[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[Senate]
[Pages 15742-15743]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KERRY (for himself, Mr. Brown of Ohio, Mrs. Murray, Mr. 
        Franken, Mr. Akaka, Mr. Schumer, Mr. Leahy, Mrs. Gillibrand, 
        and Mr. Menendez):
  S. 3786. A bill to amend the Internal Revenue Code of 1986 to permit 
the Secretary of the Treasury to issue prospective guidance clarifying 
the employment status of individuals for purposes of employment taxes 
and to prevent retroactive assessments with respect to such 
clarifications; to the Committee on Finance.
  Mr. KERRY. Mr. President, today I am introducing the Fair Playing 
Field Act of 2010 to provide a fairer playing field to America's 
businesses and workers. It will ensure workers are afforded protections 
already in the law, such as workers' compensation, Social Security, 
Medicare, payment of overtime, unemployment compensation, and the 
minimum wage. It will also ensure help employers who play by the rules 
are not forced to compete against those businesses that don't. This 
legislation is identical to legislation being introduced in the House 
of Representatives by Representative McDermott. Senators Murray, 
Gillibrand, Sherrod Brown, Franken, Akaka, Schumer, and Leahy are 
cosponsors.
  Under current law, employers are required to take certain actions on 
behalf of their employees including withholding income taxes, paying 
Social Security and Medicare taxes, paying for unemployment insurance, 
and providing a safe and nondiscriminatory workplace. Employers are not 
required to undertake these obligations for independent contractors. 
Too often, workers are misclassified by businesses looking to avoid 
paying taxes. These businesses receive an unfair advantage over 
businesses that play by the rules.
  The Internal Revenue Service, IRS, currently uses a common law test 
to determine whether a worker is an employee or independent contractor. 
Unfortunately, a loophole exists which allows a business to escape 
liability for misclassifying employees as independent contractors. 
Furthermore, there is statutory prohibition on the IRS providing 
guidance through regulation on employee classification.
  Federal and State revenue is lost when businesses misclassify their 
workers as independent contractors. A study estimated that, between 
1996 and 2004, $34.7 billion of Federal tax revenues went uncollected 
due to the misclassification of workers and the tax loopholes that 
allow it. Recently, GAO and Treasury Inspector General reports have 
cited misclassification as posing significant concerns for workers, 
their employers, and government revenue.
  Section 530 of the Revenue Act of 1978 generally allows taxpayers to 
treat a worker as not being an employee for employment tax purposes, 
regardless of the worker's actual status under the common law test, 
unless the taxpayer has no reasonable basis for such treatment or fails 
to meet certain requirements. Section 530 is commonly referred to as a 
``safe harbor.'' This provision was initially enacted in 1978 for a 
year to give Congress time to resolve these complex issues. In 1982, 
the safe harbor was made permanent. In addition, section 530 prevents 
the IRS from requiring an employer afforded a safe harbor to reclassify 
a worker prospectively.
  The Fair Playing Field Act of 2010 ends the moratorium on IRS 
guidance addressing the worker classification issue. The legislation 
requires the Secretary of Treasury to issue prospective guidance 
clarifying the employment status of individuals for Federal employment 
tax purposes. The effective date for the provision of authority to 
issue guidance is the date of enactment.
  Under the Fair Playing Field Act of 2010, the section 530 safe harbor 
will continue to be available to employers with respect to the 
treatment of an individual for Federal employment tax purposes until 
the individual has a reclassification date. An individual's 
``reclassification date'' is the earlier of the following two dates: 
the first day of the first calendar quarter beginning more than 180 
days after the date of an ``employee classification determination'' 
with respect to such individual; or the effective date of the ``first 
application final regulation'' issued by the Secretary of the Treasury 
with respect to such individual. An ``employee classification 
determination'' with respect to an individual is a determination by the 
Secretary of the Treasury, in connection with an audit of the taxpayer 
that begins after the date that is one year after the date of 
enactment, that a class of individuals holding positions with the 
taxpayer that are substantially similar to the position held by the 
individual are employees.
  I urge my colleagues to cosponsor the Fair Playing Field Act of 2010 
which will provide valuable protections to workers who are erroneously 
misclassified and help combat the underground economy.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Crapo):
  S. 3788. A bill to amend the Internal Revenue Code of 1986 to 
temporarily increase the investment tax credit for geothermal energy 
property; to the Committee on Finance.
  Mr. WYDEN. Mr. President, I am pleased to join with my colleague from 
Idaho, Senator Mike Crapo, in introducing the Geothermal Energy 
Investment Act of 2010. This legislation will amend an already existing 
investment tax credit for geothermal energy authorized under Sec. 48 of 
the tax code. The bill would provide geothermal energy with the same 30 
percent investment tax credit that is now available to solar energy and 
fuel cell technologies in Sec. 48 and extend this 30 percent tax credit 
for geothermal through December 31, 2016, as it is for these other 
technologies. Without this legislation, new geothermal energy projects 
would be allowed only a 10 percent investment tax credit under Section 
48. This legislation will create a more level playing field among 
clean, renewable energy technologies and support substantial growth in 
utility scale

[[Page 15743]]

geothermal power, distributed on-site power generation, and heating for 
buildings and commercial processes.
  Geothermal energy facilities provide a continuous supply of renewable 
energy with very few environmental impacts. Although the United States 
has more geothermal capacity than any other country, this potential has 
been barely tapped. This shortfall is partly due to the high initial 
cost and risk involved in locating and developing geothermal resources. 
Extending the 30 percent tax credit through 2016 will help give 
geothermal developers the assurance they need to make the long lead-
time investments in exploration and development necessary to make 
expansion of geothermal energy a reality.
  This legislation is identical to a bipartisan companion bill, H.R. 
5612, that Representative Earl Blumenauer from Oregon has introduced in 
the House.
  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. 3788

       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 ``Geothermal Energy Investment 
     Act of 2010''.

     SEC. 2. TEMPORARY INCREASE IN INVESTMENT TAX CREDIT FOR 
                   GEOTHERMAL ENERGY PROPERTY.

       (a) In General.--Subclause (II) of section 48(a)(2)(A)(i) 
     of the Internal Revenue Code of 1986 is amended by striking 
     ``paragraph (3)(A)(i)'' and inserting ``clause (i) or (iii) 
     of paragraph (3)(A)''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, under rules similar to the rules of section 48(m) 
     of the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of the Revenue 
     Reconciliation Act of 1990).
                                 ______
                                 
      By Mr. COBURN (for himself, Mr. Burr, Mr. Ensign, Mr. Thune, and 
        Mr. Isakson):
  S. 3790. A bill to amend title 5, United States Code to provide that 
persons having seriously delinquent tax debts shall be ineligible for 
Federal employment; read the first time.
  Mr. COBURN. Mr. President, today I have introduced two separate 
bills, S. 3790 and S. 3791, intended to hold members of Congress and 
other Federal employees to the same tax rules Washington imposes on the 
rest of America.
  In 2009, the Internal Revenue Service, IRS, found nearly 100,000 
civilian Federal employees were delinquent on their Federal income 
taxes, owing over $1 billion in unpaid Federal income taxes. When 
considering retirees and military, more than 282,000 Federal employees 
owed $3.3 billion in taxes.
  These bills are not intended to single out the majority of Federal 
employees who work hard and pay their taxes, but members of Congress 
and Federal employees have a clear obligation to pay their Federal 
income taxes. Legislators and government employees should not be exempt 
from the laws they write and enforce. The very nature of Federal 
employment and the concept inherent to ``public service'' demands those 
being paid by taxpayers contribute their fair share of taxes. They 
should lead by example.
  Tax delinquency rate among congressional employees exceeds the rate 
of all returns filed nationwide. Taxpayers are fed up with those in 
Washington living under a different set of rules than the rest of 
America. At a time when Congress may allow taxes to increase on some or 
even all Americans, Congress should not expect other Americans to pay 
more taxes when they are not even paying the taxes they owe under the 
rates they set themselves.
  The bills I am introducing are fair to Federal employees and other 
taxpayers. Both bills carefully reach only those paid by the taxpayers 
who have willfully neglected to pay their incomes taxes.
  The legislation excludes elected officials or Federal employees who 
made oversights in their personal taxes but willfully agree to pay 
them, or if they are challenging the delinquency in court or through 
the IRS. Instead, it targets those who willfully neglect or avoid the 
pay their taxes.
  Specifically, it excludes Federal employees from termination and 
Members of Congress from repercussions if the individual is currently 
paying the taxes, interest, and penalties owed to IRS under an 
installment plan; the individual and the IRS have worked out a 
compromise on the amount of taxes, interest and penalties owed and the 
compromise amount agreed upon is being repaid to IRS; the individual 
has not exhausted his or her right to due process under the law; or the 
individual filed a joint return and successfully contends he or she 
should not be fully liable for the taxes, interest, and/or penalties 
owed because of something the other party to the return did or did not 
do.
  The first bill requires all Federal employees to be current on their 
Federal income taxes or be fired from their jobs.
  The second bill requires Members of Congress to report any 
outstanding tax liability. If the Member possesses a tax liability, 
this bill would require the appropriate congressional committee to 
launch an ethics investigation and the Member's salary would be reduced 
in accordance with the amount he or she owes.
  These bills require no more of members of Congress or Federal 
employees than is required of other Americans.
  It should be a priority of this Congress to pass these solutions as a 
way to guarantee equal treatment under the law. This is especially 
important at this time when our national debt exceeds $13.5 trillion 
since this legislation is estimated to reduce the Federal deficit by at 
least $3 billion.
  I hope my colleagues on both sides of the aisle will support these 
bills to demonstrate their commitment to requiring Congress to live 
under the same rules it imposes on the rest of the country. It is time 
for every member of Congress to pay their taxes rather than simply 
spending the taxes of others.

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