[Congressional Record (Bound Edition), Volume 163 (2017), Part 11]
[Senate]
[Pages 15389-15391]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. NELSON:
  S. 1907. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief for disaster areas, and for other purposes; to the Committee 
on Finance.
  Mr. NELSON. Mr. President, I am the Senator from Florida, along with 
my colleague Marco Rubio. We, of course, have been at the forefront of 
this terrible tragedy that is going on in Puerto Rico, and I want to 
comment on that.
  By the way, speaking of bipartisanship, there is a good example. 
Senator Rubio and I, when our State was hit by Irma, spent 3 days, 
going around together, showing that we were shoulder

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to shoulder trying to help Floridians overcome the tragedy that had 
just befallen them. We dished out food together. We went and surveyed 
the floods. We went into the poor, little cities. We went and thanked 
university students who had rescued the elderly, the frail, when they 
were abandoned. We went all across the State. The day after the storm, 
we went first into the Keys to see the destruction there. Senator Rubio 
and I have been joined at the hip.
  When it comes to looking at what is happening in Puerto Rico, it is 
pretty obvious. Last week, a week had passed since the storm. In fact, 
the supplies were stacking up, but they were stacking up in the ports. 
They were not able to get out into the interior of the island. The two 
of us were pretty strong in our words; that you have to get the most 
capable organization in to do that when in fact it is almost like 
combat conditions, and that is the U.S. military.
  Finally, Wednesday night of last week, they sent me a three-star 
general who started to get it organized. Now we are seeing it 
distributed out, but it is going to take more because it is an island 
that is just absolutely devastated. It is going to take a long time to 
recover, and it is going to take a lot more money.
  Remember, these are our fellow American citizens. We saw the 
devastation in Florida. Now the continuing hardship is being tolled in 
Puerto Rico. It is a population where half are without drinking water, 
only 5 percent--and this is 2 weeks after the storm--of the electricity 
grid is restored, and cash is in short supply.
  Whereas, in Florida we saw the flooded streets, the downed trees, the 
crushed cars, the flipped over mobile homes, limited access to critical 
supplies like gasoline. Property damage was everywhere, and it was the 
entire State. What we are seeing is--multiply that many fold, and that 
is what we are seeing in Puerto Rico.
  We are working on a supplemental funding bill. Remember that right 
after the first storm in Texas, we passed a $15 billion emergency 
supplemental appropriations bill. That is going to run out within the 
next few days so we have to have another supplemental funding bill.
  As you can imagine, now it is not just Texas and Florida, but it is 
the Virgin Islands, it is Puerto Rico, and there are some other States 
as well. We are going to need to help the people cover the cost of 
recovery, and we are going to need to jump-start the local economy in 
those areas hardest hit by the storms.
  Today I am going to introduce a piece of legislation. I call it the 
National Disaster Tax Relief Act, which would give people affected by 
these storms some much needed tax relief. This is in the shadow of the 
conversations taking place, as we speak, in a hearing--which I have 
just come from--in the Finance Committee about future reform of the 
Federal Tax Code.
  The bill I am introducing today would do four things: One, it would 
let businesses and farmers immediately write off their cleanup costs, 
not just their replacement costs.
  For example, the Florida citrus growers in the central part of the 
State--and it was finally going to be a good news story on our citrus 
crop--half of the citrus buffeted by the wind is on the ground.
  Go further south into Southwest Florida, 75 percent of the citrus is 
on the ground. What this would do is allow the citrus growers to be 
able to, in the first year, write off the costs--expenses, in other 
words--of removing the downed trees, not just the cost of a new tree. 
That is especially important to citrus growers all over the United 
States because they are already hurting from a plant disease, a 
bacteria known as greening, which kills the citrus tree in 5 years.
  Therefore, there are a number of these groves that have been 
abandoned, but it is valuable land. We need to give an incentive to the 
citrus grower to be able to go in and plow under that citrus growth and 
replant--the immediate expensing of that plowing under, plus the 
replanting of what we think are hardier varieties of citrus that are 
more resistant to this disease, this bacteria called greening. We think 
that would be a huge incentive to try to save the citrus industry not 
only in my State but in Texas, Arizona, California. There is citrus 
also in Louisiana and some in other Southern States.
  The second thing the bill does is it gives taxpayers the ability to 
exempt State and local disaster mitigation payments from Federal taxes, 
and it lets them save for the next big storm tax-free. That would be in 
a catastrophe savings account.
  It would allow people to save tax-free $150,000 to cover things not 
covered by insurance. In Southwest Florida, there are a lot of seawalls 
that cave in, seawalls that are extremely expensive to rebuild and 
repair. This tax-free account would allow them to put away savings for 
that and other kinds of costs of remediation. They go out, and they try 
to save their home by getting tarps on the roof, making certain repairs 
until they can get the replacement, and the insurance can pay for it. 
Expensing of those items in the Tax Code would certainly be that 
incentive.
  The bill also includes extra infrastructure financing for areas 
damaged by the storms; for example, help for low-income housing needs 
and other infrastructure needs that are so important to economic 
recovery.
  The fourth thing the bill does is it includes tax incentives for 
Puerto Rico and the Virgin Islands and extends tax benefits that are 
available on the mainland but not in the territories like the full 
child tax credit.
  Why should we treat our American citizens in a territory any 
differently taxwise on a child tax credit than we treat our citizens on 
the mainland, the main 50 States? It shouldn't be. It doesn't make 
sense.
  What is happening in Puerto Rico should concern every American. 
Governor Rossello has warned of a humanitarian crisis if we do not 
quickly move to alleviate this situation.
  The Coast Guard is working with FEMA and others to bring in drinking 
water and other critical supplies as well. Additional work is being 
done to restore power. Generators are being shipped in to help manage 
the load at the airport, and there are 30 flights per day now, which is 
projected to grow to 60 flights in the coming days. Meanwhile, as the 
evacuations continue, we don't want to leave Puerto Rico in tatters. We 
have to rebuild. That is going to be an expensive cost to pay.
  As we are going into a supplemental package for all of these storm-
affected areas, and since the utilities in Puerto Rico were so out-of-
date and so arcane, let's think creatively. In remote villages, let's 
supply photovoltaic cells to generate electricity as a backup because 
another storm is going to come and the power lines are going to go 
down. Let's think creatively as we help these areas rebuild.
  We are working on this supplemental package to get additional aid to 
those suffering, and I am hopeful that what I have suggested here as a 
tax incentive will be a part of that conversation. Our country is 
hurting. We should be doing everything we can to help it heal.
  Now, not only are we healing from coming out of some ferocious 
storms, but now we have another grim reminder that, in America, we are 
not treating each other as we would want to be treated. Something is 
wrong in the psyche of some, so that whatever the motivation is, there 
would be mass execution. I hope we will soon have a very serious 
conversation about the direction of this country.
                                 ______
                                 
      By Mr. REED:
  S. 1912. A bill to ensure that irresponsible corporate executives, 
rather than shareholders, pay fines and penalties; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. REED. Mr. President, today, I am introducing the Corporate 
Management Accountability Act, which request each publicly traded 
company to disclose its policies on whether senior executives or 
shareholders bear the costs of paying the company's fines and 
penalties.
  In 2014, the President of the Federal Reserve Bank of New York, 
William Dudley, gave a speech on Enhancing

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Financial Stability by Improving Culture in the Financial Services 
Industry. In this speech, President Dudley said, ``in recent years, 
there have been ongoing occurrences of serious professional 
misbehavior, ethical lapses and compliance failures at financial 
institutions. This has resulted in a long list of large fines and 
penalties, and, to a lesser degree than I would have desired employee 
dismissals and punishment. . . . The pattern of bad behavior did not 
end with the financial crisis, but continued despite the considerable 
public sector intervention that was necessary to stabilize the 
financial system. As a consequence, the financial industry has largely 
lost the public trust.''
  Since 2008, ``banks globally have paid $321 billion in fines . . . 
for an abundance of regulatory failings from money laundering to market 
manipulation and terrorist financing, according to data from Boston 
Consulting Group.'' Unfortunately, despite these fines, we continue to 
see disappointing behavior at our financial institutions, whether it is 
Wells Fargo betraying the trust of its customers by opening 
unauthorized accounts or it is Equifax endangering millions of 
consumers by compromising critical personal information. Indeed, in my 
home State of Rhode Island, nearly half the State may have been 
affected by the cybersecurity breach at Equifax. Given these and other 
breaches and lapses, it is clear that many financial institutions have 
a long way to go in rebuilding the trust of Rhode Islanders and the 
American people.
  At the same time, it is also clear that more must be done than simply 
fining and penalizing financial institutions at the corporate level. 
Senior executives, many of whom are all too eager to take credit for a 
company's good news, must also take more responsibility for the bad 
news, especially if it is true that the buck stops with them. For 
example, the Financial Crisis Inquiry Commission concluded ``the 
financial crisis reached cataclysmic proportions with the collapse of 
Lehman Brothers,'' and yet, according to the Congressional Research 
Service, not a single senior executive officer at Lehman Brothers at 
the Federal level was charged, went to jail, or personally paid a 
Federal fine or penalty for the damage caused at Lehman Brothers that 
rippled through our economy in 2008.
  According to Professor Peter J. Henning, who also writes for the New 
York Times in its White Collar Watch column, ``a problem in holding 
individuals accountable for misconduct in an organization is the 
disconnect between the actual decisions and those charged with 
overseeing the company, so that executives and corporate boards usually 
plead ignorance about an issue until it is too late.''
  The Corporate Management Accountability Act I am introducing today is 
one attempt at helping to solve this problem. The bill asks publicly 
traded companies to disclose whether they expect senior executives or 
shareholders to pay the cost of corporate fines or penalties. This 
approach is supported by University of Minnesota Law School Professors 
Claire Hill and Richard Painter, who also served as President George W. 
Bush's chief ethics lawyer, as well as U.S. PIRG, Public Citizen, and 
Americans for Financial Reform.
  Companies must do a better job of aligning executive incentives so 
that they are motivated to put their shareholders, and not themselves, 
first. I urge all my colleagues to join this legislative effort to hold 
senior executives accountable for their actions.

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