
  In Minnesota, some credit the election of Jesse Ventura as Governor 
in 1998 to our same-day registration voting policy. Voters who had 
never voted before showed up at the polls and voted in unprecedented 
numbers. I can't say that I ever imagined that we would have a Governor 
wear a pink boa at his inaugural celebration, but the ability for the 
citizens of Minnesota to cast their ballot and enact change is the kind 
of democracy this country is founded upon.
  In the past decade, as states around the country are experimenting 
with new and innovative ways to combat voter fraud, Election Day 
Registration has actually helped eliminate voter fraud at the polls. 
I've worked a great deal with the Secretary of State in Minnesota, Mark 
Ritchie, and he has found that registering at the polls, instead of by 
mail with a postcard, decreases the chance for fraud. When citizens are 
registering right in front of the election official, on the day of the 
election, chances of fraud are decreased. It's a pretty simple concept, 
but a fundamental one. As Secretary of State Ritchie has said, it's ``a 
no-brainer.''
  The myriad of voter registration laws across the country are mind-
boggling. In Nevada, you must register by 9 p.m., on the fifth Saturday 
before the election. A handful of states require registration 25 days 
before the election, another handful require 29 days. Some have to be 
postmarked by that date, and others have to be received by the 
deadline. A few set the cutoff at 20 days, a few at 10 days, and in 
Vermont, you have until 5 p.m., the Wednesday before the election. If 
you're in Utah, you must register 30 days before the election by mail, 
but if you miss that, you can register in person on the 18th or 15th 
day before the election. Where we have one, national, election day of 
November 4th this year, it is hard to imagine voters, because of the 
State they reside, could miss their chance to vote.
  There are 8 States that allow citizens to register at the polls: 
Maine, Minnesota, New Hampshire, Wisconsin, Wyoming, and now Iowa and 
Montana have joined the list. Historically, these first six States have 
seen voter turnout that is 8 to 15 percent higher than the national 
average. In the 2004 Presidential election, only 64 percent of the 
eligible population voted; but in Minnesota, 79 percent of the 
population turned out to vote. As Senator Feingold mentioned, the last 
time we had turnout that high on a national level was 1896, and we only 
had 45 states. No matter what side of the aisle, we are seeing an 
unprecedented interest in the upcoming Presidential election, and we 
need to give the citizens the ability to register on Election Day.
  This is a simple, yet fundamental bill. It amends legislation we 
passed in 2002, the Help America Vote Act, to allow voters to register 
and cast their ballot on the same day in a Federal election. Where 
Americans across the country are facing skyrocketing gas prices, health 
costs that many cannot afford, and an economy that is approaching 
recession, we need to ensure that every citizen has the right to wake 
up on Election Day and decide they will cast their ballot for 
President.
  Mr. TESTER. Mr. President, I rise today to join my colleagues, 
Senators Feingold, Harkin and Klobuchar in introducing a bill that 
would significantly increase voter participation. The Election Day 
Registration Act of 2008, EDR, would allow all eligible citizens to 
register to vote in federal elections on Election Day.
  Studies have shown a strong increase in voter turnout in those States 
who have EDR. In 2004, 73.8 percent of all eligible voters in EDR 
states voted, compared with 60.2 percent of eligible voters in states 
without EDR--a difference of 13.6 percentage points. The top four 
States for turnout in 2004 had EDR--Minnesota 78 percent, Wisconsin 75 
percent, Maine 73 percent, and New Hampshire 71 percent. The fifth 
highest state was Oregon--the universal vote-by-mail state. Even more 
compelling, the turnout is higher even when controlling for 
competitiveness--in terms of voter participation, ``safe'' states with 
EDR significantly outperformed ``safe'' states without EDR. Voter 
participation in those ``Battleground'' States with EDR was 
significantly higher than in those ``battleground'' states without EDR.
  High voter participation is a fundamental part of a healthy 
democracy. This year we have seen record numbers of voters 
participating in the presidential primaries. The implementation of EDR 
for federal elections would build upon this momentum. Montana is 
expecting record turnout for our presidential primary on June 3rd.
  EDR permits eligible citizens to register and vote on Election Day. 
There are currently 9 states that have some form of EDR: Minnesota, 
Maine, Wisconsin, Idaho, Wyoming, New Hampshire, Iowa, North Carolina 
and of course my home state of Montana. Iowa adopted EDR in March 2007 
and North Carolina has implemented Same Day Registration at early 
voting sites. While the version in North Carolina isn't complete EDR, 
it is a strong move for increased access to the democratic process.
  There is nationwide interest in EDR. Last year, 21 States had bills 
before their legislature to implement, or begin feasibility studies in 
support of, EDR.
  In my home state of Montana we have had Election Day Registration. 
Montana adopted EDR in 2005 while I was president of the Montana state 
senate. Montana's version is a little different from EDR in Wisconsin 
and Minnesota--in Montana, the voter registers, election day, at the 
county courthouse rather than at the polling place. Whether it is at 
the polling place or the courthouse, the important fundamentals of 
access are maintained.
  With EDR, the use of and reliance upon provisional ballots would be 
minimized. Provisional ballots are useful and valuable tools, however 
with EDR, the costly validation process that takes place after election 
day could be avoided, as eligibility considerations could be made on 
election day and the voter would then use a standard ballot. EDR 
streamlines the administrative process and makes sure that votes are 
counted.
  Enactment of EDR would be a major step in the right direction towards 
inclusive and fully participatory elections. It's clear that people are 
more likely to vote when they know their votes will be counted. EDR has 
proven track record of increasing participation, and those concerns 
raised have been largely disproven or are easily addressed. In the end 
EDR allows more Americans to do that which is most fundamental to the 
democracy we love and the freedom we, as Americans, stand for--vote.
  My cosponsors and I think this Election Day Registration Act of 2008 
is necessary to strengthen our democracy. We welcome our fellow 
senators to support this important legislation.
                                 ______
                                 
      By Mr. DODD:

[[Page 7631]]

  S. 2960. A bill to amend the Homeland Security Act of 2002, to 
establish the Office for Bombing Prevention, to enhance the role of 
State and local bomb squads, public safety dive teams, explosive 
detection canine teams, and special weapons and tactics teams in 
national improvised explosive device prevention policy, to establish a 
grant program to provide for training, equipment, and staffing of State 
and local improvised explosive device prevention, and for other 
purposes; to the Committee on Homeland Security and Governmental 
Affairs.
  Mr. DODD. Mr. President, today I am introducing the National 
Improvised Explosive Device, IED, Preparedness and Prevention Act of 
2008. This bill will ensure that the brave men and women who are called 
on to respond to bomb threats around the country have the necessary 
tools, training, and personnel to keep our communities safe.
  Furthermore, this bill gives our State and local responders 
unprecedented access to the federal policy making committees directing 
the national agencies that keep our homeland secure.
  Regrettably, over the years, our people have suffered attacks from 
home-made bombs, not only on distant battlefields of Iraq and 
Afghanistan, but here in America. From the 1983 truck bombing of the 
Beirut Barracks to the Alfred P. Murrah Federal Building bombing in 
Oklahoma City to the recent Times Square Military Recruiting Office 
bombing in New York City, we have seen the devastating effects such 
attacks wield.
  These bombs, which have become known in the lexicon of the Pentagon 
as ``Improvised Explosive Devices'' or IEDs, are the number one cause 
of death and injury to our troops overseas. Whether it is in lives 
lost, economic damage, or the simple loss of feeling safe in our 
communities, IEDs pose a threat to American security.
  We must therefore ensure that our state and local bomb squads, SWAT 
Teams, K-9 units, and public safety dive teams are sufficiently 
prepared to meet this challenge, as they most certainly will be the 
first on the scene to respond to the next IED scare. These courageous 
public servants put their lives on the line every day to keep us safe. 
The least we can do is to make certain that they have the resources 
they need and a seat at the table in critical IED policy making 
discussions. That is why I have introduced this legislation and have 
worked hard to address these very real needs.
  Beginning in April 2006, I worked with Senator Robert Byrd to attach 
a provision to a Homeland Security Appropriations bill requiring DHS to 
produce a national strategy for IED preparedness.
  After numerous delays, and a letter to Homeland Security Secretary 
Chertoff from Senator Byrd and me, the National Security Council 
finally approved the document in late 2007.
  Unfortunately, the strategy did not include adequate detail on how 
state and local input would contribute to the federal government's IED 
prevention and preparedness. It also failed to create an IED-specific 
grant program to ensure that State and local governments can carry out 
their responsibilities under the strategy.
  My bill will address the threat of IEDs by:
  First, statutorily establishing the Office for Bombing Prevention OBP 
within FEMA's Grant Programs Directorate.
  Second, tbe bill establishes a Senior Advisory Committee, SAC, for 
IED Prevention and Response as a subcommittee under the Homeland 
Security Advisory Council.
  Third, the bill requires State, Local, and Practicing Professional 
input in Advisory Committee Selection, giving voice to our First 
Responders who understand first-hand the needs of our communities.
  Fourth, the legislation establishes a risk-based IED Prevention and 
Response Grant Program within the Homeland Security Department's Grant 
Program Directorate to specifically provide funds for equipment, 
training, and personnel in areas where DHS has identified shortfalls.
  Last, my bill requires the Coast Guard to assess the preparedness of 
our Nation's Public Safety Dive Teams, PSDT, in the completion of Area 
Maritime Transportation Security and Facility Plans.
  Mr. President, we can no longer afford to sit on our hands while many 
of our IED First Responders have to scrape by with antiquated equipment 
and training.
  We have an opportunity to be proactive, to prepare for the 
unthinkable events that befell the people of London and Madrid, just a 
few short years ago.
  Our Nation needs demonstrated capability in this vital area, and we 
in Congress need to lead. I urge my colleagues to join me in this 
endeavor.
                                 ______
                                 
      By Mr. AKAKA:
  S. 2961. A bill to amend title 38, United States Code, to enhance the 
refinancing of home loans by veterans; to the Committee on Veterans' 
Affairs.
  Mr. AKAKA. Mr. President, today I introduce a bill that will offer 
veterans more options for refinancing their mortgages. My legislation 
would raise the guarantee on VA refinance loans and decrease equity 
requirements for refinancing to a VA loan. These provisions would allow 
more qualified veterans to refinance their home loans under the VA 
program.
  At present, the maximum VA loan guaranty limit for all loans in 
excess of $144,000, except regular refinance loans, is equal to 25 
percent of the Freddie Mac conforming loan limit for a single family 
home. Presently this is $104,250. This means lenders making loans up to 
$417,000 will receive at least a 25 percent guaranty, which is 
typically required to place the loan on the secondary market.
  However, current law limits to $36,000 the guaranty that can be used 
for a regular refinance loan. This restriction means a refinance over 
$144,000 will result in a lender not receiving 25 percent backing from 
VA and probably not making the loan at all. This situation essentially 
precludes a veteran from being able to refinance his or her existing 
FHA or conventional loan into a VA guaranteed loan if the loan is 
greater than $144,000.
  To assist veterans in overcoming this obstacle in refinancing, this 
legislation would increase the maximum guaranty limit for refinance 
loans to the same level as conventional loans--25 percent limit for a 
single family home. Importantly, this increase would make the maximum 
VA home loan guaranty equal across the board.
  This bill will also increase the percentage of an existing loan that 
VA will refinance from the current maximum of 90 percent to 95 percent, 
thus allowing more veterans to use their VA benefit to refinance their 
mortgages. Many veterans do not have ten percent equity and thus are 
precluded from refinancing to a VA home loan. Given the anticipated 
number of non-VA adjustable mortgages that are approaching the reset 
time when payments are likely to increase, it seems prudent to 
facilitate veterans refinancing to VA loans.
  In light of today's housing and home loan crises, these further 
refinancing options will help some veterans to bridge financial gaps 
and allow them to stay in their homes and escape possible foreclosures.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2961

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

     SECTION 1. ENHANCEMENT OF REFINANCING OF HOME LOANS BY 
                   VETERANS.

       (a) Inclusion of Refinancing Loans Among Loans Subject to 
     Guaranty Maximum.--Section 3703(a)(1)(A)(i)(IV) of title 38, 
     United States Code, is amended by inserting ``(5),'' after 
     ``(3),''.
       (b) Increase in Maximum Percentage of Loan-to-Value of 
     Refinancing Loans Subject to Guaranty.--Section 3710(b)(8) of 
     such title is amended by striking ``90 percent'' and 
     inserting ``95 percent''.
                                 ______
                                 
      By Mr. BOND (for himself, Mrs. Boxer, Mr. Stevens, Mr. Obama, Mr. 
        Domenici, Mrs. Dole, and Ms. Murkowski):

[[Page 7632]]

  S. 2963. A bill to improve and enhance the mental health care 
benefits available to members of the Armed Forces and veterans, to 
enhance counseling and other benefits available to survivors of members 
of the Armed Forces and veterans, and for other purposes; to the 
Committee on Veterans' Affairs.
  Mr. BOND. Mr. President, there is an issue that has been festering in 
our military ranks for quite some time that we must address now.
  America's warriors voluntarily leave the comfort of their homes and 
families to serve the greater good under very difficult conditions. 
They are fighting an incredibly complex battle on an asymmetric 
battlefield, against an enemy that is not bound by rules of war or 
human decency. They are courageously protecting our freedoms--each and 
every day--against those who seek to do us harm. As the father of a 
two-tour Iraq War Veteran, this issue is very close to my heart, and 
should be at the forefront of the Senate's day-to-day business.
  Many of our military service members bear the physical scars of war. 
Thanks to advances in modern medicine and the efforts of brilliant 
medical personnel in the field, many of our war-wounded are able to 
return to a relatively normal life. Our practice of compensating 
disabled veterans financially helps our heroes reintegrate and assume 
again civilian status.
  A growing concern revolves around those soldiers, sailors, airmen and 
Marines who return home with invisible injuries, the psychological 
wounds of war that have had a huge impact on a large percentage of our 
military forces.
  Post Traumatic Stress Disorder, PTSD, Traumatic Brain Injuries, TBI, 
are not quickly diagnosed because we cannot see them. But we know they 
exist, and they often manifest years later and wreak all sorts of havoc 
on our military, on our military families, and on our society.
  The recently-released Rand Study and American Psychiatric Association 
studies acknowledge the issue and paint a bleak social and financial 
future. The question is: What are we doing to help these men and women? 
The answer now is: Not enough. There are simply not enough resources 
available to our combat veterans to deal adequately with the problem.
  Today we are proposing legislation that will address this crisis. Our 
proposal will address both short- and long-term solutions for those 
suffering from PTSD and TBI. We will increase our troops' access to 
qualified behavioral-health specialists and increase the number of 
those specialists annually in an effort to treat our men and women and 
help them cope with their ailments.
  My staff has worked closely with the VA on these proposals and our 
legislation has the support of the Iraq and Afghanistan Veterans' 
Association and Veterans for Common Sense.
  First, our bill improves veterans' access to care by expanding the 
use of our Vet Centers. Currently, our Active, Guard, and Reserve 
military personnel do not have access to the VA's Vet Centers, 
community-based counseling centers which are successfully providing 
mental health care to veterans.
  An estimated 30 percent of troops return from combat suffering from 
Post Traumatic Stress Disorder, Traumatic Brain Injury, or other mental 
health problems. But there are grossly insufficient numbers of military 
behavioral health specialists to provide the care our troops need. 
Recent testimony from all military Surgeons General highlighted the 
shortage of mental health professionals service-wide.
  This legislation will give our troops the same access to Vet Centers 
our veterans receive for mental health care, which not only opens the 
door to additional resources but also lightens the load on our 
currently over-tasked specialists. Additionally, the legislation will 
reduce the stigma associated with behavior disorders by allowing troops 
to seek treatment outside of conventional military channels.
  We also propose to enhance the recruitment and training of Military 
Behavioral Health Specialists through a scholarship program that 
targets former service members or service members preparing to separate 
from the military.
  This legislation, overseen by the Veterans Health Administration, 
will provide incentives for retiring or separating military personnel 
and veterans to pursue an education in the behavioral health field. 
Over time, that will alleviate the shortage of behavioral health 
specialists who serve our troops and veterans.
  The estimated cost to recruit an additional 80 to 90 behavioral 
health specialists a year is $1.5--$2 million annually. This program 
would pay for itself if it were to save just one veteran from 
developing 100 percent service-connected PTSD.
  We also propose extending the survivor benefits for Service Members 
who commit suicide and have a medical history of PTSD or TBI.
  We know that mental-health issues often manifest long after the 
service member has left active duty. As a result, Congress has extended 
free health care to five years for recently-discharged veterans with 
any condition that may be related to their combat service.
  Unfortunately, survivor benefits have not kept up with this logic. 
Current coverage for veterans who commit suicide does not take into 
account the time it takes for PTSD and TBI to manifest.
  This legislation guarantees benefits for any Service Member who 
commits suicide within two years of separation or retirement from the 
military, provided they have a documented medical history of a combat-
related mental-health condition, including PTSD or TBI.
  The Service Member's survivor will be entitled to the same Social 
Security, Survivor Benefit Plan, Veteran's Affairs Benefits, and active 
duty burial benefits that they would have received had the Service 
Member died on their last day of active duty.
  Our legislation also creates a grant program for non-profit 
organizations to provide support services to the families of our 
deceased Active, Guard, and Reserve Military personnel and Veterans.
  The psychological impact associated with the loss of a loved one in a 
combat zone is tremendous. Unfortunately, there are not adequate 
numbers of military Casualty Assistance Officers to serve surviving 
families. While norofit organizations have professional staff that 
provide long-term and peer-based emotional support, Department of 
Defense Casualty Assistance Officers are only temporarily detailed to 
these duties and often are unfamiliar with the regulations or the 
emotional needs of surviving families.
  This legislation establishes a competitive federal grant program for 
nonprofit support organizations to provide vital support services to 
the surviving families of deceased military personnel.
  Next, our legislation will ensure the fair treatment and care of all 
of our military personnel, including those whose discharges may have 
been caused by combat-related mental-health condition, including Post 
Traumatic Stress Disorder or Traumatic Brain Injury.
  Many of those who are forced to leave the military because of 
performance issues such as substance abuse or anger problems have 
underlying mental health conditions such as TBI or PTSD that are not 
being properly diagnosed.
  In many cases the military has inappropriately discharged these 
veterans, and they subsequently lose access to VA care and other 
benefits.
  No veteran that has served this nation in combat should be denied the 
benefits they earned on the battlefield. This provision allows the VA 
to screen the veteran's discharge, and, if the veteran is found to have 
been improperly diagnosed, to take action to correct the problem 
accordingly.
  Specifically, this legislation would reinstate the provision repealed 
from the law in 1996 giving the Vet Centers the authority to help the 
new generation of war veterans to resolve any problems presented with 
the character of their discharges.
  Finally, our legislation will better prepare our troops for combat 
through the creation of a pilot program at Ft.

[[Page 7633]]

Leonard Wood, Missouri and Ft. Carson, Colorado. We will provide 
comprehensive training to educate U.S. military personnel on Post 
Traumatic Stress Disorder--how to prevent it, how to recognize it when 
it occurs, and what to do about it when it happens. We hope to build 
resiliency, enhance performance, and mitigate stress among the troops.
  The rise in PTSD cases demands a new approach to preparing U.S. 
military personnel and their families for the stresses associated with 
combat.
  The pilot program is designed to enhance the individual's 
neurophysiological understanding of stress and trauma resolution and to 
equip them with performance-enhancing skills drawn from both the 
military special-operations community and the elite sports world.
  The program will train and support an Army Brigade Combat Team and 
their families at all stages of a soldier's tour: pre-deployment, mid-
deployment and post-deployment.
  Addressing PTSD head on through self-awareness training will teach 
military personnel to cope better with combat-related issues and reduce 
the need and cost for long-term treatment.
  The long-term effects of untreated mental illness are severe: drug 
and alcohol abuse, job and marital problems, even suicide.
  We can prevent much of this unfortunate legacy by prompt and 
effective treatment when our troops come home.
  We are all the beneficiaries of the sacrifices of others. Our 
responsibility is to continue to improve the ways in which we support 
our troops and their families.
  They do not take our freedom for granted; we should not take their 
sacrifices for granted.
  I ask my colleagues on both sides of the aisle to support these 
proposals.
                                 ______
                                 
      By Mr. AKAKA:
  S. 2969. A bill to amend title 38, United States Code, to enhance the 
capacity of the Department of Veterans Affairs to recruit and retain 
nurses and other critical health-care professionals, and for other 
purposes; to the Committee on Veterans' Affairs.
  Mr. AKAKA. Mr. President, today I am introducing legislation to 
address personnel issues in the Department of Veterans Affairs. This 
legislation, proposed Veterans' Medical Personnel Recruitment and 
Retention Act of 2008, would help ensure that VA has the workforce 
necessary to serve America's veterans most effectively.
  Health care providers are the backbone of the VA system. Yet today, 
the Department faces a shortage of these professionals. Around the 
country, too many facilities are understaffed, at the cost of services 
for veterans. A recent report by the Partnership for Public Service 
gave the Veterans Health Administration poor marks for pay and 
benefits, and for family support. VHA also rated poorly among younger 
employees. To be the health care employer of choice, VA must be able to 
offer competitive salaries, work schedules, and benefits.
  As Chairman of the Committee on Veterans' Affairs, I held a hearing 
on April 9, 2008, that focused on personnel issues within the VA health 
care system. We heard detailed testimony from VA administrators and 
health care providers. Their testimony outlined the challenges VA 
faces, and suggested possible solutions.
  This legislation would benefit a wide range of positions within VA. 
Here are some of the challenges VA faces, and the solutions I propose.
  Local labor markets for health care providers vary widely, and VA 
must be better prepared to compete in every market. Locality pay 
surveys are a crucial tool in this effort. However, a recent GAO report 
on nurse anesthetists revealed a locality pay system that is 
inconsistent and often dysfunctional. The bill I am introducing would 
make implementation of locality pay surveys more effective by requiring 
additional training on proper implementation, and improving 
transparency to allow for better oversight.
  This legislation would also encourage retention of experienced 
professionals by removing salary offsets for retired employees who 
choose to return to work at VA. In the coming years, a significant 
portion of the VA workforce will reach the age of retirement. 
Eliminating the salary offset by the amount of an employee's retirement 
annuity would encourage these experienced professionals to return to 
VA.
  Education benefits are often among the chief advantages of employment 
at VA, and I believe these benefits can be used for an even greater 
effect. VA has extensive programs to encourage further education within 
their workforce, and to provide financial assistance for employees with 
educational debt. This legislation would increase yearly benefit limits 
on the Education Debt Reduction Program--EDRP--and would broaden the 
goals of that program to include retention as well as recruitment. In 
so doing, the EDRP would be made available to both long-time VA 
employees and new hires. It would also reauthorize the Health 
Professionals Scholarship Program, and would broaden eligibility to a 
wider range of health professions.
  Further, to make VA more attractive to clinical researchers, this 
legislation would provide VA with authorities similar to the Loan 
Repayment Program of the National Health Service Corps. VA would be 
authorized to use funds from medical services appropriations to help 
researchers in need of financial assistance to payoff their education 
loans. This program would compliment EDRP, which is not available to 
researchers.
  In recent years, VA has been challenged to retain top administrators, 
especially those who have spent their careers at VA. Their expert 
knowledge is indispensable to the effective management of the VA health 
care system. However, given the high rates of compensation available 
outside of VA, retention of these professionals is often difficult. 
This legislation would provide VA with the authority to pay national 
administrators additional compensation so as to better compete with the 
private sector. It would also give VA the authority to increase, under 
limited circumstances, compensation for pharmacists, doctors, and 
dentists, in order for VA to be more competitive in local labor 
markets.
  VA faces many challenges in recruiting and retaining nurses. I have 
worked with VA administrators and nurses to develop solutions to these 
challenges. This legislation would give VA more tools to attract and 
keep these employees.
  Alternative work schedules are now commonly available in other health 
care systems. At VA, part-time and alternative work schedules are 
under-utilized, and as a result, VA loses prospective hires and damages 
employee morale. This legislation would clarify alternative work 
schedule and weekend duty rules. By making these schedules easier to 
implement, it is my hope that VA will expand their use.
  This bill would also make it easier for VA to hire and retain part-
time nurses by limiting probationary periods and expanding eligibility 
for overtime pay. For nurses who transition from full-time to part-
time, this legislation would eliminate the probationary period they are 
now required to serve. This provision would be extremely helpful in 
encouraging experienced nurses to extend their careers at VA beyond the 
customary age of retirement.
  In many locations, VA cannot compete with other health care systems 
for many nursing positions, particularly certified registered nurse 
anesthetists--CRNAs--and licensed practical and vocational nurses. A 
recent GAO report on CRNAs in VA noted that VA spends thousands of 
dollars on contract nurses to cover staffing gaps. The use of contract 
nurses, while appropriate in some situations, is not a permanent 
solution to the long-term staffing shortfall. The bill I am introducing 
would raise or eliminate pay caps currently placed on these difficult-
to-fill positions. These provisions are derived directly from testimony 
the Committee heard from VA nurses and administrators at the April 9, 
2008, hearing.
   This legislation would also clarify rules about emergency duty for 
VA nurses. The use of emergency mandatory overtime has been an issue in

[[Page 7634]]

many VA facilities, and in other health care systems. I believe this 
legislation provides a reasonable solution. By standardizing the 
definition of ``emergency,'' it would facilitate more consistent and 
equitable use of emergency mandatory overtime.
  I believe that this legislation will give VA the tools it needs to 
recruit and retain the best health care professionals in the Nation. I 
also anticipate that it will improve employee morale, as well as 
improving transparency and oversight. As we have heard many times, VA 
faces a looming retirement crisis. The solutions proposed in this 
legislation seek to address these challenges.
  I urge my colleagues to support the proposed Veterans' Medical 
Personnel Recruitment and Retention Act of 2008.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2969

       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 ``Veterans' Medical Personnel 
     Recruitment and Retention Act of 2008''.

     SEC. 2. ENHANCEMENT OF AUTHORITIES FOR RETENTION OF MEDICAL 
                   PROFESSIONALS.

       (a) Secretarial Authority to Extend Title 38 Status to 
     Additional Positions.--
       (1) In general.--Paragraph (3) of section 7401 of title 38, 
     United States Code, is amended by striking ``and blind 
     rehabilitation outpatient specialists.'' and inserting the 
     following: ``blind rehabilitation outpatient specialists, and 
     such other classes of health care occupations as the 
     Secretary considers necessary for the recruitment and 
     retention needs of the Department subject to the following 
     requirements:
       ``(A) Not later than 45 days before the Secretary appoints 
     any personnel for a class of health care occupations that is 
     not specifically listed in this paragraph, the Secretary 
     shall submit to the Committee on Veterans' Affairs of the 
     Senate, the Committee on Veterans' Affairs of the House of 
     Representatives, and the Office of Management and Budget 
     notice of such appointment.
       ``(B) Before submitting notice under subparagraph (A), the 
     Secretary shall solicit comments from any labor organization 
     representing employees in such class and include such 
     comments in such notice.''.
       (2) Appointment of nurse assistants.--Such paragraph is 
     further amended by inserting ``nurse assistants,'' after 
     ``licensed practical or vocational nurses,''.
       (b) Probationary Periods for Nurses.--Section 7403(b) of 
     such title is amended--
       (1) in paragraph (1), by striking ``Appointments'' and 
     inserting ``Except as otherwise provided in this subsection, 
     appointments'';
       (2) by redesignating paragraph (2) as paragraph (4); and
       (3) by inserting after paragraph (1) the following new 
     paragraphs:
       ``(2) An appointment of a nurse under this chapter, whether 
     on a full-time basis or a part-time basis, shall be for a 
     probationary period ending upon the completion by the person 
     so appointed of 4,180 hours of work pursuant to such 
     appointment.
       ``(3) An appointment described in subsection (a) on a part-
     time basis of a person who has previously served on a full-
     time basis for the probationary period for the position 
     concerned shall be without a probationary period.''.
       (c) Prohibition on Temporary Part-Time Nurse Appointments 
     in Excess of 4,180 Hours.--Section 7405(f)(2) of such title 
     is amended by inserting after ``year'' the following: ``, 
     except that a part-time appointment of a nurse shall not 
     exceed 4,180 hours''.
       (d) Waiver of Offset From Pay for Certain Reemployed 
     Annuitants.--
       (1) In general.--Section 7405 of such title is amended by 
     adding at the end the following:
       ``(g)(1) The Secretary may waive the application of 
     sections 8344 and 8468 of title 5 (relating to annuities and 
     pay on reemployment) or any other similar provision of law 
     under a Government retirement system on a case-by-case basis 
     for an annuitant reemployed on a temporary basis under the 
     authority of subsection (a) in a position described under 
     paragraph (1) of that subsection.
       ``(2) An annuitant to whom a waiver under paragraph (1) is 
     in effect shall not be considered an employee for purposes of 
     any Government retirement system.
       ``(3) An annuitant to whom a waiver under paragraph (1) is 
     in effect shall be subject to the provisions of chapter 71 of 
     title 5 (including all labor authority and labor 
     representative collective bargaining agreements) applicable 
     to the position to which appointed.
       ``(4) In this subsection:
       ``(A) The term `annuitant' means an annuitant under a 
     Government retirement system.
       ``(B) The term `employee' has the meaning under section 
     2105 of title 5.
       ``(C) The term `Government retirement system' means a 
     retirement system established by law for employees of the 
     Government of the United States.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date that is six months after the 
     date of the enactment of this Act, and shall apply to pay 
     periods beginning on or after such effective date.
       (e) Minimum Rate of Basic Pay for Appointees to the Office 
     of the Under Secretary for Health Set to Lowest Rate of Basic 
     Pay Payable for a Senior Executive Service Position.--
       (1) In general.--Section 7404(a) of such title is amended--
       (A) by striking ``The annual'' and inserting ``(1) The 
     annual'';
       (B) by striking ``The pay'' and inserting the following:
       ``(2) The pay'';
       (C) by striking ``under the preceding sentence'' and 
     inserting ``under paragraph (1)''; and
       (D) by adding at the end the following:
       ``(3) The minimum rate of basic pay for a position to which 
     an Executive order applies under paragraph (1) and is not 
     described by paragraph (2) may not be less than the lowest 
     rate of basic pay payable for a Senior Executive Service 
     position under section 5382 of title 5.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on the first day of the first pay period 
     beginning after the day that is 180 days after the date of 
     the enactment of this Act.
       (f) Comparability Pay Program for Appointees to the Office 
     of the Under Secretary for Health.--Section 7410 of such 
     title is amended--
       (1) by striking ``The Secretary may'' and inserting ``(a) 
     In General.--The Secretary may''; and
       (2) by adding at the end the following new subsection:
       ``(b) Comparability Pay for Appointees to the Office of the 
     Under Secretary for Health.--(1) The Secretary may authorize 
     the Under Secretary for Health to provide comparability pay 
     of not more than $100,000 per year to individuals of the 
     Veterans Health Administration appointed under section 7306 
     of this title who are not physicians or dentists to achieve 
     annual pay levels for such individuals that are comparable 
     with annual pay levels of individuals with similar positions 
     in the private sector.
       ``(2) Comparability pay under paragraph (1) for an 
     individual is in addition to all other pay, awards, and 
     performance bonuses paid to such individual under this title.
       ``(3) Except as provided in paragraph (4), comparability 
     pay under paragraph (1) for an individual shall be considered 
     basic pay for all purposes, including retirement benefits 
     under chapters 83 and 84 of title 5, and other benefits.
       ``(4) Comparability pay under paragraph (1) for an 
     individual shall not be considered basic pay for purposes of 
     adverse actions under subchapter V of this chapter.
       ``(5) Comparability pay under paragraph (1) may not be 
     awarded to an individual in an amount that would result in an 
     aggregate amount of pay (including bonuses and awards) 
     received by such individual in a year under this title that 
     is greater than the annual pay of the President.''.
       (g) Special Incentive Pay for Department Pharmacist 
     Executives.--Section 7410 of such title, as amended by 
     subsection (f), is further amended by adding at the end the 
     following new subsection:
       ``(c) Special Incentive Pay for Department Pharmacist 
     Executives.--(1) In order to recruit and retain highly 
     qualified Department pharmacist executives, the Secretary may 
     authorize the Under Secretary for Health to pay special 
     incentive pay of not more than $40,000 per year to an 
     individual of the Veterans Health Administration who is a 
     pharmacist executive.
       ``(2) In determining whether and how much special pay to 
     provide to such individual, the Under Secretary shall 
     consider the following:
       ``(A) The grade and step of the position of the individual.
       ``(B) The scope and complexity of the position of the 
     individual.
       ``(C) The personal qualifications of the individual.
       ``(D) The characteristics of the labor market concerned.
       ``(E) Such other factors as the Secretary considers 
     appropriate.
       ``(3) Special incentive pay under paragraph (1) for an 
     individual is in addition to all other pay (including basic 
     pay) and allowances to which the individual is entitled.
       ``(4) Except as provided in paragraph (5), special 
     incentive pay under paragraph (1) for an individual shall be 
     considered basic pay for all purposes, including retirement 
     benefits under chapters 83 and 84 of title 5, and other 
     benefits.
       ``(5) Special incentive pay under paragraph (1) for an 
     individual shall not be considered basic pay for purposes of 
     adverse actions under subchapter V of this chapter.
       ``(6) Special incentive pay under paragraph (1) may not be 
     awarded to an individual in an

[[Page 7635]]

     amount that would result in an aggregate amount of pay 
     (including bonuses and awards) received by such individual in 
     a year under this title that is greater than the annual pay 
     of the President.''.
       (h) Pay for Physicians and Dentists.--
       (1) Non-foreign cost of living adjustment allowance.--
     Section 7431(b) of such title is amended by adding at the end 
     the following:
       ``(5) The non-foreign cost of living adjustment allowance 
     authorized under section 5941 of title 5 for physicians and 
     dentists whose pay is set under this section shall be 
     determined as a percentage of base pay only.''.
       (2) Market pay determinations for physicians and dentists 
     in administrative or executive leadership positions.--Section 
     7431(c)(4)(B)(i) of such title is amended by adding at the 
     end the following: ``The Secretary may exempt physicians and 
     dentists occupying administrative or executive leadership 
     positions from the requirements of the previous sentence.''.
       (3) Exception to prohibition on reduction of market pay.--
     Section 7431(c)(7) of such title is amended by striking 
     ``concerned.'' and inserting ``concerned, unless there is a 
     change in board certification or reduction of privileges.''.
       (i) Adjustment of Pay Cap for Nurses.--Section 7451(c)(2) 
     of such title is amended by striking ``title 5'' and 
     inserting ``title 5 or the level of GS-15 as prescribed under 
     section 5332 of such title, whichever is greater''.
       (j) Exemption for Certified Registered Nurse Anesthetists 
     From Limitation on Authorized Competitive Pay.--Section 
     7451(c)(2) of such title is further amended by adding at the 
     end the following new sentence: ``The maximum rate of basic 
     pay for a grade for the position of certified registered 
     nurse anesthetist pursuant to an adjustment under subsection 
     (d) may exceed the maximum rate otherwise provided in the 
     preceding sentence.''.
       (k) Locality Pay Scale Computations.--
       (1) Education, training, and support for facility directors 
     in wage surveys.--Section 7451(d)(3) of such title is amended 
     by adding at the end the following new subparagraph:
       ``(F) The Under Secretary for Health shall provide 
     appropriate education, training, and support to directors of 
     Department health-care facilities in the conduct and use of 
     surveys under this paragraph.''.
       (2) Information on methodology used in wage surveys.--
     Section 7451(e)(4) of such title is amended--
       (A) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (B) by inserting after subparagraph (C) the following new 
     subparagraph (D):
       ``(D) In any case in which the director conducts such a 
     wage survey during the period covered by the report and makes 
     adjustment in rates of basic pay applicable to one or more 
     covered positions at the facility, information on the 
     methodology used in making such adjustment or adjustments.''.
       (3) Disclosure of information to persons in covered 
     positions.--Section 7451(e) of such title is further amended 
     by adding at the end the following new paragraph:
       ``(6)(A) Upon the request of an individual described in 
     subparagraph (B) for a report provided under paragraph (4) 
     with respect to a Department health-care facility, the Under 
     Secretary for Health or the director of such facility shall 
     provide to the individual the most current report for such 
     facility provided under such paragraph.
       ``(B) An individual described in this subparagraph is--
       ``(i) an individual in a covered position at a Department 
     health-care facility; or
       ``(ii) a representative of the labor organization 
     representing that individual who is designated by that 
     individual to make the request.''.
       (l) Increased Limitation on Special Pay for Nurse 
     Executives.--Section 7452(g)(2) of such title is amended by 
     striking ``$25,000'' and inserting ``$100,000''.
       (m) Eligibility of Part-Time Nurses for Additional Nurse 
     Pay.--
       (1) In general.--Section 7453 of such title is amended--
       (A) in subsection (a), by striking ``a nurse'' and 
     inserting ``a full-time nurse or part-time nurse'';
       (B) in subsection (b)--
       (i) in the first sentence--

       (I) by striking ``on a tour of duty'';
       (II) by striking ``on such tour''; and
       (III) by striking ``of such tour'' and inserting ``of such 
     service''; and

       (ii) in the second sentence, by striking ``of such tour'' 
     and inserting ``of such service'';
       (C) in subsection (c)--
       (i) by striking ``on a tour of duty''; and
       (ii) by striking ``on such tour''; and
       (D) in subsection (e)--
       (i) in paragraph (1), by striking ``eight hours in a day'' 
     and inserting ``eight consecutive hours''; and
       (ii) in paragraph (5)(A), by striking ``tour of duty'' and 
     inserting ``period of service''.
       (2) Exclusion of application of additional nurse pay 
     provisions to certain additional employees.--Section 
     7454(b)(3) of such title is amended to read as follows:
       ``(3) Employees appointed under section 7408 of this title 
     performing service on a tour of duty, any part of which is 
     within the period commencing at midnight Friday and ending at 
     midnight Sunday, shall receive additional pay in addition to 
     the rate of basic pay provided such employees for each hour 
     of service on such tour at a rate equal to 25 percent of such 
     employee's hourly rate of basic pay.''.
       (n) Exemption of Additional Nurse Positions From Limitation 
     on Increase in Rates of Basic Pay.--Section 7455(c)(1) of 
     such title is amended by inserting after ``nurse 
     anesthetists,'' the following: ``licensed practical nurses, 
     licensed vocational nurses, and nursing positions otherwise 
     covered by title 5,''.

     SEC. 3. LIMITATIONS ON OVERTIME DUTY, WEEKEND DUTY, AND 
                   ALTERNATIVE WORK SCHEDULES FOR NURSES.

       (a) Overtime Duty.--
       (1) In general.--Subchapter IV of chapter 74 of title 38, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 7459. Nurses: special rules for overtime duty

       ``(a) Limitation.--Except as provided in subsection (c), 
     the Secretary may not require a nurse to work more than 40 
     hours (or 24 hours if such nurse is covered under section 
     7456) in an administrative work week or more than eight 
     consecutive hours (or 12 hours if such nurse is covered under 
     section 7456 or 7456A).
       ``(b) Voluntary Overtime.--(1) A nurse may on a voluntary 
     basis elect to work hours otherwise prohibited by subsection 
     (a).
       ``(2) The refusal of a nurse to work hours prohibited by 
     subsection (a) shall not be grounds to discriminate (within 
     the meaning of section 704(a) of the Civil Rights Act of 1964 
     (42 U.S.C. 2000e-3(a))) against the nurse, dismissal or 
     discharge of the nurse, or any other adverse personnel action 
     against the nurse.
       ``(c) Overtime Under Emergency Circumstances.--(1) Subject 
     to paragraph (2), the Secretary may require a nurse to work 
     hours otherwise prohibited by subsection (a) if--
       ``(A) the work is a consequence of an emergency that could 
     not have been reasonably anticipated;
       ``(B) the emergency is non-recurring and is not caused by 
     or aggravated by the inattention of the Secretary or lack of 
     reasonable contingency planning by the Secretary;
       ``(C) the Secretary has exhausted all good faith, 
     reasonable attempts to obtain voluntary workers;
       ``(D) the nurse has critical skills and expertise that are 
     required for the work; and
       ``(E) the work involves work for which the standard of care 
     for a patient assignment requires continuity of care through 
     completion of a case, treatment, or procedure.
       ``(2) A nurse may not be required to work hours under this 
     subsection after the requirement for a direct role by the 
     nurse in responding to medical needs resulting from the 
     emergency ends.
       ``(d) Nurse Defined.--In this section, the term `nurse' 
     includes the following;
       ``(1) A registered nurse.
       ``(2) A licensed practical or vocational nurse.
       ``(3) A nurse assistant appointed under this chapter or 
     title 5.
       ``(4) Any other nurse position designated by the Secretary 
     for purposes of this section.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 74 of such title is amended by inserting 
     after the item relating to section 7458 the following new 
     item:

``7459. Nurses: special rules for overtime duty.''.

       (b) Weekend Duty.--Section 7456 of such title is amended--
       (1) in subsection (a) by striking ``regularly scheduled 12-
     hour tour of duty'' and inserting ``scheduled 12-hour periods 
     of service'';
       (2) in subsection (b)--
       (A) in paragraph (2), by striking ``service performed as 
     part of a regularly scheduled 12-hour tour of duty'' and 
     inserting ``any service performed''; and
       (B) in paragraph (3)--
       (i) in subparagraph (A), by striking ``regularly scheduled 
     two 12-hour tours of duty'' and inserting ``scheduled 12-hour 
     period of service'';
       (ii) in subparagraph (B), by striking ``regularly scheduled 
     two 12-hour tour of duty'' and inserting ``scheduled 12-hour 
     period of service''; and
       (iii) in subparagraph (C), by striking ``regularly 
     scheduled two 12-hour tours of duty'' and inserting 
     ``scheduled two 12-hour periods of service'';
       (3) by striking subsection (c); and
       (4) by redesignating subsection (d) as (c).
       (c) Alternate Work Schedules.--
       (1) In general.--Section 7456A(b)(1)(A) of such title is 
     amended by striking ``three regularly scheduled'' and all 
     that follows through the period at the end and inserting 
     ``six regularly scheduled 12-hour periods of service within a 
     pay period shall be considered for all purposes to have 
     worked a full 80-hour pay period.''.
       (2) Conforming amendments.--Section 7456A(b) of such title 
     is amended--
       (A) in the subsection heading, by striking ``36/40'' and 
     inserting ``72/80'';

[[Page 7636]]

       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking ``40-hour basic work 
     week'' and inserting ``80-hour pay period'';
       (ii) in subparagraph (B), by striking ``regularly scheduled 
     36-hour tour of duty within the work week'' and inserting 
     ``scheduled 72-hour period of service within the bi-weekly 
     pay period'';
       (iii) in subparagraph (C)--

       (I) in clause (i), by striking ``regularly scheduled 36-
     hour tour of duty within an administrative work week'' and 
     inserting ``scheduled 72-hour period of service within an 
     administrative pay period'';
       (II) in clause (ii), by striking ``regularly scheduled 12-
     hour tour of duty'' and inserting ``scheduled 12-hour period 
     of service''; and
       (III) in clause (iii), by striking ``regularly scheduled 
     36-hour tour of duty work week'' and inserting ``scheduled 
     72-hour period of service pay period''; and

       (iv) in subparagraph (D), by striking ``regularly scheduled 
     12-hour tour of duty'' and inserting ``scheduled 12-hour 
     period of service''; and
       (C) in paragraph (3), by striking ``regularly scheduled 12-
     hour tour of duty'' and inserting ``scheduled 12-hour period 
     of service''.

     SEC. 4. IMPROVEMENTS TO CERTAIN EDUCATIONAL ASSISTANCE 
                   PROGRAMS.

       (a) Reinstatement of Health Professionals Educational 
     Assistance Scholarship Program.--
       (1) In general.--Section 7618 of title 38, United States 
     Code, is amended by striking ``December 31, 1998'' and 
     inserting ``December 31, 2013''.
       (2) Expansion of eligibility requirements.--Paragraph (2) 
     of section 7612(b) of such title is amended by striking 
     ``(under section'' and all that follows through the period at 
     the end and inserting the following: ``as an appointee under 
     paragraph (1) or (3) of section 7401 of this title.''.
       (b) Improvements to Education Debt Reduction Program.--
       (1) Inclusion of employee retention as purpose of 
     program.--Section 7681(a)(2) of such title is amended by 
     inserting ``and retention'' after ``recruitment'' the first 
     time it appears.
       (2) Eligibility.--Section 7682 of such title is amended--
       (A) in subsection (a)(1), by striking ``a recently 
     appointed'' and inserting ``an''; and
       (B) by striking subsection (c).
       (3) Maximum amounts of assistance.--Section 7683(d)(1) of 
     such title is amended--
       (A) by striking ``$44,000'' and inserting ``$60,000''; and
       (B) by striking ``$10,000'' and inserting ``$12,000''.
       (c) Loan Repayment Program for Clinical Researchers From 
     Disadvantaged Backgrounds.--
       (1) In general.--The Secretary of Veterans Affairs may, in 
     consultation with the Secretary of Health and Human Services, 
     utilize the authorities available in section 487E of the 
     Public Health Service Act (42 U.S.C. 288-5) for the repayment 
     of the principal and interest of educational loans of 
     appropriately qualified health professionals who are from 
     disadvantaged backgrounds in order to secure clinical 
     research by such professionals for the Veterans Health 
     Administration.
       (2) Limitations.--The exercise by the Secretary of Veterans 
     Affairs of the authorities referred to in paragraph (1) shall 
     be subject to the conditions and limitations specified in 
     paragraphs (2) and (3) of section 487E(a) of the Public 
     Health Service Act (42 U.S.C. 288-5(2) and (3)).
       (3) Funding.--Amounts for the repayment of principal and 
     interest of educational loans under this subsection shall be 
     derived from amounts available to the Secretary of Veterans 
     for the Veterans Health Administration for Medical Services.

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