[Congressional Record (Bound Edition), Volume 155 (2009), Part 12]
[Senate]
[Pages 16245-16273]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. SNOWE (for herself and Mr. Conrad):
  S. 1349. A bill to amend the Internal Revenue Code of 1986 to 
simplify the deduction for use of a portion of a residence as a home 
office by providing an optional standard home office deduction; to the 
Committee on Finance.
  Ms. SNOWE. Mr. President, today I rise to reintroduce legislation to 
offer a drastically simplified alternative for home-based businesses to 
benefit from the home office tax deduction. The U.S. Small Business 
Administration's, SBA's, Office of Advocacy designated reforming the 
home office tax deduction as one of its top 10 regulatory review and 
reform initiatives for 2008. By establishing an optional home office 
deduction, the Home Office Tax Deduction Simplification and Improvement 
Act of 2009 would take a strong step toward making our tax laws easier 
to understand. I would like to thank Senator Conrad for joining me to 
introduce this critical bill here in the Senate and Representative 
Gonzalez for introducing identical legislation in the House of 
Representatives.
  As Ranking Member of the Senate Committee on Small Business and 
Entrepreneurship, I continually hear from small enterprises across 
Maine and this nation about the necessity of tax relief and reform. 
Despite the fact that small firms are our economy's real job creators, 
the current tax system places an entirely unreasonable burden on them 
as they struggle to satisfy their tax obligations.
  Notably, according to the Office of Management and Budget's Office of 
Information and Regulatory Affairs, the American public spends 
approximately nine billion hours each year to complete government-
mandated forms and paperwork. A staggering 80 percent of this time is 
consumed by completing tax forms. What is even more troubling is that 
companies that employ fewer than 20 employees spend nearly $1,304 per 
employee in tax compliance costs, an amount that is nearly 67 percent 
more than larger firms.
  Turning to the legislation we are reintroducing today, the Internal 
Revenue Code currently offers qualified individuals a home office tax 
deduction if they use a portion of their home as a principal place of 
business or as a space to meet with their patients or clients. That 
said, although recent research from the SBA indicates that roughly 53 
percent of America's small businesses are home-based, few of these 
firms take advantage of the home office tax deduction. The reason is 
simple: reporting the deduction is complicated.
  A 2006 survey conducted by the National Federation of Independent 
Business Research Foundation found that approximately 33 percent of 
small-employer taxpayers try to comprehend the tax rules governing the 
home office tax deduction, but only about half of those respondents 
believe that they actually have a good understanding of the rules. As 
Dewey Martin, a Certified Public Accountant from my home State of 
Maine, so aptly said in testimony last year before the Senate Finance 
Committee, ``Many small business owners avoid the deduction because of 
the complications and the fear of a potential audit.''
  With a morass of paperwork attributable to the home office deduction, 
the time-consuming process of navigating the tangled web of rules and 
regulations makes it unsurprising that so many small business owners 
forego the home office deduction. So to encourage the use of the home 
office tax deduction, the bill we are introducing today would establish 
an optional, easy-to-use incentive.
  Specifically, our bill would direct the Secretary of the Treasury to 
establish a method for determining a deduction that consists of 
multiplying an applicable standard rate by the square footage of the 
type of property being used as a home office. The proposal would also 
require the IRS to separately state the amounts allocated to several 
types of expenses in order to reduce the burden on the taxpayer. It is 
vital that the IRS clearly identify the amounts of the deduction 
devoted to real estate taxes, mortgage interest, and depreciation so 
that taxpayers do not duplicate them on Schedule A. Finally, the bill 
makes two changes designed to ease the administration of the deduction: 
First, to reflect an economy in which many business owners conduct 
business or consult with customers through the Internet or over the 
phone versus face-to-face, our legislation takes these entrepreneurs 
into account by allowing the home office deduction to be taken if the 
taxpayer uses the home to meet or deal with clients regardless of 
whether the clients are physically present. Second, our bill would 
allow for de minimis use of business space for personal activities so 
that taxpayers would not lose their ability to claim the deduction if 
they make a personal call or pay a bill online.
  I would be remiss not to note that the bill we are introducing today 
is the result of the dedicated efforts of various groups and 
organizations, which have worked with Senator Conrad and me on a 
consensus approach to improve the current home office tax deduction. In 
particular, it is significant to note that the IRS Taxpayer Advocate 
Service strongly backs this bill. In fact, the National Taxpayer 
Advocate, Nina E. Olson, sent my office the following statement 
regarding our legislation: ``In my 2007 Annual Report to Congress, I 
made a similar proposal to simplify the home office business deduction. 
I am pleased that Senator Snowe and Conrad's proposed bill reflects the 
gist of my legislative recommendation. Reducing the burdensome 
substantiation requirements for employees and self-employed taxpayers 
who incur modest home office costs would make the home office business 
deduction simpler and more accessible to them.''
  Our bill also received an endorsement from the National Federation of 
Independent Business. Dan Danner, the organization's Executive 
Director, said the following: ``Currently only a small percentage of 
home-based businesses in the U.S. take advantage of the home-office 
deduction because calculating the deduction is unnecessarily 
complicated. NFIB small business owners have advocated for a simpler, 
standard home-office deduction for years. The Snowe-Conrad legislation 
gives home-based businesses the option to deduct a legitimate business 
expense with minimum hassle. This commonsense

[[Page 16246]]

change to the tax code will reduce tax complexity and help many home-
based businesses take advantage of this deduction.'' Additionally, the 
SBA's Office of Advocacy added: ``The SBA Office of Advocacy reviewed 
the legislation and supports it.''
  In closing, according to the SBA's Office of Advocacy, America's 
home-based sole proprietors generate $102 billion in revenue annually. 
With this in mind, it is absolutely critical to endow these small firms 
with as much relief from burdensome tax constraints as possible so that 
they can focus their efforts on developing the products and services of 
the future, as well as creating new jobs. The confusion over the home 
office business tax deduction, in my estimation, can be easily solved 
by passing this legislation. I urge all Senators to consider the 
benefits this bill will provide to thousands of small business owners, 
and I look forward to working with my colleagues to enact it in a 
timely manner.
  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. 1349

       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 ``Home Office Tax Deduction 
     Simplification and Improvement Act of 2009''.

     SEC. 2. OPTIONAL STANDARD HOME OFFICE DEDUCTION.

       (a) In General.--Subsection (c) of section 280A of the 
     Internal Revenue Code of 1986 (relating to exceptions for 
     certain business or rental use; limitation on deductions for 
     such use) is amended by adding at the end the following new 
     paragraph:
       ``(7) Election of standard home office deduction.--
       ``(A) In general.--In the case of an individual who is 
     allowed a deduction for the use of a portion of a dwelling 
     unit as a business by reason of paragraph (1), (2), or (4), 
     notwithstanding the limitations of paragraph (5), if such 
     individual elects the application of this paragraph for the 
     taxable year with respect to such dwelling unit, such 
     individual shall be allowed a deduction equal to the standard 
     home office deduction for the taxable year in lieu of the 
     deductions otherwise allowable under this chapter for such 
     taxable year by reason of paragraph (1), (2), or (4).
       ``(B) Standard home office deduction.--
       ``(i) In general.--For purposes of this paragraph, the 
     standard home office deduction is an amount equal to the 
     product of--

       ``(I) the applicable home office standard rate, and
       ``(II) the square footage of the portion of the dwelling 
     unit to which paragraph (1), (2), or (4) applies.

       ``(ii) Applicable home office standard rate.--For purposes 
     of this subparagraph, the term `applicable home office 
     standard rate' means the rate applicable to the taxpayer's 
     category of business, as determined and published by the 
     Secretary for the 3 categories of businesses described in 
     paragraphs (1), (2), and (4) for the taxable year.
       ``(iii) Maximum square footage taken into account.--The 
     Secretary shall determine and publish annually the maximum 
     square footage that may be taken into account under clause 
     (i)(II) for each of the 3 categories of businesses described 
     in paragraphs (1), (2), and (4) for the taxable year.
       ``(C) Effect of election.--
       ``(i) General rule.--Except as provided in clause (ii), any 
     election under this paragraph, once made by the taxpayer with 
     respect to any dwelling unit, shall continue to apply with 
     respect to such dwelling unit for each succeeding taxable 
     year.
       ``(ii) One-time election per dwelling unit.--A taxpayer who 
     elects the application of this paragraph in a taxable year 
     with respect to any dwelling unit may revoke such application 
     in a subsequent taxable year. After so revoking, the taxpayer 
     may not elect the application of this paragraph with respect 
     to such dwelling unit in any subsequent taxable year.
       ``(D) Denial of double benefit.--
       ``(i) In general.--Except as provided in clause (ii), in 
     the case of a taxpayer who elects the application of this 
     paragraph for the taxable year, no other deduction or credit 
     shall be allowed under this subtitle for such taxable year 
     for any amount attributable to the portion of a dwelling unit 
     taken into account under this paragraph.
       ``(ii) Exception for disaster losses.--A taxpayer who 
     elects the application of this paragraph in any taxable year 
     may take into account any disaster loss described in section 
     165(i) as a loss under section 165 for the applicable taxable 
     year, in addition to the standard home office deduction under 
     this paragraph for such taxable year.
       ``(E) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the purposes of 
     this paragraph.''.
       (b) Modification of Home Office Business Use Rules.--
       (1) Place of meeting.--Subparagraph (B) of section 
     280A(c)(1) of the Internal Revenue Code of 1986 is amended to 
     read as follows:
       ``(B) as a place of business which is used by the taxpayer 
     in meeting or dealing with patients, clients, or customers in 
     the normal course of the taxpayer's trade or business, or''.
       (2) De minimis personal use.--Paragraph (1) of section 
     280A(c) of such Code is amended by striking ``for the 
     convenience of his employer'' and inserting ``for the 
     convenience of such employee's employer. A portion of a 
     dwelling unit shall not fail to be deemed as exclusively used 
     for business for purposes of this paragraph solely because a 
     de minimis amount of non-business activity may be carried out 
     in such portion''.
       (c) Reporting of Expenses Relating to Home Office 
     Deduction.--Within 60 days after the date of the enactment of 
     this Act, the Secretary of the Treasury shall ensure that all 
     forms and schedules used to calculate or report itemized 
     deductions and profits or losses from business or farming 
     state separately amounts attributable to real estate taxes, 
     mortgage interest, and depreciation for purposes of the 
     deductions allowable under paragraphs (1), (2), (4), and (7) 
     of section 280A(c) of the Internal Revenue Code of 1986.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.
                                 ______
                                 
      By Mr. PRYOR (for himself and Mr. Inhofe):
  S. 1350. A bill to encourage increased production of natural gas and 
liquified petroleum gas vehicles and to provide tax incentives for 
natural gas and liquefied petroleum gas vehicle infrastructure, and for 
other purposes; to the Committee on Finance.
  Mr. PRYOR. Mr. President, I rise today along with Senator Inhofe to 
introduce the Fueling America Act of 2009 which will provide incentives 
for the production and use of natural gas and propane vehicles 
throughout the United States.
  In response to high gasoline and diesel fuel prices, consumers have 
become more interested in alternative fuel vehicles that run on natural 
gas or propane. These vehicles and aftermarket conversion kits have 
been available for years, but they have been used mostly in government 
and private fleets. Very few have been purchased and used by consumers. 
Larger natural gas and propone vehicles are often used for clean-
burning transit buses and delivery trucks.
  Natural gas and propane are clean, cost-effective alternative fuel 
choices. Two important potential benefits of increasing the supply of 
natural gas and propane vehicles are energy security and reduced 
pollutant and greenhouse gas emissions than comparable gasoline or 
diesel vehicles. Compared with conventional vehicles, natural gas 
vehicles produce only 5 to 10 percent of allowable emissions, which 
means far less greenhouse gases.
  Thanks to new drilling technologies that are unlocking substantial 
amounts of natural gas from shale rocks, the nation's estimated gas 
reserves have surged by 35 percent, according to a study released last 
week. The report by the Potential Gas Committee, the authority on gas 
supplies, shows the United States holds far larger reserves than 
previously thought. Estimated natural gas reserves rose to 2,074 
trillion cubic feet in 2008, from 1,532 trillion cubic feet in 2006, 
when the last report was issued.
  Increasing the production of natural gas and propane vehicles for 
both individual and public transportation will provide a huge boost for 
Arkansas' economy and job growth. Arkansas, with its abundant natural 
gas resources, has the capability to be a leader in the alternative 
energy sector and the fight to reduce our country's dependence on 
foreign oil. Developing the natural gas vehicle and propane industry 
will help Arkansas' natural gas producers grow and thrive, boosting the 
State's economy. In Arkansas, the Fayetteville Shale is proving to be a 
major new find of domestic natural gas. The Center for Business and 
Economic Research at the University of Arkansas estimates that this 
shale play will result in about $17.9 billion in economic stimulus and 
11,000 jobs for the State.

[[Page 16247]]

  Natural gas and propane vehicles are more fuel efficient and 
environmentally friendly than their gasoline counterparts, but right 
now their high cost and lack of infrastructure, such as refueling 
stations, make them an unrealistic option for the average American. 
Since the number of natural gas refueling stations is limited only 
about 400 to 500 publicly available nationwide, compared to roughly 
120,000 retail gasoline stations the purchaser of a new natural gas 
vehicle would likely also install a home refueling system. According to 
NGVAmerica, a typical home system costs roughly $4,500 plus 
installation.
  The Fueling America Act of 2009 will establish a research, 
development and demonstration program at the Department of Energy to 
improve cleaner, more efficient natural gas and propane vehicle 
engines, on-board storage systems, and fueling station infrastructure; 
require the GSA to report on whether the Federal fleet should increase 
the number of natural gas and propane vehicles; extend the Clean School 
Bus Program through 2014; extend tax credits for natural gas and 
propane refueling property; and extend and increase the consumer tax 
credit for the purchase of natural gas, propane and bi-fuel vehicles.
  The Fueling America Act will make it easier and more practical for 
people to buy these clean, green vehicles. This bill will provide 
incentives for consumers and industry to purchase new natural gas and 
propane vehicles, as well as aftermarket conversion kits. At the same 
time, America can become less dependent on foreign oil, utilize our 
ample domestic natural gas resources, and create a cleaner environment.
  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. 1350

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Fueling 
     America Act of 2009''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

 TITLE I--INCREASED PRODUCTION OF NATURAL GAS AND LIQUEFIED PETROLEUM 
                              GAS VEHICLES

Sec. 101. Definitions.
Sec. 102. Natural gas and liquefied petroleum gas vehicle research, 
              development, and demonstration projects.
Sec. 103. Study of increasing natural gas and liquefied petroleum gas 
              vehicles in Federal fleet.
Sec. 104. Clean school bus program.

                        TITLE II--TAX INCENTIVES

Sec. 201. Credit for natural gas and liquefied petroleum gas refueling 
              property.
Sec. 202. Credit for purchase of vehicles fueled by natural gas or 
              liquefied petroleum gas.

 TITLE I--INCREASED PRODUCTION OF NATURAL GAS AND LIQUEFIED PETROLEUM 
                              GAS VEHICLES

     SEC. 101. DEFINITIONS.

       In this title:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Natural gas.--The term ``natural gas'' means--
       (A) compressed natural gas;
       (B) liquefied natural gas;
       (C) biomethane; and
       (D) mixtures of--
       (i) hydrogen; and
       (ii) methane, biomethane, compressed natural gas, or 
     liquefied natural gas.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.

     SEC. 102. NATURAL GAS AND LIQUEFIED PETROLEUM GAS VEHICLE 
                   RESEARCH, DEVELOPMENT, AND DEMONSTRATION 
                   PROJECTS.

       (a) In General.--The Secretary, in coordination with the 
     Administrator, shall conduct a program of natural gas and 
     liquefied petroleum gas vehicle research, development, and 
     demonstration.
       (b) Purposes.--The purposes of the program conducted under 
     this section are to focus on--
       (1) the continued improvement and development of new, 
     cleaner, more efficient light-duty, medium-duty, and heavy-
     duty natural gas and liquefied petroleum gas vehicle engines;
       (2) the integration of those engines into light-duty, 
     medium-duty, and heavy-duty natural gas and liquefied 
     petroleum gas vehicles for onroad and offroad applications;
       (3) expanding product availability by assisting 
     manufacturers with the certification of the engines or 
     vehicles described in paragraph (1) or (2) to comply with 
     Federal or California certification requirements and in-use 
     emission standards;
       (4) the demonstration and proper operation and use of the 
     vehicles described in paragraph (2) under all operating 
     conditions;
       (5) the development and improvement of nationally 
     recognized codes and standards for the continued safe 
     operation of vehicles described in paragraph (2) and the 
     components of the vehicles;
       (6) improvement in the reliability and efficiency of 
     natural gas and liquefied petroleum gas fueling station 
     infrastructure;
       (7) the certification of natural gas and liquefied 
     petroleum gas fueling station infrastructure to nationally 
     recognized and industry safety standards;
       (8) the improvement in the reliability and efficiency of 
     onboard natural gas and liquefied petroleum gas fuel storage 
     systems;
       (9) the development of new natural gas and liquefied 
     petroleum gas fuel storage materials;
       (10) the certification of onboard natural gas and liquefied 
     petroleum gas fuel storage systems to nationally recognized 
     and industry safety standards; and
       (11) the use of natural gas and liquefied petroleum gas 
     engines in hybrid vehicles.
       (c) Certification of Aftermarket Conversion Systems.--
       (1) In general.--The Secretary shall coordinate with the 
     Administrator on issues related to streamlining the 
     certification of natural gas and liquefied petroleum gas 
     aftermarket conversion systems to comply with appropriate 
     Federal certification requirements and in-use emission 
     standards.
       (2) Streamlined certification.--For purposes of paragraph 
     (1), streamlined certification shall include providing 
     aftermarket conversion system manufacturers the option to 
     continue to sell and install systems on engines and test 
     groups for which the manufacturers have previously received a 
     certificate of conformity without having to request a new 
     certificate in future years.
       (d) Cooperation and Coordination With Industry.--In 
     developing and carrying out the program under this section, 
     the Secretary shall coordinate with the natural gas and 
     liquefied petroleum gas vehicle industry to ensure, to the 
     maximum extent practicable, cooperation between the public 
     and the private sector.
       (e) Administration.--The program under this section shall 
     be conducted in accordance with sections 3001 and 3002 of the 
     Energy Policy Act of 1992 (42 U.S.C. 13541, 13542).
       (f) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit to the 
     appropriate committees of Congress a report on the 
     implementation of this section.
       (g) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $30,000,000 for each of fiscal years 2010 through 2014.

     SEC. 103. STUDY OF INCREASING NATURAL GAS AND LIQUEFIED 
                   PETROLEUM GAS VEHICLES IN FEDERAL FLEET.

       Not later than 180 days after the date of enactment of this 
     Act, the Administrator of General Services, in consultation 
     with the Administrator, shall--
       (1) conduct a study on whether or not the Federal fleet 
     should increase the number of light-duty, medium-duty, and 
     heavy-duty natural gas and liquefied petroleum gas vehicles 
     in the fleet;
       (2) assess the barriers to increasing the number of natural 
     gas and liquefied petroleum gas vehicles in the fleet;
       (3) assess the potential for maximizing the use of natural 
     gas and liquefied petroleum gas vehicles in the fleet; and
       (4) submit to the appropriate committees of Congress a 
     report on the results of the study.

     SEC. 104. CLEAN SCHOOL BUS PROGRAM.

       (a) In General.--Section 6015 of the Safe, Accountable, 
     Flexible, Efficient Transportation Equity Act: A Legacy for 
     Users (42 U.S.C. 16091a) is amended--
       (1) in subsection (b)(5)--
       (A) in subparagraph (A)--
       (i) in the subparagraph heading, by striking ``50'' and 
     inserting ``65''; and
       (ii) in the matter preceding clause (i), by striking ``one-
     half'' and inserting ``65 percent'';
       (iii) in clause (i)(II), by striking ``or'' after the 
     semicolon at the end;
       (iv) in clause (ii), by striking the period at the end and 
     inserting as semicolon; and
       (v) by adding at the end the following:
       ``(iii) clean school buses with engines manufactured in 
     model year 2010, 2011, 2012, 2013, or 2014 that satisfy 
     regulatory requirements established by the Administrator for 
     emissions of oxides of nitrogen and particulate matter to be 
     applicable for school buses manufactured in that model year; 
     or
       ``(iv) clean school buses with engines only fueled by 
     compressed natural gas, liquefied natural gas, or liquefied 
     petroleum gas, except that school buses described in this 
     clause may be eligible for a grant that is equal to an 
     additional 25 percent of the acquisition costs of the school 
     buses (including fueling infrastructure).''; and
       (B) in subparagraph (B)--

[[Page 16248]]

       (i) in the subparagraph heading, by striking ``25''and 
     inserting ``50''; and
       (ii) in the matter preceding clause (i), by striking ``one-
     fourth'' and inserting ``50 percent''; and
       (2) in subsection (d)--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) in paragraph (2), by striking ``2008, 2009, and 2010.'' 
     and inserting ``2008 and 2009; and''; and
       (C) by adding at the end the following:
       ``(3) $75,000,000 for each of fiscal years 2010 through 
     2014.''.
       (b) Technical Correction.--Section 741 of the Energy Policy 
     Act of 2005 (42 U.S.C. 16091) is repealed.

                        TITLE II--TAX INCENTIVES

     SEC. 201. CREDIT FOR NATURAL GAS AND LIQUEFIED PETROLEUM GAS 
                   REFUELING PROPERTY.

       (a) Increase in Credit Percentage for Natural Gas and 
     Liquefied Petroleum Gas Refueling Property.--Subsection (e) 
     of section 30C of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new paragraph:
       ``(7) Special rule for qualified natural gas vehicle 
     refueling property and qualified liquefied petroleum gas 
     vehicle refueling property.--
       ``(A) In general.--In the case of any qualified natural gas 
     vehicle refueling property and any qualified liquefied 
     petroleum gas vehicle refueling property to which paragraph 
     (6) does not apply--
       ``(i) subsection (a) shall be applied by substituting `50 
     percent' for `30 percent',
       ``(ii) subsection (b)(1) shall be applied by substituting 
     `$50,000' for `$30,000', and
       ``(iii) subsection (b)(2) shall be applied by substituting 
     `$2,000' for `$1,000'.
       ``(B) Qualified natural gas vehicle refueling property.--
     For purposes of this paragraph, the term `qualified natural 
     gas vehicle refueling property' has the same meaning as the 
     term `qualified alternative fuel vehicle refueling property' 
     would have under subsection (c) if only natural gas, 
     compressed natural gas, and liquefied natural gas were 
     treated as clean-burning fuels for purposes of section 
     179A(d).
       ``(C) Qualified liquefied petroleum gas vehicle refueling 
     property.--For purposes of this paragraph, the term 
     `qualified liquefied petroleum gas vehicle refueling 
     property' has the same meaning as the term `qualified 
     alternative fuel vehicle refueling property' would have under 
     subsection (c) if only liquefied petroleum gas were treated 
     as a clean-burning fuel for purposes of section 179A(d).''.
       (b) Extension of Credit.--Subsection (g) of section 30C of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(g) Termination.--This section shall not apply to any 
     property placed in service after December 31, 2014.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2008, in taxable years ending after such date.

     SEC. 202. CREDIT FOR PURCHASE OF VEHICLES FUELED BY NATURAL 
                   GAS OR LIQUEFIED PETROLEUM GAS.

       (a) In General.--Subsection (e) of section 30B of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new paragraph:
       ``(6) Higher incremental cost limits for natural gas 
     vehicles and liquefied petroleum gas vehicles.--
       ``(A) In general.--In the case of any eligible natural gas 
     motor vehicle and any eligible liquefied petroleum gas motor 
     vehicle, paragraph (3) shall be applied by multiplying each 
     of the dollar amounts contained in such paragraph by 2.
       ``(B) Eligible natural gas motor vehicle.--For purposes of 
     this paragraph, the term `eligible natural gas motor vehicle' 
     means (except as provided in clause (ii)) a new qualified 
     alternative fuel motor vehicle or aftermarket conversion 
     system the final assembly of which is in the United States 
     and that--
       ``(i) is only capable of operating on compressed natural 
     gas or liquefied natural gas, or
       ``(ii) is capable of operating for more than 175 miles on 
     compressed natural gas or liquefied natural gas and is 
     capable of operating on gasoline or diesel fuel.
       ``(C) Eligible liquefied petroleum gas motor vehicle.--For 
     purposes of this paragraph, the term `eligible liquefied 
     petroleum gas motor vehicle' means (except as provided in 
     clause (ii)) a new qualified alternative fuel motor vehicle 
     or aftermarket conversion system the final assembly of which 
     is in the United States and that--
       ``(i) is only capable of operating on liquefied petroleum 
     gas, or
       ``(ii) is capable of operating for more than 175 miles on 
     liquefied petroleum gas and is capable of operating on 
     gasoline or diesel fuel.
       ``(D) Aftermarket conversion system.--For purposes of this 
     paragraph, the term `aftermarket conversion system' means 
     property that converts a vehicle that is not described in 
     this paragraph into an eligible natural gas motor vehicle 
     (for purposes of subparagraph (B)) or an eligible liquefied 
     petroleum gas motor vehicle (for purposes of subparagraph 
     (C)).''.
       (b) Extension of Credit for Natural Gas and Liquefied 
     Petroleum Gas Vehicles.--Paragraph (4) of section 30B(k) of 
     the Internal Revenue Code of 1986 is amended--
       (1) by striking ``and'' at the end of paragraph (3),
       (2) by striking the period at the end of paragraph (4) and 
     inserting ``, and'',
       (3) by striking ``(as described in subsection (e))'' in 
     paragraph (4) and inserting ``(as described in paragraph (4) 
     or (5) of subsection (e))'', and
       (4) by adding at the end the following new paragraph:
       ``(5) in the case of a new qualified alternative fuel 
     vehicle described in subsection (e)(6), December 31, 2014.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to vehicles placed in service after December 31, 
     2008, in taxable years ending after such date.
                                 ______
                                 
      By Mr. DODD (for himself, Ms. Collins, Mr. Reed, Mr. Lieberman, 
        Mr. Cardin, and Mr. Whitehouse):
  S. 1352. A bill to provide for the expansion of Federal efforts 
concerning the prevention, education, treatment, and research 
activities related to Lyme and other tick-borne diseases, including the 
establishment of a Tick-Borne Diseases Advisory Committee; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. DODD. Mr. President, I rise today to join my fellow New 
Englander, Senator Susan Collins of Maine, in introducing the Lyme and 
Tick-Borne Disease Prevention, Education, and Research Act of 2009.
  As families in New England look forward to outdoor fun this summer--
and as families around the country look forward to vacationing in New 
England--they might not be thinking about the risks and dangers 
associated with hiking, camping, and other outdoor activities.
  But every year, tens of thousands of Americans working or playing 
outdoors are bitten by ticks.
  For most, a tick bite is nothing more than a minor annoyance. But 
approximately 20,000 Americans contract Lyme disease each year, and the 
numbers are rising. And because Lyme disease is difficult to diagnose, 
many experts believe the true number of cases each year could be as 
much as 10 or 12 times the reported number. Worst of all, it is our 
children who are most at risk.
  Lyme disease was first described in my home State of Connecticut, and 
we still have the unfortunate distinction of being ten times more 
likely to contract Lyme disease than the rest of the Nation. But the 
Centers for Disease Control and Prevention has received reports of new 
cases from 46 States and the District of Columbia. According to some 
estimates, Lyme disease costs our Nation more than $2 billion in 
medical costs each year.
  Lyme disease can affect every part of the body. Tens of thousands of 
Americans suffer through pain, severe fatigue, sleep disturbance, and 
cognitive difficulties, among many other symptoms. Some of these 
victims are able to lead normal lives, finding ways to cope with the 
disease. But many more find the disease significantly disrupts their 
lives, preventing them from everyday experiences that we all take for 
granted.
  The legislation we offer today directs the Secretary of Health and 
Human Services to establish a Tick-Borne Diseases Advisory Committee at 
HHS to coordinate efforts and improve communication between the federal 
government, medical experts, physicians, and the public.
  It will improve diagnostic efforts, establish a national 
clearinghouse for research and reporting, and require that scientific 
viewpoints on this often-frustrating disease be disseminated in a 
balanced way.
  It contains tools for researchers, physicians, and the public to 
improve awareness and treatment.
  Finally, it requires the Secretary to prepare and submit to Congress 
an annual report tracking developments related to Lyme disease, its 
spread, its treatment, and its impact on families in Connecticut and 
around the country.
  Lyme disease is a frustrating puzzle for physicians, a burden on our 
Nation's health care system, and most importantly, a threat to American 
families enjoying our beautiful outdoor spaces.

[[Page 16249]]

  I want to specifically mention and thank the organization from my 
home State of Connecticut that worked closely with me to develop this 
legislation, Time for Lyme. The co-presidents and founders of Time for 
Lyme, Diane Blanchard and Debbie Siciliano, are tireless advocates for 
the patients struggling with chronic Lyme disease. This is not their 
job. They are parents whose children suffer from this disease. They 
work to find time in their busy schedules to make a difference. This is 
their mission and they give me hope that we can get this done.
  I also want to thank my good friend, Senator Collins, for her 
leadership on this issue. I want to thank Senators Reed, Lieberman, 
Cardin, and Whitehouse for their support for this bill. Whether it is 
fishing on the Housatonic River or exploring Gillette Castle State Park 
near my home in East Haddam, Connecticut families enjoy a variety of 
outdoor activities.
  But Lyme disease remains a persistent and dangerous risk for my 
constituents, for Senator Collins's constituents, and for those across 
the country. With leadership from this body and better coordination 
from federal agencies, we can more effectively combat this disease, 
better protect our children and families, and make our outdoor spaces 
safer places to work and play.
  I urge my colleagues to join Senator Collins and myself in support of 
this legislation and thank them kindly for their consideration.
                                 ______
                                 
      By Mr. LEAHY (for himself and Mr. Sanders):
  S. 1353. A bill to amend title 1 of the Omnibus Crime Control and 
Safe Streets Act of 1986 to include nonprofit and volunteer ground and 
air ambulance crew members and first responders for certain benefits; 
to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, I rise today to introduce legislation that 
will correct an inequality in the Department of Justice's Public Safety 
Officers Benefits, PSOB, Program by extending benefits to non-profit 
EMS providers who die or are disabled in the line of duty. I am pleased 
to be joined in this effort by Senator Sanders.
  Vermonters were deeply saddened earlier this week when we received 
word that veteran EMT specialist Dale Long died in a tragic, on-duty 
accident in Bennington. Dale Long had a superb 25-year career as a 
Vermont EMT, and I extend our deepest condolences to his family, to the 
Bennington Rescue Squad, and to the entire Vermont EMT community.
  First responders nationwide literally put their lives at risk every 
day for the people of their communities. They represent the best of our 
nation's dedicated service to others, and Dale Long was a solid example 
of that tradition. He was Bennington Rescue Squad's 2008 EMT of the 
Year, and a 2009 recipient of the American Ambulance Association's Star 
of Life Award. I had the pleasure of meeting Dale just last month when 
he visited my office during the Star of Life festivities.
  This tragedy highlights a major shortcoming in the current PSOB 
program, which Congress established over 30 years ago to provide 
assistance to police, fire and medics who lose their lives or are 
disabled in the line of duty. The benefit, though, only applies to 
public safety officers employed by a federal, state, and local 
government entity. With many communities around the United States 
choosing to have their emergency medical services provided by non-
profit agencies, medics working for non-profit services unfortunately 
are not eligible for benefits under the PSOB program.
  Non-profit public safety officers provide identical services to 
governmental officers and do so daily in the same dangerous 
environments. With a renewed appreciation for the important community 
service of first responders since the national tragedy of September 11, 
2001, more people are answering the call to serve their communities. At 
the same time, more rescue workers are falling through the cracks of 
the PSOB program.
  The Dale Long Emergency Medical Service Provider Protection Act would 
correct this inequality by extending the PSOB program to cover non-
profit EMS officers who provide emergency medical and ground or air 
ambulance service. These emergency professionals protect and promote 
the public good of the communities they serve, and we should not 
unfairly penalize them and their families simply because they work or 
volunteer for a non-profit organization.
  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. 1353

       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 ``Dale Long Emergency Medical 
     Service Providers Protection Act''.

     SEC. 2. BENEFITS FOR CERTAIN NONPROFIT EMERGENCY MEDICAL 
                   SERVICE PROVIDERS.

       Section 1204 of title I of the Omnibus Crime Control and 
     Safe Streets Act of 1968 (42 U.S.C. 3796b) is amended--
       (1) in paragraph (7), by striking ``public employee member 
     of a rescue squad or ambulance crew'' and inserting 
     ``employee or volunteer member of a rescue squad or ambulance 
     crew (including a ground or air ambulance service) that--
       ``(A) is a public agency; or
       ``(B) is (or is a part of) a nonprofit entity serving the 
     public that is officially authorized or licensed--
       ``(i) to engage in rescue activity or to provide emergency 
     medical services; and
       ``(ii) to respond to an emergency situation;''; and
       (2) in paragraph (9)--
       (A) in subparagraph (A), by striking ``as a chaplain'' and 
     all that follows through the semicolon, and inserting ``or as 
     a chaplain;'';
       (B) in subparagraph (B)(ii), by striking ``or'' after the 
     semicolon;
       (C) in subparagraph (C)(ii), by striking the period and 
     inserting ``; or''; and
       (D) by adding at the end the following:
       ``(D) a member of a rescue squad or ambulance crew who, as 
     authorized or licensed by law and by the applicable agency or 
     entity, is engaging in rescue activity or in the provision of 
     emergency medical services.''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by section 2(1) of this Act shall apply 
     only to injuries sustained on or after January 1, 2009.
                                 ______
                                 
      By Mr. BARRASSO (for himself and Mr. Wyden):
  S. 1355. A bill to amend title XVIII of the Social Security Act to 
improve access to health care for individuals residing in underserved 
rural areas and for other purposes; to the Committee on Finance.
  Mr. WYDEN. Mr. President, along with my friend, Senator Barrasso, I 
am introducing legislation to keep rural America from becoming a health 
care sacrifice zone. Our legislation, the Rural Health Clinic Patient 
Access and Improvement Act, will make it more financially attractive 
for doctors and other providers to treat patients in rural areas. Both 
Senator Barrasso and I have heard from the folks back home about how 
hard it is to get doctors and mid-level practitioners in rural areas. 
My constituents have had to travel hours to get treatment when they 
need it. This bill takes major strides to ensure access to health care 
by building on the successes of the rural health clinic program. When 
it comes to health care, rural residents should not have to accept 
second-class status.
  As the Senate takes up comprehensive healthcare reform, this Congress 
must not lose focus on the health needs of folks in rural areas. Too 
many Oregonians cannot get the kind of affordable and comprehensive 
coverage or access to care their Members of Congress receive. In 
addition, many patients in rural Oregon, even those with good health 
benefits, do not have access to providers or have to travel long 
distances to get medical care.
  Meanwhile, providers lack incentives to go to--or stay in--rural 
areas. It is a lot more lucrative for them to work in big cities where 
they can work in state-of-the art facilities and earn top dollar. 
According to the Oregon State Office of Rural Health, a major obstacle 
facing Oregon's rural health clinics is the severe shortage of health 
care providers willing or able to work in a rural area. One out of 
three Oregon rural health clinics was recruiting in 2008.

[[Page 16250]]

  That is why Senator Barrasso and I come here to introduce the Rural 
Health Clinic Patient Access and Improvement Act. Simply put, our bill 
would help improve access for patients in rural areas, while increasing 
reimbursement rates and giving incentives to providers in rural areas.
  The Rural Health Clinic Patient Access and Improvement Act increases 
the all-inclusive Medicare payment rate for rural health clinics by 
more than 20 percent per visit from an average of $76 to $92. This bill 
would provide an additional $2 bonus for rural health clinics that 
participate in a quality improvement program. Quality of care should be 
a focus for all providers.
  The bill will allow for better collaboration between community health 
centers and rural health clinics. It also creates a 5-state 
demonstration project to recruit and retain providers in rural 
communities by subsidizing a portion of the provider's medical 
liability costs if they practice in a rural health clinic. These 
reforms will help ensure rural residents have access to the same level 
of quality care as those in other parts of the country.
  This bill builds upon the success of Oregon's 54 rural health clinics 
that serve 26 out of 36 counties across the state. These rural health 
clinics help to ensure access to primary care for the underserved 
elderly and low-income populations. Ninety-eight percent of Oregon's 
rural health clinics are willing to see Medicare and Medicaid patients 
as well as patients with no insurance. Not only are they willing to see 
these patients, but 96 percent are currently accepting new patients. 
Many rural residents--whether they are uninsured, publically insured or 
have private insurance--would have nowhere to go to receive primary 
care without rural health clinics.
  When it comes to health care, people want to go to a provider they 
know and trust. One of the reasons rural health clinics have been so 
successful is that they have become an integral part of their 
communities. A great example of this is Gilliam County Medical Center. 
Gilliam County hosted a succession of short-term physicians placed in 
the community through the National Health Service Corps. In the 1970s, 
the community, in conjunction with the State, sought a more permanent, 
stable health care provider situation. The Oregon legislature 
appropriated $20,000 as seed money to attract a team of health 
professionals to the community and the residents of Gilliam County 
created the South Gilliam Health District to support Gilliam County 
Medical Center, a certified rural health clinic.
  Two physician assistants, David Jones and Dennis Bruneau who were on 
the faculty at the University of Washington PA program at the time they 
heard about the opportunity with the clinic were hired. Dave, Dennis, 
their spouses, who also work at the clinic, and supervising physician 
Dr. Bruce Carlson created a team that continues to sustain one of the 
most stable and long-term small rural primary care clinics in the 
state.
  Dr. Carlson visits the clinic one day every 2 weeks to see those 
patients in need of his services and provide overall medical direction. 
Otherwise, the clinic is staffed full-time by physician assistants 
Jones and Bruneau. David's wife is a medical technician who works in 
the clinic and Dennis' wife serves as the clinic manager. When Dr. 
Carlson is not in Condon, he has his own medical practice 70 miles away 
in Hermiston, OR, which is also the location of the nearest hospital to 
Condon.
  Not all rural areas are alike and the rural health clinic program 
gives these providers the flexibility they need to be the regular 
source of care of primary care in their communities. Regular access to 
primary care, as you know, is one of the key tests of whether or not 
you will receive the preventive health screenings that can mean the 
difference that could save your life. They allow for health problems to 
be caught early on so that they can be headed off for just a little 
money, instead of at later stages, which require costly specialty care 
that runs up the bill for the patient and the taxpayer.
  Oregonians in rural areas have the same right to quality, affordable 
medical care as those living in urban areas, but they do not have it 
under our current system. This bill will expand access to health care 
for folks in rural areas and level the playing field for rural health 
clinics by giving them the tools they need to attract and retain 
quality medical providers.
  I want to thank Senator Barrasso and his staff for their hard work in 
bringing this important bipartisan legislation before the Senate.
  I hope my colleagues will join Senator Barrasso and me, and support 
this much needed and bipartisan bill.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mrs. Feinstein):
  S. 1356. A bill to amend the National Trails System Act to provide 
for the study of the Western States Trail; to the Committee on Energy 
and Natural Resources.
  Mrs. BOXER. Mr. President, I rise on behalf of myself and Senator 
Feinstein to speak on the introduction of the Western States Trail 
Study Act of 2009. This legislation would provide for a study by the 
Department of the Interior on the possible designation of the Western 
States Trail as a National Historic Trail.
  The National Trails System Act specifies that to qualify for listing 
as a National Historic Trail, a trail must be historically significant 
and must have significant potential for public recreational use or 
historical interpretation and appreciation. The Western States Trail 
absolutely meets these criteria.
  From the beginning of California's recorded history, the Western 
States Trail has played an important role in the development of our 
state and nation. Originally a Native American trail used by the Paiute 
and Washoe Indians, it later became the most direct link between the 
gold camps of California and silver mines of Nevada. Professor William 
Brewer also followed part of this trail in his 1863 expedition as part 
of State Geologist Josiah Whitney's survey of California.
  In 1955, the Western States Trail became the site of the world's 
first and leading 100-mile trail ride, and in 1974 became the world's 
first and leading ultramarathon run. These recreational events are of 
tremendous importance to the local community as well as equestrians and 
runners throughout the nation. Western States volunteers dedicate 
hundreds of hours each year to the U.S. Forest Service and California 
Department of Parks and Recreation to maintain the trail, exemplifying 
citizen action at its best.
  Most of the trail remains in the same state as in the 19th century, 
passing through scenic wilderness ranging from the Sierra Crest, to 
magnificent forests and mountain streams, to the grasses and oaks of 
the Sierra foothills.
  The citizen-government partnership that our bill represents continues 
the tradition of the Western States Run to protect and preserve the 
Western States Trail, and to ensure that the public has access to its 
rich history and scenery.
                                 ______
                                 
      By Mr. ROCKEFELLER:
  S. 1357. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax incentive to individuals teaching in elementary and secondary 
schools located in rural or high unemployment areas and to individuals 
who achieve certification from the National Board for Professional 
Teaching Standards, and for other purposes; to the Committee on 
Finance.
  Mr. ROCKEFELLER. Mr. President, I believe that perhaps the most 
effective way to improve the education of our children is to invest in 
their teachers, and make certain that quality teachers have the 
incentive to stay in the classroom.
  Unfortunately, without new investments, our disadvantaged and rural 
schools may not be able to attract the qualified teachers needed to 
prepare our children for the 21st Century workplace. Isolated and 
impoverished, too many West Virginia schools must compete against 
higher paying, well-funded schools for scarce classroom talent. As a 
result, they face a shortage of qualified teachers, particularly in 
math, science and foreign languages.

[[Page 16251]]

  Today, I am introducing a bill designed to invest in bringing 
dedicated and qualified teaching professionals to West Virginia and 
America's disadvantaged and rural schools. This bill will help give 
students the opportunity to learn and flourish, an opportunity that 
every child deserves. The Incentives To Educate American Children Act--
or I Teach Act--will provide teachers with a refundable tax credit 
every year they teach in the public schools with the most need. And it 
will give every public school teacher--regardless of the school they 
choose--a refundable tax credit for earning their certification by the 
National Board for Professional Teaching Standards. Together, these two 
tax credits will give economically depressed areas a better ability to 
recruit and retain skilled teachers.
  There are over 16,000 rural school districts in the U.S., and these 
schools face real challenges in recruiting and retaining teachers, as 
well as dealing with other issues related to their rural location. 
Disadvantaged urban schools must overcome similar difficulties. My I 
Teach Act will reward teachers willing to work in rural or 
disadvantaged schools with an annual $1,000 refundable tax credit. 
Additionally, teachers that obtain certification by the National Board 
for Professional Teaching Standards will receive an annual $1,000 
refundable tax credit. Therefore, teachers who work in rural or 
disadvantaged schools and get certified will earn a $2000 credit. 
Schools that desperately need help attracting teachers will get a 
boost, and children educated in disadvantaged and rural schools will 
benefit most.
  In my state of West Virginia, as in over 30 other states, there is 
already a state fiscal incentive for teachers who earn National Board 
certification. My legislation builds upon the West Virginia program. 
Together, they will create a powerful tax incentive for teachers to 
remain in the classroom and to use their skills where they are most 
needed.
  Education is among our top national priorities. It is essential for 
all children and it is vital for our economic and national security. 
Teachers are a critical component of quality education, and they 
deserve the incentives to stay in the classroom.
                                 ______
                                 
      By Mr. LEAHY (for himself and Mr. Bond):
  S. 1361. A bill to amend title 10, United States Code, to enhance the 
national defense through empowerment of the National Guard, enhancement 
of the functions of the National Guard Bureau, and improvement of 
Federal-State military coordination in domestic emergency response, and 
for other purposes; to the Committee on Armed Services.
  Mr. LEAHY. Mr. President, today I am pleased to join with Senator 
Bond in introducing the National Guard Empowerment and State-National 
Defense Integration Act of 2009. This is a clearly needed piece of 
legislation that will enable the Nation to tap more of the tremendous 
experience and expertise that exists within the National Guard.
  This legislation--known as Empowerment II--ensures that the 
Department of Defense takes advantage of the Guard's unique strengths 
and focuses on the critical mission of domestic operations and military 
support to civilian authorities. This bill is about focusing attention 
on the military's response to emergencies at home and fleshing out the 
structure of that response. Doing that will ensure our National Guard, 
Reserves and active forces can bring their specialized capabilities to 
bear, all while safely under the control of democratically elected 
officials and civilian authorities.
  The bill will specifically make the Chief of the National Guard a 
full member of the Joint Chiefs of Staff, while creating a new three-
star deputy to the Bureau Chief to reflect the Bureau Chief's increased 
responsibilities. Additionally, the 2009 Empowerment Act provides the 
National Guard Bureau with limited budget authority to be able to 
acquire specially designed equipment for domestic operations, and it 
requires the Department of Defense to establish procedures to formalize 
arrangements to allow National Guard forces to have tactical control 
over active forces that operate in a domestic setting.
  Today Senator Bond and I seek to build on some of the major 
improvements to the Guard that we, together, made in the Fiscal Year 
2008 Defense Authorization Bill. That landmark bill enacted large 
portions of the first version of the Guard Empowerment Bill which 
elevated the Chief of the National Guard from three-star general to 
full General. The goal of all the changes enacted was to begin to 
ensure that the Guard has a seat at the table in major budget and 
policy decisions.
  We need to pick up where we left off early last year and sharpen the 
focus on the National Guard's role as a homeland defense and defense 
support to civilian authorities force. In fact, we are trying, in the 
realm of domestic operations and military support to civilian 
authorities, to do exactly what Secretary of Defense Robert Gates is 
trying to do in the realm of irregular warfare. The Secretary is 
working to ensure that at least a good portion of the Department of 
Defense's equipment has utility in counterinsurgency situations. The 
Secretary has recently testified that he foresees about 10 percent of 
procured equipment to be dedicated solely for counterinsurgencies. I 
strongly support the Secretary's initiative.
  There also is a need to carve out a small wedge of the defense budget 
to develop technologies and systems that will help the National Guard, 
serving in a Title 32 capacity under the control of the Governors. Much 
of all Guard equipment is considered and should be ``dual use,'' but a 
sliver should be specially designed and used solely for domestic 
situations.
  The Guard Empowerment bill we are introducing today will also reduce 
the confusion that sometimes exists when there is a domestic emergency 
about how National Guard forces, serving under a Governor during an 
emergency, will interact with active duty forces that serve under the 
President's command. United States Northern Command in Colorado has 
unfortunately only exacerbated those concerns through attempts to 
override Governors and take command-and-control of National Guard 
assets in a State even though they are in their so-called Title 32 
status.
  There is nothing in this bill that the National Guard is not already 
undertaking. The President and the Secretary of Defense look to the 
Guard Bureau Chief on matters related to defense at home. The Guard 
works to purchase homeland defense-oriented equipment through the so-
called Guard and Reserve Equipment Account, and the Governors already 
wield active duty personnel during so-called National Security Events. 
The chain of command arrangements made during last year's political 
conventions in Minnesota and Colorado are a good example.
  The President recognizes that this legislation makes sense. In his 
``Blueprint for Change,'' his new Administration's national security 
plan, President Obama endorsed the idea of making the Guard Bureau 
Chief a full member of the Joint Chiefs of Staff, a move that Vice 
President Biden also has endorsed. In developing the bill, we worked 
closely with The National Guard Association of the United States, the 
Adjutants General Association of the United States and the Enlisted 
National Guard Association of the United States--organizations that we 
expect to formally endorse the bill after its introduction.
  Everyone recognizes that if there is an emergency like Katrina and 
our civilian resources at all levels get overwhelmed, the military is 
going to have to come in to assist. The American people expect no less 
than a swift, coordinated and effective response. And it is the 
National Guard that knows how to do this mission right. Providing 
support to civilian authorities at the State level is what the Guard 
has done since its inception more than two centuries ago, and it is a 
mission that the National Guard continues to take seriously.
  This legislation solidifies and codifies sensible approaches to 
improving the Guard's ability to support civil authorities in an 
emergency. Enactment

[[Page 16252]]

of this legislation is the very least we owe our proud citizen soldiers 
and airmen for their efforts.
  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. 1361

       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 ``National Guard Empowerment 
     and State-National Defense Integration Act of 2009''.

     SEC. 2. EXPANDED AUTHORITY OF THE CHIEF OF THE NATIONAL GUARD 
                   BUREAU.

       (a) Membership on Joint Chiefs of Staff.--
       (1) In general.--Section 151(a) of title 10, United States 
     Code, is amended by adding at the end the following new 
     paragraph:
       ``(7) The Chief of the National Guard Bureau.''.
       (2) Conforming amendment.--Section 10502 of such title is 
     amended--
       (A) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (B) by inserting after subsection (c) the following new 
     subsection (d):
       ``(d) Member of Joint Chiefs of Staff.--The Chief of the 
     National Guard Bureau shall perform the duties prescribed for 
     him or her as a member of the Joint Chiefs of Staff under 
     section 151 of this title.''.
       (b) Annual Report to Congress on Validated Requirements.--
     Section 10504 of title 10, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(c) Annual Report on Validated Requirements.--Not later 
     than December 31 each year, the Chief of the National Guard 
     Bureau shall submit to Congress a report on the following:
       ``(1) The requirements validated under section 10503a(b)(1) 
     of this title during the preceding fiscal year.
       ``(2) The requirements referred to in paragraph (1) for 
     which funding is to be requested in the next budget for a 
     fiscal year under section 10544 of this title.
       ``(3) The requirements referred to in paragraph (1) for 
     which funding will not be requested in the next budget for a 
     fiscal year under section 10544 of this title.''.

     SEC. 3. EXPANDED FUNCTIONS OF THE NATIONAL GUARD BUREAU.

       (a) Military Assistance for Civil Authorities.--Chapter 
     1011 of title 10, United States Code, is amended by inserting 
     after section 10503 the following new section:

     ``Sec. 10503a. Functions of National Guard Bureau: military 
       assistance to civil authorities

       ``(a) Identification of Additional Necessary Assistance.--
     The Chief of the National Guard Bureau shall--
       ``(1) identify gaps between Federal and State military 
     capabilities to prepare for and respond to emergencies; and
       ``(2) make recommendations to the Secretary of Defense on 
     programs and activities of the National Guard for military 
     assistance to civil authorities to address such gaps.
       ``(b) Scope of Responsibilities.--In meeting the 
     requirements of subsection (a), the Chief of the National 
     Guard Bureau shall, in coordination with the adjutants 
     general of the States, have responsibilities as follows:
       ``(1) To validate the requirements of the several States 
     and Territories with respect to military assistance to civil 
     authorities.
       ``(2) To develop doctrine and training requirements 
     relating to the provision of military assistance to civil 
     authorities.
       ``(3) To acquire equipment, materiel, and other supplies 
     and services for the provision of military assistance to 
     civil authorities.
       ``(4) To assist the Secretary of Defense in preparing the 
     budget required under section 10544 of this title.
       ``(5) To administer amounts provided the National Guard for 
     the provision of military assistance to civil authorities.
       ``(6) To carry out any other responsibility relating to the 
     provision of military assistance to civil authorities as the 
     Secretary of Defense shall specify.
       ``(c) Assistance.--The Chairman of the Joint Chiefs of 
     Staff shall assist the Chief of the National Guard Bureau in 
     carrying out activities under this section.
       ``(d) Consultation.--(1) The Chief of the National Guard 
     Bureau shall carry out activities under this section through 
     and utilizing an integrated planning process established by 
     the Chief of the National Guard Bureau for purposes of this 
     subsection. The planning process may be known as the 
     `National Guard Bureau Strategic Integrated Planning 
     Process'.
       ``(2)(A) Under the integrated planning process established 
     under paragraph (1)--
       ``(i) the planning committee described in subparagraph (B) 
     shall develop and submit to the planning directorate 
     described in subparagraph (C) plans and proposals on such 
     matters under the planning process as the Chief of the 
     National Guard Bureau shall designate for purposes of this 
     subsection; and
       ``(ii) the planning directorate shall review and make 
     recommendations to the Chief of the National Guard Bureau on 
     the plans and proposals submitted to the planning directorate 
     under clause (i).
       ``(B) The planning committee described in this subparagraph 
     is a planning committee (to be known as the `State Strategic 
     Integrated Planning Committee') composed of the adjutant 
     general of each of the several States, the Commonwealth of 
     Puerto Rico, Guam, the Virgin Islands, and the District of 
     Columbia.
       ``(C) The planning directorate described in this 
     subparagraph is a planning directorate (to be known as the 
     `Federal Strategic Integrated Planning Directorate') composed 
     of the following (as designated by the Secretary of Defense 
     for purposes of this subsection):
       ``(i) A major general of the Army National Guard.
       ``(ii) A major general of the Air National Guard.
       ``(iii) A major general of the regular Army.
       ``(iv) A major general of the regular Air Force.
       ``(v) A major general (other than a major general under 
     clauses (iii) and (iv)) of the United States Northern 
     Command.
       ``(vi) The Vice Chief of the National Guard Bureau.
       ``(vii) Seven adjutants general from the planning committee 
     under paragraph (B).''.
       (b) Budgeting for Training and Equipment and Military 
     Construction for Military Assistance to Civil Authorities and 
     Other Domestic Missions.--Chapter 1013 of such title is 
     amended by adding at the end the following new section:

     ``Sec. 10544. National Guard training and equipment and 
       military construction: budget for military assistance to 
       civil authorities and for other domestic operations

       ``(a) In General.--The budget justification documents 
     materials submitted to Congress in support of the budget of 
     the President for a fiscal year (as submitted with the budget 
     of the President under section 1105(a) of title 31) shall 
     specify separate amounts for the National Guard for purposes 
     of military assistance to civil authorities and for other 
     domestic operations during such fiscal year as follows:
       ``(1) Amounts for training and equipment, including 
     critical dual-use equipment.
       ``(2) Amounts for military construction, including critical 
     dual-use capital construction.
       ``(b) Scope of Funding.--The amounts specified under 
     subsection (a) for a fiscal year shall be sufficient for 
     purposes as follows:
       ``(1) The development and implementation of doctrine and 
     training requirements applicable to the assistance and 
     operations described in subsection (a) for such fiscal year.
       ``(2) The acquisition of equipment, materiel, and other 
     supplies and services necessary for the provision of such 
     assistance and such operations in such fiscal year.''.
       (c) Clerical Amendments.--
       (1) The table of sections at the beginning of chapter 1011 
     of such title is amended by inserting after the item relating 
     to section 10503 the following new item:

``10503a. Functions of National Guard Bureau: military assistance to 
              civil authorities.''.

       (2) The table of sections at the beginning of chapter 1013 
     of such title is amended by adding at the end the following 
     new item:

``10544. National Guard training and equipment and military 
              construction: budget for military assistance to civil 
              authorities and for other domestic operations.''.

     SEC. 4. REESTABLISHMENT OF POSITION OF VICE CHIEF OF THE 
                   NATIONAL GUARD BUREAU.

       (a) Reestablishment of Position.--
       (1) In general.--Chapter 1011 of title 10, United States 
     Code, is amended--
       (A) by redesignating section 10505 as section 10505a; and
       (B) by inserting after section 10504 the following new 
     section 10505:

     ``Sec. 10505. Vice Chief of the National Guard Bureau

       ``(a) Appointment.--(1) There is a Vice Chief of the 
     National Guard Bureau, selected by the Secretary of Defense 
     from officers of the Army National Guard of the United States 
     or the Air National Guard of the United States who--
       ``(A) are recommended for such appointment by their 
     respective Governors or, in the case of the District of 
     Columbia, the commanding general of the District of Columbia 
     National Guard;
       ``(B) have had at least 10 years of federally recognized 
     service in an active status in the National Guard; and
       ``(C) are in a grade above the grade of colonel.
       ``(2) The Chief and Vice Chief of the National Guard Bureau 
     may not both be members of the Army or of the Air Force.
       ``(3)(A) Except as provided in subparagraph (B), an officer 
     appointed as Vice Chief of the National Guard Bureau serves 
     for a term of four years, but may be removed from office at 
     any time for cause.
       ``(B) The term of the Vice Chief of the National Guard 
     Bureau shall end within a reasonable time (as determined by 
     the Secretary of Defense) following the appointment of a 
     Chief of the National Guard Bureau who is a member of the 
     same armed force as the Vice Chief.

[[Page 16253]]

       ``(b) Duties.--The Vice Chief of the National Guard Bureau 
     performs such duties as may be prescribed by the Chief of the 
     National Guard Bureau.
       ``(c) Grade.--The Vice Chief of the National Guard Bureau 
     shall be appointed to serve in the grade of lieutenant 
     general.
       ``(d) Functions as Acting Chief.--When there is a vacancy 
     in the office of the Chief of the National Guard Bureau or in 
     the absence or disability of the Chief, the Vice Chief of the 
     National Guard Bureau acts as Chief and performs the duties 
     of the Chief until a successor is appointed or the absence of 
     disability ceases.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 1011 of such title is amended by 
     striking the item relating to section 10505 and inserting the 
     following new items:

``10505. Vice Chief of the National Guard Bureau.
``10505a. Director of the Joint Staff of the National Guard Bureau.''.

       (b) Conforming Amendment.--Section 10506(a)(1) of such 
     title is amended by striking ``and the Director of the Joint 
     Staff of the National Guard Bureau'' and inserting ``, the 
     Vice Chief of the National Guard Bureau, and the Director of 
     the Joint Staff of the National Guard Bureau''.

     SEC. 5. STATE CONTROL OF FEDERAL MILITARY FORCES ENGAGED IN 
                   ACTIVITIES WITHIN THE STATES AND POSSESSIONS.

       (a) In General.--Part I of subtitle A of title 10, United 
     States Code, is amended by inserting after chapter 15 the 
     following new chapter:

  ``CHAPTER 16--CONTROL OF THE ARMED FORCES IN ACTIVITIES WITHIN THE 
                         STATES AND POSSESSIONS

``Sec.
``341. Tactical control of the armed forces engaged in activities 
              within the States and possessions: emergency response 
              activities.

     ``Sec. 341. Tactical control of the armed forces engaged in 
       activities within the States and possessions: emergency 
       response activities

       ``(a) In General.--The Secretary of Defense shall prescribe 
     in regulations policies and procedures to assure that 
     tactical control of the armed forces on active duty within a 
     State or possession is vested in the governor of the State or 
     possession, as the case may be, when such forces are engaged 
     in a domestic operation, including emergency response, within 
     such State or possession.
       ``(b) Discharge Through Joint Force Headquarters.--The 
     policies and procedures required under subsection (a) shall 
     provide for the discharge of tactical control by the governor 
     of a State or possession as described in that subsection 
     through the Joint Force Headquarters of the National Guard in 
     the State or possession, as the case may be, acting through 
     the officer of the National Guard in command of the 
     Headquarters.
       ``(c) Possessions Defined.--Notwithstanding any provision 
     of section 101(a) of this title, in this section, the term 
     `possessions' means the Commonwealth of Puerto Rico, Guam, 
     and the Virgin Islands.''.
       (b) Clerical Amendments.--The tables of chapters at the 
     beginning of title 10, United States Code, and at the 
     beginning of part I of subtitle A of such title, are each 
     amended by inserting after the item relating to chapter 15 
     the following new item:

``16. Control of the Armed Forces in Activities Within the States and 
    Possessions..............................................341''.....

     SEC. 6. FISCAL YEAR 2010 FUNDING FOR THE NATIONAL GUARD FOR 
                   CERTAIN DOMESTIC ACTIVITIES.

       (a) Continuity of Operations, Continuity of Government, and 
     Consequence Management.--
       (1) Authorization of appropriations.--There is hereby 
     authorized to be appropriated for fiscal year 2010 for the 
     Department of Defense amounts as follows:
       (A) For National Guard Personnel, Army, $11,000,000.
       (B) For National Guard Personnel, Air Force, $3,500,000.
       (C) For Operation and Maintenance, Army National Guard, 
     $11,000,000.
       (2) Availability.--The amounts authorized to be 
     appropriated by paragraph (1) shall be available to the Army 
     National Guard and the Air National Guard, as applicable, for 
     costs of personnel in training and operations with respect to 
     continuity of operations, continuity of government, and 
     consequence management in connection with response to 
     terrorist and other attacks on the United States homeland and 
     natural and man-made catastrophes in the United States.
       (b) Domestic Operations.--
       (1) Authorization of appropriations.--There is hereby 
     authorized to be appropriated for fiscal year 2010 for the 
     Department of Defense, $300,000,000 for Operation and 
     Maintenance, Defense-wide.
       (2) Availability.--The amount authorized to be appropriated 
     by paragraph (1) shall be available for the Army National 
     Guard and the Air National Guard for emergency preparedness 
     and response activities of the National Guard while in State 
     status under title 32, United States Code.
       (3) Transfer.--Amounts under the amount authorized to be 
     appropriated by paragraph (1) shall be available for transfer 
     to accounts for National Guard Personnel, Army, and National 
     Guard Personnel, Air Force, for purposes of the pay and 
     allowances of members of the National Guard in conducting 
     activities described in paragraph (2).
       (c) Joint Operations Coordination Centers.--
       (1) Authorization of appropriations.--There is hereby 
     authorized to be appropriated for fiscal year 2010 for the 
     Department of Defense amounts as follows:
       (A) For National Guard Personnel, Army, $28,000,000.
       (B) For National Guard Personnel, Air Force, $7,000,000.
       (2) Availability.--The amounts authorized to be 
     appropriated by paragraph (1) shall be available to the Army 
     National Guard and the Air National Guard, as applicable, for 
     costs of personnel in continuously staffing a Joint 
     Operations Coordination Center (JOCC) in the Joint Forces 
     Headquarters of the National Guard in each State and 
     Territory for command and control and activation of forces in 
     response to terrorist and other attacks on the United States 
     homeland and natural and man-made catastrophes in the United 
     States.
       (d) Supplement Not Supplant.--The amounts authorized to be 
     appropriated by subsections (a), (b), and (c) for the 
     purposes set forth in such subsections are in addition to any 
     other amounts authorized to be appropriated for fiscal year 
     2010 for the Department of Defense for such purposes.

     SEC. 7. ENHANCEMENT OF AUTHORITIES RELATING TO THE UNITED 
                   STATES NORTHERN COMMAND AND OTHER COMBATANT 
                   COMMANDS.

       (a) Commands Responsible for Support to Civil Authorities 
     in the United States.--The United States Northern Command and 
     the United States Pacific Command shall be the combatant 
     commands of the Armed Forces that are principally responsible 
     for the support of civil authorities in the United States by 
     the Armed Forces.
       (b) Discharge of Responsibility.--In discharging the 
     responsibility set forth in subsection (a), the Commander of 
     the United States Northern Command and the Commander of the 
     United States Pacific Command shall each--
       (1) in consultation with and acting through the Chief of 
     the National Guard Bureau and the Joint Force Headquarters of 
     the National Guard of the State or States concerned, assist 
     the States in the employment of the National Guard under 
     State control, including National Guard operations conducted 
     in State active duty or under title 32, United States Code; 
     and
       (2) facilitate the deployment of the Armed Forces on active 
     duty under title 10, United States Code, as necessary to 
     augment and support the National Guard in its support of 
     civil authorities when National Guard operations are 
     conducted under State control, whether in State active duty 
     or under title 32, United States Code.
       (c) Memorandum of Understanding.--
       (1) Memorandum required.--Not later than 180 days after the 
     date of the enactment of this Act, the Commander of the 
     United States Northern Command, the Commander of the United 
     States Pacific Command, and the Chief of the National Guard 
     Bureau shall, with the approval of the Secretary of Defense, 
     jointly enter into a memorandum of understanding setting 
     forth the operational relationships, and individual roles and 
     responsibilities, during responses to domestic emergencies 
     among the United States Northern Command, the United States 
     Pacific Command, and the National Guard Bureau.
       (2) Modification.--The Commander of the United States 
     Northern Command, the Commander of the United States Pacific 
     Command, and the Chief of the National Guard Bureau may from 
     time to time modify the memorandum of understanding under 
     this subsection to address changes in circumstances and for 
     such other purposes as the Commander of the United States 
     Northern Command, the Commander of the United States Pacific 
     Command, and the Chief of the National Guard Bureau jointly 
     consider appropriate. Each such modification shall be subject 
     to the approval of the Secretary of Defense.
       (d) Authority To Modify Assignment of Command 
     Responsibility.--Nothing in this section shall be construed 
     as altering or limiting the power of the President or the 
     Secretary of Defense to modify the Unified Command Plan in 
     order to assign all or part of the responsibility described 
     in subsection (a) to a combatant command other than the 
     United States Northern Command or the United States Pacific 
     Command.
       (e) Regulations.--The Secretary of Defense shall prescribe 
     regulations for purposes of aiding the expeditious 
     implementation of the authorities and responsibilities in 
     this section.

     SEC. 8. REQUIREMENTS RELATING TO NATIONAL GUARD OFFICERS IN 
                   CERTAIN COMMAND POSITIONS.

       (a) Commander of Army North Command.--The officer serving 
     in the position of Commander, Army North Command, shall be an 
     officer in the Army National Guard of the United States.
       (b) Commander of Air Force North Command.--The officer 
     serving in the position of Commander, Air Force North 
     Command,

[[Page 16254]]

     shall be an officer in the Air National Guard of the United 
     States.
       (c) Sense of Congress.--It is the sense of Congress that, 
     in assigning officers to the command positions specified in 
     subsections (a) and (b), the President should afford a 
     preference in assigning officers in the Army National Guard 
     of the United States or Air National Guard of the United 
     States, as applicable, who have served as the adjutant 
     general of a State.
                                 ______
                                 
      By Mr. REED (for himself, Ms. Klobuchar, Ms. Stabenow, Mr. 
        Whitehouse, and Mr. Lautenberg):
  S. 1362. A bill to provide grants to States to ensure that all 
students in the middle grades are taught an academically rigorous 
curriculum with effective supports so that students complete the middle 
grades prepared for success in high school and postsecondary endeavors, 
to improve State and district policies and programs relating to the 
academic achievement of students in the middle grades, to develop and 
implement effective middle grades models for struggling students, and 
for other purposes; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. REED. Mr. President, today I am introducing the Success in the 
Middle Act, which will help provide new support for raising student 
achievement in the middle grades. I thank Senators Klobuchar, Stabenow, 
Whitehouse, and Lautenberg for joining me as original cosponsors.
  We know that the middle grades are an important and unique transition 
period for young people, and a critical time in a student's educational 
and social development. The middle grades are the key to ensuring 
students remain on track to college and career-readiness. International 
comparisons indicate that students in the United States do not start 
out behind other nations in math and science, but they fall 
significantly behind in these subjects by the end of the middle grades. 
According to the 2007 National Assessment on Educational Progress, only 
one-third of eighth grade students in the United States can read at 
proficiency or above. For math proficiency, this number falls to 31 
percent of all American eighth grade students.
  There has been significant focus during K-12 reform discussions 
regarding high school reform, and while there is no doubt that this is 
an essential component of improving our education system, addressing 
dropout prevention must begin earlier. It must begin at the middle 
schools that feed into the thousands of ``dropout factories'' across 
the country. Dropout factories are high schools in which fewer than 60 
percent of students graduate. As one of the leading experts in the area 
of middle and high school reform, Robert Balfanz, has stated, middle 
schools are the ``first line of defense'' in identifying at-risk 
students and then effectively intervening to prevent them from dropping 
out. Balfanz's research has shown that sixth-graders who failed math or 
English, attended school less than 80 percent of the time, or received 
an unsatisfactory behavior grade in a core course had only a 10 to 20 
percent chance of graduating on time. Without successful intervention, 
these behaviors lead students to course failure, non-promotion, and 
eventually dropping out.
  That is why I am reintroducing the Success in the Middle Act. This 
bill will help strengthen that first line of defense by authorizing 
grants to states and school districts to improve and turnaround low-
performing middle schools. It would concentrate new resources on the 
middle grades by requiring districts to develop an early warning 
indicator system for indentifying students at risk of dropping out, and 
tailoring research-based interventions to get these students back on 
track to graduating college and career-ready. These interventions would 
include high-quality professional development for teachers; personal 
academic plans such as the Individual Learning Plans required in Rhode 
Island; mentoring and counseling; and extended learning time.
  When he was in the Senate, President Obama was the lead sponsor of 
this legislation. I am pleased that the President has continued to 
recognize the need for increased investment in middle and high school 
reform, including earlier this year, his action to encourage states and 
school districts to spend a significant portion of their American 
Recovery and Reinvestment Act education funds on improving student 
achievement in the middle and high school grades.
  I was pleased to work with the Rhode Island Middle Level Educators, 
Rhode Island Association of School Principals, ACT, Alliance for 
Excellent Education, The College Board, International Reading 
Association, National Association of Secondary School Principals, 
National Council of Teachers of English, National Forum to Accelerate 
Middle Grades Reform, and National Middle Schools Association, and a 
host of other education organizations on this bill. I urge my 
colleagues to cosponsor the Success in the Middle Act.
  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. 1362

       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 ``Success in the Middle Act of 
     2009''.

     SEC. 2. FINDINGS.

       In this Act:
       (1) International comparisons indicate that students in the 
     United States do not start out behind students of other 
     nations in mathematics and science, but that they fall behind 
     by the end of the middle grades.
       (2) Only \1/3\ of eighth grade students in the United 
     States, and only 4 percent of such students who are English 
     language learners, can read with proficiency, according to 
     the 2007 National Assessment on Educational Progress (NAEP). 
     The percentage of eighth grade students proficient at reading 
     has not increased since 1998, and the NAEP average reading 
     score for eighth grade students has remained static. In 
     contrast, NAEP reading scores and achievement levels for 
     fourth grade students have increased significantly.
       (3) In mathematics, less than \1/3\ of students in eighth 
     grade show skills at the NAEP proficient level, and nearly 30 
     percent score below the basic level. The percentage of eighth 
     grade students scoring above the basic level was 8 points 
     higher in 2007 than in 2000, but for fourth grade students, 
     the percentage increased 17 points, more than double the 
     increase for middle grades students. In eighth grade, the 
     gaps between the average mathematics scores of white and 
     black students and between white and Hispanic students were 
     as wide in 2007 as in 1990.
       (4) Fewer than 2 in 10 of the students who graduated from 
     high school in 2005 or 2006 met, as eighth graders, all 4 of 
     ACT's EXPLORE College Readiness Benchmarks, the minimum level 
     of achievement that ACT has shown is necessary if students 
     are to be college- and career-ready upon their high school 
     graduation.
       (5) Lack of basic skills at the end of middle grades has 
     serious implications for students. Students who enter high 
     school 2 or more years behind grade level in mathematics and 
     literacy have only a 50 percent chance of progressing on time 
     to the tenth grade; those not progressing are at significant 
     risk of dropping out of high school.
       (6) Middle grades students are hopeful about their future, 
     with 93 percent believing that they will complete high school 
     and 92 percent anticipating that they will attend college.
       (7) Sixth grade students who do not attend school 
     regularly, who are subjected to frequent disciplinary 
     actions, or who fail mathematics or English have less than a 
     15 percent chance of graduating high school on time and a 20 
     percent chance of graduating 1 year late. Without effective 
     interventions and proper supports, these students are at risk 
     of subsequent failure in high school, or of dropping out.
       (8) Student transitions from elementary school to the 
     middle grades and to high school are often complicated by 
     poor curriculum alignment, inadequate counseling services, 
     and unsatisfactory sharing of student performance and 
     academic achievement data between grades.
       (9) According to ACT, the level of academic achievement 
     that students attain by eighth grade has a larger impact on 
     the students' college and career readiness upon graduation 
     from high school than anything that happens academically in 
     high school.
       (10) Middle schools are almost twice as likely as 
     elementary schools to be identified for improvement, 
     corrective action, or restructuring (22 percent as compared 
     to 13 percent) under section 1116 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 63116).
       (11) Middle grades improvement strategies should be 
     tailored based on a variety of performance indicators and 
     data, so that educators can create and implement successful

[[Page 16255]]

     school improvement strategies to address the needs of the 
     middle grades, and so that teachers can provide effective 
     instruction and adequate assistance to meet the needs of at-
     risk students.
       (12) To stem a dropout rate nearly twice that of students 
     without disabilities, students with disabilities in the 
     critical middle grades must receive appropriate academic 
     accommodations and access to assistive technology, high-risk 
     behaviors such as absenteeism and course failure must be 
     monitored, and problem-solving skills with broad application 
     must be taught.
       (13) Local educational agencies and State educational 
     agencies often do not have the capacity to provide support 
     for school improvement strategies. Successful models do exist 
     for turning around low-performing middle grades, and Federal 
     support should be provided to increase the capacity to apply 
     promising practices based on evidence from successful 
     schools.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) ESEA definitions.--The terms ``elementary school'', 
     ``local educational agency'', ``secondary school'', and 
     ``State educational agency'' have the meanings given the 
     terms in section 9101 of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 7801).
       (2) Eligible entity.--The term ``eligible entity'' means a 
     partnership that includes--
       (A) not less than 1 eligible local educational agency; and
       (B)(i) an institution of higher education;
       (ii) an educational service agency (as defined in section 
     9101 of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 7801)); or
       (iii) a nonprofit organization with demonstrated expertise 
     in high quality middle grades intervention.
       (3) Eligible local educational agency.--The term ``eligible 
     local educational agency'' means a local educational agency 
     that serves not less than 1 eligible school.
       (4) Eligible school.--The term ``eligible school'' means an 
     elementary or secondary school that contains not less than 2 
     or more successive grades beginning with grade 5 and ending 
     with grade 8 and for which--
       (A) a high proportion of the middle grades students 
     attending such school go on to attend a high school with a 
     graduation rate of less than 65 percent;
       (B) more than 25 percent of the students who finish grade 6 
     at such school, or the earliest middle grade level at the 
     school, exhibit 1 or more of the key risk factors and early 
     risk identification signs, including--
       (i) student attendance below 90 percent;
       (ii) a failing grade in a mathematics or reading or 
     language arts course;
       (iii) 2 failing grades in any courses; and
       (iv) out-of-school suspension or other evidence of at-risk 
     behavior; or
       (C) more than 50 percent of the middle grades students 
     attending such school do not perform at a proficient level on 
     State student academic assessments required under section 
     1111(b)(3) of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6311(b)(3)) in mathematics or reading or 
     language arts.
       (5) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in section 101 of the Higher Education Act of 1965 (20 
     U.S.C. 1001).
       (6) Middle grades.--The term ``middle grades'' means any of 
     grades 5 through 8.
       (7) Scientifically valid.--The term ``scientifically 
     valid'' means the rationale, design, and interpretation are 
     soundly developed in accordance with accepted principles of 
     scientific research.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (9) State.--The term ``State'' means each of the 50 States, 
     the District of Columbia, and the Commonwealth of Puerto 
     Rico.
       (10) Student with a disability.--The term ``student with a 
     disability'' means a student who is a child with a 
     disability, as defined in section 602 of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1401).

                   TITLE I--MIDDLE GRADES IMPROVEMENT

     SEC. 101. PURPOSES.

       The purposes of this title are to--
       (1) improve middle grades student academic achievement and 
     prepare students for rigorous high school course work, 
     postsecondary education, independent living, and employment;
       (2) ensure that curricula and student supports for middle 
     grades education align with the curricula and student 
     supports provided for elementary and high school grades;
       (3) provide resources to State educational agencies and 
     local educational agencies to collaboratively develop school 
     improvement plans in order to deliver support and technical 
     assistance to schools serving students in the middle grades; 
     and
       (4) increase the capacity of States and local educational 
     agencies to develop effective, sustainable, and replicable 
     school improvement programs and models and evidence-based or, 
     when available, scientifically valid student interventions 
     for implementation by schools serving students in the middle 
     grades.

     SEC. 102. FORMULA GRANTS TO STATE EDUCATIONAL AGENCIES FOR 
                   MIDDLE GRADES IMPROVEMENT.

       (a) In General.--From amounts appropriated under section 
     107, the Secretary shall make grants under this title for a 
     fiscal year to each State educational agency for which the 
     Secretary has approved an application under subsection (f) in 
     an amount equal to the allotment determined for such agency 
     under subsection (c) for such fiscal year.
       (b) Reservations.--From the total amount made available to 
     carry out this title for a fiscal year, the Secretary--
       (1) shall reserve not more than 1 percent for the Secretary 
     of the Interior (on behalf of the Bureau of Indian Affairs) 
     and the outlying areas for activities carried out in 
     accordance with this section;
       (2) shall reserve 1 percent to evaluate the effectiveness 
     of this title in achieving the purposes of this title and 
     ensuring that results are peer-reviewed and widely 
     disseminated, which may include hiring an outside evaluator; 
     and
       (3) shall reserve 5 percent for technical assistance and 
     dissemination of best practices in middle grades education to 
     States and local educational agencies.
       (c) Amount of State Allotments.--
       (1) In general.--Except as provided in paragraph (2), of 
     the total amount made available to carry out this title for a 
     fiscal year and not reserved under subsection (b), the 
     Secretary shall allot such amount among the States in 
     proportion to the number of children, aged 5 to 17, who 
     reside within the State and are from families with incomes 
     below the poverty line for the most recent fiscal year for 
     which satisfactory data are available, compared to the number 
     of such individuals who reside in all such States for that 
     fiscal year, determined in accordance with section 
     1124(c)(1)(A) of the Elementary and Secondary Education Act 
     of 1965(20 U.S.C. 6333(c)(1)(A)).
       (2) Minimum allotments.--No State educational agency shall 
     receive an allotment under this subsection for a fiscal year 
     that is less than \1/2\ of 1 percent of the amount made 
     available to carry out this title for such fiscal year.
       (d) Special Rule.--For any fiscal year for which the funds 
     appropriated to carry out this title are less that 
     $500,000,000, the Secretary is authorized to award grants to 
     State educational agencies, on a competitive basis, rather 
     than as allotments described in this section, to enable such 
     agencies to award subgrants under section 104 on a 
     competitive basis.
       (e) Reallotment.--
       (1) Failure to apply; application not approved.--If any 
     State educational agency does not apply for an allotment 
     under this title for a fiscal year, or if the application 
     from the State educational agency is not approved, the 
     Secretary shall reallot the amount of the State's allotment 
     to the remaining States in accordance with this section.
       (2) Unused funds.--The Secretary may reallot any amount of 
     an allotment to a State if the Secretary determines that the 
     State will be unable to use such amount within 2 years of 
     such allotment. Such reallotments shall be made on the same 
     basis as allotments are made under subsection (c).
       (f) Application.--In order to receive a grant under this 
     title, a State educational agency shall submit an application 
     to the Secretary at such time, in such manner, and 
     accompanied by such information as the Secretary may 
     reasonably require, including a State middle grades 
     improvement plan described in section 103(a)(4).
       (g) Peer Review and Selection.--The Secretary--
       (1) shall establish a peer-review process to assist in the 
     review and approval of proposed State applications;
       (2) shall appoint individuals to participate in the peer-
     review process who are educators and experts in identifying, 
     evaluating, and implementing effective education programs and 
     practices (including the areas of teaching and learning, 
     educational standards and assessments, school improvement, 
     and academic and behavioral supports for middle grades 
     students), which individuals may include recognized exemplary 
     middle grades teachers and middle grades principals who have 
     been recognized at the State or national level for exemplary 
     work or contributions to the field;
       (3) shall ensure that States are given the opportunity to 
     receive timely feedback, and to interact with peer-review 
     panels, in person or via electronic communication, on issues 
     that need clarification during the peer-review process;
       (4) shall approve a State application submitted under this 
     title not later than 120 days after the date of submission of 
     the application unless the Secretary determines that the 
     application does not meet the requirements of this title;
       (5) may not decline to approve a State's application 
     before--
       (A) offering the State an opportunity to revise the State's 
     application;
       (B) providing the State with technical assistance in order 
     to submit a successful application; and
       (C) providing a hearing to the State; and
       (6) shall direct the Inspector General of the Department of 
     Education to--

[[Page 16256]]

       (A) review final determinations reached by the Secretary to 
     approve or deny State applications;
       (B) analyze the consistency of the process used by peer-
     review panels in reviewing and recommending to the Secretary 
     approval or denial of such State applications; and
       (C) report the findings of this review and analysis to 
     Congress.

     SEC. 103. STATE PLAN; AUTHORIZED ACTIVITIES.

       (a) Mandatory Activities.--
       (1) In general.--A State educational agency that receives a 
     grant under this title shall use the grant funds--
       (A) to prepare and implement the needs analysis and middle 
     grades improvement plan, as described in paragraphs (3) and 
     (4), of such agency;
       (B) to make subgrants to eligible local educational 
     agencies or eligible entities under section 104; and
       (C) to assist eligible local educational agencies and 
     eligible entities, when determined necessary by the State 
     educational agency or at the request of an eligible local 
     educational agency or eligible entity, in designing a 
     comprehensive schoolwide improvement plan and carrying out 
     the activities under section 104.
       (2) Funds for subgrants.--A State educational agency that 
     receives a grant under this title shall use not less than 80 
     percent of the grant funds to make subgrants to eligible 
     local educational agencies or eligible entities under section 
     104.
       (3) Middle grades needs analysis.--
       (A) In general.--A State educational agency that receives a 
     grant under this title shall enter into a contract, or 
     similar formal agreement, to work with entities such as 
     national and regional comprehensive centers (as described in 
     section 203 of the Educational Technical Assistance Act of 
     2002 (20 U.S.C. 9602)), institutions of higher education, or 
     nonprofit organizations with demonstrated expertise in high-
     quality middle grades reform, to prepare a plan that analyzes 
     how to strengthen the programs, practices, and policies of 
     the State in supporting students in the middle grades, 
     including the factors, such as local implementation, that 
     influence variation in the effectiveness of such programs, 
     practices, and policies.
       (B) Preparation of plan.--In preparing the plan under 
     subparagraph (A), the State educational agency shall examine 
     policies and practices of the State, and of local educational 
     agencies within the State, affecting--
       (i) middle grades curriculum instruction and assessment;
       (ii) education accountability and data systems;
       (iii) teacher quality and equitable distribution; and
       (iv) interventions that support learning in school.
       (4) Middle grades improvement plan.--
       (A) In general.--A State educational agency that receives a 
     grant under this title shall develop a middle grades 
     improvement plan that--
       (i) shall be a statewide plan to improve student academic 
     achievement in the middle grades, based on the needs analysis 
     described in paragraph (3); and
       (ii) describes what students are required to know and do to 
     successfully--

       (I) complete the middle grades; and
       (II) make the transition to succeed in academically 
     rigorous high school coursework that prepares students for 
     college, independent living, and employment.

       (B) Plan components.--A middle grades improvement plan 
     described in subparagraph (A) shall also describe how the 
     State educational agency will do each of the following:
       (i)(I) Ensure that the curricula and assessments for middle 
     grades education are aligned with high school curricula and 
     assessments and prepare students to take challenging high 
     school courses and successfully engage in postsecondary 
     education; and
       (II) ensure coordination, where applicable, with the 
     activities carried out through grants for P-16 education 
     alignment under section 6401(c)(1) of the America COMPETES 
     Act (20 U.S.C. 9871(c)(1)).
       (ii) Ensure that professional development is provided to 
     school leaders, teachers, and other school personnel in--

       (I) addressing the needs of diverse learners, including 
     students with disabilities and English language learners;
       (II) using challenging and relevant research-based best 
     practices and curricula; and
       (III) using data to inform instruction.

       (iii) Identify and disseminate information on effective 
     schools and instructional strategies for middle grades 
     students based on high-quality research.
       (iv) Include specific provisions for students most at risk 
     of not graduating from secondary school, including English 
     language learners and students with disabilities.
       (v) Provide technical assistance to eligible entities to 
     develop and implement their early warning indicator and 
     intervention systems, as described in section 104(d)(2)(D).
       (vi) Define a set of comprehensive school performance 
     indicators that shall be used, in addition to the indicators 
     used to determine adequate yearly progress, as defined in 
     section 1111(b)(2)(C) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311(b)(2)(C)), to evaluate 
     school performance, and guide the school improvement process, 
     such as--

       (I) student attendance and absenteeism;
       (II) earned on-time promotion rates from grade to grade;
       (III) percentage of students failing a mathematics, reading 
     or language arts, or science course, or failing 2 or more of 
     any courses;
       (IV) teacher quality and attendance measures;
       (V) in-school and out-of-school suspension or other 
     measurable evidence of at-risk behavior; and
       (VI) additional indicators proposed by the State 
     educational agency, and approved by the Secretary pursuant to 
     the peer-review process described in section 102(g).

       (vii) Ensure that such plan is coordinated with State 
     activities to turn around other schools in need of 
     improvement, including State activities to improve high 
     schools and elementary schools.
       (b) Permissible Activities.--A State educational agency 
     that receives a grant under this title may use the grant 
     funds to--
       (1) develop and encourage collaborations among researchers 
     at institutions of higher education, State educational 
     agencies, educational service agencies (as defined in section 
     9101 of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 7801)), local educational agencies, and nonprofit 
     organizations with demonstrated expertise in high quality 
     middle grades interventions, to expand the use of effective 
     practices in the middle grades and to improve middle grades 
     education;
       (2) support local educational agencies in implementing 
     effective middle grades practices, models, and programs 
     that--
       (A) are evidence-based or, when available, scientifically 
     valid; and
       (B) lead to improved student academic achievement;
       (3) support collaborative communities of middle grades 
     teachers, administrators, and researchers in creating and 
     sustaining informational databases to disseminate results 
     from rigorous research on effective practices and programs 
     for middle grades education; and
       (4) increase middle grades student support services, such 
     as school counseling on the transition to high school and 
     planning for entry into postsecondary education and the 
     workforce.

     SEC. 104. COMPETITIVE SUBGRANTS TO IMPROVE LOW-PERFORMING 
                   MIDDLE GRADES.

       (a) In General.--A State educational agency that receives a 
     grant under this title shall make competitive subgrants to 
     eligible local educational agencies and eligible entities to 
     enable the eligible local educational agencies and eligible 
     entities to improve low-performing middle grades in schools 
     served by the agencies or entities.
       (b) Priorities.--In making subgrants under subsection (a), 
     a State educational agency shall give priority to eligible 
     local educational agencies or eligible entities based on--
       (1) the respective populations of children described in 
     section 102(c)(1) served by the eligible local educational 
     agencies participating in the subgrant application process; 
     and
       (2) the respective populations of children served by the 
     participating eligible local educational agencies who attend 
     eligible schools.
       (c) Application.--An eligible local educational agency or 
     eligible entity that desires to receive a subgrant under 
     subsection (a) shall submit an application to the State 
     educational agency at such time, in such manner, and 
     accompanied by such information as the State educational 
     agency may reasonably require, including--
       (1) a comprehensive schoolwide improvement plan described 
     in subsection (d);
       (2) a description of how activities described in such plan 
     will be coordinated with activities specified in plans for 
     schoolwide programs under section 1114 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6314) and school 
     improvement plans required under section 1116(b)(3) of such 
     Act (20 U.S.C. 6316(b)(3)); and
       (3) a description of how activities described in such plan 
     will be complementary to, and coordinated with, school 
     improvement activities for elementary schools and high 
     schools in need of improvement that serve the same students 
     within the participating local educational agency.
       (d) Comprehensive Schoolwide Improvement Plan.--An eligible 
     local educational agency or eligible entity that desires to 
     receive a subgrant under subsection (a) shall develop a 
     comprehensive schoolwide improvement plan for the middle 
     grades that shall--
       (1) include the information described in subsection (c)(2);
       (2) describe how the eligible local educational agency or 
     eligible entity will--
       (A) identify eligible schools;
       (B) ensure that funds go to the highest priority eligible 
     schools first, based on the eligible schools' populations of 
     children described in section 102(c)(1);
       (C) use funds to improve the academic achievement of all 
     students, including English language learners and students 
     with disabilities, in eligible schools;

[[Page 16257]]

       (D) implement an early warning indicator and intervention 
     system to alert schools when students begin to exhibit 
     outcomes or behaviors that indicate the student is at 
     increased risk for low academic achievement or is unlikely to 
     progress to secondary school graduation, and to create a 
     system of evidence-based interventions to be used by schools 
     to effectively intervene, by--
       (i) identifying and analyzing, such as through the use of 
     longitudinal data of past cohorts of students, the academic 
     and behavioral indicators in the middle grades that most 
     reliably predict dropping out of high school, such as 
     attendance, behavior measures (including suspensions, officer 
     referrals, or conduct marks), academic performance in core 
     courses, and earned on-time promotion from grade-to-grade;
       (ii) analyzing student progress and performance on the 
     indicators identified under clause (i) to guide 
     decisionmaking;
       (iii) analyzing academic indicators to determine whether 
     students are on track to graduate on time, and developing 
     appropriate evidence-based intervention; and
       (iv) identifying or developing a mechanism for regularly 
     collecting and reporting--

       (I) student-level data on the indicators identified under 
     clause (i);
       (II) student-level progress and performance, as described 
     in clause (ii);
       (III) student-level data on the indicators described in 
     clause (iii); and
       (IV) information about the impact of interventions on 
     student outcomes and progress;

       (E) increase academic rigor and foster student engagement 
     to ensure students are entering high school prepared for 
     success in a rigorous college-ready curriculum, including a 
     description of how such readiness will be measured;
       (F) implement a systemic transition plan for all students 
     and encourage collaboration among elementary grades, middle 
     grades, and high school grades; and
       (G) provide evidence that the strategies, programs, 
     supports, and instructional practices proposed under the 
     schoolwide improvement plan are new and have not been 
     implemented before by the eligible local educational agency 
     or eligible entity; and
       (3) provide evidence of an ongoing commitment to sustain 
     the plan for a period of not less than 4 years.
       (e) Review and Selection of Subgrants.--In making subgrants 
     under subsection (a), the State educational agency shall--
       (1) establish a peer-review process to assist in the review 
     and approval of applications under subsection (c); and
       (2) appoint individuals to participate in the peer-review 
     process who are educators and experts in identifying, 
     evaluating, and implementing effective education programs and 
     practices, including areas of teaching and learning, 
     educational standards and assessments, school improvement, 
     and academic and behavioral supports for middle grades 
     students, including recognized exemplary middle grades 
     teachers and principals who have been recognized at the State 
     or national level for exemplary work or contributions to the 
     field.
       (f) Revision of Subgrants.--If a State educational agency, 
     using the peer-review process described in subsection (e), 
     determines that an application for a grant under subsection 
     (a) does not meet the requirements of this title, the State 
     educational agency shall notify the eligible local 
     educational agency or eligible entity of such determination 
     and the reasons for such determination, and offer--
       (1) the eligible local educational agency or eligible 
     entity an opportunity to revise and resubmit the application; 
     and
       (2) technical assistance to the eligible local educational 
     agency or eligible entity, by the State educational agency or 
     a nonprofit organization with demonstrated expertise in high 
     quality middle grades interventions, to revise the 
     application.
       (g) Mandatory Uses of Funds.--An eligible local educational 
     agency or eligible entity that receives a subgrant under 
     subsection (a) shall carry out the following:
       (1) Align the curricula for grades kindergarten through 12 
     for schools within the local educational agency to improve 
     transitions from elementary grades to middle grades to high 
     school grades.
       (2) In each eligible school served by the eligible local 
     educational agency receiving or participating in the 
     subgrant:
       (A) Align the curricula for all grade levels within 
     eligible schools to improve grade to grade transitions.
       (B) Implement evidence-based or, when available, 
     scientifically valid instructional strategies, programs, and 
     learning environments that meet the needs of all students and 
     ensure that school leaders and teachers receive professional 
     development on the use of these strategies.
       (C) Ensure that school leaders, teachers, pupil service 
     personnel, and other school staff understand the 
     developmental stages of adolescents in the middle grades and 
     how to deal with those stages appropriately in an educational 
     setting.
       (D) Implement organizational practices and school schedules 
     that allow for effective leadership, collaborative staff 
     participation, effective teacher teaming, and parent and 
     community involvement.
       (E) Create a more personalized and engaging learning 
     environment for middle grades students by developing a 
     personal academic plan for each student and assigning not 
     less than 1 adult to help monitor student progress.
       (F) Provide all students with information and assistance 
     about the requirements for high school graduation, college 
     admission, and career success.
       (G) Utilize data from an early warning indicator and 
     intervention system described in subsection (d)(2)(D) to 
     identify struggling students and assist the students as the 
     students transition from elementary school to middle grades 
     to high school.
       (H) Implement academic supports and effective and 
     coordinated additional assistance programs to ensure that 
     students have a strong foundation in reading, writing, 
     mathematics, and science skills.
       (I) Implement evidence-based or, when available, 
     scientifically valid schoolwide programs and targeted 
     supports to promote positive academic outcomes, such as 
     increased attendance rates and the promotion of physical, 
     personal, and social development.
       (J) Develop and use effective formative assessments to 
     inform instruction.
       (h) Permissible Uses of Funds.--An eligible local 
     educational agency or eligible entity that receives a 
     subgrant under subsection (a) may use the subgrant funds to 
     carry out the following:
       (1) Implement extended learning opportunities in core 
     academic areas including more instructional time in literacy, 
     mathematics, science, history, and civics in addition to 
     opportunities for language instruction and understanding 
     other cultures and the arts.
       (2) Provide evidence-based professional development 
     activities with specific benchmarks to enable teachers and 
     other school staff to appropriately monitor academic and 
     behavioral progress of, and modify curricula and implement 
     accommodations and assistive technology services for, 
     students with disabilities, consistent with the students' 
     individualized education programs under section 614(d) of the 
     Individuals with Disabilities Education Act (20 U.S.C. 
     1414(d)).
       (3) Employ and use instructional coaches, including 
     literacy, mathematics, and English language learner coaches.
       (4) Provide professional development for content-area 
     teachers on working effectively with English language 
     learners and students with disabilities, as well as 
     professional development for English as a second language 
     educators, bilingual educators, and special education 
     personnel.
       (5) Encourage and facilitate the sharing of data among 
     elementary grades, middle grades, high school grades, and 
     postsecondary educational institutions.
       (6) Create collaborative study groups composed of 
     principals or middle grades teachers, or both, among eligible 
     schools within the eligible local educational agency 
     receiving or participating in the subgrant, or between such 
     eligible local educational agency and another local 
     educational agency, with a focus on developing and sharing 
     methods to increase student learning and academic 
     achievement.
       (i) Planning Subgrants.--
       (1) In general.--In addition to the subgrants described in 
     subsection (a), a State educational agency may (without 
     regard to the preceding provisions of this section) make 
     planning subgrants, and provide technical assistance, to 
     eligible local educational agencies and eligible entities 
     that have not received a subgrant under subsection (a) to 
     assist the local educational agencies and eligible entities 
     in meeting the requirements of subsections (c) and (d).
       (2) Amount and duration.--Each subgrant under this 
     subsection shall be in an amount of not more than $100,000 
     and shall be for a period of not more than 1 year in 
     duration.

     SEC. 105. DURATION OF GRANTS; SUPPLEMENT NOT SUPPLANT.

       (a) Duration of Grants.--
       (1) In general.--Except as provided in paragraph (2), 
     grants under this title and subgrants under section 104(a) 
     may not exceed 3 years in duration.
       (2) Renewals.--
       (A) In general.--Grants and subgrants under this title may 
     be renewed in 2-year increments.
       (B) Conditions.--In order to be eligible to have a grant or 
     subgrant renewed under this paragraph, the grant or subgrant 
     recipient shall demonstrate, to the satisfaction of the 
     granting entity, that--
       (i) the recipient has complied with the terms of the grant 
     or subgrant, including by undertaking all required 
     activities; and
       (ii) during the period of the grant or subgrant, there has 
     been significant progress in--

       (I) student academic achievement, as measured by the annual 
     measurable objectives established pursuant to section 
     1111(b)(2)(C)(v) of the Elementary and Secondary Education 
     Act (20 U.S.C. 6311(b)(2)(C)(v)); and
       (II) other key risk factors such as attendance and on-time 
     promotion.

       (b) Federal Funds To Supplement, Not Supplant, Non-Federal 
     Funds.--
       (1) In general.--A State educational agency, eligible local 
     educational agency, or eligible entity shall use Federal 
     funds received

[[Page 16258]]

     under this title only to supplement the funds that would, in 
     the absence of such Federal funds, be made available from 
     non-Federal sources for the education of pupils participating 
     in programs assisted under this title, and not to supplant 
     such funds.
       (2) Special rule.--Nothing in this title shall be construed 
     to authorize an officer, employee, or contractor of the 
     Federal Government to mandate, direct, limit, or control a 
     State, local educational agency, or school's specific 
     instructional content, academic achievement standards and 
     assessments, curriculum, or program of instruction.

     SEC. 106. EVALUATION AND REPORTING.

       (a) Evaluation.--Not later than 180 days after the date of 
     enactment of this Act, and annually thereafter for the period 
     of the grant, each State receiving a grant under this title 
     shall--
       (1) conduct an evaluation of the State's progress regarding 
     the impact of the changes made to the policies and practices 
     of the State in accordance with this title, including--
       (A) a description of the specific changes made, or in the 
     process of being made, to policies and practices as a result 
     of the grant;
       (B) a discussion of any barriers hindering the identified 
     changes in policies and practices, and implementations 
     strategies to overcome such barriers;
       (C) evidence of the impact of changes to policies and 
     practices on behavior and actions at the local educational 
     agency and school level; and
       (D) evidence of the impact of the changes to State and 
     local policies and practices on improving measurable learning 
     gains by middle grades students;
       (2) use the results of the evaluation conducted under 
     paragraph (1) to adjust the policies and practices of the 
     State as necessary to achieve the purposes of this title; and
       (3) submit the results of the evaluation to the Secretary.
       (b) Availability.--The Secretary shall make the results of 
     each State's evaluation under subsection (a) available to 
     other States and local educational agencies.
       (c) Local Educational Agency Reporting.--On an annual 
     basis, each eligible local educational agency and eligible 
     entity receiving a subgrant under section 104(a) shall report 
     to the State educational agency and to the public on--
       (1) the performance on the school performance indicators 
     (as described in section 103(a)(4)(B)(vi)) for each eligible 
     school served by the eligible local educational agency or 
     eligible entity, in the aggregate and disaggregated by the 
     subgroups described in section 1111(b)(2)(C)(v)(II) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311(b)(2)(C)(v)(II)); and
       (2) the use of funds by the eligible local educational 
     agency or eligible entity and each such school.
       (d) State Educational Agency Reporting.--On an annual 
     basis, each State educational agency receiving grant funds 
     under this title shall report to the Secretary and to the 
     public on--
       (1) the performance of eligible schools in the State, based 
     on the school performance indicators described in section 
     103(a)(4)(B)(vi), in the aggregate and disaggregated by the 
     subgroups described in section 1111(b)(2)(C)(v)(II) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311(b)(2)(C)(v)(II)); and
       (2) the use of the funds by each eligible local educational 
     agency in the State and by each eligible school.
       (e) Report to Congress.--Every 2 years, the Secretary shall 
     report to the public and to Congress--
       (1) a summary of the State reports under subsection (d); 
     and
       (2) the use of funds by each State under this title.

     SEC. 107. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     title $1,000,000,000 for fiscal year 2010 and such sums as 
     may be necessary for each of the 5 succeeding fiscal years.

                   TITLE II--RESEARCH RECOMMENDATIONS

     SEC. 201. PURPOSE.

       The purpose of this title is to facilitate the generation, 
     dissemination, and application of research needed to identify 
     and implement effective practices that lead to continual 
     student learning and high academic achievement in the middle 
     grades.

     SEC. 202. RESEARCH RECOMMENDATIONS.

       (a) Study on Promising Practices.--
       (1) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary shall enter into a 
     contract with the Center for Education of the National 
     Academies to study and identify promising practices for the 
     improvement of middle grades education.
       (2) Content of study.--The study described in paragraph (1) 
     shall identify promising practices currently being 
     implemented for the improvement of middle grades education. 
     The study shall be conducted in an open and transparent way 
     that provides interim information to the public about 
     criteria being used to identify--
       (A) promising practices;
       (B) the practices that are being considered; and
       (C) the kind of evidence needed to document effectiveness.
       (3) Report.--The contract entered into pursuant to this 
     subsection shall require that the Center for Education of the 
     National Academies submit to the Secretary, the Committee on 
     Health, Education, Labor, and Pensions of the Senate, and the 
     Committee on Education and Labor of the House of 
     Representatives a final report regarding the study conducted 
     under this subsection not later than 1 year after the date of 
     the commencement of the contract.
       (4) Publication.--The Secretary shall make public and post 
     on the website of the Department of Education the findings of 
     the study conducted under this subsection.
       (b) Synthesis Study of Effective Teaching and Learning in 
     Middle Grades.--
       (1) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary shall enter into a 
     contract with the Center for Education of the National 
     Academies to review existing research on middle grades 
     education, and on factors that might lead to increased 
     effectiveness and enhanced innovation in middle grades 
     education.
       (2) Content of study.--The study described in paragraph (1) 
     shall review research on education programs, practices, and 
     policies, as well as research on the cognitive, social, and 
     emotional development of children in the middle grades age 
     range, in order to provide an enriched understanding of the 
     factors that might lead to the development of innovative and 
     effective middle grades programs, practices, and policies. 
     The study shall focus on--
       (A) the areas of curriculum, instruction, and assessment 
     (including additional supports for students who are below 
     grade level in reading, writing, mathematics, and science, 
     and the identification of students with disabilities) to 
     better prepare all students for subsequent success in high 
     school, college, and cognitively challenging employment;
       (B) the quality of, and supports for, the teacher 
     workforce;
       (C) aspects of student behavioral and social development, 
     and of social interactions within schools that affect the 
     learning of academic content;
       (D) the ways in which schools and local educational 
     agencies are organized and operated that may be linked to 
     student outcomes;
       (E) how development and use of early warning indicator and 
     intervention systems can reduce risk factors for dropping out 
     of school and low academic achievement; and
       (F) identification of areas where further research and 
     evaluation may be needed on these topics to further the 
     development of effective middle grades practices.
       (3) Report.--The contract entered into pursuant to this 
     subsection shall require that the Center for Education of the 
     National Academies submit to the Secretary, the Committee on 
     Health, Education, Labor, and Pensions of the Senate, and the 
     Committee on Education and Labor of the House of 
     Representatives a final report regarding the study conducted 
     under this subsection not later than 2 years after the date 
     of commencement of the contract.
       (4) Publication.--The Secretary shall make public and post 
     on the website of the Department of Education the findings of 
     the study conducted under this subsection.
       (c) Other Activities.--The Secretary shall carry out each 
     of the following:
       (1) Create a national clearinghouse, in coordination with 
     entities such as What Works and the Doing What Works 
     Clearinghouses, for research in best practices in the middle 
     grades and in the approaches that successfully take those 
     best practices to scale in schools and local educational 
     agencies.
       (2) Create a national middle grades database accessible to 
     educational researchers, practitioners, and policymakers that 
     identifies school, classroom, and system-level factors that 
     facilitate or impede student academic achievement in the 
     middle grades.
       (3) Require the Institute of Education Sciences to develop 
     a strand of field-initiated and scientifically valid research 
     designed to enhance performance of schools serving middle 
     grades students, and of middle grades students who are most 
     at risk of educational failure, which may be coordinated with 
     the regional educational laboratories established under 
     section 174 of the Education Sciences Reform Act of 2002 (20 
     U.S.C. 9564), institutions of higher education, agencies 
     recognized for their research work that has been published in 
     peer-reviewed journals, and organizations that have such 
     regional educational laboratories. Such research shall target 
     specific issues such as--
       (A) effective practices for instruction and assessment in 
     mathematics, science, technology, and literacy;
       (B) academic interventions for adolescent English language 
     learners;
       (C) school improvement programs and strategies for closing 
     the academic achievement gap;
       (D) evidence-based or, when available, scientifically valid 
     professional development planning targeted to improve 
     pedagogy and student academic achievement;
       (E) the effects of increased learning or extended school 
     time in the middle grades; and

[[Page 16259]]

       (F) the effects of decreased class size or increased 
     instructional and support staff.
       (4) Strengthen the work of the existing national research 
     and development centers under section 133(c) of the Education 
     Sciences Reform Act of 2002 (20 U.S.C. 9533(c)), as of the 
     date of enactment of this Act, by adding an educational 
     research and development center dedicated to addressing--
       (A) curricular, instructional, and assessment issues 
     pertinent to the middle grades (such as mathematics, science, 
     technological fluency, the needs of English language 
     learners, and students with disabilities);
       (B) comprehensive reforms for low-performing middle grades; 
     and
       (C) other topics pertinent to improving the academic 
     achievement of middle grades students.
       (5) Provide grants to nonprofit organizations, for-profit 
     organizations, institutions of higher education, and others 
     to partner with State educational agencies and local 
     educational agencies to develop, adapt, or replicate 
     effective models for turning around low-performing middle 
     grades.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS; RESERVATIONS.

       (a) Authorization.--There are authorized to be appropriated 
     to carry out this title $100,000,000 for fiscal year 2010 and 
     such sums as may be necessary for each of the 5 succeeding 
     fiscal years.
       (b) Reservations.--From the total amount made available to 
     carry out this title, the Secretary shall reserve--
       (1) 2.5 percent for the studies described in subsections 
     (a) and (b) of section 202;
       (2) 5 percent for the clearinghouse described in section 
     202(c)(1);
       (3) 5 percent for the database described in section 
     202(c)(2);
       (4) 42.5 percent for the activities described in section 
     202(c)(3);
       (5) 15 percent for the activities described in section 
     202(c)(4); and
       (6) 30 percent for the activities described in section 
     202(c)(5).
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Merkley):
  S. 1369. A bill to amend the Wild and Scenic Rivers Act to designate 
segments of the Molalla River in the State of Oregon, as components of 
the National Wild and Scenic Rivers System, and for other purposes; to 
the Committee on Energy and Natural Resources.
  Mr. WYDEN. Mr. President, today I am introducing a bill to amend the 
Wild and Scenic Rivers Act to designate segments of the Molalla River 
as Wild and Scenic. I am pleased to be introducing this legislation 
with my colleague from Oregon, Senator Merkley. This legislation has 
already been introduced by Representative Schrader in the House, who is 
a champion for protecting the river. The Molalla River Wild and Scenic 
Rivers Act of 2009 will designate an approximately 15.1-mile segment of 
the Molalla River, and an approximately 6.2-mile segment of Table Rock 
Fork Molalla River as a recreational river under the Wild and Scenic 
Rivers Act.
  The Molalla River Wild and Scenic Rivers Act protects a popular 
Oregon destination that provides abundant recreational activities all 
of which take place among the abundant wildlife that call this area 
home. The scenic beauty of the Molalla River provides a backdrop for 
hiking, mountain biking, camping, and horseback riding, while the 
waters of the river are a popular destination for fishing, kayaking, 
and whitewater rafting enthusiasts. My bill would not only preserve 
this area as a recreation destination, but would also protect the river 
habitat of the Chinook salmon and Steelhead trout, along with the 
wildlife habitat surrounding the river, home to the northern spotted 
owl, the pileated woodpecker, golden and bald eagles, deer, elk, the 
pacific giant salamander, and many others.
  The Molalla River is not only an important habitat for wildlife and a 
popular northwest recreation destination, but it is also the source of 
clean drinking water for the towns of Molalla and Canby, Oregon. 
Protecting the approximately 21.3 miles of the Molalla River will 
provide the residents of these Oregon towns with the assurance that 
they will continue to receive clean drinking water, and will provide 
all the people of the Pacific Northwest and beyond the knowledge that 
this important natural resource will be preserved for continued 
enjoyment for years to come.
  I want to express my thanks to the Molalla River Alliance--a 
coalition of more than 45 organizations that recognize that this river 
is a jewel. Michael Moody, the President of this Alliance, made sure 
that irrigators, city councilors, the mayor, businesses and 
environmentalists all came together on this. I look forward to working 
with Senator Merkley, Representative Schrader, and the bill's 
supporters to advance this legislation to the President's desk.
  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. 1369

       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 ``Molalla River Wild and 
     Scenic Rivers Act''.

     SEC. 2. DESIGNATION OF WILD AND SCENIC RIVER SEGMENTS, 
                   MOLALLA RIVER, OREGON.

       Section 3(a) of the Wild and Scenic Rivers Act (16 U.S.C. 
     1274(a)) is amended by adding at the end the following:
       ``(208) Molalla river, oregon.--
       ``(A) In general.--The following segments in the State of 
     Oregon, to be administered by the Secretary of the Interior 
     as a recreational river:
       ``(i) Molalla river.--The approximately 15.1-mile segment 
     from the southern boundary line of T. 7 S., R. 4 E., sec. 19, 
     downstream to the edge of the Bureau of Land Management 
     boundary in T. 6 S., R. 3 E., sec. 7.
       ``(ii) Table rock fork molalla river.--The approximately 
     6.2-mile segment from the easternmost Bureau of Land 
     Management boundary line in the NE\1/4\ sec. 4, T. 7 S., R. 4 
     E., downstream to the confluence with the Molalla River.
       ``(B) Withdrawal.--Subject to valid existing rights, the 
     Federal land within the boundaries of the river segments 
     designated by subparagraph (A) is withdrawn from all forms 
     of--
       ``(i) entry, appropriation, or disposal under the public 
     land laws;
       ``(ii) location, entry, and patent under the mining laws; 
     and
       ``(iii) disposition under all laws relating to mineral and 
     geothermal leasing or mineral materials.
       ``(C) Effect of designation.--
       ``(i) In general.--The designation of the river segments 
     under this paragraph shall not affect valid existing rights 
     (including rights-of-way and easements) in, through,  and to 
     the land designated as part of the Wild and Scenic River 
     System under this paragraph.
       ``(ii) Private land.--  Nothing in this paragraph requires 
     management of private land within the basins of the river 
     segments designated under this paragraph in a manner  
     different than  that required  under State law, including 
     Chapter 527 of the Oregon Revised Statutes.''.
                                 ______
                                 
      By Mr. NELSON, of Florida (for himself, Mr. Ensign, and Mr. 
        Martinez):
  S. 1371. A bill to amend the Internal Revenue Code of 1986 to provide 
for clean renewable water supply bonds; to the Committee on Finance.
  Mr. NELSON of Florida. Mr. President, I rise today to introduce, with 
my colleagues Senators Ensign and Martinez, the Clean Renewable Water 
Supply Bond Act of 2009.
  While many of us do not think twice when we turn on the faucet, State 
and local authorities anticipate widespread water shortages in the near 
future, and the consequences may be severe, if not catastrophic. Rising 
demand and dwindling sources of fresh water raise serious questions 
about our ability to ensure every community has access to a clean, 
safe, and affordable water supply. The U.S. population has grown more 
than 50 percent in the last 30 years. At the same time, the amount of 
water used by each of us has tripled. In many States, particularly 
fast-growing States, water consumption nears or exceeds the renewable 
water supply.
  Several parts of the country have experienced drought or near-drought 
conditions requiring authorities to impose water user strictions. 
According to a comprehensive Government Accountability Office study, 
even under normal conditions, 36 States expect water shortages by 2013. 
Compounding the problem, the Environmental Protection Agency estimates 
a shortfall of $224 billion in funding for water projects over the next 
20 years.
  Water shortages also have implications for the environment. The 
Everglades is a prime example. Over the years, diminished flows into 
the Everglades have reduced the ecosystem to

[[Page 16260]]

half its original size. As a result of less water, the Everglades 
experienced a 90 percent reduction in the population of wading birds. 
The effects of climate change--including salt water intrusion and 
higher sea levels--mean our recent experiences will only intensify over 
the next couple decades.
  There is a growing consensus on the need for new investments in water 
supply and treatment projects. Advanced technologies offer 
extraordinary promise and can provide new sources of clean water, but 
the cost of the initial capital investment is often prohibitive. States 
are primarily responsible for managing the development, allocation, and 
use of freshwater supplies. A single advanced water project can cost as 
much as $400 million, an amount difficult to finance with conventional 
tax-exempt bonds, which require principal and interest payments by the 
issuer.
  The bipartisan legislation we are introducing today would authorize 
public water agencies at the State and local level to issue tax credit 
bonds as a financing vehicle for innovative new water supply 
technologies. The legislation would create a new category of Clean 
Renewable Water Supply Bonds, to finance innovative projects such as 
water recycling, desalination, and groundwater contamination clean-up. 
Tax credit bonds such as CREWS provide a deeper and more efficient 
subsidy than tax-exempt bonds. The Federal Government provides a tax 
credit to the bondholder in lieu of an interest payment. As a result, a 
public agency financing a $100 million project with CREWS would save an 
estimated $62 million in interest payments over the life of the bond. 
The issuer remains responsible for repayment of the principal. The 
bonds would be issued by public agencies in the same way that they 
issue conventional tax-exempt bonds.
  A project would not be eligible for CREWS unless the issuer has 
received all Federal and State regulatory approvals necessary to 
construct the project. Qualifying projects must be designed to comply 
with regulations that minimize negative environmental impacts. In order 
to limit the revenue loss to $1 billion over ten years, the bill caps 
the amount of annual CREWS bonding authority.
  Tax credit bonds are a proven and effective financing mechanism. 
Congress has authorized the issuance of tax credit bonds for the 
construction of inner city schools, renewable energy projects, energy 
conservation measures, forestry conservation programs, and post-Katrina 
and Rita reconstruction. According to an analysis prepared for the New 
Water Supply Coalition, an investment of $6.2 billion in construction 
for desalination, recycling and groundwater recovery would generate a 
national economic impact of $19.5 billion and approximately 143,000 
jobs. Most importantly, if enacted and fully funded, the Coalition 
projects that over 1.8 billion gallons of water per day would be 
created by the new investment resulting from the Clean Renewable Water 
Supply Bond Act--enough new water to meet the needs of over four 
million families of four.
  Addressing the challenges of our growing water needs will require a 
concerted effort that involves all levels of government--Federal, 
State, and local. The Clean Renewable Water Supply Bond Act would 
create an effective tool for the shared Federal-State financing of 
advanced, innovative clean water supply projects. I encourage my 
colleagues to support the legislation.
  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. 1371

       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 ``Clean Renewable Water Supply 
     Bond Act of 2009''.

     SEC. 2. CLEAN RENEWABLE WATER SUPPLY BONDS.

       (a) In General.--Subpart I of Part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new section:

     ``SEC. 54G. CLEAN RENEWABLE WATER SUPPLY BONDS.

       ``(a) Clean Renewable Water Supply Bonds.--For purposes of 
     this subpart, the term `clean renewable water supply bond' 
     means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for capital expenditures incurred by 
     qualified borrowers for 1 or more qualified projects,
       ``(2) the bond is issued by a qualified issuer,
       ``(3) the issuer designates such bond for purposes of this 
     section, and
       ``(4) in the case of a bond issued by a qualified issuer 
     before 2019, the bond is issued--
       ``(A) pursuant to an allocation by the Secretary to such 
     issuer of a portion of the national clean renewable water 
     supply bond limitation under subsection (b), and
       ``(B) not later than 6 months after the date that such 
     qualified issuer receives an allocation under subsection (b).

     ``Any allocation under subsection (b) not used within the 6-
     month period described in paragraph (4)(B) shall be applied 
     to increase the national clean renewable water supply bond 
     limitation for the next succeeding application period under 
     subsection (b)(2)(B).
       ``(b) National Limitation on Amount of Bonds Designated.--
       ``(1) In general.--There is a national clean renewable 
     water supply bond limitation for each calendar year before 
     2019. Such limitation is--
       ``(A) $0 for 2009,
       ``(B) $100,000,000 for 2010,
       ``(C) $150,000,000 for 2011,
       ``(D) $200,000,000 for 2012,
       ``(E) $250,000,000 for 2013,
       ``(F) $500,000,000 for 2014,
       ``(G) $750,000,000 for 2015,
       ``(H) $1,000,000,000 for 2016,
       ``(I) $1,500,000,000 for 2017, and
       ``(J) $1,750,000,000 for 2018.
       ``(2) Allocation of limitation.--
       ``(A) In general.--The limitation under paragraph (1) shall 
     be allocated by the Secretary among qualified projects as 
     provided in this paragraph.
       ``(B) Method of allocation.--For each calendar year after 
     2009 for which there is a national clean renewable water 
     supply bond limitation, the Secretary shall publish a notice 
     soliciting applications by qualified issuers for allocations 
     of such limitation to qualified projects. Such notice shall 
     specify a 3-month application period in the calendar year 
     during which the Secretary will accept such applications. 
     Within 30 days after the end of such application period, and 
     subject to the requirements of subparagraph (C), the 
     Secretary shall allocate such limitation to qualified 
     projects on a first-come, first-served basis, based on the 
     order in which such applications are received from qualified 
     issuers.
       ``(C) Allocation requirements.--
       ``(i) Certifications regarding regulatory approvals.--No 
     portion of the national clean renewable water supply bond 
     limitation shall be allocated to a qualified project unless 
     the qualified issuer has certified in its application for 
     such allocation that as of the date of such application the 
     qualified issuer or qualified borrower has received all 
     Federal and State regulatory approvals necessary to construct 
     the qualified project.
       ``(ii) Restriction on allocations to large projects or to 
     individual projects.--

       ``(I) In general.--Except as provided in subclause (III), 
     for any calendar year the Secretary shall not allocate more 
     than 60 percent of the national clean renewable water supply 
     bond limitation to 1 or more large projects, more than 18 
     percent of such limitation to any single project that is a 
     large project, or more than 12 percent of such limitation to 
     any single project that is not a large project.
       ``(II) Definition of large project.--For purposes of 
     subclause (I), the term `large project' means a qualified 
     project that is designed to deliver more than 10,000,000 
     gallons of water per day.
       ``(III) Exception to restriction.--Subclause (I) shall not 
     apply to the extent its application would cause any portion 
     of the national clean renewable water supply bond limitation 
     for the calendar year to remain unallocated, based on 
     applications for allocations of such limitation received by 
     the Secretary during the application period referred to in 
     subparagraph (B).

       ``(3) Carryover of unused limitation.--If the clean 
     renewable water supply bond limitation for any calendar year 
     exceeds the aggregate amount allocated under paragraph (2) 
     for such year, such limitation for the succeeding calendar 
     year shall be increased by the amount of such excess.
       ``(c) Maturity Limitation.--
       ``(1) In general.--A bond shall not be treated as a clean 
     renewable water supply bond if the maturity of such bond 
     exceeds 20 years.
       ``(2) Coordination with section 54a.--The maturity 
     limitation in section 54A(d)(5) shall not apply to any clean 
     renewable water supply bond.
       ``(d) Refinancing Rules.--For purposes of paragraph (a)(1), 
     a qualified project may be refinanced with proceeds of a 
     clean renewable water supply bond only if the indebtedness 
     being refinanced (including any obligation directly or 
     indirectly refinanced by such

[[Page 16261]]

     indebtedness) was originally incurred by a qualified borrower 
     after the date of the enactment of this section.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Governmental body.--The term `governmental body' 
     means any State or Indian tribal government, or any political 
     subdivision thereof.
       ``(2) Local water company.--The term `local water company' 
     means any entity responsible for providing water service to 
     the general public (including electric utility, industrial, 
     agricultural, commercial, or residential users) pursuant to 
     State or tribal law.
       ``(3) Qualified borrower.--The term `qualified borrower' 
     means a governmental body or a local water company.
       ``(4) Qualified desalination facility.--The term `qualified 
     desalination facility' means any facility that is used to 
     produce new water supplies by desalinating seawater, 
     groundwater, or surface water if the facility's source water 
     includes chlorides or total dissolved solids that, either 
     continuously or seasonally, exceed maximum permitted levels 
     for primary or secondary drinking water under Federal or 
     State law (as in effect on the date of issuance of the 
     issue).
       ``(5) Qualified groundwater remediation facility.--The term 
     `qualified groundwater remediation facility' means any 
     facility that is used to reclaim contaminated or naturally 
     impaired groundwater for direct delivery for potable use if 
     the facility's source water includes constituents that exceed 
     maximum contaminant levels regulated under the Safe Drinking 
     Water Act (as in effect on the date of the enactment of this 
     section).
       ``(6) Qualified issuer.--The term `qualified issuer' 
     means--
       ``(A) a governmental body, or
       ``(B) in the case of a State or political subdivision 
     thereof (as defined for purposes of section 103), any entity 
     qualified to issue tax-exempt bonds under section 103 on 
     behalf of such State or political subdivision.
       ``(7) Qualified project.--
       ``(A) In general.--The term `qualified project' means any 
     facility owned by a qualified borrower which is a--
       ``(i) qualified desalination facility,
       ``(ii) qualified recycled water facility,
       ``(iii) qualified groundwater remediation facility, or
       ``(iv) facility that is functionally related or subordinate 
     to a facility described in clause (i), (ii), or (iii).
       ``(B) Environmental impact.--A project shall not be treated 
     as a qualified project under subparagraph (A) unless such 
     project is designed to comply with regulations issued under 
     subsection (f) relating to the minimization of the 
     environmental impact of the project.
       ``(8) Qualified recycled water facility.--
       ``(A) In general.--The term `qualified recycled water 
     facility' means any wastewater treatment or distribution 
     facility which--
       ``(i) exceeds the requirements for the treatment and 
     disposal of wastewater under the Clean Water Act and any 
     other Federal or State water pollution control standards for 
     the discharge and disposal of wastewater to surface water, 
     land, or groundwater (as such requirements and standards are 
     in effect on the date of issuance of the issue), and
       ``(ii) except as provided in subparagraph (B), is used to 
     reclaim wastewater produced by the general public (including 
     electric utility, industrial, agricultural, commercial, or 
     residential users) to the extent such reclaimed wastewater is 
     used for a beneficial use that the issuer reasonably expects 
     as of the date of issuance of the issue otherwise would have 
     been satisfied with potable water supplies.
       ``(B) Impermissible uses.--Reclaimed wastewater is not used 
     for a use described in subparagraph (A)(ii) to the extent 
     such reclaimed wastewater is--
       ``(i) discharged into a waterway or used to meet waterway 
     discharge permit requirements and not used to supplement 
     potable water supplies,
       ``(ii) used to restore habitat,
       ``(iii) used to provide once-through cooling for an 
     electric generation facility, or
       ``(iv) intentionally introduced into the groundwater and 
     not used to supplement potable water supplies.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as are necessary to carry out the purposes of 
     this section, including regulations promulgated in 
     consultation with the Administrator of the Environmental 
     Protection Agency to ensure the environmental impact of 
     qualified facilities is minimized.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d) of the Internal Revenue 
     Code of 1986 is amended by striking ``or'' at the end of 
     subparagraph (D), by inserting ``or'' at the end of 
     subparagraph (E), and by inserting after subparagraph (E) the 
     following new subparagraph:
       ``(F) a clean renewable water supply bond,''.
       (2) Subparagraph (C) of section 54A(d)(2) of such Code is 
     amended by striking ``and'' at the end of clause (iv), by 
     striking the period at the end of clause (v) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(vi) in the case of a clean renewable water supply bond, 
     a purpose specified in section 54G(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     at the end the following new item:

``Sec. 54G. Clean renewable water supply bonds.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after December 31, 2008.
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Cochran, and Mr. Dodd):
  S. 1372. A bill to provide a vehicle maintenance building to house 
the Smithsonian Institution's Vehicle Maintenance Branch at the 
Suitland Collections Center in Suitland, Maryland; to the Committee on 
Rules and Administration.
  Mr. LEAHY. 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. 1372

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

     SECTION 1. VEHICLE MAINTENANCE BUILDING.

       The Board of Regents of the Smithsonian Institution is 
     authorized to plan, design, and construct a vehicle 
     maintenance building at its Vehicle Maintenance Branch in 
     Suitland, Maryland, to house, maintain, and repair 
     Smithsonian vehicles and transportation equipment.

     SEC. 2. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated $4,000,000 for 
     fiscal year 2010 for the purposes described in section 1.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself and Mr. Cornyn):
  S. 1373. A bill to provide for Federal agencies to develop public 
access policies relating to research conducted by employees of that 
agency; or from funds administered by that agency to the Committee on 
Homeland Security and Governmental Affairs.
  Mr. CORNYN. Mr. President, I rise to introduce the Federal Research 
Public Access Act. I am very pleased to be joined again by my good 
friend and colleague, Senator Joe Lieberman, who has remained dedicated 
to seeing this important legislation passed. This bipartisan bill is 
the same legislation we introduced in the 109th Congress. The purpose 
of this legislation is to ensure American taxpayers' dollars are spent 
wisely, which is even more important now in this time of fiscal 
tension.
  To put things in perspective, the Federal Government spends upwards 
of $55 billion on investments for basic and applied research every 
year. There are approximately 11 departments/agencies that are the 
recipients of these investments, including: the National Institutes of 
Health, National Science Foundation, NASA, the Department of Energy, 
the Department of Defense, and the Department of Agriculture. These 
departments/agencies then distribute the taxpayers' money to fund 
research which is typically conducted by outside researchers working 
for universities, health care systems, and other groups.
  While this research is undoubtedly necessary and is beneficial to 
America, it remains the case that not all Americans are capable of 
experiencing these benefits firsthand. Usually the results of the 
researchers are published in academic journals. Despite the fact that 
the research was paid for by Americans' tax dollars, most citizens are 
unable to attain timely access to the wealth of information that the 
research provides.
  Some Federal agencies, most notably the NIH, have recognized this 
lack of availability and have proceeded to take positive steps in the 
right direction by requiring that those articles based on government-
funded research be easily accessible to the public in a timely manner. 
I am proud to report that the NIH's public access policy has been a 
success over the past few years. By the NIH implementing a 
groundbreaking public access policy, there has been strong progress in 
making the NIH's federally funded research available to the public, and 
has helped to energize this debate.
  Although this has surely been an encouraging and important step 
forward, Senator Lieberman and I believe there is more that can and 
must be done, as

[[Page 16262]]

this is just a small part of the research funded by the Federal 
Government.
  With that in mind, Senator Lieberman and I find it necessary to 
reintroduce the Federal Research Public Access Act that will build on 
and refine the work done by the NIH and require that the Federal 
Government's leading underwriters of research adopt meaningful public 
access policies. Our legislation provides a simple and practical 
solution to giving the public access to the research it funds.
  Our bill will ask all Federal departments and agencies that invest 
$100 million or more annually in research to develop a public access 
policy. Our goal is to have the results of all government-funded 
research to be disseminated and made available to the largest possible 
audience. By speeding access to this research, we can help promote the 
advancement of science, accelerate the pace of new discoveries and 
innovations, and improve the lives and welfare of people at home and 
abroad.
  Each policy that these departments and agencies develop will require 
that articles resulting from federal funding must be presented in some 
publicly accessible archive within six months of publication. In doing 
so, the American taxpayers will have guaranteed access to the latest 
research, ensuring that they do not have to pay for the same research 
twice--first to conduct it and then again to view the results.
  This simple legislation will provide our government with an 
opportunity to better leverage our investment in research and in turn 
ensure a greater return on that investment. All Americans stand to 
benefit from this bill, including patients diagnosed with a disease who 
will have the ability to use the Internet to read the latest articles 
in their entirety concerning their prognosis, students who will be able 
to find full abundant research as they further their education, or 
researchers who will have their findings more broadly evaluated which 
will lead to further discovery and innovation.
  While a comprehensive competitiveness agenda is still a work-in-
progress, this legislation is good step forward. Providing public 
access to cutting-edge scientific information is one way we can 
encourage public interest in these fields and help accelerate the pace 
of discovery and innovation. In promoting this legislation, I hope to 
guarantee that students, researchers, and every American can access the 
published results of the research they funded.
                                 ______
                                 
      By Mr. ROCKEFELLER:
  S. 1377. A bill provide for an automatic increase in the federal 
matching rate for the Medicaid program during periods of national 
economic downturn to help States cope with increases in Medicaid costs; 
to the Committee on Finance.
  Mr. ROCKEFELLER. Mr. President, I rise today to introduce legislation 
that will guarantee that Medicaid remains available as a critical 
safety-net for working families in the event of another economic 
downturn. Medicaid is consistently the first program slated for cuts 
during a State budget crisis. My legislation would establish an 
automatic trigger for a temporary FMAP increase so that state Medicaid 
assistance becomes available in a timely and targeted manner during 
significant economic challenges.
  State cutbacks during the 2001-2003 recession eliminated public 
health coverage for more than one million Americans. According to the 
Kaiser Commission on Medicaid and the Uninsured, between fiscal years 
2002 and 2005, the loss of revenue led all 50 States to reduce Medicaid 
provider payment rates and implement prescription drug cost controls, 
38 States to reduce Medicaid eligibility and 34 States to reduce 
benefits. Many more Americans would have lost coverage if Congress had 
not provided states with $20 billion in Federal aid in 2003.
  Now, once again, the country is facing economic challenges unlike 
anything else we have faced since the Great Depression. Fortunately, 
the American Recovery and Reinvestment Act, ARRA, included $87 billion 
in Federal Medicaid relief for States. It is estimated that through 
this temporary FMAP increase, my State of West Virginia will receive 
nearly $450 million in Federal funding over the next 2 years to help 
meet the existing and growing enrollment needs in Medicaid. This 
temporary FMAP increase will protect the health care coverage of nearly 
400,000 West Virginians, and approximately 58 million Americans, as 
this country works to pull itself out of the current economic 
recession.
  After the last economic downturn, I joined a bipartisan group of my 
colleagues in requesting that the Government Accountability Office, 
GAO, study and report on options to protect Medicaid during future 
recessions. In response to this request, the GAO issued a report GAO-
07-97, entitled Medicaid: Strategies to Help States Address Increased 
Expenditures during Economic Downturn and developed a State and local 
government model that can simulate the fiscal outcomes for this sector 
in the aggregate for several decades into the future.
  The legislation I am introducing today is based on the findings of 
this GAO study. As we have seen in the past two recessions, waiting for 
Congress to act to provide necessary Federal Medicaid relief results in 
harmful delays in families getting the assistance they need. I believe 
that there should be an automatic economic trigger for State fiscal 
relief--independent of Congressional intervention--during future 
recessions. My legislation would create such a trigger for a temporary 
FMAP increase.
  State fiscal relief would become available when the average 
unemployment rate has increased by at least 10 percent in at least 23 
States. This type of automatic trigger would provide states with the 
timely, targeted, and temporary Federal Medicaid assistance that they 
need in the face of a significant economic downturn. More importantly, 
it would help Americans maintain access to health care in tough times.
  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. 1377

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

     SECTION 1. AUTOMATIC INCREASE IN THE FEDERAL MEDICAL 
                   ASSISTANCE PERCENTAGE DURING PERIODS OF 
                   NATIONAL ECONOMIC DOWNTURN.

       (a) National Economic Downturn Assistance FMAP.--
       (1) In general.--Section 1905 of the Social Security Act 
     (42 U.S.C. 1396d) is amended--
       (A) in subsection (b), in the first sentence--
       (i) by striking ``and (4)'' and inserting ``(4)''; and
       (ii) by inserting ``and (5) with respect to each fiscal 
     year quarter other than the first quarter of a national 
     economic downturn assistance period described in subsection 
     (y)(1), the Federal medical assistance percentage for any 
     State described in subsection (y)(2) shall be equal to the 
     national economic downturn assistance FMAP determined for the 
     State for the quarter under subsection (y)(3)'' before the 
     period; and
       (B) by adding at the end the following:
       ``(y) National Economic Downturn Assistance FMAP.--For 
     purposes of clause (5) of the first sentence of subsection 
     (b):
       ``(1) National economic downturn assistance period.--A 
     national economic downturn assistance period described in 
     this paragraph--
       ``(A) begins with the first fiscal year quarter for which 
     the Secretary determines that for at least 23 States, the 
     rolling average unemployment rate for that quarter has 
     increased by at least 10 percent over the corresponding 
     quarter for the most recent preceding 12-month period for 
     which data are available (in this subsection referred to as 
     the `trigger quarter'); and
       ``(B) ends with the first succeeding fiscal year quarter 
     for which the Secretary determines that less than 23 States 
     have a rolling average unemployment rate for that quarter 
     with an increase of at least 10 percent over the 
     corresponding quarter for the most recent preceding 12-month 
     period for which data are available.
       ``(2) Eligible state.--A State described in this paragraph 
     is a State for which the Secretary determines that the 
     rolling average unemployment rate for the State for any 
     quarter occurring during a national economic downturn 
     assistance period described in paragraph (1) has increased 
     over the corresponding quarter for the most recent preceding 
     12-month period for which data are available.
       ``(3) Determination of national economic downturn 
     assistance fmap.--
       ``(A) In general.--The national economic downturn 
     assistance FMAP for a fiscal year

[[Page 16263]]

     quarter determined with respect to a State under this 
     paragraph is equal to the Federal medical assistance 
     percentage for the State for that quarter increased by the 
     number of percentage points determined by--
       ``(i) dividing--

       ``(I) the Medicaid additional unemployed increased cost 
     amount determined under subparagraph (B) for the quarter; by
       ``(II) the State's total Medicaid quarterly spending amount 
     determined under subparagraph (C) for the quarter; and

       ``(ii) multiplying the quotient determined under clause (i) 
     by 100.
       ``(B) Medicaid additional unemployed increased cost 
     amount.--For purposes of subparagraph (A)(i)(I), the Medicaid 
     additional unemployed increased cost amount determined under 
     this subparagraph with respect to a State and a quarter is 
     the product of the following:
       ``(i) State increase in rolling average number of 
     unemployed individuals from the base quarter of 
     unemployment.--

       ``(I) In general.--The amount determined by subtracting the 
     rolling average number of unemployed individuals in the State 
     for the base unemployment quarter for the State determined 
     under subclause (II) from the rolling average number of 
     unemployed individuals in the State for the quarter.
       ``(II) Base unemployment quarter defined.--

       ``(aa) In general.--For purposes of subclause (I), except 
     as provided in item (bb), the base quarter for a State is the 
     quarter with the lowest rolling average number of unemployed 
     individuals in the State in the 12-month period preceding the 
     trigger quarter for a national economic downturn assistance 
     period described in paragraph (1).
       ``(bb) Exception.--If the rolling average number of 
     unemployed individuals in a State for a quarter occurring 
     during a national economic downturn assistance period 
     described in paragraph (1) is less than the rolling average 
     number of unemployed individuals in the State for the base 
     quarter determined under item (aa), that quarter shall be 
     treated as the base quarter for the State for such national 
     economic downturn assistance period.
       ``(ii) National average amount of additional federal 
     medicaid spending per additional unemployed individual.--In 
     the case of--

       ``(I) a calendar quarter occurring in fiscal year 2012, 
     $350; and
       ``(II) a calendar quarter occurring in any succeeding 
     fiscal year, the amount applicable under this clause for 
     calendar quarters occurring during the preceding fiscal year, 
     increased by the annual percentage increase in the medical 
     care component of the consumer price index for all urban 
     consumers (U.S. city average), as rounded up in an 
     appropriate manner.

       ``(iii) State nondisabled, nonelderly adults and children 
     medicaid spending index.--

       ``(I) In general.--With respect to a State, the quotient 
     (not to exceed 1.00) of--

       ``(aa) the State expenditure per person in poverty amount 
     determined under subclause (II); divided by--
       ``(bb) the National expenditure per person in poverty 
     amount determined under subclause (III).

       ``(II) State expenditure per person in poverty amount.--For 
     purposes of subclause (I)(aa), the State expenditure per 
     person in poverty amount is the quotient of--

       ``(aa) the total amount of annual expenditures by the State 
     for providing medical assistance under the State plan to 
     nondisabled, nonelderly adults and children; divided by
       ``(bb) the total number of nonelderly adults and children 
     in poverty who reside in the State, as determined under 
     paragraph (4)(A).

       ``(III) National expenditure per person in poverty 
     amount.--For purposes of subclause (I)(bb), the National 
     expenditure per person in poverty amount is the quotient of--

       ``(aa) the sum of the total amounts determined under 
     subclause (II)(aa) for all States; divided by
       ``(bb) the sum of the total amounts determined under 
     subclause (II)(bb) for all States.
       ``(C) State's total medicaid quarterly spending amount.--
     For purposes of subparagraph (A)(i)(II), the State's total 
     Medicaid quarterly spending amount determined under this 
     subparagraph with respect to a State and a quarter is the 
     amount equal to--
       ``(i) the total amount of expenditures by the State for 
     providing medical assistance under the State plan to all 
     individuals enrolled in the plan for the most recent fiscal 
     year for which data is available; divided by
       ``(ii) 4.
       ``(4) Data.--In making the determinations required under 
     this subsection, the Secretary shall use, in addition to the 
     most recent available data from the Bureau of Labor 
     Statistics Local Area Unemployment Statistics for each State 
     referred to in paragraph (5), the most recently available--
       ``(A) data from the Bureau of the Census with respect to 
     the number of nonelderly adults and children who reside in a 
     State described in paragraph (2) with family income below the 
     poverty line (as defined in section 2110(c)(5)) applicable to 
     a family of the size involved, (or, if the Secretary 
     determines it appropriate, a multiyear average of such data);
       ``(B) data reported to the Secretary by a State described 
     in paragraph (2) with respect to expenditures for medical 
     assistance under the State plan under this title for 
     nondisabled, nonelderly adults and children; and
       ``(C) econometric studies of the responsiveness of Medicaid 
     enrollments and spending to changes in rolling average 
     unemployment rates and other factors, including State 
     spending on certain Medicaid populations.
       ``(5) Definition of `rolling average number of unemployed 
     individuals', `rolling average unemployment rate'.--In this 
     subsection, the term--
       ``(A) `rolling average number of unemployed individuals' 
     means, with respect to a calendar quarter and a State, the 
     average of the 12 most recent months of seasonally adjusted 
     unemployment data for each State;
       ``(B) `rolling average unemployment rate' means, with 
     respect to a calendar quarter and a State, the average of the 
     12 most recent monthly unemployment rates for the State; and
       ``(C) `monthly unemployment rate' means, with respect to a 
     State, the quotient of--
       ``(i) the monthly seasonally adjusted number of unemployed 
     individuals for the State; divided by
       ``(ii) the monthly seasonally adjusted number of the labor 
     force for the State,

     using the most recent data available from the Bureau of Labor 
     Statistics Local Area Unemployment Statistics for each State.
       ``(6) Increase in cap on payments to territories.--With 
     respect to any fiscal year quarter for which the national 
     economic downturn assistance Federal medical assistance 
     percentage applies to Puerto Rico, the Virgin Islands, Guam, 
     the Northern Mariana Islands, or American Samoa, the amounts 
     otherwise determined for such commonwealth or territory under 
     subsections (f) and (g) of section 1108 shall be increased by 
     such percentage of such amounts as the Secretary determines 
     is equal to twice the average increase in the national 
     economic downturn assistance FMAP determined for all States 
     described in paragraph (2) for the quarter.
       ``(7) Scope of application.--The national economic downturn 
     assistance FMAP shall only apply for purposes of payments 
     under section 1903 for a quarter and shall not apply with 
     respect to--
       ``(A) disproportionate share hospital payments described in 
     section 1923;
       ``(B) payments under title IV or XXI; or
       ``(C) any payments under this title that are based on the 
     enhanced FMAP described in section 2105(b).
       ``(8) Additional requirement for certain states.--In the 
     case of a State described in paragraph (2) that requires 
     political subdivisions within the State to contribute toward 
     the non-Federal share of expenditures required under section 
     1902(a)(2), the State shall not require that such political 
     subdivisions pay for any fiscal year quarters occurring 
     during a national economic downturn assistance period a 
     greater percentage of the non-Federal share of such 
     expenditures, or a greater percentage of the non-Federal 
     share of payments under section 1923, than the respective 
     percentage that would have been required by the State under 
     State law in effect on the first day of the fiscal year 
     quarter occurring immediately prior to the trigger quarter 
     for the period.''.
       (2) Effective date; no retroactive application.--The 
     amendments made by paragraph (1) take effect on January 1, 
     2012. In no event may a State receive a payment on the basis 
     of the national economic downturn assistance Federal medical 
     assistance percentage determined for the State under section 
     1905(y)(3) of the Social Security Act for amounts expended by 
     the State prior to January 1, 2012.
       (b) GAO Study and Report.--
       (1) Study.--The Comptroller General of the United States 
     shall analyze the previous periods of national economic 
     downturn, including the most recent such period in effect as 
     of the date of enactment of this Act, and the past and 
     projected effects of temporary increases in the Federal 
     medical assistance percentage under the Medicaid program with 
     respect to such periods.
       (2) Report.--Not later than April 1, 2011, the Comptroller 
     General of the United States shall submit a report to 
     Congress on the results of the analysis conducted under 
     paragraph (1). Such report shall include such recommendations 
     as the Comptroller General determines appropriate for 
     modifying the national economic downturn assistance FMAP 
     established under section 1905(y) of the Social Security Act 
     (as added by subsection (a)) to improve the effectiveness of 
     the application of such percentage in addressing the needs of 
     States during periods of national economic downturn, 
     including recommendations for--
       (A) improvements to the factors that begin and end the 
     application of such percentage;
       (B) how the determination of such percentage could be 
     adjusted to address State and regional economic variations 
     during such periods; and
       (C) how the determination of such percentage could be 
     adjusted to be more responsive to actual Medicaid costs 
     incurred by States during such periods, as well as to the 
     effects of any other specific economic indicators that the 
     Comptroller General determines appropriate.

[[Page 16264]]


                                 ______
                                 
      By Mr. GRASSLEY:
  S. 1381. A bill to amend the Internal Revenue Code of 1986 to provide 
additional tax relief for small businesses, and for other purposes; to 
the Committee on Finance.
  Mr. GRASSLEY. Mr. President, President Obama, in his press briefing 
this past Tuesday, June 23, 2009, made the following statement 
regarding his assessment of the first four months of the American 
Recovery and Reinvestment Act: ``I am not satisfied with the progress 
that we've made.'' I could not agree more with President Obama's 
assessment. Thus far, the $787 billion American Recovery and 
Reinvestment Act has fallen short on virtually every one of its 
advertised effects.
  In the abbreviated debate leading up to the consideration of this 
bill, we constantly heard the mantra from my friends on the other side: 
JOBS, JOBS, JOBS! This stimulus bill was supposed to create jobs, jobs, 
jobs, but in the four months since the bill's passage, there are still 
no jobs in sight.
  The architects of this bill made several bold claims in projecting 
the job effects of the $787 billion stimulus bill. First, they said 
that its passage would keep the unemployment rate from exceeding 8 
percent. Second, they said it was going to create or save 3 to 4 
million jobs. And third, they said that 90 percent of the new jobs 
created would be in the private sector.
  So far, in all three of these areas, the actual effects of the 
stimulus bill have not lived up to the hype. Let us examine each of 
these areas one by one.
  First, the stimulus bill was supposed to keep unemployment at or 
below 8 percent. In fact, the administration projected that in the 
absence of stimulus, the unemployment rate would peak at around 8.8 
percent. However, four months into this program, the unemployment rate 
stands at 9.4 percent and rising--higher than the administration 
projected it would be in the absence of stimulus.
  Just listen to President Obama's comments from his June 23rd press 
briefing to see which direction the unemployment rate is headed: ``I 
think it's pretty clear now that unemployment will end up going over 10 
percent, if you just look at the pattern, because of the fact that even 
after employers and businesses start investing again and start hiring 
again, typically it takes a while for that employment number to catch 
up with economic recovery. And we're still not at actual recovery yet. 
So I anticipate that this is going to be a difficult, difficult year, a 
difficult period.''
  When asked how high he thought the unemployment rate would go, 
President Obama responded, ``I am not suggesting that I have a crystal 
ball. Since you just threw back at us our last prognosis, let's not 
engage in another one.'' Once again, I have to agree with President 
Obama's assessment.
  As the unemployment rate continues to go up, that means job numbers 
continue to go down, which brings me to my next point: The 
administration projected that the stimulus bill would create--or save--
between 3 and 4 million jobs by the end of 2010. While we've got a long 
way to go before the end of 2010, the prospects of the stimulus bill 
living up to this job creation estimate seem very unlikely. Before we 
look at the actual job numbers for the past few months from the 
Department of Labor, let me discuss the source of the administration's 
projections.
  In January, Christina Romer, who is now Chair of the Council of 
Economic Advisers, and Jared Bernstein, who is now the Chief Economist 
for the Vice President, released a 14-page paper titled ``The Job 
Impact of the American Recovery and Reinvestment Act.''
  In this document, Romer and Bernstein repeatedly asserted that a 
package of the size discussed by the President-Elect would be expected 
to create between three and four million jobs by the end of 2010, which 
would more than meet the President-Elect's goal of creating or saving 3 
million jobs by the end of 2010. In a follow-up report in May, the 
Council of Economic Advisers attempted to explain how the 
administration planned on measuring the number of jobs created or saved 
by the stimulus. This document articulated that all recipients of 
stimulus funds for government investment will be required to provide 
``recipient reports'' estimating the number of jobs retained or created 
directly by the funds.
  Then, to arrive at the total estimate of jobs created or saved by the 
stimulus, the job numbers from the recipient reports will be added to 
the administration's estimate of jobs created or saved through tax 
cuts, State fiscal relief and transfer payments. These estimates will 
be derived from administration-produced multipliers and macro-economic 
modeling.
  Sounds pretty simple, don't you think? Unfortunately, there are some 
problems.
  The first problem is that the most accurate part of these job 
estimates will be from the recipient reports, and since the stimulus 
bill included approximately $271 billion in government investment 
spending, these reporting requirements cover just over a third of the 
$787 billion of stimulus funding.
  While the job estimates from these recipient reports should be an 
accurate representation of actual jobs created by the stimulus, the 
administration even admits that ``there will likely be inconsistencies 
and measurement error across the individual reports.''
  This leads us to the second problem: for the other \2/3\ of the bill, 
in the administration's own words, ``There is no mechanism available 
for collecting data on actual job creation from these parts of the 
Act.'' So, for \2/3\ of the bill, the job estimates are basically going 
to be guesswork from the administration based on mathematical formulas.
  Since President Obama's ``First 100 Days'' address on April 29, 2009, 
we have heard plenty about the 150,000 jobs that have been created or 
saved so far by the stimulus.
  As I have pointed out, it is impossible to verify these numbers with 
any degree of certainty, and the administration can not even give an 
estimate of how many of the 150,000 jobs were created and how many were 
saved.
  What we can verify are the actual job numbers produced on a monthly 
basis by the Department of Labor. According to the Department of Labor, 
in the 3 full months March, April, and May, following the enactment of 
the stimulus bill, the U.S. economy has lost over 1.5 million jobs. In 
the first 5 months of 2009, the U.S. economy has lost 2.9 million jobs. 
These are the painful numbers that really matter.
  As Jared Bernstein, Chief Economist for the Vice President, said on 
June 8, 2009, ``Most importantly from the perspective of American 
families, the nation's employers are still shedding jobs on net.''
  So, the advertised effect of the stimulus on unemployment was clearly 
wrong, and the job claims resulting from the stimulus are unverifiable. 
Now, how about the claim suggesting that 90 percent of the jobs created 
by the stimulus will be in the private sector?
  To be clear, this claim was first made in Romer and Bernstein's 
January report, and the President himself has repeated this assertion. 
Unfortunately, this projection--like the first two--is missing the mark 
by a long shot.
  Let's look at the actual data from the Department of Labor once 
again. In the first three months since the stimulus bill has been the 
law of the land, the private sector has lost nearly 1.6 million jobs. 
In those same 3 months, government payrolls have actually expanded by 
81,000 jobs. Similarly, in the first 5 months of 2009, while the 
private sector has lost over 3 million jobs, the government has gained 
96,000 jobs.
  While I am encouraged to see at least one sector of the economy 
experiencing job gains, I don't expect that the administration's 
projection of 90 percent of stimulus jobs being in the private sector 
will be realized. The administration has promised that 600,000 
additional public sector jobs will be created or saved this summer. 
While an increase of 600,000 government jobs would certainly be a 
positive development if it comes to pass, it does raise concerns as to 
whether the government will be the only winner from the stimulus bill.
  My point today, Mr. President, is not to berate the administration or 
those who voted for this bill.
  My point is, first, to note the conspicuous absence of job gains in 
our

[[Page 16265]]

economy following the stimulus, and second, to bring our focus back to 
the source of 70 percent of net new jobs over the past decade--the 
engine that drives the U.S. economy. Of course, I am talking about 
America's small businesses.
  America's small businesses have been suffering during this recession. 
If you go back to your States frequently, like I do, you'll hear about 
it directly. A few months ago, Senators Landrieu and Snowe held a 
hearing on the credit crunch hitting small business. They found that 
big banks have been cracking down on lending to small businesses.
  Another very good source of answers about the environment of small 
business is found in the monthly survey of small business. This survey 
is published by the National Federation of Independent Business 
``NFIB''.
  NFIB is the largest small business organization. NFIB has been 
conducting these surveys for 35 years.
  NFIB's membership includes hundreds of thousands of small businesses 
all across America. You can find the survey on NFIB's website at http:/
/www.nfib.com/Portals/0/PDF/sbet/sbet200906.pdf. I would encourage 
every member to check out the June 2009 survey.
  The survey shows some extremely disturbing trends. On credit 
availability, small businesses are getting squeezed very hard. The 
availability of loans has fallen off a cliff since late 2007 and is at 
its lowest point since the recession period of 1980 to 1982.
  This credit crunch and other factors have contributed to NFIB's index 
of small business optimism falling well below average. According to the 
survey, small business owners have become extremely pessimistic in the 
last couple of years. What you see here is the attitude of the decision 
makers in small business America.
  Those are the decision makers for businesses that President Obama and 
Congress agree are the businesses most likely to grow or contract jobs. 
This data should concern every policy maker in this town.
  While those two sets of data are bad, it doesn't get any better when 
you look at small business hiring plans. Another question on the survey 
asks the small business owner whether he or she plans to expand or 
contract employment over the next three months. The survey results show 
small business activity contracting tremendously, and the overall small 
business employment numbers tell the same story.
  I must say that the President's recent efforts to increase lending to 
the small business sector are commendable. The center piece of his 
small business plan will allow the federal government to spend up to 
$25 billion to purchase the small-business loans that are now hindering 
community banks and lenders. Unfortunately, that is a drop in a very 
empty bucket.
  Remember, colleagues, that small business accounts for about half of 
the private sector.
  Moreover, the positives that will come to small businesses from this 
relatively small package of loans--which will ultimately have to be 
paid back--will be heavily outweighed by the negative impact of the 
President's proposed tax increases. Helping small businesses get loans 
just to take that money back in the form of tax hikes is not wise.
  I now want to turn to those aforementioned tax hikes on small 
businesses that President Obama and my colleagues on the other side of 
the aisle have proposed. I certainly understand that small business is 
vital to the health of our economy. The President and I agree that 70 
percent of new private sector jobs are created by small businesses.
  However, where we differ is that I believe small businesses' taxes 
should be lowered, not raised, to get our economy back on track. In 
2001 and 2003, Congress enacted bipartisan tax relief designed to 
trigger economic growth and create jobs by reducing the tax burden on 
individuals and small businesses. This included an across-the-board 
income tax reduction, which reduced marginal tax rates for income 
earners of all levels, a reduction of the top dividends and capital 
gains tax rate to 15 percent, and a gradual phaseout of the estate tax.
  Unfortunately, like many of the other provisions enacted in 2001 and 
2003, these tax relief measures are scheduled to expire at the end of 
2010.
  Some have referred to this bipartisan tax relief as ``the Bush tax 
cuts for the wealthy'' and have suggested that the tax relief provided 
for higher-income earners should be allowed to expire. However, this 
tax relief was bipartisan and provides tax relief for all taxpayers. 
The President and my colleagues on the other side of the aisle have 
proposed increasing the top two marginal tax rates from 33 percent and 
35 percent to 36 percent and 39.6 percent, respectively.
  They have also proposed increasing the tax rates on capital gains and 
dividends to 20 percent, and providing for an estate tax rate as high 
as 45 percent and an exemption amount of $3.5 million.
  Also, the President has called for fully reinstating the personal 
exemption phaseout, or PEP for short, and the limitation on itemized 
deductions, which is known as Pease. Under the 2001 tax law, PEP and 
Pease are scheduled to be completely phased out in 2010. However, like 
other provisions in the law, PEP and Pease are scheduled to come back 
in full force in 2011 should Congress fail to take further action.
  With PEP and Pease fully reinstated, individuals in the top two rates 
could see their marginal effective tax rate increased by 20 percent or 
more. For example, a family of four that is in the 33 percent tax 
bracket in 2010 could pay a marginal effective tax-rate of 41 percent 
after 2010--or even more if they had more children--because of PEP and 
Pease.
  Some of my colleagues on the other side of the aisle have defended 
this proposal by claiming they will only raise taxes on ``wealthy'' 
taxpayers who make over $200,000 a year. For the vast majority of 
people who earn less than $200,000, raising taxes on higher earners 
might not sound so bad.
  However, this means that many small businesses will be hit with a 
higher tax bill. These small businesses happen to at least 70 percent 
of all new private sector jobs in the U.S.
  These small businesses that are taxed as sole proprietorships, S 
corporations, and partnerships--including LLCs--whose owners make over 
$200,000, or $250,000 if married, would get hit with the President's 
proposal to raise the top two marginal tax rates.
  In addition, there are just under 2 million C corporations that are 
not publicly traded, and all C corporations are subject to double 
taxation. To the extent these C corporations' owners that make over 
$200,000, or $250,000 if married, pay themselves a salary, they would 
get hit with the tax increase on the top two marginal tax rates 
proposed by the President.
  Also, any owners of C corporations that receive dividends or realize 
capital gains and make over $200,000, or $250,000 if married, would pay 
a 20 percent rate on these dividends and capital gains after 2010 under 
the President's tax hike proposals, instead of paying the current law 
rate of 15 percent.
  According to NFIB survey data, 50 percent of owners of small 
businesses that employ 20-249 workers would fall in the top two 
brackets. According to the Small Business Administration, about \2/3\ 
of the Nation's small business workers are employed by small businesses 
with 20-500 employees.
  Do we really want to raise taxes on these small businesses that 
create new jobs and employ \2/3\ of all small business workers?
  With these small businesses already suffering from the credit crunch, 
do we really think it's wise to hit them with the double-whammy of a 20 
percent increase in their marginal tax rates?
  Newly developed data from the Joint Committee on Taxation 
demonstrates that 55 percent of the tax from the higher rates will be 
borne by small business owners with income over $250,000. This is a 
conservative number, because it doesn't include flow-through business 
owners making between $200,000 and $250,000 that will also be hit with 
the Budget's proposed tax hikes.

[[Page 16266]]

  If the proponents of the marginal rate increase on small business 
owners agree that a 20 percent tax increase for half of the small 
businesses that employ two-thirds of all small business workers is not 
wise, then they should either oppose these tax increases, or present 
data that show a different result.
  I will also fight for a lower estate tax rate and a higher estate tax 
exemption amount to protect successful small businesses and farmers. In 
a time when many businesses are struggling to stay afloat, it does not 
make sense to impose additional burdens on them by raising their taxes.
  Odds are, they will cut spending. They will cancel orders for new 
equipment, cut health insurance for their employees, stop hiring, and 
lay people off. Instead of seeking to raise taxes on those who create 
jobs in our economy, policies need to focus on reducing excessive tax 
and regulatory barriers that stand in the way of small businesses and 
the private sector making investments, expanding production, and 
creating sustainable jobs.
  As the current ranking member of the tax writing Finance Committee, 
you can be sure that I will continue to fight to prevent a dramatic tax 
increase on our nation's job engine--the small businesses of America. 
This includes working to protect small businesses from higher marginal 
tax rates, an increase in the capital gains and dividends tax rate, and 
an increase in the unfair estate tax rate that will penalize the 
success of small businesses and farmers who would like to pass on their 
gains to the next generation.
  In fact, today I have introduced a bill to lower taxes on these job-
creating small businesses.
  My bill contains a number of provisions that will leave more money in 
the hands of these small businesses so that these businesses can hire 
more workers, continue to pay the salaries of their current employees, 
and make additional investments in these businesses.
  For instance, my bill would increase the amount of capital 
expenditures that small businesses can expense from $250,000 to 
$500,000. Also, my bill would allow more small C corporations to 
benefit from the lower graduated tax rates for smaller C corporations.
  Another provision takes the general business credits, which are 
listed in section 38, out of the Alternative Minimum Tax, AMT, for 
those sole proprietorships, flow-throughs and non-publicly traded C-
corps with 50 million or less in annual gross receipts. This provision 
amends section 39 to extend the 1-year carryback for general business 
credits to a 5-year carryback. This applies to general business credits 
for those sole proprietorships, flow-through entities and non-publicly 
traded C-corps with 50 million or less in annual gross receipts.
  Another provision in my bill amends section 199 of the Internal 
Revenue Code, which contains the deduction for manufacturing, to 
provide a 20 percent deduction for flow-through business income for all 
small businesses, which are defined as flow-through entities with 50 
million or less in annual gross receipts. Another provision in my bill 
deals with the situation where a C corporation becomes an S 
corporation. Under current law, there is no tax on built-in gains of 
assets within a C corporation that converts to an S corporation if 
those assets with built-in gain are held for 10 years by the S 
corporation. The stimulus bill reduced this 10-year period down to 7 
years for sales of assets with built-in gain that occur within 2009 and 
2010.
  My provision reduces this time period down to 5 years for all S 
corporations that have converted from a C corporation.
  Another provision in my bill expands the net operating loss provision 
contained in the stimulus bill. Current law provides that net operating 
losses from any size business may be carried back 2 taxable years 
before the year that the loss arises and carried forward 20 years. The 
stimulus bill amended the carryback provision by expanding the 
carryback from 2 years to 5 years if a small business had gross 
receipts of $15 million or less.
  This provision expands that $15 million gross receipt requirement to 
$50 million in gross receipts so that more small businesses can qualify 
for this benefit.
  Another provision in my bill amends section 1202 of the Internal 
Revenue Code to eliminate the tax on capital gains for certain start-up 
C corporations. The stimulus bill reduced the capital gains tax to 
approximately 7 percent on stock qualifying under 1202. However, 
President Obama has called for eliminating, not simply reducing, the 
tax on capital gains for these start-up businesses, and that is exactly 
what my provision would do.
  The final provision in my bill permits a deduction for payments made 
under the Self-Employment Contribution Act, or SECA, at one-hundred 
percent of health insurance premiums that are paid by those who are 
self-employed.
  We all want to see the job numbers from the Department of Labor 
moving in a positive direction. We all want to see the unemployment 
rate plummet. I firmly believe that the best way for us to do that is 
to prime the job-creating engine of our economy, which is small 
businesses. Furthermore, increasing taxes on small businesses as 
President Obama has proposed will destroy even more jobs.
  My small business bill, if enacted, will lead to many new jobs. As 
opposed to the jobs President Obama argues that the stimulus bill has 
saved while our economy has been hemorrhaging jobs, my bill will create 
countable, verifiable, private sector jobs that will put people to work 
and get the economy moving in the right direction again.
  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. 1381

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Tax Relief Act of 2009''.
       (b) Reference.--Except as otherwise expressly provided, 
     whenever in this Act an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Internal Revenue Code of 
     1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

     SEC. 2. PERMANENT INCREASE IN LIMITATIONS ON EXPENSING OF 
                   CERTAIN DEPRECIABLE BUSINESS ASSETS.

       (a) In General.--Subsection (b) of section 179 (relating to 
     limitations) is amended--
       (1) by striking ``$25,000'' and all that follows in 
     paragraph (1) and inserting ``$500,000.'',
       (2) by striking``$200,000'' and all that follows in 
     paragraph (2) and inserting ``$2,000,000'',
       (3) by striking ``after 2007 and before 2011, the $120,000 
     and $500,000'' in paragraph (5)(A) and inserting ``after 
     2009, the $500,000 and the $2,000,000'',
       (4) by striking ``2006'' in paragraph (5)(A)(ii) and 
     inserting ``2008'', and
       (5) by striking paragraph (7).
       (b) Permanent Expensing of Computer Software.--Section 
     179(d)(1)(A)(ii) of the Internal Revenue Code of 1986 
     (defining section 179 property) is amended by striking ``and 
     before 2011''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 3. MODIFICATION OF CORPORATE INCOME TAX RATES.

       (a) In General.--Paragraph (1) of section 11(b) (relating 
     to amount of tax) is amended to read as follows:
       ``(1) In general.--The amount of the tax imposed by 
     subsection (a) shall be the sum of--
       ``(A) 15 percent of so much of the taxable income as does 
     not exceed $1,000,000,
       ``(B) 25 percent of so much of the taxable income as 
     exceeds $1,000,000 but does not exceed $1,500,000,
       ``(C) 34 percent of so much of the taxable income as 
     exceeds $1,500,000 but does not exceed $10,000,000, and
       ``(D) 35 percent of so much of the taxable income as 
     exceeds $10,000,000.

     In the case of a corporation which has taxable income in 
     excess of $2,000,000 for any taxable year, the amount of tax 
     determined under the preceding sentence for such taxable year 
     shall be increased by the lesser of (i) 5 percent of such 
     excess, or (ii) $235,000. In the case of a corporation which 
     has taxable income in excess of $15,000,000, the amount of 
     the tax determined under the foregoing provisions of this 
     paragraph shall be increased

[[Page 16267]]

     by an additional amount equal to the lesser of (i) 3 percent 
     of such excess, or (ii) $100,000.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 4. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL BUSINESSES 
                   NOT SUBJECT TO ALTERNATIVE MINIMUM TAX.

       (a) In General.--Section 38(c) (relating to limitation 
     based on amount of tax) is amended by redesignating paragraph 
     (5) as paragraph (6) and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) Special rules for eligible small business credits.--
       ``(A) In general.--In the case of eligible small business 
     credits--
       ``(i) this section and section 39 shall be applied 
     separately with respect to such credits, and
       ``(ii) in applying paragraph (1) to such credits--

       ``(I) the tentative minimum tax shall be treated as being 
     zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the eligible 
     small business credits).

       ``(B) Eligible small business credits.--For purposes of 
     this subsection, the term `eligible small business credits' 
     means the sum of the credits listed in subsection (b) which 
     are determined for the taxable year with respect to an 
     eligible small business. Such credits shall not be taken into 
     account under paragraph (2), (3), or (4).
       ``(C) Eligible small business.--For purposes of this 
     subsection, the term `eligible small business' means, with 
     respect to any taxable year_
       ``(i) a corporation the stock of which is not publicly 
     traded, or
       ``(ii) a partnership,

     which meets the gross receipts test of section 448(c) (by 
     substituting `$50,000,000' for `$5,000,000' each place it 
     appears) for the taxable year (or, in the case of a sole 
     proprietorship, which would meet the test if such 
     proprietorship were a corporation).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to credits determined in taxable years beginning 
     after December 31, 2009, and to carrybacks of such credits.

     SEC. 5. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL BUSINESSES 
                   CARRIED BACK 5 YEARS.

       (a) In General.--Section 39(a) (relating to carryback and 
     carryforward of unused credits) is amended by adding at the 
     end the following new paragraph:
       ``(4) 5-year carryback for eligible small business 
     credits.--
       ``(A) In general.--Notwithstanding subsection (d), in the 
     case of eligible small business credits--
       ``(i) this section shall be applied separately from the 
     business credit (other than the eligible small business 
     credits) or the marginal oil and gas well production credit,
       ``(ii) paragraph (1) shall be applied by substituting `each 
     of the 5 taxable years' for `the taxable year' in 
     subparagraph (A) thereof, and
       ``(iii) paragraph (2) shall be applied--

       ``(I) by substituting `25 taxable years' for `21 taxable 
     years' in subparagraph (A) thereof, and
       ``(II) by substituting `24 taxable years' for `20 taxable 
     years' in subparagraph (B) thereof.

       ``(B) Eligible small business credits.--For purposes of 
     this subsection, the term `eligible small business credits' 
     has the meaning given such term by section 38(c)(5)(B).''.
       (b) Conforming Amendment.--Section 39(a)(3)(A) is amended 
     by inserting ``or the eligible small business credits'' after 
     ``credit)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to credits arising in taxable years beginning 
     after December 31, 2009.

     SEC. 6. DEDUCTION FOR ELIGIBLE SMALL BUSINESS INCOME.

       (a) In General.--Paragraph (1) of section 199(a) is amended 
     to read as follows:
       ``(1) In general.--There shall be allowed as a deduction an 
     amount equal to the sum of--
       ``(A) 9 percent of the lesser of--
       ``(i) the qualified production activities income of the 
     taxpayer for the taxable year, or
       ``(ii) taxable income (determined without regard to this 
     section) for the taxable year, and
       ``(B) in the case of an eligible small business for any 
     taxable year beginning after 2009, 20 percent of the lesser 
     of--
       ``(i) the eligible small business income of the taxpayer 
     for the taxable year, or
       ``(ii) taxable income (determined without regard to this 
     section) for the taxable year.''.
       (b) Eligible Small Business; Eligible Small Business 
     Income.--Section 199 is amended by adding at the end the 
     following new subsection:
       ``(e) Eligible Small Business; Eligible Small Business 
     Income.--
       ``(1) Eligible small business.--For purposes of this 
     section, the term `eligible small business' has the meaning 
     given such term by section 38(c)(5)(C).
       ``(2) Eligible small business income.--
       ``(A) In general.--For purposes of this section, the term 
     `eligible small business income' means the excess of--
       ``(i) the income of the eligible small business which--

       ``(I) is attributable to the actual conduct of a trade or 
     business,
       ``(II) is income from sources within the United States 
     (within the meaning of section 861), and
       ``(III) is not passive income (as defined in section 
     904(d)(2)(B)), over

       ``(ii) the sum of--

       ``(I) the cost of goods sold that are allocable to such 
     income, and
       ``(II) other expenses, losses, or deductions (other than 
     the deduction allowed under this section), which are properly 
     allocable to such income.

       ``(B) Exceptions.--The following shall not be treated as 
     income of an eligible small business for purposes of 
     subparagraph (A):
       ``(i) Any income which is attributable to any property 
     described in section 1400N(p)(3).
       ``(ii) Any income which is attributable to the ownership or 
     management of any professional sports team.
       ``(iii) Any income which is attributable to a trade or 
     business described in subparagraph (B) of section 1202(e)(3).
       ``(iv) Any income which is attributable to any property 
     with respect to which records are required to be maintained 
     under section 2257 of title 18, United States Code.
       ``(C) Allocation rules, etc.--Rules similar to the rules of 
     paragraphs (2), (3), (4)(D), and (7) of subsection (c) shall 
     apply for purposes of this paragraph.
       ``(3) Special rules.--Except as otherwise provided by the 
     Secretary, rules similar to the rules of subsection (d) shall 
     apply for purposes of this subsection.''.
       (c) Conforming Amendment.--Section 199(a)(2) is amended by 
     striking ``paragraph (1)'' and inserting ``paragraph 
     (1)(A)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 7. REDUCTION IN RECOGNITION PERIOD FOR BUILT-IN GAINS 
                   TAX.

       (a) In General.--Paragraph (7) of section 1374(d) (relating 
     to definitions and special rules) is amended to read as 
     follows:
       ``(7) Recognition period.--
       ``(A) In general.--The term `recognition period' means the 
     5-year period beginning with the 1st day of the 1st taxable 
     year for which the corporation was an S corporation.
       ``(B) Special rule for distributions to shareholders.--For 
     purposes of applying this section to any amount includible in 
     income by reason of distributions to shareholders pursuant to 
     section 593(e), subparagraph (A) shall be applied without 
     regard to the phrase `10-year'.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 8. CARRYBACK OF NET OPERATING LOSSES OF CERTAIN SMALL 
                   BUSINESSES ALLOWED FOR 5 YEARS.

       Subparagraph (H) of section 172(b)(1) is amended to read as 
     follows:
       ``(H) 5-year carryback of losses of certain small 
     businesses.--
       ``(i) In general.--In the case of a net operating loss with 
     respect to any eligible small business for any taxable year 
     ending after 2008, or, if applicable, following the taxable 
     year with respect to which an election was made by such 
     eligible small business under this subparagraph (as in effect 
     before the date of the enactment of the Small Business Tax 
     Relief Act of 2009)--

       ``(I) subparagraph (A)(i) shall be applied by substituting 
     `5' for `2',
       ``(II) subparagraph (E)(ii) shall be applied by 
     substituting `4' for `2', and
       ``(III) subparagraph (F) shall not apply.

       ``(ii) Eligible small business.--For purposes of clause 
     (i), the term `eligible small business' has the meaning given 
     such term by section 38(c)(5)(C).''.

     SEC. 9. MODIFICATIONS TO EXCLUSION FOR GAIN FROM CERTAIN 
                   SMALL BUSINESS STOCK.

       (a) Temporary Increase in Exclusion.--Paragraph (3) of 
     section 1202(a) (relating to exclusion) is amended to read as 
     follows:
       ``(3) Special rules for stock acquired before 2011.--In the 
     case of qualified small business stock--
       ``(A) acquired after the date of the American Recovery and 
     Reinvestment Tax Act of 2009 and on or before the date of the 
     enactment of the Small Business Tax Relief Act of 2009--
       ``(i) paragraph (1) shall be applied by substituting `75 
     percent' for `50 percent', and
       ``(ii) paragraph (2) shall not apply, and
       ``(B) acquired after the date of the enactment of the Small 
     Business Tax Relief Act of 2009 and before January 1, 2011--
       ``(i) paragraph (1) shall be applied by substituting `100 
     percent' for `50 percent',
       ``(ii) paragraph (2) shall not apply, and
       ``(iii) section 57(a)(7) shall not apply.''.
       (b) Increase in Limitation.--
       (1) In general.--Subparagraph (A) of section 1202(b)(1) 
     (relating to per-issuer limitation on taxpayer's eligible 
     gain) is amended by striking ``$10,000,000'' and inserting 
     ``$15,000,000''.
       (2) Married individuals.--Subparagraph (A) of section 
     1202(b)(3) (relating to treatment of married individuals) is 
     amended by

[[Page 16268]]

     striking ``paragraph (1)(A) shall be applied by substituting 
     `$5,000,000' for `$10,000,000''' and inserting ``the amount 
     under paragraph (1)(A) shall be half of the amount otherwise 
     in effect''.
       (c) Modification of Definition of Qualified Small 
     Business.--Section 1202(d)(1) (defining qualified small 
     business) is amended by striking ``$50,000,000'' each place 
     it appears and inserting ``$75,000,000''.
       (d) Inflation Adjustments.--Section 1202 (relating to 
     partial exclusion for gain from certain small business stock) 
     is amended by redesignating subsection (k) as subsection (l) 
     and by inserting after subsection (j) the following new 
     subsection:
       ``(k) Inflation Adjustment.--
       ``(1) In general.--In the case of any taxable year 
     beginning after 2009, the $15,000,000 amount in subsection 
     (b)(1)(A), the $75,000,000 amount in subsection (d)(1)(A), 
     and the $75,000,000 amount in subsection (d)(1)(B) shall each 
     be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost of living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2008' 
     for `calendar year 1992' in subparagraph (B) thereof.
       ``(2) Rounding.--If any amount as adjusted under paragraph 
     (1) is not a multiple of $1,000,000 such amount shall be 
     rounded to the next lowest multiple of $1,000,000.''.
       (e) Effective Dates.--
       (1) Exclusion; qualified small business.--The amendments 
     made by subsections (a) and (c) shall apply to stock acquired 
     after the date of the enactment of this Act.
       (2) Limitation; inflation adjustment.--The amendments made 
     by subsections (b) and (d) shall apply to taxable years 
     ending after the date of the enactment of this Act.

     SEC. 10. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING 
                   SELF-EMPLOYMENT TAXES.

       (a) In General.--Section 162(l) (relating to special rules 
     for health insurance costs of self-employed individuals) is 
     amended by striking paragraph (4) and by redesignating 
     paragraph (5) as paragraph (4).
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mr. DODD:
  S. 1382. A bill to improve and expand the Peace Corps. for the 21st 
century, and for other purposes; to the Committee on Foreign Relations.
  Mr. DODD. Mr. President, I rise today to introduce a piece of 
legislation--and not just any old piece of legislation, I might add, 
because this organization I am about to talk about had as much to do 
with the formation of who I am as my family did: the Peace Corps 
Improvement and Expansion Act of 2009.
  I would point out that some 35 years ago a young man from 
Massachusetts and an equally young man from Connecticut were elected to 
the House of Representatives. A fellow by the name of Paul Tsongas and 
myself were the first two former Peace Corps volunteers to be elected 
to the Congress. Paul Tsongas went on to be elected to the Senate, I 
think, in 1978. He is no longer with us. He died tragically a number of 
years ago. His wife Niki is now a Member of the House of 
Representatives from Massachusetts.
  Paul Tsongas and I were great friends and enjoyed sharing stories 
with each other for many years about our respective Peace Corps 
experiences.
  Paul Tsongas served in Ethiopia--one of the earliest programs, if not 
the earliest program, in that country. I served in the Dominican 
Republic from 1966 through 1968 as a Peace Corps volunteer up in the 
mountains of that country, not far from the Haitian border. The Peace 
Corps experience for me was as formative, as I said at the outset of 
these remarks, as anything else in my life, with the exception of my 
own family; growing up with wonderful five brothers and sisters in 
Connecticut and a family who was deeply involved in public service.
  The Peace Corps experience was formative, and so over the years, I 
have expressed a great deal of interest in the organization and the 
various administrations that have served in Washington since the late 
1970s through the 1980s and 1990s and this decade. So my interest in 
the organization is strong.
  The contribution of the Peace Corps has been remarkable over the 
years. It is one of the few Federal agencies that enjoys almost 
universal support from the American public. It has had greater moments 
of celebration and public awareness than at others, but it has been 
consistent in the minds of most Americans. This organization sends 
mostly younger Americans, but not always younger Americans, to serve in 
underprivileged nations, nations that are struggling, including Third 
World nations, to make a difference in the lives of others. It has been 
a unique contribution to the world.
  There are many other volunteer organizations--some in our own 
country, some in other nations--but I think the Peace Corps holds a 
special place in the minds not only of our own fellow citizenry but 
also millions of people around the world who have come to know those 
Peace Corps volunteers--as I said, mostly younger people but not always 
younger people--who serve and spend 2 years working with them in their 
villages or urban areas, not only making a difference in their daily 
lives but also getting to know them, getting to know us. People who 
would never have the chance to come to America got to know America 
because they got to know that young American who was learning their 
language and spending time with them and making a contribution to 
improve their lives.
  Well, for 48 years, the Peace Corps has stood as a uniquely American 
institution. I know other nations make contributions. This is not a 
unique idea for ourselves. But what other great nation would send its 
people abroad not to extend its power or intimidate its adversaries, 
not to kill or be killed, but to dig, to teach, to empower, and ask for 
nothing in return. For 48 years, those men and women--180,000 of us--
have returned, as stronger, wiser, and more inspired people prepared to 
live our American lives of service.
  For a half century, the Peace Corps has shaped our lives and the 
identity of all Americans; who we are as a people and what we hope to 
achieve, not only for our own Nation but also for others who share this 
planet with us.
  Today I rise to offer a piece of legislation for one simple reason, 
Mr. President: I want the Peace Corps to continue playing that role 
that it has for the last half century for another half century to come. 
But before we consider how the Peace Corps can grow going forward, I 
think it might be worth remembering just how it came into being. Where 
did it all start? How was it created?
  Like an awful lot of groundbreaking ideas, Mr. President, the Peace 
Corps might not have survived a board meeting or a subcommittee hearing 
where the idea was first proposed. It was a wild notion in many ways, 
so breathtakingly outrageous that it could only have been born out of 
idealism, youthful energy, and--perhaps a key element--too much 
caffeine. For you see, the Peace Corps was born at 2 in the morning.
  It was October 4, 1960, and a then young Senator from Massachusetts 
by the name of John F. Kennedy was running for the Presidency. He was 
running hours late, as candidates often do, for a campaign stop at the 
University of Michigan in Ann Arbor. John Kennedy assumed that most of 
the crowd would have gone home by that late hour. But when he arrived 
at the student union, at the campus in Ann Arbor, he found 10,000 
students waiting outside in the frigid dark to greet him. As public 
officials and holders of elective office, I think we can sympathize 
with then-Senator Kennedy at that hour, having endured months of late 
nights on a campaign trail, uncomfortable beds, and a bad diet along 
the way. I suspect he might have been sorely tempted at that late 
hour--as all of us have been from time to time--to offer a perfunctory 
thank-you to the Michigan students for hanging around all that long, 
recite a memorized stump speech--having given it on countless 
occasions, he would know it from memory--and send them home and retire 
himself.
  But something besides a chill was in the air that night in Ann Arbor. 
Floodlit and shivering, the crowd began to chant his name as he climbed 
the steps to the student union, and Senator John Kennedy realized this 
was something special. He realized he owed these students more than 
just that perfunctory set of remarks. So at 1:30 or 2:00 in the 
morning, on a frigid night in Michigan, he challenged them

[[Page 16269]]

as a candidate, as a United States Senator, and he asked:

       How many of you, who are going to be doctors, are willing 
     to spend your days in Ghana? Technicians or engineers, how 
     many of you are willing to work in the Foreign Service and 
     spend your lives traveling around the world?

  I believe, Mr. President, that challenge is the Peace Corps' founding 
document. It didn't begin with a white paper or a TV ad. It began with 
a simple question.
  In the days that followed the Kennedy rally at the student union in 
Michigan, students drafted a petition, circulating it to colleges all 
across the State, and within a couple of weeks across the country, 
presenting several scrolls ultimately to John Fitzgerald Kennedy 
containing thousands upon thousands upon thousands of names. Some 
30,000 letters flooded his office asking him to continue with this 
idea.
  So I think it is fair to say, Mr. President, the answer to that 
question--are you willing to serve your country by serving the world?--
was an overwhelming yes by a generation almost 50 years ago. Of course, 
several other pressing questions also followed: How do you build an 
organization around that raw energy? How do you pay for that? What do 
you even call that idea or organization?
  John Kennedy's top advisers were already working on those issues. 
After all, they had decided, if we don't start doing our part for the 
developing world, they were concerned--and rightfully so--the 
Communists around the world would. At a time much like today, when our 
Nation faced conflicts with people who knew as little of America as we 
knew of them, this case for a Peace Corps could be made not only in the 
lofty rhetoric of idealism but in the cold hard language of 
realpolitik.
  The notion that service could be a part of our foreign policy--indeed 
that it could be a powerful weapon in the Cold War--was truly a radical 
idea. It suggested that there could be more measures of strength than 
caliber or tonnage. It argued that the world needed to see our ideals 
not just in ink but incarnate in the person of Americans with dirty 
hands working under a hot foreign sun. It said: You cannot hate America 
if you know Americans.
  The skeptics quickly descended upon John Kennedy's idea. Richard 
Nixon called the Peace Corps ``a haven for draft-dodgers.'' Former 
President Dwight Eisenhower called it ``a juvenile experiment.'' Even 
those old foreign policy hands who supported Kennedy's idea thought it 
was a fine idea, as long as it was kept small. Academics and State 
Department officials agreed: Proceed with caution, they urged. Start 
with just a few hundred volunteers. Don't create a fiasco, they said. 
Don't let this experiment get out of hand.
  If they had gotten their way, I suspect the Peace Corps might not 
even exist today. But just as a late-night burst of exuberance gave 
birth to the Peace Corps in Ann Arbor, a similar bolt of sleepless 
inspiration kept it alive. In a hotel room in downtown Washington--not 
far from where I am on the floor of the Senate--with only a few 
typewriters and a stack of blank papers, two aides--only two of them; 
one named Sergeant Shriver and the other named Harris Wofford, who 
turned out many years later to be a colleague of ours in the Senate--
comprised the entirety of the Peace Corps staff that had been tasked 
with figuring out how to put this outrageous idea into practice.
  The one thing the two of these men knew, Sergeant Shriver later told 
us, was that the conventional approach then in vogue wouldn't work. 
America would only have one chance to get it right. So it was that 
Sergeant Shriver happened to be in the office at 3 o'clock in the 
morning--not unlike the hour at Ann Arbor--reading a paper prepared by 
a State Department employee who had sent along some ideas. His name was 
Warren Wiggins.
  Warren Wiggins called his paper ``The Towering Task,'' a reference to 
JFK's first State of the Union Address, where the young President said:

       The problems are towering and unprecedented and the 
     response must be towering and unprecedented as well.

  Warren Wiggins called for a towering and unprecedented Peace Corps. 
He wrote:

       One hundred youths engaged in agricultural work of some 
     sort in Brazil might pass by unnoticed, but 5,000 American 
     youths helping to build Brasilia might warrant the full 
     attention and support of the President of Brazil himself.

  Where a handful of young people might present a nuisance to a foreign 
ambassador, an army of motivated young Americans could make a real 
difference. Besides, wasn't it a moment for great ambition?
  At 3 o'clock in the morning, Sergeant Shriver read Warren Wiggins's 
conclusion: The Peace Corps needed to begin with a ``quantum jump,'' 
and it needed to begin immediately, by Executive order, with as many as 
5,000 to 10,000 volunteers right away. By 9 o'clock that same morning, 
Warren Wiggins himself was sitting alongside Sergeant Shriver in that 
very hotel room drafting a report for the President of the United 
States.
  Within a month of that date, President John Kennedy had created the 
Peace Corps by Executive order. Within 2 years, more than 7,000 young 
Americans were serving across the globe, and that number had more than 
doubled by 1966, the year that I joined the Peace Corps.
  One of those young Americans--as I mentioned, the person speaking to 
you this afternoon--was a 22-year-old English major at Providence 
College who arrived in the small village of Moncion in the Dominican 
Republic. As a young person, I spoke barely any Spanish. I had little 
idea I was doing, and I certainly didn't have a clue that more than 40 
years later I would be standing on the floor of the United States 
Senate explaining that the Peace Corps gave me the richest 2 years of 
my life.
  I owe those 2 years, and the impact they had on all of my years 
since, to John Kennedy's 2 a.m. question and Warren Wiggins paper that 
Sergeant Shriver read at 3 in the morning.
  From the story of the Peace Corps, and my own story, we can learn 
three things: First, the Peace Corps works, Mr. President. Besides 
simple labor and goodwill, every American we send abroad brings with 
him or her another chance to make America known to a world that often 
fears and suspects us and our motives. Every American who returns to 
our country from that service comes home as a citizen strengthened with 
the knowledge of the world in which he or she has just lived.
  As Sargent Shriver said, ``Peace Corps Volunteers come home to the 
USA realizing that there are billions--yes, billions--of human beings 
not enraptured by our pretensions, or our practices, or even our 
standards of conduct.''
  Second: size matters. The perils of a small, timid Peace Corps are 
just as clear today as they were in 1961. Just as then, advocates of a 
stripped-down mission make the same arguments: sending untrained, 
untested students only aggravates our host countries and raises the 
chance of a mishap--so let's send a few experts instead. And just as in 
1961, our response is fundamentally the same, and still fundamentally 
correct: of course we need volunteers of the highest quality. But we 
need the highest quantities, too.
  Third: size comes at a cost. The bigger any organism grows, the 
slower it gets. The Peace Corps that charted its course in a hotel room 
with a staff of two now enjoys a staff of over a thousand and a fine 
office building close to the White House. But even the most 
groundbreaking ideas must all make, in good time, what the philosopher 
Gramsci called ``the long march through the institutions.'' And where 
President Kennedy once predicted that, within a few decades, our Nation 
would have more than one million returned volunteers, today fewer than 
200,000 have had the opportunity to serve.
  The legislation I offer today is designed to help the Peace Corps not 
only grow--and I have joined the many voices calling for it to grow 
dramatically--but also reform.
  To those who know and love the Peace Corps, reform is an 
uncomfortable subject. After all, we don't want

[[Page 16270]]

to destroy what has made this institution so remarkable and unique. 
There wouldn't be a Peace Corps if JFK had stuck to the script in Ann 
Arbor. There wouldn't be a Peace Corps if thousands of students, acting 
on their own initiative, hadn't caught his attention with their 
movement. There might not be a Peace Corps if Sargent Shriver had 
listened to the respectable voices of caution in the early days of 
1961.
  The Peace Corps is unlike any other organ of our government because 
of its uniquely grassroots origin. And we can't treat it like any other 
organ of our government for those reasons.
  So the Peace Corps Improvement and Expansion Act of 2009 does not 
include a list of mandates. It does not micromanage.
  Instead, it asks those who have written this remarkable success 
story--from the Director to managers and country directors to current 
and returned volunteers--to serve once more by undertaking a thorough 
assessment of the Peace Corps and developing a comprehensive strategic 
plan for reforming and revitalizing the organization.
  Just as JFK's question to those Michigan students sparked the Peace 
Corps, asking questions today, some 50 years later, I believe will 
strengthen it. How can volunteers be better managed? How can they be 
better trained? Can we improve recruiting? Are we sending our 
volunteers to the right countries? Why do we have volunteers in Samoa 
and Tonga, but not in Indonesia, Egypt, or Brazil? Are we still 
achieving the broader goals of the Peace Corps and helping our country 
meet 21st century challenges?
  Most of all: How can we strengthen and grow this remarkable 
organization without losing the spark--the ambitious sense of the 
possible that led JFK to stay up late dreaming with those students in 
Ann Arbor and Sargent Shriver to stay up even later reading Warren 
Wiggins's paper?
  Warren Wiggins died 2 years ago at the age of 84. His obituary quoted 
Harris Wofford: ``I think he embodied the watchwords that were once 
given to me: We must be more inventive if we're going to do our duty.''
  Inventiveness and duty: two qualities that don't often go together. 
But the Peace Corps is the result of just such a combination. It has 
strengthened our Nation, improved the world, and stands today as one of 
the signal accomplishments of the 20th century. It has been supported 
by Republican and Democratic administrations over the last 50 years.
  As I said at the outset of these remarks, except for my own family, 
nothing has meant more in my life--or in the lives of so many others--
than the experience I enjoyed so many years ago.
  Today we honor the accomplishment of this organization. But let us 
commit to strengthening and expanding the Peace Corps by passing this 
legislation which I will send to the desk momentarily. Let us strive to 
inspire future generations to walk the path of service and exploration, 
the one that led me and thousands of our Nation's citizens to nations 
such as the Dominican Republic or Ethiopia, where Paul Tsongas served, 
and then years later to arrive at this institution, which I cherish and 
love as well. And let us never lose that spirit, that idealism, that 
ambition that led a young President of a young nation to ask a 
generation to serve.
                                 ______
                                 
      By Mr. DURBIN (for himself and Mr. Grassley):
  S. 1383. A bill to amend the Controlled Substances Act to prevent the 
abuse of dextromethorphan, and for other purposes; to the Committee on 
the Judiciary.
  Mr. DURBIN. I rise to introduce the Dextromethorphan Abuse Reduction 
Act of 2009. This legislation will help prevent the dangerous abuse by 
minors of cough medicines containing the ingredient dextromethorphan, 
and will also help education and prevention efforts regarding teen 
abuse of prescription and nonprescription drugs. I am pleased to be 
joined by my colleague Senator Grassley of Iowa in sponsoring this 
legislation, and I look forward to working with him to see it enacted 
into law.
  Dextromethorphan, or DXM, is a cough suppressant commonly found in 
over-the-counter cold medicines. These medicines are safe and effective 
when taken in their recommended dosage, but when consumed in large 
amounts, medicines containing DXM can produce a hallucinogenic high. 
Teens who abuse cough medicines often refer to the practice as 
``Robotripping,'' a term derived from the cough medicine Robitussin 
which contains DXM. When abused, cold medicines containing DXM can 
cause a variety of harmful physical effects, including disorientation, 
impaired physical coordination, abdominal pain, nausea, rapid 
heartbeat, and seizures. However, medicines containing DXM are legal, 
inexpensive, and sold at retail stores and over the Internet.
  Studies show that teenagers are abusing cough medicines at an 
alarming rate. A recent study by the Partnership for a Drug-Free 
America revealed that about 7 percent of teens--or 1.7 million--
reported abusing cough medicine in the year 2008. This study also found 
high rates of teen abuse of other prescription drugs, with 2.5 million 
teens reporting having abused a prescription pain reliever in 2008. 
Experts say that cough syrup and prescription drug abuse is 
significantly underreported.
  The Dextromethorphan Abuse Reduction Act would take significant steps 
to reduce and prevent teen abuse of DXM and other over-the-counter 
drugs. First, the bill prohibits the sale of products containing DXM to 
a buyer who is under 18 years old. Several major retailers, including 
Walgreens, Rite-Aid, and Giant, have already voluntarily agreed not to 
sell products that contain DXM to purchasers who are under 18, and 
their retail clerks check IDs to verify the purchaser's age. The 
legislation would codify these voluntary steps, and would also direct 
the Justice Department to promulgate regulations ensuring that Internet 
sales of DXM-containing products comply with these age restrictions. 
Notably, the legislation prohibits the sale to minors of any product 
containing DXM, including not just over-the-counter cough medicines but 
also products containing DXM in its raw, unfinished form. This is 
important since the abuse of unfinished DXM products has been 
responsible for several deaths in my home State of Illinois and 
elsewhere.
  Second, this legislation would fund prevention and educational 
programs to combat over-the-counter and prescription drug abuse. The 
bill authorizes the Director of National Drug Control Policy to provide 
money for the creation of a nationwide education campaign directed at 
teens and their parents regarding the prevention of abuse of 
prescription and nonprescription drugs. It also authorizes grants to 
communities for over-the-counter drug abuse awareness and prevention 
efforts, and provides increased funding to the National Community Anti-
drug Coalition Institute to provide training and technical assistance 
to boost those community-level efforts.
  I am pleased that drug manufacturers and drug prevention groups have 
joined together in support of this legislation. The bill is supported 
by the Consumer Healthcare Products Association, the Partnership for a 
Drug-Free America, and the Community Anti-Drug Coalitions of America.
  Restricting access by minors to DXM-containing products and 
increasing awareness for teens and their parents of the potential harms 
of cough syrup and other over-the-counter drugs will help combat the 
high rates of teen abuse of these products. I urge my colleagues to 
support this important legislation.
  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. 1383

       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 ``Dextromethorphan Abuse 
     Reduction Act of 2009''.

     SEC. 2. FINDINGS.

       Congress finds the following:

[[Page 16271]]

       (1) When used properly, cough medicines that contain 
     dextromethorphan have a long history of being safe and 
     effective. But abuse of dextromethorphan at doses that exceed 
     the recommended levels can produce hallucinations, rapid 
     heart beat, high blood pressure, loss of consciousness, and 
     seizures. The dangers multiply when dextromethorphan is 
     abused with alcohol, prescription drugs, or narcotics.
       (2) Dextromethorphan is inexpensive, legal, and readily 
     accessible, which has contributed to the increased abuse of 
     the drug, particularly among teenagers.
       (3) Increasing numbers of teens and others are abusing 
     dextromethorphan by ingesting it in excessive quantities. 
     Prolonged use at high doses can lead to psychological 
     dependence on the drug. Abuse of dextromethorphan can also 
     cause impaired judgment, which can lead to injury or death.
       (4) An estimated 1,700,000 teenagers (7 percent of teens) 
     abused over-the-counter cough medicines in 2008.
       (5) The Food and Drug Administration has called the abuse 
     of dextromethorphan a ``serious issue'' and has said that 
     while dextromethorphan, ``when formulated properly and used 
     in small amounts, can be safely used in cough suppressant 
     medicines, abuse of the drug can cause death as well as other 
     serious adverse events such as brain damage, seizure, loss of 
     consciousness, and irregular heart beat.''
       (6) In recognition of the problem, several retailers have 
     voluntarily implemented age restrictions on purchases of 
     cough and cold medicines containing dextromethorphan, and 
     several manufacturers have placed language on packaging of 
     cough and cold medicines alerting parents to the dangers of 
     medicine abuse.
       (7) Prevention is a key component of the effort to address 
     the rise in the abuse of dextromethorphan and other legal 
     medications. Education campaigns teaching teens and parents 
     about the dangers of these drugs are an important part of 
     this effort.

     SEC. 3. SALES OF PRODUCTS CONTAINING DEXTROMETHORPHAN.

       (a) Sales of Products Containing Dextromethorphan.--
       (1) In general.--Part D of title II of the Controlled 
     Substances Act (21 U.S.C. 841 et seq.) is amended by adding 
     at the end the following:

     ``SEC. 424. CIVIL PENALTIES FOR CERTAIN DEXTROMETHORPHAN 
                   SALES.

       ``(a) In General.--
       ``(1) Sale.--
       ``(A) In general.--Except as provided in paragraph (2), it 
     shall be unlawful for any person to knowingly or 
     intentionally sell, cause another to sell, or conspire to 
     sell a product containing dextromethorphan to an individual 
     under 18 years of age, including any such sale using the 
     Internet.
       ``(B) Failure to check identification.--If a person fails 
     to request identification from an individual under 18 years 
     of age and sells a product containing dextromethorphan to 
     that individual, that person shall be deemed to have known 
     that the individual was under 18 years of age.
       ``(C) Affirmative defense.--It shall be an affirmative 
     defense to an alleged violation of subparagraph (A) that the 
     person selling a product containing dextromethorphan examined 
     the purchaser's identification card and, based on that 
     examination, that person reasonably concluded that the 
     identification was valid and indicated that the purchaser was 
     not less than 18 years of age.
       ``(2) Exception.--This section shall not apply to any sale 
     made pursuant to a validly issued prescription.
       ``(3) Regulations.--Not later than 180 days after the date 
     of enactment of this section, the Attorney General shall 
     promulgate regulations for Internet sales of products 
     containing dextromethorphan to ensure compliance with this 
     subsection. The Attorney General may issue interim rules as 
     necessary to ensure that such rules take effect not later 
     than 180 days after the date of enactment of this section.
       ``(b) Civil Penalty.--
       ``(1) In general.--The Attorney General may file a civil 
     action in an appropriate United States district court to 
     enforce subsection (a).
       ``(2) Maximum amount.--Any person who violates subsection 
     (a)(1)(A) shall be subject to a civil penalty in an amount--
       ``(A) not more than $1,000 for the first violation of 
     subsection (a)(1)(A) by a person;
       ``(B) not more than $2,000 for the second violation of 
     subsection (a)(1)(A) by a person; and
       ``(C) not more than $5,000 for the third violation, or a 
     subsequent violation, of subsection (a)(1)(A) by a person.
       ``(3) Employee or agent.--A violation of subsection 
     (a)(1)(A) by an employee or agent of a person shall be deemed 
     a violation by the person as well as a violation by the 
     employee or agent.
       ``(4) Factors.--In determining the amount of a civil 
     penalty under this subsection for a person who is a retailer, 
     a court may consider whether the retailer has taken 
     appropriate steps to prevent subsequent violations, such as--
       ``(A) the establishment and administration of a documented 
     employee training program to ensure all employees are 
     familiar with and abiding by the provisions of this section; 
     or
       ``(B) other actions taken by a retailer to ensure 
     compliance with this section.
       ``(c) Definitions.--In this section--
       ``(1) the term `identification card' means an 
     identification card that--
       ``(A) includes a photograph and the date of birth of the 
     individual; and
       ``(B) is--
       ``(i) issued by a State or the Federal Government; or
       ``(ii) considered acceptable for purposes of sections 
     274a.2(b)(1)(v)(A) and 274a.2(b)(1)(v)(B)(1) of title 8, Code 
     of Federal Regulations (as in effect on or after the date of 
     the enactment of the Dextromethorphan Abuse Reduction Act of 
     2009); and
       ``(2) the term `retailer' means a grocery store, general 
     merchandise store, drug store, pharmacy, convenience store, 
     or other entity or person whose activities as a distributor 
     relating to products containing dextromethorphan are limited 
     almost exclusively to sales for personal use, both in number 
     of sales and volume of sales, either directly to walk-in 
     customers or in face-to-face transactions by direct sales.''.
       (2) Sense of the senate.--It is the sense of the Senate 
     that--
       (A) manufacturers of products containing dextromethorphan 
     should continue the practice of including language on 
     packages cautioning consumers about the dangers of 
     dextromethorphan abuse; and
       (B) retailers selling products containing dextromethorphan 
     should implement appropriate safeguards to protect against 
     the theft of such products.
       (b) Prevention Funding.--
       (1) Prescription and nonprescription drug abuse prevention 
     grants.--
       (A) In general.--The Director of National Drug Control 
     Policy shall provide grants to one or more eligible entities 
     for the creation and operation of a nationwide education 
     campaign directed at individuals under the age of 18 years 
     and their parents regarding the prevention of abuse of 
     prescription and nonprescription drugs (including 
     dextromethorphan).
       (B) Eligible entity.--For purposes of subparagraph (A), the 
     term ``eligible entity'' means an organization that--
       (i) is a not-for-profit organization;
       (ii) has broad national experience and a nationwide 
     presence and capabilities;
       (iii) has specific expertise and experience in conducting 
     nationwide education campaigns;
       (iv) has experience working directly with parents, teens, 
     people in recovery, addiction scientists, and drug 
     specialists to design drug education programs;
       (v) has conducted research upon which to base the campaign 
     specified in subparagraph (A);
       (vi) has experience generating news media coverage related 
     to drug prevention;
       (vii) is able to secure pro bono media time and space to 
     support the campaign specified in subparagraph (A); and
       (viii) has a well-established national Internet presence 
     targeting parents seeking information about drug prevention 
     and intervention.
       (C) Authorization of appropriations.--There are authorized 
     to be appropriated $4,000,000, for each of fiscal years 2010 
     through 2012 to carry out this paragraph.
       (D) Supplement not supplant.--Grant funds provided under 
     this subsection shall be used to supplement, not supplant, 
     Federal and non-Federal funds available for carrying out the 
     activities described in this subsection.
       (2) Grants for education, training and technical assistance 
     to community coalitions.--
       (A) In general.--The Director of National Drug Control 
     Policy shall award a grant to the entity created by section 4 
     of Public Law 107-82, as amended by Public Law 109-469 (21 
     U.S.C. 1521 note), for the development and provision of 
     specially tailored education, training, and technical 
     assistance to community coalitions throughout the nation 
     regarding the prevention of abuse of prescription and 
     nonprescription drugs (including dextromethorphan).
       (B) Authorization of appropriations.--There are authorized 
     to be appropriated $1,500,000, for each of fiscal years 2010 
     through 2012 to carry out this paragraph.
       (C) Supplement not supplant.--Grant funds provided under 
     this subsection shall be used to supplement, not supplant, 
     Federal and non-Federal funds available for carrying out the 
     activities described in this subsection.
       (c) Supplemental Grants for Communities With Major 
     Prescription and Nonprescription Drug Issues.--
       (1) Definitions.--In this subsection--
       (A) the term ``Administrator'' means the Administrator of 
     the Substance Abuse and Mental Health Services 
     Administration;
       (B) the term ``drug'' has the meaning given that term in 
     section 201 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 321);
       (C) the term ``eligible entity'' means an organization 
     that--
       (i) before the date on which the organization submits an 
     application for a grant under this subsection, has received a 
     grant under the Drug-Free Communities Act of 1997 (21 U.S.C. 
     1521 et seq.); and

[[Page 16272]]

       (ii) has documented, using local data, rates of 
     prescription or nonprescription drug abuse above national 
     averages for comparable time periods, as determined by the 
     Administrator (including appropriate consideration of the 
     Monitoring the Future Survey by the University of Michigan);
       (D) the term ``nonprescription drug'' has the meaning given 
     that term in section 760 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 379aa); and
       (E) the term ``prescription drug'' means a drug described 
     in section 503(b)(1) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 353(b)(1)).
       (2) Authorization of program.--From amounts made available 
     to carry out this subsection, the Administrator, in 
     consultation with the Director of the Office of National Drug 
     Control Policy, shall make enhancement grants to eligible 
     entities to implement comprehensive community-wide strategies 
     regarding the prevention of abuse of prescription and 
     nonprescription drugs (including dextromethorphan).
       (3) Application.--
       (A) In general.--An eligible entity seeking an enhancement 
     grant under this subsection shall submit an application to 
     the Administrator at such time, in such manner, and 
     accompanied by such information as the Administrator may 
     require.
       (B) Criteria.--As part of an application for a grant under 
     this subsection, the Administrator shall require an eligible 
     entity to submit a detailed, comprehensive, multisector plan 
     for addressing abuse of prescription and nonprescription 
     drugs (including dextromethorphan).
       (4) Uses of funds.--An eligible entity that receives a 
     grant under this subsection shall use the grant funds for 
     implementing a comprehensive, community-wide strategy that 
     addresses abuse of prescription and nonprescription drugs 
     (including dextromethorphan) in that community, in accordance 
     with the plan submitted under paragraph (3)(B).
       (5) Grant terms.--A grant under this subsection--
       (A) shall be made for a period of not more than 4 years; 
     and
       (B) shall not be in an amount of more than $100,000 per 
     year.
       (6) Supplement not supplant.--Grant funds provided under 
     this subsection shall be used to supplement, not supplant, 
     Federal and non-Federal funds available for carrying out the 
     activities described in this subsection.
       (7) Evaluation.--A grant under this subsection shall be 
     subject to the same evaluation requirements and procedures as 
     the evaluation requirements and procedures required of the 
     recipient of a grant under the Drug-Free Communities Act of 
     1997 (21 U.S.C. 1521 et seq.).
       (8) Administrative expenses.--Not more than 6 percent of a 
     grant under this subsection may be expended for 
     administrative expenses.
       (9) Authorization of appropriations.--There are authorized 
     to be appropriated $4,000,000 for each of fiscal years 2010 
     through 2012 to carry out this subsection.
       (d) Data Collection.--It is the sense of the Senate that 
     Federal agencies and grantees that collect data on drug use 
     trends should ensure that the survey instruments used by such 
     agencies and grantees include questions to ascertain changes 
     in the trend of abuse of prescription and nonprescription 
     drugs (including dextromethorphan).
       (e) Technical and Conforming Amendments.--
       (1) In general.--Section 201(g) of the Controlled 
     Substances Act (21 U.S.C. 811(g)) is amended--
       (A) by striking paragraph (2); and
       (B) by redesignating paragraph (3) as paragraph (2).
       (2) Table of contents.--The table of contents for the 
     Comprehensive Drug Abuse Prevention and Control Act of 1970 
     (Public Law 91-513; 84 Stat. 1236) is amended by inserting 
     after the item relating to section 423 the following:

       ``Sec. 424. Civil penalties for certain dextromethorphan 
           sales.''
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Chambliss):
  S. 1387. A bill to enable the Director of National Intelligence to 
transfer full-time equivalent positions to elements of the intelligence 
community to replace employees who are temporarily absent to 
participate in foreign language training, and for other purposes; to 
the Select Committee on Intelligence.
  Mr. WYDEN. Mr. President, today I am introducing legislation that I 
hope will enable our national intelligence agencies to increase their 
employees' proficiency in critical foreign languages. I have been a 
member of the Senate Intelligence Committee for over eight years, and 
during that time I have sat in a number of briefings and hearings that 
addressed foreign language capabilities. While specific details 
regarding the intelligence community's capabilities are generally 
classified, it is no secret that there is still a great need for more 
analysts and agents trained in key foreign languages. Over the past few 
years there have been a number of new initiatives designed to address 
this problem from different angles, and even newer initiatives are 
being introduced this year. The legislation that I am introducing 
today, which I have drafted along with Senator Chambliss of Georgia, is 
not designed to replace any of those initiatives--rather, we think it 
will complement those other initiatives by filling a key gap.
  Let me explain this gap a little, so it will be clear what problem we 
are trying to fix. Most efforts to improve the language capabilities of 
various intelligence agencies focus on recruiting Americans who have a 
background in critical foreign languages--either from their education, 
or from their family. But this only attacks the problem from one angle. 
If you want the national security workforce to have the strongest 
language skills possible, you also need to improve language training 
for people who already work for the intelligence agencies. This means 
both teaching the basics of key languages to more people, and helping 
people who are already proficient improve their skills further. 
Unfortunately, language training is time-intensive, and this can mean 
that personnel are diverted from short-term priorities.
  Here is an example of how this problem might crop up in practice. 
Imagine that you are the supervisor of a group of 10 people somewhere 
in the intelligence community, working on counterterrorism issues, and 
that one of those employees decides he wants to go spend several months 
in intensive language training to improve his Arabic. This would be a 
good career move for that individual, and a good long-term investment 
for your agency. But for you, the supervisor, it means that you might 
be short-handed for several months while one of your employees is off 
getting language training. Since you have a fixed number of positions 
available for your office, it is difficult for you to replace someone 
while they are gone. This means that as the supervisor you actually 
have an incentive to resist letting that employee head off for language 
training, since it will leave your team less well-equipped to meet 
short-term priorities.
  I am not saying that all supervisors within the intelligence 
community are focused solely on short-term priorities, to the detriment 
of our long-term security interests. But I am saying that if we want 
our intelligence agencies to effectively balance short- and long-term 
priorities, we need to give them incentives that encourage them to do 
so, and not penalize people who try to balance short-term needs and 
long-term goals.
  Here is how the bipartisan legislation that Senator Chambliss and I 
are introducing today would attempt to address this problem. Our bill 
would give the Director of National Intelligence the authority to 
transfer additional positions to offices whose personnel are 
temporarily unavailable due to language training. The Director of 
National Intelligence is uniquely situated to evaluate which offices 
are most in need of these extra positions, and could transfer them to 
the places where they would do the most good.
  So, to return to my previous example, if you were the supervisor of a 
young counterterrorism analyst who wants to take 6 months to go learn 
Arabic, you could go ask the Director of National Intelligence to 
transfer an extra position to your office for that 6 month period. That 
way, you could bring someone else in on a temporary basis to do that 
analyst's work while they are gone for training. The analyst and the 
agency would get the long-term benefits of additional language 
training, and you, the supervisor, would not have to sacrifice in the 
short-term.
  Senator Chambliss and I do not claim that this legislation will 
revolutionize the intelligence community's language capabilities 
overnight. But it is our hope that it will make it easier than it is 
today for managers to balance short- and long-term priorities. If we 
can achieve that it will be good for

[[Page 16273]]

our national intelligence workforce, and for our national security 
interests.

                          ____________________