E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 108 CONGRESS, SECOND SESSION

Vol. 150 WASHINGTON, TUESDAY, MARCH 23, 2004 No. 37 Senate The Senate met at 9:45 a.m. and was first half of the time will be under the Magically, when it came back after called to order by the President pro control of the majority leader or his the conference, it was stricken, even tempore [Mr. STEVENS]. designee, and the remaining time will though it had passed both Houses of be under the control of the Democratic the legislature by a large margin. PRAYER leader or his designee. The point is, having had a vote on The Chaplain, Dr. Barry C. Black, of- Following morning business at 11, the overtime bill should not take away fered the following prayer: the Senate will resume consideration the fact that it was stripped in con- Let us pray. of S. 1637, the JOBS bill, also known as ference with Democrats not partici- Eternal Lord God, who illuminates the FSC/ETI bill. The bill managers pating in the conference. We believe our paths with love and laughter, hal- were able to make some progress dur- that overtime is important. lowed be Your Name. Lord, thank You ing yesterday’s session by working On my trip home last week, I visited for life’s clouds and storms that posi- through several amendments. As a re- fire stations and police stations. The tion us to receive Your deliverance. minder, a cloture motion was filed with first thing they talk about is: What is Thank You also for refusing to move respect to the FSC bill. That vote will happening to our overtime? People in our mountains but instead giving us occur tomorrow. We hope, if cloture is America are concerned by the hundreds strength to climb them. Give us the invoked, we can finish the bill this of thousands, if not millions. That is wisdom to see spiritual things in life’s week. It is still possible we could con- why we demand a vote on overtime. commonplace happenings. May a sider related amendments during to- The PRESIDENT pro tempore. The baby’s cry or a falling leaf or the day’s session. Therefore, rollcall votes Senator from Kentucky is recognized. gentle dew or a golden sunset whisper are possible throughout the day, al- Mr. MCCONNELL. Mr. President, to us about the sacred. though we do not anticipate any vote very briefly, my good friend from Ne- Today, bless our dedicated law- prior to our respective policy lunch- vada and I discussed this last night and makers and each member of their staffs eons. If there are votes, obviously Sen- I listened carefully to what he just who routinely deliver excellence in the ators will be notified. said. I want to make one adjustment as midst of the frenetic. May they never f we get the facts before our colleagues. forget Your promise to always be with On the amendment to prohibit the them. Guide them today with fresh in- RECOGNITION OF THE ACTING Labor Department from going forward sights on living abundantly. Supply all MINORITY LEADER with the 541 regulations, that was ap- their needs, for the kingdom, the The PRESIDENT pro tempore. The proved in the Senate. We voted on it power, and the glory belong to You. minority whip. earlier. It was not approved in the Amen. f House. That is why it was a matter in f conference. VOTE ON OVERTIME PLEDGE OF ALLEGIANCE As my good friend from Nevada Mr. REID. Mr. President, last night pointed out, it was subsequently not The PRESIDENT pro tempore led the there was an exchange between the dis- agreed to in the conference. There was Pledge of Allegiance, as follows: tinguished Senator from Kentucky and an additional vote in the House on a I pledge allegiance to the Flag of the myself, pleasant as it always is be- motion to instruct conferees, which United States of America, and to the Repub- tween the two of us, regarding the came out the way my friend from Ne- lic for which it stands, one nation under God, overtime vote that we believe is essen- vada suggests; but on the vote that indivisible, with liberty and justice for all. tial to moving forward on this legisla- counted, the House of Representatives f tion that will be before the Senate at did not approve the effort to block the RECOGNITION OF THE ACTING 11 o’clock today. My friend, the senior Department of Labor from going for- MAJORITY LEADER Senator from Kentucky, said we had ward with the overtime regulation. The PRESIDENT pro tempore. The voted on this once before. As my friend from Nevada conceded, acting majority leader is recognized. I wanted to make sure what the facts we have voted on this once and I am were. There is no question that I was rather confident, given the persistence f right. We did vote on it once before. We of Members on that side of the aisle, at SCHEDULE voted on it in the Senate and it passed some point we will probably vote on it Mr. MCCONNELL. Good morning, Mr. by a nice margin. It was voted on in again. But this underlying bill is a bill President. the House and passed by a nice margin. that is widely supported on both sides The Senate will be in a period of It was on the Omnibus appropriations of the aisle. Sanctions have already morning business until 11 a.m. The bill. been imposed on March 1 on American

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

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When he did, the people around cials for political gain. And we RESERVATION OF LEADER TIME the President quickly retaliated. With- shouldn’t try to destroy people who are The PRESIDENT pro tempore. Under in weeks of debunking the President’s out to make our country safer. the previous order, leadership time is claim, Ambassador Wilson’s wife was I think the people around the Presi- reserved. the target of a despicable act. dent have crossed into dangerous terri- Her identity as a deep-cover CIA tory. We are seeing abuses of power f agent was revealed to Bob Novak, a that cannot be tolerated. MORNING BUSINESS syndicated columnist, and was printed The President needs to put a stop to in newspapers around the country. The PRESIDENT pro tempore. Under it, right now. We need to get to the That was the first time in our history, truth, and the President needs to help the previous order, there will now be a I believe, that the identity and safety period for the transaction of morning us do that. of a CIA agent was disclosed for purely The PRESIDENT pro tempore. The business until 11 a.m., with the major- political purposes. It was an uncon- ity leader in control of the first half of Senator from Pennsylvania is recog- scionable and intolerable act. nized. the time, and the Democratic leader or Around the same time Bush adminis- his designee in control of the remain- tration officials were endangering Am- f ing time. bassador Wilson’s wife, they appear to THE CARE ACT Does the minority leader seek rec- have been threatening another Federal ognition? Mr. SANTORUM. Mr. President, I employee for trying to do his job. In re- rise to offer a unanimous consent re- Mr. DASCHLE. I do, Mr. President. cent weeks Richard Foster, an actuary quest having to do with the CARE Act. The PRESIDENT pro tempore. The for the Department of Health and I noted that a week ago the Senator minority leader is recognized. Human Services, has revealed that he from South Dakota, the Democratic was told he would be fired if he told f leader, sent a letter suggesting we Congress and the American people the should move forward on this legisla- DISTURBING PATTERN OF real costs of last year’s Medicare bill. CONDUCT Mr. Foster, in an e-mail he wrote on tion. I wanted to take him up on his suggestion. I believe, as he says in his Mr. DASCHLE. Mr. President, I want June 26 of last year, said the whole epi- sode had been ‘‘pretty nightmarish.’’ letter, it is important for us to take a to talk this morning about a disturbing piece of legislation that passed with pattern of conduct by the people He wrote: ‘‘I’m no longer in grave dan- ger of being fired, but there remains a over 90 votes, has passed the House of around President Bush. They seem to Representatives, and give it the oppor- be willing to do anything for political strong likelihood that I will have to re- sign in protest of the withholding of tunity to be negotiated between the purposes, regardless of the facts and of House and the Senate so we can get it what is right. important technical information from key policymakers for political pur- to the President’s desk in a timely I don’t have the time this morning to fashion. talk in detail about all the incidents poses.’’ Think about those words. He would I want to put in the RECORD about a that come to mind. Larry Lindsay, for dozen articles, letters, and press re- instance, seems to have been fired as lose his job if he did his job. If he pro- vided the information the Congress and leases from a variety of groups—every- the President’s Economic Adviser be- thing from the United Jewish Commu- cause he spoke honestly about the the American people deserved and were entitled to, he would lose his job. When nities, to the Catholic Health Associa- costs of the Iraq war. General Shinseki tion, to the Farm Bureau, to the Na- seems to have become a target when he did this become the standard for our government? When did we become a tional Conference of State Legisla- spoke honestly about the number of tures, all of which are asking to either troops that would be needed in Iraq. government of intimidation? And now, in today’s newspapers, we put this legislation on the bill we have There are many others, who are less see the latest example of how the peo- before us or, more preferably, get this well known, who have also faced con- ple around the President react when bill to conference where we can work sequences for speaking out. U.S. Park faced with facts they want to avoid. out the differences. Police Chief Teresa Chambers was sus- The White House’s former lead I ask unanimous consent that this in- pended from her job when she disclosed counterterrorism adviser, Richard formation be printed in the RECORD. budget problems that our Nation’s Clarke, is under fierce attack for ques- There being no objection, the mate- parks are less safe, and Professor Eliza- tioning the White House’s record on rial was ordered to be printed in the beth Blackburn was replaced on the combating terrorism. Mr. Clarke has RECORD, as follows: Council on Bioethics because of her sci- served in four White Houses, beginning entific views on stem-cell research. UNITED JEWISH COMMUNITIES, with Ronald Reagan’s administration, Washington, DC. Each of these examples deserves ex- and earned an impeccable record for amination, but they are not my focus CHARITABLE GIVING AND SOCIAL SERVICES his work. BLOCK GRANTS today. Instead, I want to talk briefly Now the White House seeks to de- about four other incidents that are 2004 PRIORITY: ENACT CHARITABLE GIVING TAX stroy his reputation. The people INCENTIVES AND RESTORE FUNDING FOR THE deeply troubling. around the President aren’t answering SOCIAL SERVICES BLOCK GRANT When former Treasury Secretary his allegations; instead, they are try- For decades, many Jewish organizations Paul O’Neill stepped forward to criti- ing to use the same tactics they used have partnered with government to provide a cize the Bush administration’s Iraq with Paul O’Neill. They are trying to wide range of social services for people in policy, he was immediately ridiculed ridicule Mr. Clarke and destroy his need. In 2004, UJC has made it a priority to by the people around the President and credibility, and create any diversion support restoration of funding for Social his credibility was attacked. Even possible to focus attention away from Services Block Grants and tax incentives for worse, the administration launched a his serious allegations. charitable giving as a way to ensure and ex- government investigation to see if Sec- The purpose of government isn’t to pand critical nonprofit services. retary O’Neill improperly disclosed In 2003, both the Senate and the House of make the President look good. It isn’t Representatives overwhelmingly passed leg- classified documents. He was, of to produce propaganda or misleading islation that would create new charitable course, exonerated, but the message information. It is, instead, to do its giving tax incentives—specifically, IRA was clear: If you speak freely, there best for the American people and to be charitable rollovers and tax deductions for will be consequences. accountable to the American people. non-itemizers. Current tax law requires that

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IRAs be fully taxed before they can be trans- MCCARRICK, ing-poor individuals and families and will ferred to a charity, substantially reducing Archbishop of Wash- help those who want to help themselves. both the amounts transferred and the size of ington, Chairman, Thank you in advance of your support for the contributor’s tax deduction. The pro- Domestic Policy IDAs. If you have any questions or need any posed IRA rollover provision—in what is gen- Committee, United additional information on how IDAs work, erally referred to as the CARE legislation— States Conference of please call Sandi Smith at the Corporation would permit tax-free donation of IRAs to Catholic Bishops. for Enterprise Development at 202–408–9788. charities. The non-itemizer provision would THOMAS A. DESTEFANO, America’s Community Bankers allow individuals who do not itemize deduc- President, Catholic Association for Enterprise Opportunity tions on their tax returns to receive a deduc- Charities USA. Center for Social Development tion for charitable gifts. Rev. MICHAEL D. PLACE, Consumer Federation of America The Senate-passed CARE bill would also STD, Corporation for Enterprise Development restore funding to the Social Services Block President and Chief Credit Union National Association Grant (SSBG); the House bill did not include Executive Officer, Economic Security 2000 the SSBG funding increase. The SSBG pro- Catholic Health As- Education, Training and Enterprise Center vides Federal grants to the States on a for- sociation of the Entergy mula basis, which are then allocated to local United States. Enterprise Corporation of the Delta agencies. SSBG programming is delivered Financial Services Roundtable through countless agencies that provide ALLIANCE FOR IDA TAX CREDITS, First Nations Development Institute adult day care, kosher Meals on Wheels and Washington, DC, March 11, 2004. Foundation for the Mid South other nutrition programs, employment Hon. ROY BLUNT, H&R Block training for the homeless, immigrants and Majority Whip, House of Representatives, Cap- Ibero American Chamber of Commerce refugees, and counseling. SSBG is currently itol Building, Washington, DC. Institute for Responsible Fatherhood funded at $1.7 billion—a cut of more than $1.1 Hon. RICK SANTORUM, Levi Strauss & Co. billion since 1995. The budget cuts have Chairman, Republican Conference, U.S. Senate, National Association of Homebuilders forced social services providers, including Hart Senate Office Building, Washington, National Bankers Association Federation agencies, to discontinue services DC. National Black Chamber of Commerce and reduce benefits for families in need. The DEAR REPRESENTATIVE BLUNT AND SENATOR National Center for Neighborhood Enterprise current shortfalls in State budgets will make SANTORUM: The Alliance for Individual De- National Conference of State Legislatures SSBG funding even more crucial over the velopment Account (IDA) Tax Credits—a National Congress for Community Economic next few years. consortium of philanthropic organizations, Development The CARE legislation’s new incentives for businesses, industry associations, and orga- charitable giving, as well as restoration of National Federation of Community Develop- nizations of elected officials created to ment Credit Unions SSBG to its 1995 level of $2.8 billion are vital champion tax credit legislation for IDAs—is to meeting the needs of the most vulnerable National Housing Conference strongly committed to enacting needed tax National Organization of African Americans members of our communities. UJC is work- incentives to help working, low-income fami- ing hard to ensure passage of a CARE bill in Housing lies save, build assets and move into the fi- New America Foundation that would enable Federations and other nancial mainstream. The Alliance has been a charitable non-profits to access new sources Progressive Policy Institute consistent supporter of the Savings for RESULTS of planned giving and restore vital SSBG Working Families Act, which is Title V of S. funding. Shorebank Corporation 476, the CARE Act of 2003, as it will provide The Empowerment Network tax credits to create 300,000 IDAs across the MARCH 11, 2004. The Enterprise Foundation country. We also strongly support upcoming U.S. SENATE, US Pan Asian American Chamber of Com- efforts to finally begin conference delibera- merce Washington, DC. tions of S. 476, and H.R. 7, the Charitable DEAR SENATOR: We urge you to support an United Way of America Giving Act of 2003, and encourage these con- amendment by Senators Santorum and Lie- Wal-Mart ference discussions to include the IDA provi- berman to attach the Charity Aid, Recovery sions of S. 476 as part of any final agreement and Empowerment Act of 2003 (CARE Act) to NATIONAL CONFERENCE OF regarding S. 476 and H.R. 7. STATE LEGISLATURES, S. 1637, the Jumpstart Our Business Strength IDAs are endorsed by President Bush and Washington, DC, March 9, 2004. (JOBS) Act. While we have not taken a posi- have received considerable bipartisan sup- tion on S. 1637, we see this as an opportunity DEAR SENATOR: On behalf of the National port in the House led by Representatives Joe Conference of State Legislatures (NCSL), we to pass the CARE Act. Pitts and Charles Stenholm and in the Sen- The CARE Act, which the Senate has al- urge you to adopt Amendment 2670 to the S. ate by Senators Rick Santorum and Joe Lie- ready approved by an overwhelming 95–5 1637—Jumpstart Our Business Strength berman, as these policymakers recognize the vote, will provide crucial assistance to char- (JOBS) Act. This amendment, offered by ities and the people they serve by restoring importance of rewarding work, savings, and Senators Santorum and Lieberman, would $1.3 billion in funding to the Social Services self-reliance by low-income families and in- add the language of S. 476 (the CARE Act) Block Grant (SSBG) program; allowing non- dividuals. Passage of Title V of S. 476 pre- which passed the Senate 95–5 on April 9, 2003 itemizers to claim charitable deductions on sents an opportunity to enact sound asset- into the underlying bill. The CARE Act will their taxes to spur additional private giving; building tax policy for a segment of our soci- enhance the role of faith-based and commu- creating a Compassion Capital Fund to pro- ety that traditionally does not benefit from nity based organizations in the delivery of vide technical assistance and capacity build- existing wealth building, tax-based incen- social services and provide much needed ing for faith-based and community groups; tives. technical guidance and assistance to states and authorizing $33 million to establish IDAs are targeted, matched savings ac- without compromising the states’ role in the group maternity homes for young mothers. counts held by financial institutions and implementation of social services to people Restoring SSBG funding is especially cru- credit unions, which help low- and moderate- in need. The CARE Act reflects a thoughtful cial given the state of the economy and the income families and individuals buy their and harmonized approach to the inclusion of severe fiscal crises facing the states. States first home, start a small business, or expand faith-based organizations in providing serv- use SSBG funding to assist community post-secondary education. No federal re- ices at the state level. groups and religious agencies that serve sources are provided until people work, save It is laudable that the CARE Act increases working families, abused and abandoned their own hard-earned dollars, fulfill finan- funding for the Social Services Block Grant children, persons with disabilities, and the cial education requirements, and meet their (SSBG). The SSBG is an essential source of frail elderly. savings goals. In addition, IDA funds for community and home-based serv- We support these provisions in the CARE accountholders have to meet strict program ices to the most vulnerable segments of our Act because they are among the very few ac- standards and safeguards to ensure that society including the disabled, elderly and tive legislative initiatives that will help low- IDAs are a hand-up, and not a handout. children. We cannot expand the role of faith- income families and the most vulnerable The upcoming conference deliberations on based and community programs without in- members of our society. If enacted, they will S. 476 and H.R. 7 provides both the House of creasing the funds available for these pro- strengthen the partnership between govern- Representatives and the Senate with an his- grams. We support the Individual Develop- ment and religious and other community toric opportunity to show its support for ment Account provisions, as such accounts groups to meet the basic human needs of all helping working, low-income families who are an important tool to promote self-suffi- in our country, a partnership that is de- want to build a better future and achieve ciency that will complement state efforts to manded by the moral scandal of so much their piece of the American Dream. Includ- reform welfare. We are especially pleased to poverty in the richest nation on earth. ing the Savings for Working Families Act in see that the CARE Act provides funding to We urge you to vote ‘‘yes’’ on the amend- the final conference agreement on the CARE states for seed money and for technical as- ment to add the CARE Act to S. 1637. Act/Charitable Giving Act will provide the sistance to the states to support admin- Sincerely, necessary matching dollars to make IDAs a istering the provisions of the bill. NCSL THEODORE Cardinal reality for hundreds of thousands of work- greatly appreciates Senators’ Santorum and

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Lieberman commitment to this legislation AMERICAN FARM BUREAU FEDERATION, tant amendment. Thank you for your consid- and their willingness to work with NCSL to Washington, DC. eration. resolve our outstanding issues. STATEMENT BY BOB STALLMAN, PRESIDENT, Sincerely, MARINA L. WEISS, Ph.D., We support the CARE Act and urge you to AMERICAN FARM BUREAU FEDERATION, RE- Senior Vice President, Public Policy vote for Amendment 2670 during floor consid- GARDING THE CARE ACT and Government Affairs. erations of the JOBS Act. For further infor- WASHINGTON, D.C., March 11, 2004.—‘‘Con- mation about NCSL’s position, please con- gress can provide important hunger-relief as- AMERICA’S BLOOD CENTERS, sistance by enacting the CARE Act of 2003. tact Sheri Steisel, Federal Affairs Counsel Washington, DC, March 18, 2004. and Director, Human Services Committee or The legislation has been adopted by both Senator THOMAS A. DASCHLE, chambers, endorsed by President Bush, and Tamra Spielvogel, Policy Associate, State- Hart Senate Office Building, Federal Relations in NCSL’s Washington, DC is awaiting conference. If enacted, the law would create incentives Washington, DC. Office at 202/624–5400. DEAR SENATOR DASCHLE: We are writing to to allow all farmers and ranchers to deduct Sincerely, ask that you allow the Charity, Aid, Recov- the costs and value of food donated to hun- MARTIN R. STEPHENS, ery, and Empowerment Act of 2003 (CARE ger-relief charities, regardless of how their Speaker of the House, Utah, Act—S. 476) and the Charitable Giving Act of farming business is organized. This will en- President, NCSL. 2003 (H.R. 7) to go to a conference com- able us to get more food to hungry people mittee. Members of America’s Blood Centers, who can’t afford to feed their families. The such as United Blood Services of South Da- AMERICA’S SECOND HARVEST, CARE Act would increase the amount of food kota and Siouxland Community Blood Bank, March 10, 2004. provided to needy people by an estimated 878 which together support the blood needs of all Hon. TOM DASCHLE, million new meals over the next 10 years. South Dakota patients, strongly endorse this U.S. Senate, Hart Senate Office Building, Passage of the CARE Act could not come legislation and specifically support a provi- Washington, DC. at a better time. The American Farm Bureau sion contained in both bills that corrects an Federation and America’s Second Harvest DEAR SENATOR DASCHLE: I’m writing to inequality by extending to not-for-profit just completed a successful year of activity you today because times are desperate for independent community blood centers cer- with a program called ‘‘Harvest for All.’’ the food banks in South Dakota. We need tain exemptions from the Federal excise tax. your help in the passage of important legis- Throughout the year, farmers across the na- In spite of their importance in maintaining lation pending before the Senate. In tens of tion donated food, funds and people power America’s volunteer donor blood supply, thousands of local food pantries, soup kitch- with the goal of creating a hunger-free community-based blood centers do not enjoy ens and emergency shelters the lines of America. Both organizations, in partnership the same status as the Red Cross blood cen- needy Americans requesting short-term food with Syngenta, are working together to en- ters under the Federal tax code. Even though assistance are increasing. These increasing sure that every American can enjoy the the Red Cross is exempt from paying Federal lines of needy families include the faces of bounty produced on American farms and excise taxes for its blood-related activities the working poor, the recently unemployed ranches. Those efforts will be greatly en- and functions, America’s independent, com- and children. As these lines grow, I continue hanced by enactment of the CARE Act.’’ munity-based, not-for-profit blood centers to hear from our member food banks what are not. These taxes directly impact the abil- sounds like a broken record: ‘‘there’s more MARCH OF DIMES, ity of blood centers to provide mobile blood Washington, DC, March 4, 2004. requests for food, and it’s hard to keep collections, conduct telerecruiting of donors, Hon. THOMAS DASCHLE, pace.’’ and engage in other similar activities. The Democratic Leader, U.S. Senate, tax exemption will significantly help our Last year, you joined 94 other Senators in Washington, DC. centers and other community-based blood the common call that we need the CARE Act DEAR DEMOCRATIC LEADER DASCHLE: On be- centers by allowing us to allocate more of now more than ever. Now, America’s emer- half of more than 3 million volunteers and our funding to what we do best—collecting gency food providers are asking you to con- 1400 staff members of the March of Dimes, I blood for the millions of Americans who rely tinue your strong commitment to America’s am writing to urge you to vote for Senate upon us. hungry by supporting an amendment to the Amendment 2670 to S. 1637, the Foreign Sales The differences between the House and JOBS Act, S. 1637, which would allow the Corporation/Extraterritorial Income (FSC/ Senate versions of the charitable giving bills provisions of the Senate-passed Charity, Aid, ETI) bill. This amendment provides much are small. Now is the time to take the steps Recovery and Empowerment Act of 2003 (the needed tax incentives to encourage chari- needed to turn this legislation into law. CARE Act, S. 476/H.R. 7) to move forward. table giving. America’s Blood Centers strongly urge you As you know, many of America’s charities As you know, the CARE Act includes a to support a successful conference and quick are facing heightened financial challenges passage of this legislation to level the play- strong food donation tax incentive provision due to the soft economy and increasing reli- that we estimate will create more than 878 ing field among blood collection organiza- ance on services offered through community tions and demonstrate your strong support million new meals over the next 10 years, based programs. Tax incentives to encourage much of that food coming from farmers, for the importance of independent, commu- increased charitable giving are needed now nity-based, not-for-profit blood centers. ranchers, and small businesses. The need for more than ever. The March of Dimes strong- this tax law change is urgent. Today, the Please contact ABC’s CEO Jim MacPherson ly supports the following two provisions that ([email protected]); 202–654– USDA estimates that nearly 96 billion we believe will stimulate additional chari- pounds of food in the United States is wast- 2902 if you have any questions. We appreciate table donations and create greater equity in your attention to this concern and thank ed, dumped, plowed over or destroyed. If even the tax code: one percent of that food was donated, rather you in advance for your responsiveness. Creation of a charitable tax deduction for Sincerely, than dumped, we would be able to feed hun- individuals and couples who do not itemize LOUIS KATZ, M.D., dreds of thousands more needy Americans. on their tax returns; and President. Simply put, we have a strong moral obliga- An IRA Charitable Rollover provision that tion to stop the waste, and get this food on would allow donors who are at least 591⁄2 to Mr. SANTORUM. Mr. President, this the tables of the people who desperately need rollover amounts from a traditional or Roth is a bill that has been a bipartisan bill. it. IRA to create a life income gift and donors The Senator from South Dakota has 1 Passage of Senate Amendment 2670 is crit- who are at least 70 ⁄2 to be eligible to rollover mentioned on numerous occasions, and ical for the emergency food providers in DC amounts as direct gifts. again in this letter, that the concern If enacted, these provisions would benefit and the America’s Second Harvest nation- is—and in the newspaper article—that the March of Dimes and other charities that wide network of food banks and food rescue things have been put in conference that rely on small donations, by creating incen- organizations working so hard to encourage tives for current donors and encouraging were not either the scope of the con- food donations within the food industry. The others to become donors. The donations ference or slipped in without the mi- provisions in the Santorum-Lieberman stimulated by these changes in the tax code nority’s knowledge of what was going amendment are very important to companies would provide increased resources for ex- to happen. trying to decide how to dispose of their sur- panding the Foundation’s investment in cut- I just ask the Senator from South plus food. ting-edge research, widening the distribution Dakota and all those who are objecting We’re hoping we can continue to count on of education materials aimed at preventing to this bill going to conference to look you to make sure this amendment is adopted birth defects and infant mortality, and in- at the history of this legislation. and the CARE Act becomes law. Thank you creasing support of community-based pro- The history of this legislation has for consideration. grams to improve birth outcomes. Sincerely, March of Dimes volunteers and staff in been bipartisan. Senator JOE LIEBER- ROBERT FORNEY, every state as well as the District of Colum- MAN and I have worked to put this bill President and CEO, bia and Puerto Rico stand ready to work together. It has priorities on the Demo- America’s Second Harvest. with you to secure enactment of this impor- cratic side. It has priorities

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00004 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2951 on the Republican side. We have door meetings because, candidly, Sen- cial services block grant and the im- worked to take out everything that ator LIEBERMAN and I have worked portance we place on fully funding it, could be controversial. hand in glove on this. We continue to and the need for offsets to the tax pro- At a press conference we had the work hand in glove, as have Senator visions in this legislation. other day, Senator LIEBERMAN said this BAUCUS and Senator GRASSLEY. We agree there should be tax provi- bill is simply all good. There is not We will continue to work with our sions. We agree there should be an anything bad or controversial. There is colleagues on the other side of the aisle SSBG provision. What we have not not any kind of strong opposition to because we believe it is so important to agreed to is how we resolve ways in this bill on either side of the aisle. If get done. I believe basically the four which to fully fund them and to offset there was strong opposition on either corners of the bill are fairly well estab- the costs involved with the tax provi- side of the aisle, it would not be in this lished. It is now working on how we do sions of the bill. That is a substantive bill. We have a bill that provides it. question. money to those who are serving those Another thing that shows bipartisan Then there is a procedural question. in need in our society. We have a bill cooperation is we have actually been The Senator from Pennsylvania con- on which the track record through the working on a bipartisan basis on off- tinues to insist the only way to resolve Finance Committee and through the sets. I know the Democratic leader has the procedural issue is by forcing this Senate floor has shown we have worked been rather insistent about having the bill to conference. As I have said to together. tax provisions offset. We have been him on several occasions, we are very Senator GRASSLEY and Senator BAU- working, again in a bipartisan manner, reluctant without the concurrence of CUS have worked together in com- on the Finance Committee. I know the House leadership that there will be mittee to pass a bill unanimously out Senator LIEBERMAN and myself have the kind of bipartisan participation we of that committee, on a bipartisan been trying to find offsets to get this need to resolve these issues in a fair basis. When it came to the floor, there bill in a position to get strong bipar- way. He has given his assurance, but he were concerns. We were able to take tisan support. I would make the point has also indicated to me privately he care of those concerns and pass a bill. there may be instances in which the cannot commit for the House, and I un- I believe it was 95 to 5. Democratic leader can justifiably say derstand that. I would not expect him As we were going through the pas- there has not been a cooperative ven- to. sage, we had some concerns as to some ture in getting a bill through the Sen- We have done a lot of work between things the House might be interested ate and we are hesitant about taking a the House and the Senate in the last in putting in this bill, some faith-based bill to conference because of that. That two Congresses in the way I have pro- provisions some Members on the Demo- has not been the case on this bill. posed we resolve these issues. We send The Senator has the commitment cratic side had concerns about. We re- the bill over to the House. The House from the leader and myself that it will ceived a letter from the House saying deals with the amendments. We not be the case in conference, and I am they had no intention of doing that. In preconference or we negotiate the hopeful that word and the track record a sense, we were able to preconference amendment and either through con- of this bill will have some influence some of the concerns to make sure we ference or a final ratification of the over the Democratic leader’s decision were trying to pass something good bill the legislation is sent to the Presi- to allow this bill to move forward in and helpful to those agencies and indi- dent. viduals wanting to help people in need the process so we can get a good nego- We have actually resolved our dif- in our society. At a time when many in tiation going with the House of Rep- ferences with the House without a con- this Chamber are clamoring about resentatives to get this done. ference on 51 occasions during the 107th those who are falling through the UNANIMOUS CONSENT REQUEST—H.R. 7 Congress, and already this year we cracks, this is an opportunity for us to I ask unanimous consent that the have resolved our differences with the get literally billions of dollars, some of Senate proceed to the immediate con- House on 19 occasions on a whole array it Government money but most of it sideration of H.R. 7, the charitable giv- of bills: the veterans benefits bill, the contributed by individuals, to groups ing bill. I further ask unanimous con- Healthy Forest Act last year, the Syr- which get favorable tax treatment for sent that all after the enacting clause ian Accountability Act, the military doing so. be stricken, that the Snowe amend- We set up individual development ac- ment and the Grassley-Baucus amend- tax bill. All of these issues have been counts, which has been a high priority ment which are at the desk be agreed preconferenced and resolved in a way that has allowed us to work through of Senator LIEBERMAN, Senator FEIN- to en bloc; that the substitute amend- our differences, with the assurance we STEIN, myself, and others on both sides ment which is the text of S. 476, the of the aisle. We have a laundry list of Senate-passed version of the charitable would have the kind of involvement very positive things this legislation giving bill, as amended by the Snowe and participation I expect and all of does, and we have a history of bipar- and Grassley-Baucus amendments, be our colleagues expect with regard to tisan cooperation. agreed to; that the bill, as amended, be the conferencing or the working out of With some of the other legislation read a third time and passed, the mo- the differences between the two that may have been brought forward, I tion to reconsider be laid upon the versions. I ask unanimous consent that understand why the Senator from table; further, that the Senate insist we simply remove references to the South Dakota may say, well, I do not upon its amendments and request a conference in the request made by the want to take the chance, let’s say, of conference with the House; and lastly, distinguished Senator from Pennsyl- the FSC bill, for example, or something that the Chair be authorized to appoint vania so we can do what we have done going to conference; we do not know conferees with a ratio of 3 to 2, and on 19 occasions so far in this Congress: what is going to go on there and there that any statements relating to the Send the bill to the House, let us re- solve our differences through negotia- may have been controversies around it. bill be printed in the RECORD. There has been no controversy The PRESIDING OFFICER (Mr. tion, and send the bill to the President, around this bill. Other bills have SMITH). Is there objection? as we all want. passed and gone to conference we did Mr. DASCHLE. Mr. President, reserv- The PRESIDING OFFICER. Does the not have great controversy about, we ing the right to object, I will respond Senator from Pennsylvania so modify had a broad consensus about, and they to the Senator from Pennsylvania by his request? were allowed to be worked out. For saying there are two issues. One is Mr. SANTORUM. No, Mr. President, I some reason, this was the first one process and the other is substance. I do not. I ask that my unanimous con- grabbed and it has been held on to now think there is ample opportunity for us sent be acted upon. for quite some time. to agree on substance. The distin- The PRESIDING OFFICER. Is there One final thing. Senator FRIST, the guished Senator from Pennsylvania objection? leader, and I have given a commitment and I have talked on a few occasions in Mr. DASCHLE. With the objection the Democrats will be fully involved in recent weeks about this matter and it raised by the Senator from Pennsyl- this conference; there will be no back- comes down to two questions: the so- vania, I, too, would have to object.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00005 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2952 CONGRESSIONAL RECORD — SENATE March 23, 2004 The PRESIDING OFFICER. The ob- I ask if the Senator from Alaska This first chart shows that situation. jection is heard. The Senator from wishes to have morning business in ad- I call it to the attention of the Senate. Pennsylvania. dition to what is now left? We would be As crude oil prices go up, there are Mr. SANTORUM. Mr. President, I am happy to agree to that. We have three changes in our gross domestic product. very disappointed we cannot get agree- Senators on our side who wish to speak We have seen these effects firsthand al- ment. As the Senator from South Da- in morning business. ready. High energy prices, which rose kota said, there are two major issues. Mr. STEVENS. Mr. President, I ask 4.7 percent in January and another 1.7 They are not particularly complex that the floor management check with percent in February, greatly contrib- issues, but they are ones in which I the leader, to see if there is any objec- uted to an increase in consumer prices. think it is important for us to be in a tion to restoring the concept there be 1 The Department of Labor recently an- position to be able to drive to a resolu- hour equally divided. nounced that those prices jumped .3 tion. There has been no talk about ex- Mr. REID. I am confident that if percent in February and another .5 per- traneous matters being brought in. there is some problem at a subsequent cent in March. Consumers are paying This is simply the four corners of this time we will be happy to take that more for food, goods, and energy bills. bill trying to be worked out. The way time away, because I am confident it High energy prices are essentially act- we have done it historically in this would not be. So I ask there be—let’s ing as a consumer tax, leaving Ameri- Congress and previous Congresses is to make it 11:15, an extra 2 minutes, and cans with less disposable income for sit down with both bodies in a con- the time be equally divided? travel, home buying, restaurants, re- ference and work it out. I am very dis- Mr. STEVENS. I support that and tail establishments, and daily living. appointed we do not have the oppor- ask unanimous consent that be the Record high gasoline prices only in- tunity to get that done for this very case. tensify this problem. Gasoline prices important bill. The PRESIDING OFFICER. Without rose 8.1 percent in January and an ad- The PRESIDING OFFICER. The Sen- objection, it is so ordered. ditional 2.5 percent in March. Last Mr. REID. If the Senator would just ator from South Dakota. week the average price at the gas pump yield for one other unanimous consent Mr. DASCHLE. I want to make sure reached $1.72 per gallon, with Cali- request, on our side we have three the record is clear. We have not actu- fornia leading at an average of $2.10 at speakers. We have Senators SCHUMER, ally resolved our differences in the the pump. These prices are an addi- DORGAN, and CARPER on our side—I am House on a majority of occasions tional constraint on the consumer sorry, Senators SCHUMER, WYDEN, DOR- through conference. We have actually spending power. For every 1 cent in- GAN—and Senator CARPER also wishes done the opposite. We have done what crease at the pump, we see $1 billion to speak. I ask the time be equally di- I have suggested we do with this bill. lost in consumer spending capability. On 51 occasions in the 107th Congress vided among those four Senators on The rise in fuel prices also greatly and on 19 occasions so far in the 108th our side, in the order I have just an- impacts our aviation and trucking in- Congress, we have not gone to con- nounced. dustry. Our airline industry has lost The PRESIDING OFFICER. Without ference. We have resolved these mat- over $25 billion in the last 3 years. Sus- ters by sending the bill to the House objection, it is so ordered. Mr. STEVENS. Mr. President, it is tained high jet fuel costs of $1 per gal- and worked on legislation either in lon, which is double that of 1998–1999, preconference or through negotiation. I my understanding the first half of this 1-hour period is under the control of continues to hamper the health of our am fully prepared to do that again in critical transportation industry. High this case and look forward to working the majority; is that correct? The PRESIDING OFFICER. The Sen- energy prices also prevent job creation not only with the Senator from Penn- ator is correct. for the transportation sector. The Air sylvania but others who want to see The Senator from Alaska. Transport Association estimates for this legislation passed as I do. f every $1 increase in the price of fuel, I yield the floor. they could fund 5,300 airline jobs. The f ENERGY increase in these prices is staggering. ORDER OF PROCEDURE Mr. STEVENS. Mr. President, the Every homeowner in America feels Energy Committee has introduced a re- the pressure of high energy prices. Mr. STEVENS. Mr. President, par- vised energy bill. Swift passage of this Home heating costs for the 2002–2003 liamentary inquiry: What is the status bill is vital. We should not underesti- season were up 12 percent for natural of time now under morning business? gas, 7 percent for propane, and 2 per- The PRESIDING OFFICER. The ma- mate the widespread and important cent for electricity. This winter alone, jority leader or his designee controls consequences that this comprehensive natural gas prices were 60 percent high- the next 19 minutes 40 seconds. The mi- energy legislation will have for the fu- er than last year—60 percent higher nority leader has 30 minutes 24 sec- ture of our Nation. American citizens and businesses than last year. Estimates show that onds, and he would have the remainder rely on our ability to stabilize energy consumers may pay more than $200 bil- of that time until 11 o’clock. Mr. STEVENS. Is the time equally prices and provide them with the en- lion this year in energy costs. This is divided between now and 11 o’clock? ergy resources they need. Now, in the an enormous and unnecessary burden The PRESIDING OFFICER. It is not post-9/11 world, our energy develop- on our economy. now. The majority leader has used ment and production has taken on an Overall, it is estimated that since some time already. They have remain- additional level of importance. Our na- 2000 consumers paid $111 billion more ing 19 minutes. tional security is dependent upon our than they did in the previous 3 years Mr. STEVENS. The minority used no ability to decrease our reliance on for- for natural gas alone. This increase time? eign energy sources, particularly from cost industrial consumers $57 billion, The PRESIDING OFFICER. That is unstable or unfriendly regimes. commercial customers $21 billion, and what the clock reads. The comprehensive energy policy em- residential consumers $33 billion. Mr. STEVENS. Very well. bodied by this new bill is also critical This second chart shows that situa- The PRESIDING OFFICER. The mi- for ensuring our economic growth. tion. We have had job losses through- nority has used 30 seconds. High energy prices impact our econ- out the country because of this change Mr. REID. Mr. President, if the Sen- omy in many ways, and our ability to in energy prices. Look at that: In Cali- ator will yield, the time Senator stabilize energy prices will have far- fornia alone, 250,000 jobs. It has had an DASCHLE used was under leader’s time. reaching consequences for our overall amazing impact. High energy prices We have some speakers on our side. We economic health and growth. have had a devastating impact on know you have speakers on your side. I The United States is recovering from American jobs. Since 2000, when the en- think it is pretty clear, based on the a recession, but this recovery is threat- ergy crisis began, we have lost 2.9 mil- conversation on the floor last evening ened by sustained high energy prices lion jobs related to the cost of energy. and today between Senator MCCONNELL which will increase real interest rates, Sustained high energy prices have the and this Senator, that not much is the rate of inflation, and reduce gross potential to lower our gross domestic going to happen on the bill today. domestic product growth. product, which could cost the U.S. an

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00006 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2953 additional 770,000 to 2.7 million jobs. needs. Today the Government encour- ploration and production in the United The jobs issue is an energy issue. If we ages use of natural gas but discourages States by 2025. Unless we pass an en- want to deal with the jobs issue, we exploration and development of domes- ergy bill to bring certainty to Amer- must pass the energy bill. tic natural gas. As a result, most major ican energy policy, that investment The industrial energy consumers of energy companies, including some will not take place. I repeat: Unless America have stated that high energy which operate in my own State of Alas- this bill is passed, there will be no new prices, most in natural gas, contrib- ka, are abandoning the United States investment in the production and de- uted to the loss of almost 2.8 million and investing in and developing energy velopment of oil and gas resources in manufacturing jobs. Chart No. 3 deals resources in other countries. the United States. with this problem. Since 1982, jobs in A recent article shows while the 4 The high impact of energy prices can the oil and gas industry have declined major oil and gas companies realized be seen at all levels of our economy. by one-half, from over 700,000 jobs to $21 billion in cashflow from their U.S. High energy prices have produced job roughly 330,000 jobs. oil and gas activities, they only rein- losses, trade deficits, and constraints As chart No. 4 shows, the chemical vested $9.15 billion back into the on consumer spending and economic industry lost jobs. As gas prices go up, United States. Less than half of the growth. But the most disturbing aspect the number of chemical industry jobs money they paid was invested here to of this problem is the fact that Con- goes down. The price of energy is di- increase the supply of gas. gress has been debating comprehensive rectly related to the loss of jobs in this This lack of reinvestment makes us legislation since 2001. I don’t think we country. dependent on foreign sources of energy have passed a real energy bill in 12 Since 2000, our chemical industry has from unstable or unfriendly regimes. years. We are squabbling here in Con- lost 85,000 jobs. This industry employs More and more we are dependent on gress while high energy prices burn our more than 1 million Americans, and 5 foreign sources. economy and destroy American jobs. million Americans have jobs that de- This industry generates jobs and rev- In April of 2002, the Senate passed pend upon the chemical industry. More enues in other countries at our own ex- H.R. 4, the Energy Policy Act of 2002, of these jobs are threatened as major pense. These new jobs should be Amer- by a vote of 88–11. Then the bill died in chemical companies across the United ican jobs and that energy royalty in- conference. States are closing their factories and come should be coming into our Gov- In July of 2003, after months of inten- moving to countries which provide ernment. The receipts generated by sive debate, the Senate passed H.R. 6, cheaper natural gas. that economic activity would help re- the Energy Policy Act of 2003. How- This jeopardizes millions of well-pay- duce the deficit, provide new jobs, fund ever, in November of that year the Sen- ing American jobs that will not be re- the war on terror, and support many of ate rejected cloture by a vote of 57–40, placed unless we have energy. Moving the domestic programs we cannot fully 3 votes short of having an energy bill. these industries offshore not only con- fund. We were elected as public officials to tributes to job losses but it increases Despite the obvious benefits of do- improve the lives of American people, our burgeoning trade deficit. Our mestic energy exploration and develop- to enact laws and to formulate policies chemical industry once was a major ex- ment, today we rely on foreign imports designed to ensure the strength and porter, generating a $16 to $18 billion for over 60 percent of our oil supply. economic viability of our Nation. By trade surplus. Last year the chemical Imagine that. It was about 33 percent failing to enact a comprehensive en- industry generated a trade deficit of at the time of the embargo on oil in ergy policy for our Nation, we have $9.6 billion, contributing to an overall the 1970s. Now it is over 60 percent. We failed the American people. American U.S. trade deficit of over $530 billion. are 60 percent reliant on foreign oil, businesses and citizens are struggling That deficit, too, is related to energy and more people oppose the develop- out of recession and meaningful and availability and the cost of energy. ment of the oil resources on the North sustainable economic recovery. Job High energy prices are threatening Slope of my State. Currently, we also creation will only come with stable en- our fertilizer industry. Up to 90 percent rely on 16 percent for foreign sources ergy prices, and they will come only if of the cost of producing fertilizer is di- for our natural gas supply. Energy im- we pass an energy bill and send it to rectly linked to the cost of natural gas. ports make up the largest portion of the President. Between 2001 and 2003, eight U.S. nitro- our foreign trade deficit. A comprehensive energy policy is gen fertilizer manufacturers perma- This is chart No. 5. It shows the nat- necessary to secure domestic energy nently closed. That is one-fifth—20 per- ural gas consumption outlook. In the security and to support American jobs. cent—of all the United States fertilizer last 10 years, demand for natural gas Given the negative impact of high en- production. Additionally, our ammonia has increased by 19 percent, and that ergy prices on our Nation, we should factories are operating at 60 to 65 per- number is projected to grow by 50 per- act quickly to address this situation. cent capacity. Why? Because of the cent in the next 25 years. Absent a new As I said, the Energy Committee has cost of natural gas. supply of natural gas, we will likely see introduced a revised energy bill which The impact of high energy prices is a gap of 15 billion cubic feet per day or encompasses a comprehensive and bal- acutely felt by the agriculture commu- 6 trillion cubic feet per year in the next anced natural energy policy. This bill nity. The energy costs account for 6 10 years. will increase domestic energy supplies, percent of farm production costs. This chart shows the difference be- encourage energy conservation, sta- Farmers spent between $1 and $2 billion tween our consumption and the projec- bilize energy prices, bring certainty to more this year to plant crops. In 2003, tion into the future. We are growing American energy policy for our busi- farmers paid $350 per ton for fertilizers, more reliant on foreign sources for our nesses and consumers, and ensure our more than twice what they paid just 1 natural gas. We are already 60 percent energy security. It contains provisions year previously. That is a 100-percent reliant for oil. This chart shows that as designed to increase oil and gas explo- or more increase in the cost of fer- the years go by we are going to be ration and development, while at the tilizer in 1 year. more reliant on foreign sources for nat- same time promoting energy conserva- The good news is a worsening crisis is ural gas. It will be expensive natural tion and alternative and renewable en- avoidable. The United States has the gas. It has to be gasified, transported ergy resources. This bill is a jobs bill. natural resources to increase our en- in cryogenic tankers, and then It will create more than 800,000 new ergy supply. But inconsistent Govern- regasified when it gets here. Our own jobs. Many of those jobs will be the re- ment policies discourage exploration, natural gas is pumped out of the sult of a major component of this en- development, and the use of our own ground and shipped in a pipeline. The ergy bill, which is authorization for the natural resources—our own energy re- costs associated with foreign reliance building of the Alaska natural gas sources. are going to be staggering. That means pipeline. Over 95 percent of undiscovered oil more American jobs lost. Our gas pipeline will create over and 40 percent of undiscovered natural The Natural Petroleum Council 400,000 jobs in and of itself, including gas is located on Federal land. These found that to bridge this gap, $1.2 tril- 7,000 construction jobs, thousands of public resources can secure our energy lion dollars must be invested in new ex- manufacturing jobs necessary to create

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00007 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2954 CONGRESSIONAL RECORD — SENATE March 23, 2004 equipment, and thousands of infra- being done by our troops there, by United Nations, and a number of other structure jobs. It will meet approxi- other Americans there seeking to work western governments, including several mately 10 percent of our country’s nat- for a secular government and freedom that actively opposed the war. In fact, ural gas needs. Over 4 billion cubic feet in that part of the world. I hope we can regime change in Iraq has been a U.S. per day will come from Alaska to de- be more positive about it than we have policy since 1998. It is clear that some crease our dependence on foreign gas been, particularly in the media. of the prewar intelligence on which de- and imports of liquefied natural gas. It I was especially interested to read an cisions may have been made were not will generate over $40 billion in rev- editorial in the newspaper ‘‘Wingspan’’ complete, perhaps were flawed, but the enue for the American Government, in- from Laramie County Community Col- fact remains the President acted in stead of sending that money overseas. lege in Cheyenne, WY. It was partially good faith based on the best intel- Chart 7 shows the 800,000 energy bill about a young man named Nathan ligence available at the time. jobs. The renewable fuel standard pro- Span, and written by Ashley Colgan, But cynical political efforts, of vision of this new bill will create in the co-editor of this college paper. Ma- course, have portrayed the President as and of itself 214,000 new jobs. It is esti- rine Corporal Nathan Span, at the age deliberately misleading the public and mated this provision will increase farm of 22, is a two-time war veteran and has remaining dishonest. Rather than play- revenue by $51 billion over the next 10 only good things to say about the risks ing the election year politics with this years. This reduces the overall farm he has taken. He was in Operation En- issue, we need to focus on correcting payments currently expended by the during Freedom and Operation Iraqi the existing programs, focus on the fu- Federal Government by $5.9 billion. Freedom, and returned home in Decem- ture and where we are going, and how In a time when the Federal budget ber of 2003. It was interesting what to complete the task to ensure that our deficit is increasing, it is incredibly Ashley had to say. leaders have accurate and reliable in- important we find some cashflow to On this one-year anniversary, I remind formation on which to implement pol- offset this spending. people that although the war may be some- icy in the future. I am still convinced unless Congress what political, it is not so to the men and I hope the mission of the September acts to ensure greater domestic produc- women who fought and still fight in Iraq. 11 Commission that we hear so much Americans should remember that at one tion of our oil resources, our energy se- about, the talk about it, what should curity is jeopardized. point we fought for our freedom from oppres- sion, and we also had to seek help. All I ask have been done and was not done— Given the importance of Congress en- for Americans to remember is what soldiers what we ought to do is keep this from acting a comprehensive energy policy in Iraq represent: Freedom. happening in the future. That is really this year, I urge the Senate to move Ashley goes on to say: the issue. This idea of seeking to assess swiftly to pass this Energy bill. I can blame in the past is immaterial. The think of not one thing the Senate can I understand the fear, pain, and confusion but why get angry at what I feel is America’s point is, What can we do differently to do to assist the American people more, attempt to make the world a better place. avoid something of this kind happening that will restore American jobs, than Many Americans feel misled and lied to by in the future? We all know what is acting quickly on the Energy bill that the administration, but let’s keep in mind going on with respect to those issues. has just been reintroduced. the greater good for which the soldiers are Where are we today? Two weeks ago, fighting. Soldiers in Iraq feel they are set- The PRESIDING OFFICER. The Sen- the Iraqi Governing Council unani- ator from Wyoming. ting an example of what America will not tolerate from a malicious dictator. mously signed an interim constitution Mr. THOMAS. Mr. President, I agree toward a secular government, an amaz- Corporal Span is a young man who with the Senator from Alaska. Having ing change in that part of the world. It just returned from spending part of his worked for several years on this En- guarantees freedom of religion and ex- life in Iraq and Afghanistan. In the edi- ergy bill, it seems to me there is noth- pression, the right to assemble, to or- torial, Span says, ‘‘For those who have ing more timely than to move forward. ganize political parties, the right to fought for it, freedom has a taste that This is a policy. We think it is for to- vote, the right to a fair and speedy and the protected will never know.’’ morrow, but it is looking forward. It is open trial. It prohibits discrimination a balanced policy that has alternative I will talk a little bit about where we are. Certainly, most recognize this ac- on gender, nationality, religion, and fuels. It has clean air. It has conserva- arbitrary arrests and detention. tion and efficiency, as well as domestic tion in Iraq was necessary for a number Of course, what the terrorist enemy production. We need to do this. I hope of reasons. Saddam Hussein’s regime fears most is a free and democratic we move forward. harbored and supported terrorists and Iraq. Freedom, liberty, and democracy f was consistently an aggravating factor in the Middle East. He had attacked his are threats to all that oppose it. They IRAQ neighbors and launched wars of aggres- will not see this happen without a Mr. THOMAS. Mr. President, a year sion. Saddam had a history of pos- fight. ago we started the Iraqi freedom activ- sessing and using chemical and biologi- Our challenge is to stay there until ity. I will talk a little bit about what cal weapons, in violation of the terms we have completed our goals. The situ- has been accomplished this past year, of the cease-fire agreement in 1991 of ation remains dangerous and volatile. to recognize all those who have done so the Gulf War, and numerous United Na- The cost of freedom is high. Thanks to much to have a successful operation tions resolutions. the selfless devotion and hard work of there. We are moving toward comple- The best intelligence available at the our men and women in uniform, we tion—hopefully not too long in the fu- time showed Saddam Hussein to be a continue to make definite and visible ture, but we have accomplished a great growing threat to the United States. I progress toward a goal of returning a deal. We recognize and thank those am pleased the President acted swiftly free and stable country to the Iraqi who have given so much to continue to and decisively before the threat be- people. fight for freedom, in this case in Iraq came imminent. The mission in Iraq is Iraqis are much better off today than and, of course, around the world. critical to winning the global war on they were under Saddam Hussein. The I am sorry this has become so much terrorism. The war on terrorism re- Middle East is more stable and the of a political issue. The fact is, we are mains an aggressive effort to bring not United States is safer with Saddam out talking about finishing a task we start- only the perpetrators of September 11 of power. Operation Iraqi Freedom is ed. It is not something that ought to be to justice but also those who sup- the right action. We are winning the constantly talked about as a political ported, aided terrorism. This has been war in Iraq and the war on terrorism. issue in a Presidential election. Cer- policy from day one in Iraq and clearly I thank those who have participated, tainly we ought to be talking about fits this definition. those service men and women who have some of the successes that have oc- The conclusion that Saddam Hussein given so much for this kind of freedom curred there. was hiding chemical and biological to be achieved. I had the opportunity to visit Iraq weapons while conspiring to rebuild I yield the floor. and Afghanistan. I was impressed with the nuclear program was also reached The PRESIDING OFFICER. The Sen- the things that have been done and are in the Clinton administration, the ator from Nevada.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00008 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2955 ORDER OF PROCEDURE sort of making up your mind first and partisan. In fact, sometimes the Demo- Mr. REID. Mr. President, there is a then trying to get the facts to fit that. cratic leadership in the House would unanimous consent agreement that has It is no secret I have been sympa- tear their hair out at Lee Hamilton’s been made, an order dividing the time thetic to the President on the war in bipartisan nature. Iraq. I disagree with certain things he Yet there is almost a fear of facts on the Democratic side. Senator CAR- did, but I voted for the war. I voted for coming out. What does this say to the PER is not going to come, so that being American people? Do we believe our the case, I ask unanimous consent that the $87 billion. I think we have to fight terrorism. And I do think it is easy to country is right? I do. Do we believe, Senator SCHUMER be given 10 minutes, second-guess. I also believe we could unlike other countries, that we search Senator WYDEN be given 10 minutes, get so hamstrung and do nothing that for the truth, even though that truth and Senator DORGAN be given 10 min- the terrorists would gain more than sometimes creates bad currents, dis- utes—in that order, changing the order sension, whatever, but that truth is the now in effect. they have. Having said that, if there is one thing hallmark of our democracy? I do. I The PRESIDING OFFICER. Without we thrive on, if there is a thing that is think the vast majority of Americans objection, it is so ordered. a hallmark not only of winning a suc- do. I think if you ask President Bush, Mr. REID. Senator SCHUMER is on his cessful war on terrorism but of defend- he would say he does. way. ing the very democracy the terrorists But yet, over and over again, with I suggest the absence of a quorum. hate and fight, it is that all informa- the 9/11 Commission, with Richard The PRESIDING OFFICER. The tion come out so we can make an accu- Clarke, with Mr. Foster, with Ambas- clerk will call the roll. rate assessment. sador Wilson, there has been not only The assistant legislative clerk pro- I have to tell you, as you look at it, an aversion to facts coming out but a ceeded to call the roll. it seems this administration does not kind of ‘‘McCarthyism’’ in sort of call- Mr. SCHUMER. Mr. President, I ask want all the facts to come out and, in ing names at the person who had a dif- unanimous consent that the order for fact, oftentimes thwarts facts coming ferent interpretation instead of debat- the quorum call be rescinded. out; and then, when they hear facts ing whether their interpretation was The PRESIDING OFFICER. Without they do not like that come out not be- right or wrong. objection, it is so ordered. cause of administration auspices, they This is bad for our democracy. This Mr. SCHUMER. Mr. President, I ask start kneecapping the bringer of bad does not bring credit to this President unanimous consent that I be recog- news. or the Presidency. This has to stop. I nized for 10 minutes of our side’s morn- This has not just happened in one in- hope today, as the 9/11 Commission be- ing business time. stance; this has happened in instance gins to interview a series of very im- The PRESIDING OFFICER. Without after instance after instance. Today portant witnesses—two Presidents, two objection, it is so ordered. there is a whole machine discrediting Vice Presidents, many of their lead- The Senator from New York. Richard Clarke—certainly disagree ers—maybe we can turn over a new f with his arguments, certainly disagree leaf; that maybe, instead of with his interpretations of what hap- stonewalling and name-calling and hid- THE 9/11 COMMISSION pened in the White House. ing from the truth, this administration Mr. SCHUMER. Mr. President, I There are two sides to every argu- will say, look, when you are President would like to talk a little bit about the ment. But to say Mr. Clarke—who, you have the powers of the incum- 9/11 Commission which, of course, is until 2000, according to the newspapers, bency, but it is also a tough country to right now beginning to interview some was a registered Republican, whom I govern and sometimes you have to of the most high-level people in our know well, whose sole mission was to take one for the truth, you have to Government. The Commission has an defend us against terrorism—to call take one because the facts do not quite important and, I would say, sacred mis- him names and say he is motivated by square how you thought they did, and sion, and that mission is to find out partisan politics and he has one friend explain that to the American people. I see my colleague from Oregon in what happened and why so many peo- in the John Kerry campaign, that does the Chamber, and I know he is going to ple were killed in the tragedy of 9/11. Of a disservice to America; to do the same course, many of those people were from speak on the same subject. thing to Mr. Foster, who had numbers But, again, this 9/11 Commission is my city and State—the vast majority. on how much the prescription drug bill extremely important. As Santayana Some of those people I knew: someone would cost; to do the same thing to said: Those of us who don’t learn the I played basketball with in high school, Ambassador Wilson; to do the same lessons of history are condemned to re- someone who was a businessman who thing to Chief of Staff General peat them. As a New Yorker, I believe befriended me on the way up, someone Shinseki, this is a pattern that does that particularly in regard to 9/11. If we who was a brave firefighter from the not do the President, the White House, cannot get a full, unvarnished, non- Marine Park neighborhood from where or the administration proud. In fact, it partisan reading of the facts—an anal- I come. And the families mirror—of has an antidemocratic tinge to it that ysis of why we were caught so unpre- course with greater intensity—the de- should make all of us worry, that pared on that awful day, 9/11—it will termination of the American people to should make all of us troubled by what hurt us in fighting this war on ter- get to the bottom of this. has happened. rorism, which I believe will be with us The unfortunate situation is the 9/11 Probably the last analogy to 9/11 was for a generation. Commission—which is bipartisan and Pearl Harbor. And what did this coun- If we start off in a way that we are has an important mission that tran- try do? What did Franklin D. Roosevelt afraid of the facts, if we start off seem- scends any politics, any one adminis- and the leaders of this country do? ing to believe only one side is right and tration, any one Secretary of Defense They said: We need to find the facts as the motivation of anyone who dis- or Secretary of State or President—is to why we were so unprepared. Might agrees is suspect, I fear we will not win being thwarted as it tries to do its those facts have damaged people in of- the war on terror because we will not work. They have not been given docu- fice? Surely. But, nonetheless, pursue learn what has happened and we will ments. They have been delayed. Even the facts we did, and a comprehensive not be able to correct the mistakes to this day, Condoleezza Rice has said report on why America slept was that have been made by many different she will not testify to the Commission issued. people of both political parties in the in public, even though she was in prob- This 9/11 Commission is in that tradi- past. ably the most sensitive staff position tion. Yet this 9/11 Commission has been My final plea to our President at 1600 there could be in regard to figuring out thwarted every step of the way. Gov- Pennsylvania Avenue is, don’t hide the the signals before 9/11 and what should ernor Kean is a Republican, greatly re- facts. Don’t be afraid of the facts. be done as a result of 9/11. spected, not a partisan man. The vice Don’t try to undermine those who will I think this is regretful. I think this chairman is Lee Hamilton, whom I present the facts. Our country will be shows, unfortunately, a pattern in this served with in the House—the same better and stronger for it if you can administration of not wanting facts, of way, a Democrat, but not regarded as stick to those rules.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00009 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2956 CONGRESSIONAL RECORD — SENATE March 23, 2004 I yield the floor. and I together have tried to set an ex- in limited circumstances. The fact is, The PRESIDING OFFICER. The Sen- ample of bipartisanship. That is the on Sunday she was a guest on all five ator from Oregon is recognized for 10 way we need to proceed in this critical network morning shows. She has plen- minutes. area. When you have the Clarke book ty of time to do that, but somehow Mr. WYDEN. Mr. President, I thank backing up what former Secretary there is not enough time to appear pub- my colleague from New York for tak- O’Neill said, that ought to set off licly before the 9/11 Commission to give ing this time. I want to spend a few alarm bells. That ought to set off testimony. I do not understand that. I minutes trying to put in context the alarm bells with respect to exactly how believe and hope that all Republicans debate about Mr. Clarke’s new book. It information is filtered now in the exec- and Democrats, this President and this seems to me that first and foremost utive branch. Congress, just want the unvarnished this debate is about more than ‘‘he I am hopeful we will see this inde- facts, what happened and what can we said/she said.’’ Invariably that is what pendent inquiry get to the bottom of learn from it. these discussions become fairly quick- the situation and find out exactly what I know in recent days there have ly. I want to review a couple of in- transpired after this critical situation been discussions about a number of stances that have caused me to be par- with the attack on our country. It is books that have been written. I was on ticularly concerned about the way the important that our Nation get the the floor also and spoke about former Clarke book has been handled. facts. It is important that they are Treasury Secretary O’Neill’s book. The When former Ambassador Wilson was found in a dispassionate fashion. Now Secretary described circumstances concerned that the administration had with this new book by Mr. Clarke mak- where almost instantly, in meetings in no evidence that the Iraqis had at- ing it clear that he shares the judg- the White House, the question posed by tempted to buy yellow cake from Nige- ment of Secretary O’Neill, it ought to the President and the Vice President ria, there was a very significant effort renew a concern in the Congress and a and Mr. Wolfowitz and others was, to try to discredit him. When former concern on a bipartisan basis that this What about Iraq? Let’s get the evi- Treasury Secretary O’Neill, a close country has a right to know, this coun- dence on Iraq. Suggesting that there friend of the Vice President, in effect try has a right to the facts. Certainly was only one issue, and that was to use talked about the administration going the question of responsibility for 9/11 is 9/11 to get Iraq. My colleague from Oregon said it after Saddam Hussein, everybody in an issue the American people should be well. The leader of Iraq was a mur- the administration said he was all wet able to see in a dispassionate fashion, derer. We are unearthing football-field- as well. Now we see the same tactic what really happened and how it hap- employed against Mr. Clarke, who sized graves in Iraq. pened. If anything, the events of the This man was a butcher, no question served both Republican and Demo- last week reaffirm in my mind how im- about that. But there are bad people cratic administrations, beginning with portant it is that the American people around the world who are in place now the Reagan administration. get the real story. and there are no plans in this Chamber Having worked closely with Mr. I yield my time. I note the Senator or at the White House to go after them. Clarke on a number of issues relating from North Dakota is on the floor as The pretext of dealing with Iraq was to cyber terrorism, Mr. Clarke has been well. He and I have worked together on that they had weapons of mass destruc- very critical of actions taken by execu- many issues. Certainly on the foreign tion, we were told. The CIA and others tive branch officials of both political policy arena, we share the view that provided secret briefings to us, and parties. these issues have to be worked on in a Condoleezza Rice, George Tenet, and My sense is that, when you look at bipartisan way. I will continue to focus many others provided the evidence. what people such as former Post re- on the evidence and focus on that evi- Secretary Rumsfeld said, ‘‘We know porters Bob Woodward and Carl Bern- dence no matter where it leads. where those weapons of mass destruc- stein have said over the years, you I yield the floor. tion are, where they exist.’’ don’t go with a story unless you have The PRESIDING OFFICER. The Sen- The Secretary of State went to the two independent sources to confirm it. ator from North Dakota. United Nations and laid it out with pic- What you have this morning is Mr. Mr. DORGAN. Mr. President, let me tures and slides and said, ‘‘Here is the Clarke in effect confirming Secretary follow on the comments of my col- evidence.’’ It turns out that evidence O’Neill’s account of the administra- leagues from New York and Oregon. wasn’t accurate. So Mr. O’Neill writes tion’s focus on Saddam Hussein. The issue of 9/11 is very important. I a bit about that. Now Mr. Clarke That is particularly important. have spoken a couple of times about it writes a book about it. He is not a These are two people with a long his- previously, only because we created a Democrat; he is a Republican. There is tory of working in Washington, DC. commission to take a look at what now an industry in the last 24 hours to Both of them have been fiercely inde- happened with respect to 9/11, events try to destroy his credibility. I don’t pendent. Both are known for calling leading up to it and following, to try to know Mr. Clarke. I don’t believe I have the issues on the basis of how they see understand what happened, how did it ever met him. All I know is that legiti- them. In effect, you have Mr. Clarke happen, and what lessons can we learn. mate questions are being raised about now confirming Secretary O’Neill’s ac- I have been very distraught that the these issues, about intelligence, about count with respect to the focus on Sad- 9/11 Commission has actually had to Iraq, and about the commission that dam Hussein. issue subpoenas. This Commission that has been impaneled to look into 9/11. There is an old saying that all roads we, with the President, have impaneled It all has the same kind of origin; lead to Rome. It seems the administra- to find the answers of what happened that is, let’s not ask questions, let’s tion so often clearly believes that no and what we can learn has had to issue not disclose this or that, let’s keep it matter what the evidence was at any subpoenas to our government to get in- all secret, if we can. Part of this shroud particular time, essentially everything formation. I don’t understand that. of secrecy that Mr. Krugman writes led to Saddam Hussein. Why on earth should this Commission about, in fact, I believe in this morn- It is clear that Saddam Hussein, have had to use any subpoena power at ing’s New York Times, also relates to throughout his leadership in Iraq, con- any time? something we learned last week that is sistently looked for opportunities to Why would not the administration of incredible importance. We learned inflict pain and trauma on the people have said to all of the agencies under last week that this issue of the Medi- of that country. It is beyond question their control, anything this Commis- care bill being discussed on the floor of that this was an evil individual. But at sion wants, anything they ask for— the Senate—adding prescription drugs the same time, it is critically impor- they are doing the country’s work— to Medicare—that the estimates of the tant that we be in a position to follow provide complete information? Instead, cost of that proposal that were given to the facts. they have met with roadblocks. I do Congress were wrong and, in fact, the I sit on the Senate Intelligence Com- not understand that. administration had estimates that mittee. I have always tried to work in I learned this morning that National would have had a substantial impact, a bipartisan way. I see the Presiding Security Adviser Condoleezza Rice is perhaps, on the debate on that legisla- Officer of the Senate, Mr. SMITH. He willing to testify but not in public and tion. They had those estimates, but the

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00010 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2957 person who had them, the chief actu- tioners. It may sound like a small natural gas, it will have a positive ef- ary—again, no Democrat, just a career thing, but in the scheme of things, it is fect on the price of natural gas and, I public servant who, by all accounts, is a big step. I thank him for his leader- think, a positive effect on the manu- a wonderful public servant—had the es- ship on that. facturing industry in this country. timates and was told: If you provide I bought gasoline in my hometown of The second district court has ruled the real estimates to Congress, you Wilmington, and I think it cost $1.77 that the Clinton standard—the SEER will be fired. per gallon, a little higher than it has 13 standard—should prevail. Last week, If anything demands an investiga- been in recent months. I read a news the association that represents the air- tion, it is that. It demands an imme- account the other day that said we conditioning manufacturers joined, diate investigation. If you cannot rely might be looking at prices as high as $3 saying they thought they could build on information coming from the execu- per gallon in some parts of America be- and begin selling, by 2006, air-condi- tive branch about programs we are con- fore the end of the summer. We are also tioners that met the more rigorous sidering on the floor of the Senate be- hearing a fair amount of concern about standard. cause someone threatened to fire some- the price of not just gasoline but of I hold a letter signed by 53 col- one if they tell the truth to the Con- natural gas. Natural gas is what we use leagues, Democrats and Republicans, gress, there is something radically to provide a feedstock for many of our that was sent last week to the Presi- wrong. So it doesn’t matter whether it chemical companies. A lot of agri- dent. is Mr. Clarke who writes a book and de- businesses use it for fertilizers. Natural It is a letter that simply says: Mr. scribes what he found in the White gas is also the fuel of choice for many President, we do a lot of good for our House. He also worked, as you know, of the new electric-generating power- country. We can help ourselves on the for the Clinton administration. He plants that are being built across this manufacturing side. We can help our- worked for the first George Bush Presi- country. selves by building fewer electric-power- dency. He has worked for George W. I want us to go back in time about 4 generating plants. We can reduce the Bush for the last couple of years. He years to the last year of the Clinton price of natural gas to some extent. We writes a book and raises serious ques- administration. In 2000, the Clinton ad- can reduce the emissions that are com- tions about the information that was ministration suggested, through regu- ing out of our electric-power-gener- used to decide to focus on Iraq rather lation, that we call on the makers of ating plants by millions of tons of CO2 than on al-Qaida. I think many of us air-conditioners in this country to cre- each year. We can do that, Mr. Presi- now, at least in the rearview mirror, ate and begin selling more energy-effi- dent, if the administration does not ap- look at that and say moving from Af- cient air-conditioners in 2006. Some- peal the decision of the second district ghanistan to Iraq and not continuing thing was adopted called the SEER 13, court. to focus on the destruction of al-Qaida seasonal energy efficiency rating. The If the Association of American Air- may have been a serious mistake. idea behind the regulation was that, by Conditioning Manufacturers can say we How did that happen? Why did that 2006, air-conditioners would have to be have the ability to live up to this more happen? These are legitimate public 30 percent more energy efficient than rigorous standard, more than half the policy questions. I suppose there is pol- those currently available. We adopted a Senate can say: Mr. President, we be- itics in some of it. I think the well- standard that was implemented and lieve we, too, have the ability to live being and future of this country de- then withdrawn by the Bush adminis- by this more rigorous standard. pends on our getting this right. We tration in the following year or two, I am tempted to say let’s let sleeping talk about the quality of intelligence and it was replaced by a less rigorous dogs lie. But rather than say that, let’s and the questions about that, and standard. let the more rigorous standard stand. There has been a court battle over whether intelligence information was Whether or not we pass an energy bill the last year or so, and the outcome is misrepresented. this year or not—we need an energy that the court battle has sustained the Look, the next potential terrorist at- policy desperately—I will say one more rigorous standards, the SEER 13 tack against this country will be thing: One good component of energy standard, which says that manufactur- thwarted—if it is thwarted, and we cer- policy in this Nation is conservation. ers in this country, by 2006, should be tainly hope it is—by good intelligence. One good way to conserve a whole lot producing air-conditioners that are 30 We must rely on our intelligence sys- of electricity, particularly starting in percent more efficient than those tem. Is there something wrong with 2006, is making sure that when we turn available in 2000. That may or may not that system? If there is, it must be on the air-conditioners in our homes, sound like a very big deal, 30 percent fixed now. It is not sufficient just to offices, and buildings, they are meeting more energy efficient, but I ask my say, somebody wrote a book, so let’s the more tough and rigorous standard. colleagues to think about this. When trash this person time and time again. That would be a good thing for Amer- was the last time we had a blackout That is not what we ought to do. We ica. ought to get to the bottom of what is during March or April or May or, I ask unanimous consent that a copy happening here, what caused all these frankly, in October, November, Decem- of this letter signed by 53 of our col- things to happen, what can we learn ber? I don’t recall one. My guess is that leagues be printed in the RECORD. about it and what can we do to protect you don’t, either. We have them, for There being no objection, the mate- our country. the most part, in the summer. We have Mr. President, I yield the remaining blackouts, for the most part, when rial was ordered to be printed in the time I might have to the Senator from temperatures get hot and people turn RECORD, as follows: Delaware, Mr. CARPER. How much time on their air-conditioners. U.S. SENATE, remains? If we begin buying more energy-effi- Washington, DC. cient air-conditioners in 2006, we will Hon. GEORGE W. BUSH, The PRESIDING OFFICER. Just The White House, under 7 minutes. do a couple of things: One, reduce the Washington, DC. f likelihood of blackouts and the kind of MR. PRESIDENT: A recent federal court de- calamity they create for our economy; ENERGY INDEPENDENCE cision regarding energy efficient air condi- two, we reduce the need to build new tioners is a significant victory for con- Mr. CARPER. I thank my colleague electric powerplants. Some 48 fewer sumers, for the environment, and for our na- for yielding. Before he leaves the floor, electric powerplants will have to be tion’s energy future. We respectfully request I want to take a moment and thank built because of the higher standard. In that you do not appeal the decision to the him for his leadership on another issue. addition to that, we will reduce, with a U.S. Supreme Court. As we have sought to become more en- higher efficiency standard for air-con- Last month, the U.S. Court of Appeals for the Second District (Natural Resources De- ergy independent, Senator DORGAN has ditioners, the emissions of carbon diox- fense Council et al v. Abraham, Docket 01– led the charge, saying maybe part of ide from our electric-generating plants 4102) affirmed that central air conditioners that would be to practice better con- by 2.5 million tons by 2020. sold beginning in 2006 must be at least 30 per- servation. He focused, among other In addition, if we are building more cent more energy efficient than those avail- things, on the efficiency of air-condi- power-generating plants that will use able today.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00011 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2958 CONGRESSIONAL RECORD — SENATE March 23, 2004 Air conditioners are a necessary modern JUMPSTART OUR BUSINESS adopted a good number of amendments. convenience but are also major users of elec- STRENGTH (JOBS) ACT Let me just list them. tricity. On hot days, cooling homes and busi- We have adopted, first, the managers’ nesses is the largest category of electricity The PRESIDING OFFICER. Under the previous order, the Senate will re- amendment on leasing shelters; the demand. Requiring air conditioners to be as managers’ amendment making modi- energy efficient as possible will begin to re- sume consideration of S. 1637, which duce the stress on the electricity generation the clerk will report. fications to the revenue provisions; the and transmission network and decrease the The legislative clerk read as follows: committee substitute. We have also adopted the Bingaman amendment to likelihood of blackouts that many regions of A bill (S. 1637) to amend the Internal Rev- the country experience during warm weather enue Code of 1986 to comply with the World expand the research credit; the Hatch- conditions. Trade Organization rulings on the FSC/ETI Murray amendment to extend the re- Air conditioners that meet the Seasonal benefit in a manner that preserves jobs and search and development credit. We Energy Efficiency Rating 13 standard will production activities in the United States, to have further adopted the McConnell provide benefits for consumers, the environ- reform and simplify the international tax- amendment to protect American work- ment, and the nation. The SEER 13 standard ation rules of the United States, and for ers; the McCain amendment on defense; will alleviate the need for additional elec- other purposes. tricity production and transmission result- the Dodd amendment to protect Amer- ing in as many as 48 fewer power plants re- Pending: ican workers; the Bayh amendment to quired by 2020. This standard will also result Harkin amendment No. 2881, to amend the extend expiring provisions; the Bun- in less harmful air pollution being emitted Fair Labor Standards Act of 1938 to clarify ning amendment to extend the net op- into the atmosphere. Moreover, by 2020 provisions relating to overtime pay. erating loss carryover provision; and power plant emissions of carbon dioxide will McConnell motion to recommit the bill to the Committee on Finance, with instructions the Bunning-Stabenow amendment to be 2.5 million tons lower as a result, and accelerate the phase-in of the manufac- emissions of mercury, sulfur dioxide, and ni- to report back forthwith the following trogen oxides will also be held down result- amendment: turing deduction. ing in cleaner air and healthier citizens. McConnell (for Frist) amendment No. 2886, That is quite a bit. A lot of legisla- Finally, the higher standard can be ex- in the nature of a substitute. tion adopted, amendments passed al- pected to save businesses and residential The PRESIDING OFFICER. The Sen- ready. Now, under the previous order, consumers $1 billion per year in lower elec- ator from Iowa. Senator HARKIN has offered his amend- tricity bills. Lower electricity bills will re- AMENDMENT NO. 2898 ment on the Department of Labor’s cover the slightly higher purchase cost for overtime regulations and that is the the more efficient air conditioners in less Mr. GRASSLEY. I send an amend- ment to the desk. pending first-degree amendment. than 18 months. Regrettably, in my view, the assist- As the Congress continues to debate the fu- The PRESIDING OFFICER. The ture of our nation’s energy policy, this court clerk will report. ant majority leader offered a motion to decision is one that should be embraced and The legislative clerk read as follows: recommit the bill and filed cloture on that motion to recommit. This morn- encouraged, not appealed. The Senator from Iowa [Mr. GRASSLEY] Respectfully, proposes an amendment No. 2898 to the in- ing the majority filled that amend- Tom Carper, Susan Collins, Byron L. structions to the motion to recommit S. ment tree by offering a couple of sec- Dorgan, Peter Fitzgerald, Jeff Binga- 1637. ondary amendments. man, Dick Durbin, Jack Reed, Lincoln The amendment follows: There may come a time, after full D. Chafee, Charles Schumer, Deborah and fair debate and amendment on the At the end of the instructions (Amdt. No. Stabenow, Dianne Feinstein, Daniel K. bill, when I would support a motion to Akaka, Elizabeth Dole, Ernest Hol- 2886) insert the following: lings, Patty Murray, Lamar Alexander, SEC. . This act shall become effective one cut off debate. But under the current Judd Gregg, Carl Levin, Olympia day following enactment of the legislation. circumstances, I will oppose that clo- Snowe, Joseph Lieberman, Paul Sar- Mr. GRASSLEY. I ask for the yeas ture motion. This is a bill about jobs, banes, Max Baucus, Maria Cantwell, and nays. about quality jobs here in America. Patrick Leahy, Joe Biden, Russell D. The PRESIDING OFFICER. Is there a Senator HARKIN’s amendment is also Feingold, Jim Jeffords, Jay Rocke- about the quality of jobs in America. feller, Frank Lautenberg, Ben Nelson, sufficient second? There is a sufficient second. This is not some amendment out of left Hillary Rodham Clinton, Barbara field. The Senator from Iowa is not try- Boxer, Barbara A. Mikulski, Chris- The yeas and nays were ordered. topher Dodd, Jon Corzine, John E. AMENDMENT NO. 2899 ing to change the subject, for example, Sununu, Mark Dayton, Arlen Specter, Mr. GRASSLEY. I send an amend- to gun control or Medicare or reproduc- Bill Nelson, Bob Graham, Ted Kennedy, ment to the desk. tive choice, but rather he is staying on Gordon Smith, Ron Wyden, Robert C. the subject. He is talking about jobs. Byrd, Herb Kohl, Tim Johnson, John The PRESIDING OFFICER. The His amendment, although relevant, Edwards, John F. Kerry, Thomas clerk will report. may not be strictly germane within the Daschle, Daniel Inouye, Kent Conrad, The legislative clerk read as follows: meaning of that term in Senate proce- Harry Reid, Richard Lugar. The Senator from Iowa [Mr. GRASSLEY] dure. The effect of this cloture motion, The PRESIDING OFFICER. Who proposes an amendment No. 2899 to the if adopted, would be to block a vote on yields time? Is there further morning amendment numbered 2898. the Harkin amendment. I will not be a business? The amendment follows: party to that effort. On a major bill Mr. BAUCUS. Mr. President, I sug- In the pending amendment strike ‘‘one’’ such as this one, Senators deserve a gest the absence of a quorum. and insert ‘‘two’’. full and fair opportunity to offer and The PRESIDING OFFICER. The Mr. GRASSLEY. Mr. President, I get votes on amendments. We should clerk will call the roll. yield the floor. allow that process to continue. The legislative clerk proceeded to The PRESIDING OFFICER. The Sen- Even though this cloture motion has call the roll. ator from Montana. brought the Senate to something of an Mr. GRASSLEY. Mr. President, I ask Mr. BAUCUS. Mr. President, let me impasse, I remain hopeful. I am hopeful unanimous consent that the order for take a few moments to review where because I believe after the Senate rec- the quorum call be rescinded. we are on this legislation. ognizes that the votes are not there to The PRESIDING OFFICER (Mr. First, I don’t want to sound melodra- block the Harkin amendment, the Sen- ENZI). Without objection, it is so or- matic but this is an important bill. ate can then reach an agreement lim- dered. This bill would help to create and keep iting amendments to the bill to a rea- good manufacturing jobs where they sonable number. I believe we can then f should be; that is, in America. work through this bill and bring it to We need to move this bill. The Sen- completion by the end of the week. It CONCLUSION OF MORNING ate conducted 3 days of debate on the is important that we do so. We need to BUSINESS bill, one of them a Monday without respond to the European Union’s sanc- The PRESIDING OFFICER. Under rollcall votes, and this is our fourth tions, sanctions that impose a harmful the previous unanimous agreement, day on the bill. In that time, we might tax on dozens of American products. morning business is closed. say, the Senate has considered and Most importantly, we need to do what

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00012 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2959 we can to help to create and keep jobs sanctions hit a wide range of prod- Even then we were concerned about in America. ucts—agricultural, timber, and manu- the outsourcing of jobs. We were con- I urge a prompt vote on the Harkin facturing products that we sell over- cerned about American manufacturing amendment, that we reach an agree- seas. being able to compete with the global ment limiting amendments to a rea- We need to get this issue behind us environment we are in. We heard at sonable number, and then move on to very soon or we will never get this bill that time vital testimony from a cross- complete this bill. passed and we will continue to have section of industries that would be ad- I yield the floor. this mounting level of taxation on our versely affected by the repeal of this Mr. GRASSLEY. Mr. President, last products being exported to a point extraterritorial income act. night the majority leader set up a proc- where we are even more uncompetitive, We also heard from U.S. companies ess for moving this bill to a cloture to a point where workers may be laid that were clamoring for international vote. This is not our preferred route for off; whereas just the opposite can hap- tax reform more broadly than FSC/ETI moving what is clearly a bipartisan bill pen if we pass this legislation. We are because our tax rules were hurting voted out of committee 19 to 2. The two going to be able to make our manufac- their competitiveness in the foreign dissenting votes happened to be Repub- turing more competitive and across the markets. If you want to create jobs in licans, not Democrats. This is clearly a board with a wider range—not just for America, and we have a tax system bipartisan bill. A bipartisan bill should big corporations in America but for in- that makes us uncompetitive, would not require a cloture vote to get dividuals that export, for sole propri- you not expect the Congress of the passed. etorships that are in manufacturing; United States to respond, and respond I remain hopeful we will be able to you name it. People are going to get in a bipartisan way to that problem for work out an agreement on moving the the benefit of a lower rate of taxation our manufacturers? Or if you did not, bill forward without the need for this if they manufacture in America—not if why would you harangue about out- extraordinary parliamentary process, they have a company in America and sourcing? You need to do something but if cloture is the only way to move they manufacture overseas but just about it. this bill, then I hope everybody will American jobs, American products These companies that testified in the summer of 2002 told us their foreign support cloture. We need to support made in America, or if a company competitors were running circles cloture in the same bipartisan manner wants to come over here and invest in around them because of our antiquated we used to build this bill. It is urgent America and build a plant and hire international taxing rules. During this that we move this bill immediately. American workers, they will get the hearing, we had our colleagues, Sen- This bill reduces the income tax on benefit of it as well. ator BOB GRAHAM of Florida and Sen- goods manufactured in the United We had 3 or 4 days on this bill 2 ator HATCH of Utah, express concerns States and sold overseas so we can cre- weeks ago. We started on it again yes- terday. I think it is very important about how our international tax laws ate jobs in America. We give a priority that we move ahead on this legislation. were impairing the competitiveness of on taxation to goods made in America. U.S. companies. After some discussion Everybody in this body is concerned But the opening debate and the proce- dural shenanigans confirm my worst on forming a blue-ribbon commission about outsourcing. If we want to do fears because there are some on the to study this problem, we all decided something about keeping jobs in Amer- other side who want to use this legisla- that decisive action was more impor- ica and adding to the number of jobs in tion to move things that are unrelated tant than the usual commission ap- America, this bill will do it. It is going to making our industry competitive proach that usually ends up with a lot to make our costs of operation less and and unrelated to the motivations be- of public relations and high talk but no consequently competitive with world hind this bipartisan bill. action. competition. That is why we call it the Senator BAUCUS and I agreed on an During that hearing, then-Chairman JOBS bill. order of amendments that would im- Baucus formed an international tax The reason we are in a bad position prove the bill and broaden important working group that was joined by Sen- right now is because under the inter- relevant issues. That agreement was ator GRAHAM, Senator HATCH, and this national agreements we have on trade, undermined by the process coming Senator, and was open to any other Fi- the World Trade Organization has ruled from the other side of the aisle. nance Committee Senator interested in that our pretax policy is an illegal ex- It means Members there presumably this issue. The bipartisan Finance port subsidy, and consequently the do not know the importance of this leg- Committee working group formed the World Trade Organization has author- islation, do not want to debate the sub- basis for the bill we are debating this ized Europe to do up to $4 billion a year stance of the bill but debate everything very minute. We directed our staff to in sanctions against U.S. exports. else. In a sense, this bipartisan bill is engage in an exhaustive analysis of It isn’t just the case of our tax sys- being turned into a political football. many international reform proposals tem causing us to not be competitive. That is inexcusable because we have that have been offered. Our efforts were On top of that, we now have $4 billion worked hard throughout this process to intended to glean the very best ideas of sanctions to further weigh down our make sure everyone’s concerns, both from as many sources as possible. ability to compete in the export mar- Republican and Democrat, were incor- Senator BAUCUS and I also formed a ket. These sanctions began on March 1. porated into this bill. You do not play bipartisan, bicameral working group These sanctions started at 5 percent, political games with a bipartisan bill with the chairman and ranking mem- which is just like a 5-percent sales tax that affects the jobs of manufacturing ber of the Ways and Means Committee on the stuff we are going to sell. The workers across this land. of the other body in an effort to find rule of Economics 101 is if you tax I take a moment to talk about how some common ground on dealing with something at a higher rate, you get bipartisan this bill is. It is bipartisan this repeal of FSC/ETI. Obviously, that less of it. But not only is it 5 percent and was built that way from the did not go so well because the other now, it is going to be 5 percent for each ground up. It is the construction that body has come out with legislation month we do not conform our tax laws began when my friend and colleague, somewhat different than ours. Con- to our trade agreements. Senator BAUCUS, was chairman of the sequently, they are finding it very dif- Remember, we have trade agree- Finance Committee. Senator BAUCUS ficult to get the votes to pass it in the ments because the U.S. Congress en- held hearings on this issue in July 2002 other body. That is another reason, if acted those trade agreements. It has to address the FSC/ETI controversy we move quickly, maybe we can im- been done by a majority of the rep- going on within the World Trade Orga- press upon the House of Representa- resentatives of the American people. nization. The title of the hearing was tives that this body can function, this One percent a month can take us all ‘‘The Role of the Extraterritorial In- body works; we have a good product the way up to a maximum of 17 percent come Exclusion Act in the Inter- and maybe that will encourage biparti- over the course of a year. By Novem- national Competitiveness of U.S. Com- sanship in the House of Representa- ber, we are going to have a 12-percent merce.’’ Talk about a chairman taking tives. tax on our exports. This is a very seri- his responsibilities seriously, Senator Through this working group we con- ous threat for all States because the BAUCUS did. tinued our efforts in cooperation with

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00013 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2960 CONGRESSIONAL RECORD — SENATE March 23, 2004 Senator HATCH, Senator BOB GRAHAM, thing about outsourcing? Outsourcing we are here to represent the interests and other members of the Finance only comes as a matter of competition. of jobs in America. We are here to rep- Committee who wanted to do what was There is not any American resent the symbol ‘‘Made in America.’’ fair and what was right in complying businessperson sitting around anyplace If we do not pass this bill, whether with this World Trade Organization that decides, I want Mary’s job to go to people realize it, they are representing ruling. We continued our bipartisan ef- India. I want Pete’s job to go to China. the interests of the European Union, forts when I became chairman in 2003. I want Ralph’s job to go to Russia. because it is the European Union which In July last year, we held two hearings There is not any American business- is going to benefit with European jobs. on the FSC/ETI and international re- man who speaks in terms of: I don’t We have 5.6 percent unemployment in form issues. One hearing focused on: want this American to have a job, be- America, which is probably less unem- ‘‘An Examination of the United States cause they would not have hired them ployment than most of my life in poli- Tax Policy and Its Effect on Domestic in the first place. tics as an index of how the economy is and International Competitiveness of This outsourcing happens because going. But still, it is bad to have 5.6 United States-Based Operations,’’ they look at what their competition is percent unemployment. What is worse building upon the very successful hear- paying to produce a product. In the ec- than the 5.6 percent unemployment is ing that chairman BAUCUS had in 2002. onomics of business, when you are a the people who are complaining about Our second hearing was entitled businessperson, wherever in the world, the 5.6 percent unemployment and not ‘‘United States Tax Policy and Its Ef- if you do not make a profit, you are passing this bill that is going to make fects on International Competitiveness not going to be in business. So a employment in America better. of United States-Owned Foreign Oper- businessperson seeing that he is not Oh, maybe they are looking over to ations,’’ as opposed to United States- competitive, that is where you lead to Germany. Their unemployment rate based operations in the first hearing. outsourcing. went up last month to 10.7 percent. By These two hearings concluded our final Now these American manufacturers not passing this bill, we might help bipartisan effort in reviewing all of the come and testify before our committee. some German workers get a job, some policy options that led to the creation They tell us what makes them non- of the German unemployed get a job. of the bill that is before the Senate competitive. One is the cost of capital Well, I do not think we ought to put right now. in America being high. We have an op- the interests of the European Union Let me again emphasize there is not portunity to reduce the cost of capital first. one provision in this JOBS bill that and, at the same time, encourage man- The only way to honor our trade obli- was not agreed to by both Republicans ufacturing in America. That is what gations and to make American busi- and Democrats. We have acted in good this bill does. ness competitive and to create jobs in So everyone on both sides of the aisle America is to pass this bill and repeal faith. We have acted in the best of faith who talks about outsourcing—I do my- the extraterritorial income provisions to produce a bill that takes American self—needs to band together if we are of our law. It is very simple. It is so manufacturing jobs and ensures that serious about doing something about simple that is why this is a bipartisan our companies remain the global com- outsourcing and get behind this effort bill. As I said before, I hope the leader- petitors we want them to be. We did to get the bill passed because manufac- ship of this body can cooperate, both this in a fully bipartisan manner, turers tell us this bill will help. And, Republican and Democrat, to focus on which is what the American people ex- for sure, they know these sanctions this legislation, to focus on the task at pect on such an important issue as that are on American manufacturing hand, and particularly on the other manufacturing jobs in our Nation’s now are an additional burden they can- side where all the amendments are economic health. not withstand. coming from, to know the importance These efforts that have been ex- America’s farmers and manufac- of passing this bill, not stalling this pended to bring this bill to this point turing workers must not pay the price bill, and moving forward. are apparently not enough for some. for the sort of stonewalling we are see- Repealing FSC/ETI raises about $55 They still view this whole process as ing. Efforts to delay this bipartisan bill billion over 10 years, and 89 percent of political punt, pass, and kick competi- with unrelated measures is a bad ex- that money comes from manufac- tion. I now realize there are some who cuse. Why would they raise political turing. It gives us an opportunity to do not want this bill to pass, and issues that are unrelated to this bill in use that $55 billion to emphasize Amer- maybe not having it passed will serve an attempt to undermine the JOBS ican manufacturing, the creation of their political end. They want eco- Act? jobs in America, and to use that $55 bil- nomic downturns that continued sanc- Delay will allow sanctions to con- lion as an incentive to American manu- tions will produce to continue eco- tinue and drive down our economy. facturers to manufacture here and not nomic doldrum. That will allow sanctions to increase to manufacture overseas. Several weeks ago, an article in the to 12 percent by the November elec- We need to send that money back to Washington Post quoted a Democratic tions. Maybe that is too tempting for the manufacturing sector because if we tax aide as saying: ‘‘There is not a lot some people who are worried about the do not, then besides these sanctions, of incentive for us to figure out this election instead of the next generation we have a $50 billion tax increase on problem.’’ The Democratic aide went to pass up. American manufacturing. on to say that allowing the I am hopeful we will see the best poli- The Congressional Budget Office says extraterritorial income controversy to tics ends up being good policy. That is we have lost 3 million manufacturing fester would yield increased sanctions what we have with this bill. We help jobs since July of 2000. Is this manufac- that somehow would benefit the Demo- domestic manufacturers. We help U.S. turing decline something the Bush ad- crats in November. That is an appall- companies compete overseas. Putting ministration did? No. It started in July ing statement because we hear the con- politics ahead of good policy is exactly of 2000. A $50 billion tax increase will cern that is legitimately expressed the wrong approach. In effect, this po- not stimulate manufacturing jobs. about outsourcing. litical game does not help those who Again, simple principles of economics We have a bill before the Senate that face the sanctions. It does not help do- 101: If you tax something more, you get can do something about outsourcing. mestic manufacturers and workers in less of it. We have a situation before the Senate those industries. The JOBS bill uses all of the money that if we do not pass this bill, not only A vote against this bill is a vote to from the FSC/ETI repeal to give a 3 will we not have some tax advantage continue European Union sanctions, al- percentage point tax cut on all income we thought we once had, but we will ready at 5 percent—6 percent in April, derived from manufacturing in the have the sanctions on top of that to 7 percent in May, 8 percent in June, 9 United States. Let me emphasize: just weight down American industry so percent in July, 10 percent in August, in the United States. It is not for man- more people are laid off. 11 percent in September, 12 percent in ufacturing by American companies How can Members one day give a November. overseas. speech about outsourcing and the next We are here to represent the inter- The relief applies not only to big day slow down a bill that does some- ests of the United States. On this bill, manufacturers but sole proprietors,

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00014 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2961 partnerships, farmers, individuals, In addition to the previously agreed I propose to the leadership of the Re- family businesses, multinational cor- upon R&D amendment, there are sev- publican and Democratic caucuses that porations if they are manufacturing in eral additional provisions to improve somehow, if we are going to get be- America, and also plain big or small this bill. We have the amendment by tween now and adjournment this fall, foreign companies that set up manufac- Senators BUNNING and STABENOW, a bi- without a lot of waste of time on the turing plants in the United States. partisan amendment to accelerate the part of the Senate and the 100 Members We also include international tax re- manufacturing deduction. This amend- equally affected, that we get a list of forms, mostly in the foreign tax area, ment ensures the tax relief and related the so-called amendments I referred to and most of which benefit manufac- economic benefits of the bill are pro- as politically motivated. I think the turing. vided more quickly to those hurt by other side sees they have certain issues Our bill also includes the Homeland the repeal of FSC/ETI. This is now part that ought to get before the American Reinvestment Act, which has broad of the bill. people, ought to be discussed. Repub- support in both bodies of the Congress. Second, there is an amendment I of- licans have some of those issues as well The Finance bill is revenue neutral. fered with Senator BAUCUS to extend that Democrats would just as soon we That is another thing we have to do: for 2 years tax provisions that have ex- not bring up. I don’t know why there have it carefully crafted in order to get pired. Some expired in 2003, some this can’t be some agreement unrelated to a bipartisan support for this legislation year. This includes items such as the specific bill before the Senate that cer- and not add to the deficit; there are work opportunity tax credit and the tain of these issues are going to be both Republicans and Democrats who welfare-to-work tax credit which have brought up, and we will find someplace do not want to pass a tax bill that loses been merged and simplified into a sin- to handle one on this bill, one on an- revenue. So we have the ability, by ex- gle credit as proposed by Senator other bill, a third one on another bill, tending Customs user fees—and, more SANTORUM and others in the bill S. 1180. so they don’t get dumped at one time importantly, by shutting down illicit This is now a part of the legislation. all on one piece of legislation. Then we tax shelters, corporate tax shelters, A third provision on net operating know ahead of time what the situation and closing abusive corporate tax loop- losses is also included. This provision is; there will be a plan for the func- holes—to raise money to do even more allows companies that operated at tioning of the Senate. than we have described to be able to do losses during the difficult economic I should not speak for Senator BAU- some reform of the international tax- conditions of last year to offset those CUS but I believe I can. He comes from ing regime generally beyond just FSC/ losses against their income of the pre- a philosophy that this place ought to ETI. work, that it ought to make product. As with all bills, there is never com- vious 5 years. So this provision is going We ought to do our job. And I am sure plete agreement on this approach. That to accelerate tax relief to companies that even though he might have a dif- is even considering the fact it was that need it to continue operations and ferent view than I do on this issue of voted out of committee in a bipartisan to continue their recovery from the re- cloture, he wishes it were not that way. way 19 to 2. Remember, all Democrats cent economic difficulties. This provi- I wish it were not that way. He wishes voted for this bill to come out of com- sion is now in the bill. there was a plan before us to move mittee. The JOBS bill before us also contains Our bill contains a haircut on the many other items that are widely sup- every important piece of legislation in rate reduction some of us would like to ported by the Members. We have en- an expeditious way because that is remove and others would like to retain. hanced the amount of transition relief what we are sent here to do. We all Some Members prefer a reduction in for U.S. manufacturing companies that ought to want to make this place work the top corporate rate across the board will be harmed by the FSC/ETI repeal. because when it does not work, it in place of the international reforms We have enhanced depreciation provi- makes all of us look bad. It puts the and the manufacturer’s rate cut in this sions, brownfield revitalization, mort- good of the American people secondary bill. I understand the desire for this gage revenue bonds. We allow deduc- to politics, whether it is Republican simpler approach cutting taxes, but a tions from private mortgage insurance politics or Democratic. top level rate cut would only go to the for people struggling to afford a home. I yield the floor. Mr. HARKIN. Mr. President, par- biggest corporations of America. Local The bill includes tax benefits for re- family-held S corporations and part- servist employees that provides a tax liamentary inquiry. The PRESIDING OFFICER. The Sen- nerships, which presently get some credit to employers for wages paid to reservists who have been called up to ator from Iowa is recognized. extraterritorial income benefits, get Mr. HARKIN. The parliamentary in- nothing from this. If we redirect FSC/ active duty. We have extended and en- hanced the Liberty Zone Bonds for the quiry I would like to make is where are ETI money to an across-the-board cor- we right now on the bill? Are we on the porate cut, then the manufacturing rebuilding of New York City, particu- larly requested by its two Senators. We motion to recommit, at this point? sector will be the revenue offset. In The PRESIDING OFFICER. The mo- other words, we are going to be shifting have increased industrial development bond levels to spur economic develop- tion to recommit is pending. from tax advantages from manufac- Mr. HARKIN. I understand also that ment. We have included the Civil turing to services where we have some a cloture motion has been filed on the Rights Tax Fairness Act. We have pro- problem, but I think we generally motion to recommit. agree not as much of a problem as we vided for rail infrastructure and The PRESIDING OFFICER. The Sen- have in manufacturing. broadband. ator is correct. The international tax reforms largely All of these benefits are being held Mr. HARKIN. Since there is a motion fix problems our domestic companies hostage because some Members are to recommit that is pending, is it not face with the complexities of the for- pushing politically motivated votes on in order for an amendment to be made eign tax credit. These reforms are nec- an issue that is not even in this bill. to that motion? essary if we are to level the playing Let’s get on with the business at hand The PRESIDING OFFICER. Amend- field for U.S. companies that compete and finish it. Let’s put good economic ments have already been made to the with our trading partners. The Finance policy first in the Senate. motion to recommit. Committee bipartisan bill has been im- We do have the issue of cloture which Mr. HARKIN. Do I understand that proved with an amendment to extend comes up periodically when we have to both a first-degree and second-degree the research and development tax cred- get to the completion of legislation. I, amendment have been made already? it through the end of 2005. That is a do- for one, was hoping this cloture would The PRESIDING OFFICER. The Sen- mestic tax benefit that incentives re- not be filed. That is the way Senator ator is correct. search and development, makes our BAUCUS and I hoped it would happen. I Mr. HARKIN. So, therefore, no businesses competitive and prepared have to deal with the fact it is filed. amendments, then, are allowed, under for the next generation of technology. My colleague Senator BAUCUS has to the rules of the Senate, to be made to This, however, translates also into deal with that fact as well. This needs the motion to recommit? good, high-paying jobs for workers in to be dealt with on a little higher plain The PRESIDING OFFICER. The Sen- America and not overseas. than from bill to bill. ator is correct.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00015 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2962 CONGRESSIONAL RECORD — SENATE March 23, 2004 Mr. HARKIN. Further inquiry, Mr. The PRESIDING OFFICER. The Sen- The PRESIDING OFFICER. The Sen- President: Yesterday this Senator of- ator is correct. It will ripen. ator is correct. Mr. HARKIN. If in fact there is a vote fered an amendment dealing with over- Mr. HARKIN. Mr. President, we are tomorrow on cloture and cloture is in- time. Is that amendment still pending? in a situation where it looks as though voked—that is, a majority of the Sen- The PRESIDING OFFICER. The the majority on the other side simply amendment is still pending. ate votes yes on cloture—then this does not want to vote on my overtime Mr. HARKIN. Is it further correct to Senator’s amendment on overtime will amendment. They are going to do ev- say that if cloture is invoked, this not be allowed under the rules of the erything they can to try to prevent it. amendment would fall, that it would Senate pertaining to germaneness; is not be allowed under the rules of the that correct? Again, there is talk about delay and Senate? The PRESIDING OFFICER. It will who is delaying this bill. Look, I of- The PRESIDING OFFICER. If the not be allowed on the motion to recom- fered my amendment the other day and motion to recommit is adopted, the mit. we could have had a vote by now. I was Harkin amendment would be vitiated. Mr. KENNEDY. Will my amendment willing to enter into a time agreement. Mr. HARKIN. I understand that. But be allowed on the bill that is then be- They would not do it. I offered the then this Senator would be allowed to fore the Senate? amendment under a unanimous con- The PRESIDING OFFICER. The bill offer my overtime amendment on the sent agreement reached with the other will be pending before the Senate with new bill that will be before us at that side to bring it up. Now, the parliamen- a new substitute that is amendable. point? Mr. HARKIN. Then under the rules of tary games being played are not on The PRESIDING OFFICER. The Sen- Senate, if cloture is invoked, this Sen- this side; they are on the other side. ator is correct. ator’s amendment would not be al- One really has to ask, Does the other Mr. HARKIN. Further inquiry, Mr. lowed, I understand, because it will be side really want to get this bill President: If, however, cloture is in- nongermane. through? voked on the motion to recommit, is it The PRESIDING OFFICER. The new Again, I have no doubt that the not true that this Senator’s amend- substitute will be fully open to amend- chairman, my friend and colleague ment then would fall and not be al- ment. The Senator can then offer his from Iowa, wants to get it through. He lowed, under the rules of cloture, or am amendment to the substitute. is chairman. Having been in that posi- I wrong? Maybe my amendment would The Senator from Montana. tion before on another committee, I be allowed. Mr. BAUCUS. Mr. President, I thank know you want to get your bill The PRESIDING OFFICER. The my good friend, the chairman of the question is on whether, if cloture is in- committee, for his remarks. I am quite through. I have no doubt that the Sen- voked—— hopeful, frankly, that we can reach an ator from Iowa would like to get the Mr. HARKIN. Yes. agreement fairly quickly so that we bill through. It looks as though the The PRESIDING OFFICER. If cloture can move on this bill. At the present leadership on that side—either the is invoked, then the amendment would moment, we are at an impasse with the leadership or the administration; I be nongermane. cloture motion filed, and the amend- don’t know who is calling the shots—is Mr. HARKIN. I understand that. I ment tree is filled up. simply saying they don’t want to have want to make it very clear for those I expect it is the wish of the majority a vote on overtime. who may be watching in their offices to eventually avoid a vote on the It is really unfortunate that they and not present on the floor. If cloture amendment offered by Senator HARKIN. have now filed cloture on this bill. My tomorrow, when it ripens, is invoked, I believe Senator HARKIN deserves a friend and colleague from Iowa, and we will not be allowed to vote on an vote. I believe the vast majority of others on the other side, have referred overtime amendment; is that correct? Senators on both sides of the aisle to this as a jobs bill. They keep talking Because it will be deemed to be non- would like to move quickly on this leg- about it is a jobs bill. Well, all I can germane under the rules of cloture, is islation—reach agreement on a number say in response to that is I believe the that correct? of amendments that would be in order ranking member of our committee, I repeat my question. I want to make so we can move quickly. Senator BAUCUS from Montana, would it clear to those who are watching in Based on my conversations with Sen- like to get the bill through, we would their offices and may not be on the ators and with the leadership, I have like to get completion of this bill and floor right now. Under the rules of ger- every expectation that we can reach get it through, but that does not mean maneness, under the rules of the Sen- that agreement quite soon—hopefully, we should not be allowed to offer some this afternoon. This is the Senate. ate, because of the parliamentary tac- reasonable number of amendments to Every Senator deserves an opportunity tics just taken by the majority, having try to improve it as we see fit. They to offer his or her amendments. We a motion to recommit and then sort of may win, they may lose, but at least also have to reach agreements. We filling the tree, as we call it around we ought to be allowed the right to have to pass legislation. It requires here in parliamentary parlance, having offer and debate some amendments compromise. I do believe we will reach the first-degree amendment and the within reasonable timeframes. second-degree amendment and then fil- that agreement which, necessarily, will ing cloture—that was filed, I guess, be the result of compromise, fairly One of the most important job-re- yesterday—that through all of this par- quickly. lated amendments is the amendment liamentary maneuvering, if in fact the I urge Senators to push their inter- on overtime. How could we possibly Senate votes for cloture, on Wednes- ests, as they should, but push them in tell the American people with a day, on tomorrow, then Senators will a way where we can get an agreement straight face that we are passing a be denied a right to vote on my over- to pass this legislation. I hope we will ‘‘jobs bill’’ on the Senate floor but we do that this afternoon. time amendment; is that not correct? are not addressing the issue of over- I yield the floor and suggest the ab- The PRESIDING OFFICER. The dif- time pay and the administration’s pro- sence of a quorum. ficulty in answering the question is posed regulations that would have the The PRESIDING OFFICER. The effect of taking overtime pay protec- based on the motion that is pending, clerk will call the roll. which is the motion to recommit as op- tion away from millions of American The assistant legislative clerk pro- workers? posed to the cloture vote, and the clo- ceeded to call the roll. ture vote depends upon whether the Mr. HARKIN. Mr. President, I ask This is an issue that goes right to the motion to recommit passes or not. unanimous consent that the order for heart, the gut, of our American work- Mr. HARKIN. I will ask one more the quorum call be rescinded. force: The right to be paid time and a time because I want to get this The PRESIDING OFFICER. Without half when one works over 40 hours a straight. There is pending a cloture objection, it is so ordered. week. It has been in the law since 1938. motion. That cloture motion will be Mr. HARKIN. Mr. President, I under- Yet, as I said yesterday and I will con- voted on tomorrow; is that not correct? stand that under a previous order the tinue to point out, last year the admin- It will ripen tomorrow. Senate is going to recess at 12:30 p.m. istration came out with a proposed set

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00016 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2963 of regulations to change the underlying would like to see this bill get through. time amendment, well, I am sorry to overtime law. They did it without hav- I think there are some good things in disappoint them. We are going to con- ing one public hearing. Imagine that, this bill. That does not mean we should tinue to debate and have a vote on this changing something so fundamental to not be allowed to offer our amend- overtime amendment. It is that cru- the American work ethic as the right ments and have an up-or-down vote on cial, that important, to the American to overtime pay without having a pub- those amendments. worker that this Senate express itself lic hearing. A jobs bill? Well, fine, call it a jobs once again and say no to the adminis- They put out the proposed regula- bill, but do not tell me this is a jobs tration, that we are not going to let tions and the American public re- bill and then say we cannot have a vote them trample on the rights of Amer- sponded with thousands—I have heard on our overtime amendment. That is ican workers and take away their right maybe 60,000 to 70,000 comments. Then about jobs. We know it is about jobs to overtime pay if they work over 40 last summer, after a number of us had because we know, common sense dic- hours a week. gotten wind of what they were trying tates, if an employer can work a person I see my time has expired. I yield the to do and we started reading the pro- longer than 40 hours a week and not floor. posed regulations, we offered an have to pay overtime, why, it would be f amendment on the Senate floor that much better to work the person longer, would have basically denied that part pay them less, and then not hire any RECESS of the overtime regulation that would new workers. The PRESIDING OFFICER. Under take away this overtime right. At a time when we have 9 million the previous order, the hour of 12:30 That amendment I offered last sum- Americans out of work, we have a job- p.m. having arrived, the Senate will mer passed the Senate. It was bipar- less recovery in this country, why now stand in recess until the hour of tisan. I have heard a lot of references would we now be wanting to give em- 2:15 p.m. to the fact that this bill is a bipartisan ployers another incentive not to hire Thereupon, the Senate, at 12:29 p.m., bill. Well, the amendment I am offering new workers? recessed until 2:15 p.m. and reassem- is a bipartisan amendment because it We had an agreement to consider my bled when called to order by the Pre- was voted on last summer by both Re- amendment. It was the fourth amend- siding Officer (Mr. ALEXANDER). publicans and Democrats and passed in ment in the series we agreed to prior to f the Senate, 54 to 46. Around here, that last week’s recess, but no sooner was I is pretty bipartisan. able to offer my amendment last JUMPSTART OUR BUSINESS Basically, what that amendment said evening than the majority leadership STRENGTH (JOBS) ACT—Continued is, no, we are not going to agree with decided to move to recommit the whole The PRESIDING OFFICER. The as- the administration’s proposed changes bill and to file cloture on that motion. sistant Democratic leader. on overtime rules. If the administra- I am not sure how that meets our Mr. REID. Mr. President, the matter tion wants to make fundamental previous agreement to take up my before the Senate is what? changes in overtime rules, they ought amendment, but that is where we are The PRESIDING OFFICER. The sec- to do it in the time-honored manner: now. A motion to recommit the bill is ond-degree amendment by Senator work with Congress, have public hear- pending. I would like to talk about GRASSLEY. ings around the country, and then let overtime. I would like to have an Mr. REID. Mr. President, I suggest Congress and the administration get amendment about overtime and have a the absence of a quorum. together to revise, if revision is needed, vote on it. As my parliamentary in- The PRESIDING OFFICER. The overtime laws. But that is not the way quiries earlier this morning showed, we clerk will call the roll. the administration did it. can go through this whole charade, mo- The assistant legislative clerk pro- Again, if I hear correctly people on tion to recommit, file a cloture, we can ceeded to call the roll. the other side say we are slowing down vote on that, and we can still come Mr. REID. Mr. President, I ask unan- or stopping this bill, I am sorry; it does back with this amendment. imous consent the order for the not ring true. This bill could have been I suppose then they will file cloture quorum call be rescinded. brought up last fall, and it was not. We on the bill. That is why it was wrong The PRESIDING OFFICER. Without just spent a whole week in the Senate on the majority side to file cloture on objection, it is so ordered. debating a gun bill that failed with this motion to recommit and why I Mr. REID. Mr. President, the Senator over 90 votes against it. What was that hope we will oppose that cloture mo- from Connecticut, Mr. DODD, wishes to all about? Why did we spend over a tion and deny cloture until we can get speak for 15 minutes. I ask following week doing that when we could have a right to offer our amendments and that, the Senator from Massachusetts, been doing this bill, if this bill is so im- have a vote on our amendments. Mr. KENNEDY, be recognized. portant? We are not asking for unlimited de- The PRESIDING OFFICER. The Sen- One has to raise some questions bate. I would agree with the manager ator from Connecticut. about what is going on because when of the bill right now to a time limit on Mr. DODD. Mr. President, I thank one reads some of the publications my amendment with an up-or-down the Senator from Nevada for securing around here—this was in Congressional vote. So it is not about us stalling this the time. I may not need all of that Quarterly Today about this bill. Ac- bill. Forget about that. Get that out of time. I want to take a few minutes to cording to the Congressional Quar- your head. That is not what is hap- express my deep concerns about the terly, the chairman of the House com- pening. What is happening is the ma- pending amendment. I am in favor of mittee, Congressman THOMAS: jority side simply does not want to the pending amendment. My concern is . . . told the Tax Executive Institute, a vote on overtime. Why? Because I that an effort will be made to somehow group of corporate tax officials, on Monday think they are afraid, and the vote will avoid having to vote on this critical that lobbyists seeking specific changes in international tax rules had effectively sty- be even stronger this time than it was issue, the issue of overtime pay. mied his bill, according to the Associated last summer because more and more First, let me commend Senator HAR- Press. American workers, more and more peo- KIN of Iowa for being so tenacious and So it is not us who are stymying this ple have found out what this adminis- patient about this amendment. He has bill. Again, there are some corporate tration downtown is trying to do to offered this proposal in the past. We lobbyists downtown who are. Again, their overtime pay. carried the amendment, as I recall, in from CQ Today: I will be on the floor waiting for the Chamber, only to watch the matter Meanwhile, House Ways and Means Chair- every opportunity to offer this amend- be dispensed with and dropped in con- man Bill Thomas, R–California, told a group ment and to get a vote on it. If the ference. of business tax officials on Monday that the other side believes that somehow by He has tried to bring up this matter current House version of the bill (H.R. 2896) going through this charade and slowing before. In fact, prior to the recess pe- was probably doomed. this bill down and somehow blaming us riod, Senator HARKIN was on the floor So it is not us who are slowing this for it when we are not doing this is of this Chamber for a number of hours, bill down, not at all. This Senator somehow going to get rid of this over- trying to get a vote. I think he agreed

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00017 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2964 CONGRESSIONAL RECORD — SENATE March 23, 2004 to a simple 20 minutes or 25 minutes of Member of this Chamber for a number tration has over time, but, of course, debate on whether we would be able to of years, and I have been here for al- they are going a step further and pro- prohibit the administration from im- most a quarter of a century. I say to posing regulations. plementing a new regulation that my colleague from Massachusetts, I Let me be clear so people understand. would take overtime away from mil- was born at night but not last night. If you are among one of 250 current lions of working Americans. You can use the rules of this institu- white-collar occupations, if you are a I have no doubt about the outcome of tion for various purposes. It seems nurse, a firefighter, a police officer, the vote if we can actually get a vote. clear to this Member that the reason emergency medical training personnel, I have no doubt the overwhelming ma- the Republican leadership—a deter- health technician, clerical worker, sur- jority of our colleagues, if given the mined minority within the majority— veyor, chef, if you are in those cat- chance to express themselves on the is engaging in these parliamentary egories and many more, even though proposed regulation by the administra- sorts of gymnastics is because they your work obligations don’t change at tion, would support the Harkin amend- know the outcome. I suspect a strong all, it gives your employer the right to ment. We have done that already. I majority of us would speak with a re- reclassify you as no longer someone think that is where Members are, both sounding voice in saying no, you who qualifies for overtime pay. Even Democrats and Republicans. shouldn’t implement a rule that would though your work doesn’t change, you But a determined minority here will prohibit hard-working Americans from will be deprived of overtime pay, no not allow us to have this vote. We will collecting overtime pay. This is par- matter how many hours you work. I not get the chance to express whether ticularly troublesome at a time when don’t understand. we believe that hard-working Ameri- so many are out of work and where two Mr. KENNEDY. Will the Senator cans who work beyond their 40 hours incomes in a family may be necessary yield? ought to get paid for the overtime to keep up with the mortgage pay- Mr. DODD. I am happy to yield to my work they do. ments, or to pay college tuition, or colleague. I was stunned to learn not only is the make car payments. We cannot deprive Mr. KENNEDY. Will the Senator not administration proposing the regula- 8 million Americans who today have agree with me that for the first time in tion that would prohibit overtime pay the right to collect overtime. The only the history of the overtime laws this for people, but actually, within admin- reason the Republican leadership is administration has stated if individ- istration documents, they instruct em- prohibiting a vote is because they uals in the military—I am reading from ployers on how to craft their working know the outcome—the amendment their proposed regulation of March 31, relationships with their employees to would pass. 2003. They talk about training in the avoid paying overtime pay, moving Mr. KENNEDY. Mr. President, as the Armed Forces, stating if you are a people into whole new classifications Senator remembers, we had a vote on member of the National Guard and are they had never held. this measure on September 10, 2003. To called up to go over to Iraq, you take I am baffled that the administration substantiate what the Senator has a training program in order to try to has unveiled such an antiworker, pointed out, they voted 54 to 45 in the provide greater protection and defense antifamily proposed regulation. It is Senate to retain overtime, and in the for the men and women in your unit, simply one more bad economic policy House of Representatives it was 221 to you come back here to the United decision that I think is indefensible, States, you go back to your workplace, and I think we would like a chance, 203. This was a matter of 7 or 8 months ago when we had this body speak in a and you think you are entitled to over- both Democrats and Republicans, to time, under their proposal, make no express ourselves on this proposal. bipartisan way and the House of Rep- resentatives speak in a bipartisan way. mistake about it, you are excluded. I am determined, along with the Sen- I draw the attention of the Senator Still we find the Republicans are deny- ator from Iowa and many others, to to the comments of the very distin- ing the Senate an opportunity to ex- stay here and do whatever we have to guished head of a veterans organiza- do to get an up-or-down vote on wheth- press its will. Does the Senator not agree with me tion. The Senator has mentioned the er we ought to ban people from col- categories of those who will be made lecting overtime pay when they work that this is sending a message to every working family in this country that we ineligible for an increase in overtime. those hours. This is a letter to Secretary Chao from Mr. KENNEDY. Will the Senator have Republican opposition to the in- crease in the minimum wage, Repub- Thomas Corey, national president of yield? the Vietnam Veterans of America, Mr. DODD. I will be happy to yield to lican opposition to extending the un- dated February 17, 2004: my colleague from Massachusetts. employment compensation, and Repub- Mr. KENNEDY. Mr. President, I join lican opposition to halting the proposal [We] would like to make you aware that that will eliminate overtime for some 8 the proposed modification of the rules would the Senator in cosponsoring the Harkin give employers the ability to prohibit vet- amendment. million Americans; that one can con- erans from receiving overtime pay based on Is the Senator familiar with the fact clude this administration is not on the the training they received in the military. that the Republican leadership has now side of working families? This legitimizes the already extensive prob- done a parliamentary maneuver so Mr. DODD. Again, I thank my col- lem of ‘‘vetism’’ or the discrimination there is absolutely no opportunity for league for his question. I don’t know against veterans. this institution to act on the Harkin how you can draw any other conclusion There it is. That is what their pro- amendment dealing with overtime; than my colleague from Massachusetts posal is all about. I don’t blame the that they have taken the rules of the has. other side for not wanting to have a Senate and are so unwilling to address As I recall—again, my colleague has vote on it. the amendment of the Senator from a wonderful sense of history, and I Has the Senator ever heard of such a Iowa that they have effectively fore- think my memory is not bad but cor- time when we have American service- closed any opportunity for the Senate rect me if I am wrong—during the men spread all over the world being of the United States to act this after- Reagan administration, during the called on—and the National Guard and noon, late afternoon, this evening, or Bush administration, the President’s Reserve—to get some training, and at any time until after the cloture mo- father, extended unemployment bene- they come back and go back to work, tion? fits in those years when people were and there comes the boss who says, Can the Senator from Connecticut out of work. I think during both Re- Well, you have some training in the possibly tell us why the Republican publican and Democratic administra- military, and you are out? leadership would want to deny the peo- tions, they said we ought to extend Mr. DODD. Mr. President, I had heard ple’s representatives in the Senate the those unemployment benefits and raise some reports about this. I had never opportunity to express their view on an the minimum wage. But in this admin- seen this letter before, but I find it in- issue that affects approximately 8 mil- istration’s case, the answer is a re- credible. Like many of my colleagues, I lion workers in this country? sounding no. Not only do they not have attended various meetings with Mr. DODD. I thank the Senator. The allow us to vote on those matters and the families of guardsmen and reserv- Senator from Massachusetts has been a extend those benefits as every adminis- ists who have deployed to Afghanistan

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00018 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2965 and Iraq over the last number of Mr. KENNEDY. I had requested to be your overtime pay. The Republicans months. I have also been at armories in recognized following the Senator. are saying that because they will not my State as the men and women have The PRESIDING OFFICER. The Sen- let us get a vote on it. come back from their service there. I ator from Massachusetts is recognized We have a lot of problems in this have even visited with our troops in under the previous order. country, but I don’t believe one of the Iraq for a few days in December. I can- Mr. KENNEDY. Mr. President, this is problems is that we are paying our fire- not believe that these men and women, on my time. fighters, our nurses, and our police offi- many of whom have spent a year boots- This chart shows if you do not have cers who are on the front line of home- on-the-ground overseas would be treat- overtime protections, you are twice as land security—I don’t think the prin- ed in this way. These men and women likely to work more than 40 hours a cipal problem we have is we are paying have already had to put their jobs and week and three times as likely to work them too much. families on hold as they go over for a more than 50 hours a week. The Senator from Connecticut is the year—maybe getting back for a week Without overtime protections, hold leader in this body with regard to chil- or so. It is hard enough to do that, hard onto your seat, employers will make dren and children’s issues. I have a enough to be away, hard enough to go you work twice as hard after hours. chart that looks at the number of chil- through the perils of serving in a war Does the Senator agree with me that dren hungry in this country. We are zone as these young men and women the Bush Administration is not only seeing an expansion of hunger in this are doing. But I find it stunning to also denying fair compensation on a pro- country. We do not talk about it a be told because of the training they posal that has been in effect since the great deal in this body, but it is a di- may receive in order to help us rebuild 1930s, but the message ought to go out rect result of the fact working families Iraq and defend their fellow men and to workers across this country they are are having a hard time making ends women in the uniform, that the train- going to work a great deal longer, a meet. They have not gotten an increase ing they got now deprives them of get- great deal harder because without the in the minimum wage, unemployment ting as much as 25 percent of their in- overtime protection, that is the record. compensation has been denied, they are come. I am told that as much as 25 per- They will be exploited in the work- facing the threat of loss of overtime. cent of the earning power of an average place. We have 13 million hungry children. I worker in this country comes from Mr. DODD. I thank my colleague for ask the Senator, we have the other overtime pay. People coming back who the question. I see our friend from Illi- problem with 8 million unemployed, 8 just served their country, who put nois, as well, so I will not take much million workers who will lose over- their life on the line, and been away for time. time, the low minimum wage for 7 mil- a year, are now being told if they got I am glad the Senator pointed this lion, 3 million more Americans are liv- job training over there, they will no out. It reinforces the argument I men- ing in poverty because of the economic longer be eligible for overtime pay. tioned a moment ago that according to policies of the last 3 years, and 90,000 That is incredible. Labor Department studies, this elimi- workers a week are losing their unem- Mr. KENNEDY. I draw the attention nation of overtime pay for 250 job clas- ployment benefits. Regarding the im- of the Senator to the comments from sifications will reduce the earning pact of all these economic policies on the National Association of Manufac- power of the average working family children, I am wondering if the Senator turers. by 25 percent. What the Senator from would address this issue briefly. It is The NAM applauds the department for in- Massachusetts is saying is not only important when we are talking about cluding this alternative means of estab- will you have less pay, but you will these issues, we are not just talking lishing that an employee has the knowledge have to work longer hours, as well. about technical questions of overtime; required for the exception [from the over- I am glad the Senator referenced the we are talking about real people with time protections] to apply . . . For example, Fair Labor Standards Act of 1938. We real lives and people who are facing many people who come out of the mili- went through World War II, we went some very challenging times. tary . . . through Korea, Vietnam, through eco- Mr. DODD. Mr. President, again I There it is again, the National Asso- nomic downturns, and no administra- thank my colleague from Massachu- ciation of Manufacturers praising that tion ever suggested the kind of changes setts. He has in a sense answered the part of the Bush proposal. in overtime pay this Bush administra- question himself with these numbers. We are talking about those who are tion is advocating today. It is hard to believe, given the times, serving in the Armed Forces now, and I urge, as my colleague from Massa- the hardship, 90,000 people a week are we know 40 percent of the combat arms chusetts has, give us a chance to vote. exhausting their unemployment insur- in Iraq are National Guard reserve Give this body a chance to express its ance benefits. units. We find out that those individ- will on whether we think during these We know of the pressures that exist uals who get that extra training, which times of economic hardship people on families already. We know how hard is essential in order to help protect the ought to be able to get overtime pay. it is today economically. It is not an lives of their fellow servicemen, are If you are a nurse, clerical worker, uncommon story to hear, whether you told when they come back home, too firefighter, a reporter, a paralegal, den- are in the home State of the Presiding bad, you are not going to get your tal hygienist, graphic artist, the list Officer in Ohio, or Massachusetts, Illi- overtime pay. goes on, those are the job classifica- nois or Connecticut, to have families I ask the Senator if this has been his tions in which you will be denied over- where two, three, and four jobs are held experience. I have a chart, as well, re- time pay. Your work remains the same, in order to make ends meet and how garding workers without overtime pro- you do not get the extra pay, you work critically important it is to have that tections being more than twice as like- longer hours. income coming in. ly to work longer hours. Let’s vote on the Harkin amendment. When we read about jobs being The point I have heard the Senator Let’s have an up-or-down vote to deter- outsourced across the country, being from Connecticut and the Senator from mine whether this body believes over- shipped off to India and China, and the Illinois make is, if you do not have the time pay ought to still be the practice administration is saying that that is a protections, some think you will have in this country. good thing for the economy, when 2.6 to work a little bit longer, but it will Mr. KENNEDY. I ask a final two million manufacturing jobs have been not make much difference. questions of my friend from Con- lost, many of which have left the coun- This chart from the Labor Depart- necticut. try, we have to be concerned about the ment shows what happens in the two When we are talking about police of- future of America’s families. These are cases: where workers are paid time and ficers and nurses and firefighters, they all pressure points on these families a half for overtime and where they are are the categories we rely on for home- who are living on the margins. We are not. land security. They are the backbone not talking about families who are nec- The PRESIDING OFFICER (Mr. of homeland security. Here we are in essarily in poverty but families who VOINOVICH). The time of the Senator the Senate effectively saying to those are struggling to provide for their basic from Connecticut has expired. workers, we are going to take away needs, trying to prepare for children

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00019 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2966 CONGRESSIONAL RECORD — SENATE March 23, 2004 going on to college, seeing to it they than workers in any other industrial jobs overseas is not a good thing. It is get a good education, keeping them nation in the world. Look at this line costing us jobs in America. properly clothed, and in good health. right over here. The United States is When the Senators from Massachu- Forty-four million Americans do not right at the top. Americans are work- setts and Connecticut stand up and have health care. The overwhelming ing longer, they are working harder, say, well, for goodness’ sake, at least majority of that 44 million are working and they are falling further and further take pity on unemployed Americans, people with two incomes. That is the and further and further behind. And help them keep their families together, average. Over 80 percent of the 44 mil- what is the answer of this administra- pay for their health insurance now that lion people without health care are tion? Cut overtime. We can do better. they have lost their jobs, consistently, working families. Now you take up to What is the answer of the Republican on the floor of the Senate, the other 25 percent of their income away and leadership? Deny us a chance to do party—the Republican Party—votes make them work longer hours. How is something about it. That is what we against the extension of unemployment that balancing work and family? are faced with. benefits. This body took 7 years to pass the Well, it seems to me that hopefully In my State we have thousands of Family and Medical Leave Act with Americans will have their answer people unemployed who have no bene- the help of my good friend from Massa- sometime soon. If we are not able to on fits coming in. How do you keep it to- chusetts. We tried to make it possible this bill, I know the Senators from gether under those circumstances? for people to balance their needs, but Connecticut and Illinois share my And the last point—an important one now, this administration is depriving view. I know the Senator from Iowa we are discussing—is the idea that we these families and their children from does. This is just the beginning. This is would eliminate overtime pay for 8 receiving basic necessities. the opening shot. I tell our Republican million workers. I think the Senator I am glad my colleague from Massa- friends, this issue is coming at you has made such a positive and impor- chusetts has raised the issue beyond again and again and again. Make no tant point. Who are these workers? just the numbers and statistics we cite. mistake about it. You don’t like to They are firefighters; they are police- These are real people and real lives vote on it? Too bad. These families are men; they are nurses. out there struggling to make ends suffering out there, and we are going to I do not know about the State of meet. And now the Republican leader- keep bringing this up, again and again Massachusetts. In the State of Illinois, ship is depriving this body a chance to and again and again, until you do vote we have a serious shortage of nurses. vote on this amendment which would on it. Hospitals come to me and say: Can you prohibit the administration from mov- Mr. DURBIN. Will the Senator yield help us bring nurses in from the Phil- ing forward with their overtime pro- for a question? ippines and overseas? We don’t have posal. I am glad my colleague made the Mr. KENNEDY. I am glad to yield. enough nurses. And this administra- point about the firefighters, about the Mr. DURBIN. I thank the Senator tion says we are going to eliminate EMT services, about the police officers. from Massachusetts and the Senator overtime pay for nurses? What will These are the first responders on home- from Connecticut. I think what we that do to us? Fewer and fewer health land security. This administration is hear in this discussion should be de- care professionals in hospitals cannot not only turning their back on vet- scribed in simple terms to those fol- make America healthier or safer, and erans and people in uniform who are lowing this debate. We are asking, on that is what they are proposing. going to be shoved into the class of not the floor of the Senate, for an up-or- getting overtime pay, but even our down vote for Members to be counted But today I believe the Senator from first responders now are going to be on the question of whether the Bush Massachusetts has brought to us the asked to pay a price as well. administration will, for the first time icing on the cake. Now we have this ad- Let’s vote on the Harkin amendment. in the history of the law, restrict over- ministration saying, when it comes to Let’s have an up-and-down vote to de- time pay to American workers. overtime, if you happen to be a soldier termine whether or not this body be- Since the law was created in 1938 es- in the military or an activated guards- lieves overtime pay ought to still be tablishing overtime, each successive man or reservist, and you serve your the law of the land and not relegated to administration that has changed the country, and are trained in service, a handful of people. law—Democrat and Republican—has pick up skills, when you come home, So, Mr. President, I thank my col- expanded the class of workers eligible because of this Bush administration league for his efforts. I am glad to join for overtime. proposal, you will be disqualified from with him as a cosponsor of the Harkin But this time, this administration, overtime pay. amendment. which has witnessed almost 3 million It is almost incredible to say those Mr. KENNEDY. Mr. President, I un- jobs eliminated in America, has now words: That men and women leave derline once again what the Senator suggested that we should reduce and their families with the 233rd unit of the from Connecticut has been saying eliminate overtime for 8 million Amer- Illinois National Guard, military po- about the average wage in 2001. The av- ican workers. lice, and are gone for a year over in erage wage of the jobs we lost in 2001 I say to the Senator from Massachu- Iraq—who are coming home in a few was $44,570, according to the Bureau of setts, it is part of a pattern. The Bush weeks, thank God; their families have Labor Statistics. The average wage of administration is not sensitive to the waited patiently—but if they made the the jobs we are gaining today is $35,000, real needs of working families. They mistake of picking up a new skill while down 21 percent. This is outside of the have resisted the efforts of the Senator they were activated, they could be dis- overtime. These are the new jobs. This from Massachusetts to increase the qualified from overtime pay when they is the average wage today of the new minimum wage for 7 years. Think return to their job. That is exactly jobs being created, $35,000; $44,000 of the about how many people are working what the Bush administration is pro- jobs we lost in 2001. one, two, and three jobs to try to put posing. This is what is happening, and we are enough money together to keep their We hear so many speeches about how saying to these workers: Well, that is families in a good home, to pay their Members of the Senate are going to not bad enough. We are going to deny basic bills. Yet they resist increases in stand up for fighting soldiers, stand up you overtime pay. We have been deny- the minimum wage. for the vets. I ask the Senator from ing you an increase in the minimum Then, when you ask them about Massachusetts, when it comes to the wage for 7 years. We are going to deny these jobs going overseas, the Bush ad- Bush proposal to eliminate overtime you unemployment compensation— ministration’s economic adviser says for those vets who have been trained in 90,000 people a week. These are the the outsourcing of jobs to India and the military, how can this possibly be facts. The average wage of jobs lost China is a good thing. Where does he a demonstration of our support and ad- was $44,570 to but only $35,410 for the live? Where does he get his advice? miration for the men and women in jobs gained. This man is trapped in a textbook. He uniform? As this chart shows you, American should get out on Main Street and talk Mr. KENNEDY. Well, it is beyond workers are working longer and harder to real families. The outsourcing of comprehension, I say to the Senator,

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00020 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2967 that in this proposal the administra- the Senator Randy Fleming, who our young men and women who served tion has yielded to the recommenda- writes: in the military who got training and tion of the National Association of I am also proud to say that I am a then later got out were still eligible for Manufacturers, that those who get spe- military veteran. I have worked for overtime pay regardless of the kind of cial skills in the military would not Boeing for 23 years. The training I re- training they got? qualify for overtime. And I read that ceived in the Air Force qualified me for Mr. KENNEDY. The Senator is abso- particular provision in the proposed a good civilian job. The second thing is lutely correct. I welcome his historical regulation. overtime pay. With the overtime, I memory on this issue. We have been in- I ask unanimous consent to print the have paid for my kid’s college edu- volved in conflicts—Vietnam, Korean paragraph in the RECORD, dated March cation. The changes this administra- War, World War II—with Republican 31, of the proposed rules that talk tion is trying to make in the overtime and Democratic administrations, and about training in the Armed Forces. regulations would break the govern- at no time during those conflicts did [From the Federal Register Mar. 31, 2003] ment’s bargain with the men and we ever say the skills that were devel- (d) The phrase ‘‘customarily acquired by a women in the military, close down the oped in the military were going to ef- prolonged course of specialized intellectual opportunities that working vets and fectively preclude you from receiving instruction’’ generally restricts the exemp- their families thought they could overtime. This is the first time with tion to professions where specialized aca- count on. this administration. The Senator is demic training is a standard prerequisite for correct. entrance into the profession. The best prima When I signed up back in 1973, the Air facie evidence that an employee meets this Force and I made a deal that I thought Mr. HARKIN. I ask the Senator fur- requirement is possession of the appropriate was fair. They got a chunk of my time ther, would this not then set up the academic degree. However, the word ‘‘cus- and I got training to help me build the oddest kind of circumstance with a vet- tomarily’’ means that the exemption is also rest of my life. There was no part of eran and a nonveteran? Let’s say two available to employees in such professions the deal that said I would have to give young people just got out of high who have substantially the same knowledge up my right to overtime pay. You have school. They see these ads on television level as the degreed employees, but who at- that say join the Army, be all you can tained such knowledge through a combina- heard of the marriage penalty. I think tion of work experience, training in the what these new rules do is create a be, get all this training to help you armed forces, attending a technical school, military penalty. If you get your train- out. One friend decides to go in the attending a community college or other in- ing in the military, no matter what Army. The other doesn’t. It is a volun- tellectual instruction. your white-collar profession is, your teer force. The person who goes in the Mr. KENNEDY. It is right in there. employer can make you work as many Army gets training as an aerospace And it was requested by the National hours as they want and not pay an mechanic on engines or something like Association of Manufacturers. They extra dime. If that is not a bait and that, and comes out. The other person made a comment about how happy switch, I don’t know what is. has not gone in the military, has dif- they are it is in there. It is one of the I have no doubt employers will take ferent jobs, gets some kind of on-the- most offensive proposals this adminis- advantage of this new opportunity to job training. Could this not set up a tration has made. cut our overtime pay. They will say if circumstance where if both of them I want to just make a final comment they can’t take out our overtime pay, were working for the same company, and respond to what the Senator has they will have to eliminate the jobs. It the person who entered the military mentioned with regard to the nurses won’t be just the bad employers be- and got that training, because of the because this is so important, as I know cause these rules will make it very way it is written in the rules, could be the Senator is concerned about the hard for companies to do the right classified exempt from overtime, and issue of the quality of health care. thing. The veterans and other working the person who didn’t go in the mili- This is from Cathy Stoddart of Mingo people will be stuck with less time, less tary would still get the overtime for Junction, OH, a nurse at the Allegheny money, and a broken deal. the same exact job? Wouldn’t this be Regional Hospital in Pittsburgh: There it is, in real life, Randy Flem- the kind of situation that could arise? . . . President Bush and the Republican ing, a veteran who looks down the road Mr. KENNEDY. The overtime rule is members of the House and Senate are trying in the eyes of his children, hard work- unfair. As the Senator knows, particu- to take away the one thing that discouraged ing, played by the rules, served our larly today, when so much of the com- hospital administrators from forcing nurses bat arms are National Guard—probably to work overtime. If you think nurses are country, acquired some skills, and he is running away now, just wait until their em- looking to the future. 40 percent of the combat arms in Iraq ployers start telling them they have to work This is a lousy proposal. It doesn’t today are National Guard and Re- a 20 hour shift and aren’t getting overtime deserve to be favorably considered. But serve—these are people getting these pay for a single minute of it! our Republican friends are refusing us, skills, going back home, and getting This proposal affects the quality of denying us the opportunity to get a the jobs. They are not staying in there health care. We talked about the stand- vote on it. I know the Senator from 5, 7, 10 years. They are receiving these ard of living for working families and Iowa would be willing to agree to an skills now, and these skills are nec- the challenges they are facing over a hour of debate, a half hour of debate, 15 essary in terms of protecting the mem- lack of an increase in the minimum minutes of debate—we know what the bers of their squad or unit, to ensure wage, over the lack of unemployment issues are—to get a vote. The idea to that the military mission is going to be compensation, and now there is the use the rules of the Senate to deny the advanced. overtime proposal. This is going to Senate the ability to express its will on I would be interested in the Senator’s have a dramatic impact and adverse ef- this issue is an enormous insult to reaction. I mentioned Randy Fleming, fect on the quality of health care in working families all across the country who is a military veteran and served in this country. And for what? And that is and one they will not forget easily. the Air Force from 1973 to 1979, got because of the urging of the National Mr. HARKIN. Will the Senator yield? training in the military, and used over- Association of Manufacturers, the Mr. KENNEDY. I am glad to yield. time to pay for the tuition of his chil- Chamber of Commerce urging the ad- Mr. HARKIN. I thank the Senator dren. He says: When I went in the serv- ministration to find a way to cut back from Massachusetts for his continued ice, I went in the service to get that on overtime for 8 million workers in strong support of our working families, training. No one told me that after I this country. especially on the issues of the min- served 6 years in the Air Force and got I thank the Senator from Illinois for imum wage and overtime. I was listen- my training, that in the twilight pe- raising not only what this issue is ing to the Senator talk about the issue riod of my life, because I received that going to mean for working families, dealing with training in the armed training 20 years ago, I am going to be but what the impact is going to be on, services. I ask the Senator, is it not denied the overtime pay I had planned in this case, health care and other vital true that since 1938, when we have gone to put aside to educate my daughter. services. through World War II, the Korean War, No one told me, he said in his letter. We have talked about veterans. In the cold war, the Vietnam War, Gulf You talk about a marriage penalty. that regard, I bring to the attention of War, everything else, during that time Here it is, a penalty against us. Where

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00021 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2968 CONGRESSIONAL RECORD — SENATE March 23, 2004 is the fairness? Where is the justice? of new jobs, and to keep the 40-hour work you 50 hours a week or 60 hours a Isn’t the word of the United States workweek and to get rid of this goofy week if we choose. good on this? proposal from the Department of Labor We go to bed at night in this country I commend the Senator for bringing would actually be job creating? feeling good and safe. Why? Because up this historical background because Mr. HARKIN. Mr. President, the Sen- the men and women from our police we have never done that to the vet- ator has put his finger on it. This pro- forces are driving up and down the erans. posal by the administration to take streets to keep us safe. We go to bed I mentioned earlier the letter to Sec- away the rights of up to 8 million not worrying about fires because we retary Chao from Thomas Corey: We Americans on overtime is what I call a have firefighters out there who are would like to make you aware that the job-killing proposal. The Senator is ab- awake all night. Many of them work modification of the rules would give solutely right. It is common sense. extra hours and are paid overtime for the employers the ability to prohibit Look, if you have people working and it. That is an important part of their veterans from receiving overtime pay you can work them over 40 hours and family’s income. based on the training they received. not pay them time and a half, but reg- Now we are told by the Department This legitimizes the already extensive ular pay, why would you hire anybody of Labor we would like to change all problem of vetism, discrimination else? You would just work them longer. that after almost 70 years; we don’t against veterans. In fact, I say to the Senator—and he think employers ought to pay over- This is it. I put the section in the may well be aware of this—when they time. My colleague had it right. In RECORD of the proposal. I think there put out the proposed rules, they put fact, the sole job of some consulting are many reasons to be against this out certain examples on how employers companies it is to say to corporations, proposal, but the signal it sends to the could get around paying overtime. One we are going to find a way with these families of our servicemen couldn’t be of the proposals—I will read it into the rules to allow you not to have to pay more unfortunate. RECORD later; I have done it pre- overtime to your employees. I don’t I yield the floor. viously—was to say, look, what you do understand it. The PRESIDING OFFICER. The Sen- is simply reclassify your workers; you I watched this morning when my col- ator from North Dakota. then pay them a little bit less, but league from Iowa was on the floor. I Mr. DORGAN. Mr. President, I was work them longer so your out-of-pock- don’t understand why we are not vot- listening with interest to my col- et expenses are the same, but you work ing on this amendment. We voted on it leagues from Massachusetts and Iowa them over 40 hours a week. What a before. The Senate already expressed talk about the overtime issue. I was deal. itself. We said we support this amend- thinking about this in the context of This is like the IRS telling people ment. I don’t have the foggiest idea jobs. how to cheat on their taxes and giving what those who are now scheduling One of the great debates we have is them information on how to get around this place think they are accom- an economy that apparently is growing the IRS Code. At a time when we need plishing. This isn’t going away. This is but producing really no new jobs. We jobs in this country, this is another going to be voted on. Perhaps not 5 are about 2.5 million jobs down from 3 disincentive to creating jobs. Not only minutes from now, maybe not 5 hours years ago. Last month’s jobs numbers do they want to outsource jobs to other from now, but the Senate will vote. were pretty anemic—I think 12,000 jobs, countries, I say to my friend; they now When the Senate votes on this, the almost all of them government jobs. want to tell the American worker to Senate is going to say the Department I was thinking about the announce- work longer every week and don’t ex- of Labor should not be allowed to pro- ment 2 weeks ago that scheduled to pect to get paid any more for it. mulgate those rules. Why? Because the create this manufacturing jobs czar Mr. DORGAN. As I walked over to Senate, by and large, has a sense of that had been promised last fall. The the Chamber a few moments ago, it oc- fairness about this. The only way the administration is going to create a jobs curred to me there is almost never leadership can stop this is to prevent a czar because they are concerned about someone walking around this building, vote. jobs, so they announced a ceremony or standing out in front of the building That is why we are here today, trying that was going to be held to introduce who is advocating on behalf of working to force a vote. But those who have their jobs czar. And then just before it families, saying my job is to be here to their foot in the door are doing it for happens, it is called off because the make sure the voice of working fami- one reason. They would lose a vote if jobs czar is in China visiting his manu- lies is heard in the Halls of Congress. they had it. They are going to have it facturing plant he has moved from Ne- There are a lot of people with shiny and lose it. It will probably be tomor- braska to China. Everybody in the Ad- shoes, suspenders, and Cohiba cigars row or next week, but this vote will ministration was embarrassed about here and they are paid well to look happen and they are going to lose it. that. They are going to have a jobs after the big interests of this country, Why? Because there is a basic sense of czar that actually moved some of his and they do a great job, God bless fairness, in my judgment. American jobs to China. He was over them. But the fact is working families Finally, I come back to the propo- there visiting his employees when the don’t have so much influence, regret- sition I started with. This kind of rule President was prepared to announce a tably, in Washington, DC. They don’t at this point is a way of saying we new jobs czar for U.S. jobs. have people here looking after their in- don’t need more jobs in this country. It seems to me that the 40-hour terests. Eliminating overtime for 6 or 8 million workweek has always been about cre- I am talking about those families in people is a way of saying we don’t care ating jobs, because if you can work em- this country who know about second about creating jobs. If you cannot work ployees 50 hours, 60 hours, 70 hours, and jobs. Why? Because they work second people overtime, over 40 hours, without there is no consequence to it, then you jobs. They know about second shifts. paying time and a half—if you cannot don’t have to create new jobs. Why? Because they have the second- do that, you have to create jobs to do You just work your current employ- shift job. They know about second- the extra work. That is the way the ees overtime, on and on. But for 60 or hand, they know about second mort- system works. That is what has al- 70 years in this country we have de- gages, and about second everything. lowed the economy to grow. That is cided if you are required to work more Now they are worried about job secu- what produces new jobs. than 40 hours a week, you have a right rity and about whether they will keep Those who now support this propo- to be paid overtime. That is incentive their jobs, about whether their jobs sition—the administration, Depart- to create jobs for the amount of work will be exported to China because they ment of Labor, the majority party in that is available or necessary for that cannot compete with 33-cent labor. Congress—that these overtime rules amount over 40 hours. So at a time Now they have to worry about a pro- ought to be changed after 60-some when we are losing jobs, and when jobs posal that says, for 70 years we have years and prevent overtime payments are the issue, I ask my colleague from had a 40-hour workweek, and we are to 6 million or 8 million people, they Iowa, isn’t it the case this overtime thinking of changing that so the big are the ones who are saying, appar- proposal actually retards the creation employers have the opportunity to ently, we don’t need new jobs in this

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00022 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2969 country. They don’t stand for creating this? I hear now that the Republicans, Then this man, no politician, no dip- new jobs. I cannot think of a worse po- since they do not want to vote on the lomat, no scholar, no intellectual, no sition to take at this point than, in the overtime amendment, may actually military hero, told his story. I will face of diminishing jobs and jobs mov- pull the bill, kill this bill, which means never forget the speech he gave that ing overseas and outsourcing and those then we will have to pay tariffs to Eu- day. The story briefly was this: He was issues, for somebody to come to this rope, we will have to pay a penalty, a worker in a shipyard in Gdansk, Po- floor and say, by the way, let’s cut that may amount, according to the land. He had been fired from his job as down even more on jobs by forcing peo- Senator from Iowa, up to $4 billion a an electrician because he was leading a ple to work longer without paying year. Am I correct, I ask the Senator strike to organize workers. He was them overtime. This makes no sense to from North Dakota, that they would fired by the Communist government. me at all. rather pay tariffs to Europe than over- On a Saturday morning, he was back in Again, my colleague is doing a serv- time to our workers? the shipyard in Gdansk, Poland, lead- ice to the Senate by standing here and That is what they are saying. If they ing a strike of workers in that shipyard saying we are going to vote on this. pull this bill, we will have to pay these once again against the Communist gov- Mr. HARKIN. If the Senator will tariffs; we will be paying money to Eu- ernment. He told us that the Com- yield. Again, I thank the Senator from rope but we will not be paying over- munist secret police grabbed him and North Dakota for not forgetting his time. Does the Senator from North Da- beat him severely. They took him to populace roots of North Dakota. When kota see it that way, that somehow be- the edge of the shipyard and they the Senator speaks on the floor, as he cause they do not want to vote on over- hoisted him up unceremoniously over just has, he speaks with clarity, com- time they will pay tariffs to Europe the barbed wire fence and threw him on mon sense, and the wisdom of the com- but not overtime to our people? I ask the other side of the fence in this ship- mon man and woman. That is why I the Senator from North Dakota what yard in Gdansk, Poland. have always admired the Senator from kind of fairness is there to our working He told us that he lay there face North Dakota. people in that? down bleeding. Remember, this is an What he has just said strikes right at Mr. DORGAN. That is an interesting unemployed electrician who was lead- the heart of what the common man and construct of the debate, and I think a ing a strike for a free labor movement woman in this country feel—that their reasonably accurate one. This under- against a Communist government. He rights to at least overtime pay, if they lying bill, while it has some flaws, lay there on that Saturday morning, are working over 40 hours, are being would pass the Senate, in my judg- bleeding face down in the dirt, won- taken away without their having any- ment, and will pass the Senate. Those dering what to do next. The history thing to say about it. who are the architects of the bill and As the Senator pointed out very books, of course, tell us what he did bring it to the floor want to bring it in clearly, we are not being allowed our next. He pulled himself back up, a circumstance where they say, oh, by right to represent the common man climbed right back over the fence into the way, this is our idea and you can- and woman—his constituents in North that shipyard, and then 10 years later not add any of your ideas to it. Dakota, my constituents in Iowa, or he was introduced in the House of Rep- What the Senator from Iowa is doing anywhere else in this country—in get- resentatives to a joint session of the is using the only alternative available ting a vote on the Senate floor as to Congress as the President of the coun- to him to try to stop something that whether we will permit the administra- try of Poland. diminishes and destroys jobs in this tion to take away those overtime This is what he said to us: We did not country and destroys the opportunity rights. have any guns. The Communist govern- I say to the Senator this is some- to create more jobs. ment had all the guns. We did not have The Senator from Iowa is perfectly thing that should not be allowed to any bullets. The Communist govern- happen on the Senate floor. I thank the within his rights to offer this amend- ment had all the bullets. We were only Senator for his stalwart support for our ment. The Senate already expressed armed with an idea, and that is work- working men and women and for insist- itself on this amendment. Republicans ers ought to be free to choose their own ing we have a vote on this Senate floor. and Democrats have said: We believe destiny. He said: My friends, ideas are The Senator is absolutely right that we we ought to stop the Department of more powerful than guns. are having all kinds of games being Labor from issuing these rules on over- This man was no intellectual, no pol- played, all kinds of little parliamen- time. It is not a radical position. The itician or diplomat, he was an unem- tary tricks, so we will not vote on this. Senate has already taken this position. ployed electrician. And 10 years later There is one other thing I want to It had the vote. he walked into this building as the ask the Senator from North Dakota, I conclude by trying to put this in President of his country, saying that who also has a keen insight and judg- some perspective. I find it interesting workers have rights. ment on issues dealing with fairness that there are people in our political Our country embraced him. Our and taxation and jobs going overseas. system who like organized labor as country embraced the effort and the This morning, the senior Senator long as it is overseas. I will describe a sacrifice by Lech Walesa and so many from Iowa, who is the chairman of the story of something that happened. My others in the country of Poland in sup- Finance Committee, went on to talk colleague was perhaps there at the port of workers rights, in support of about how if we do not pass this bill time. There was a joint session of Con- labor unions, in support of the very there are going to be tariffs because gress held in Washington, DC. As joint things we are talking about today. the WTO said we are in violation, and sessions are in almost all cases, it was It is interesting that it was Lech so therefore we have to change the law a majestic situation. The House and Walesa and Poland that lit the fuse or we are going to have to start paying Senate come together in the House that created a free Eastern Europe. In tariffs. Chamber. It is normally when the country after country, he lit the fuse I am reading from what basically he President gives a State of the Union that started it all and changed the said this morning: The sanctions began Address, but sometimes a foreign lead- world—the power of one and the power on March 1, 5 percent. The Senator er is invited to speak to a joint session of an idea. from Iowa said: It is like a 5-percent of Congress. My colleague from Iowa is talking sales tax on everything we are going to On this day, at the backdoor of the about the power of an idea, and this is sell overseas or stuff we are going to House of Representatives, a man was not a new idea; it is a timeless truth. sell overseas. He said by March it introduced to a joint session as Lech Yes, there are some timeless truths, would be 5 percent; 6 percent in April; Walesa from Poland. I will never forget and that is working people have a right 7 percent in May; 8 percent in June; 9 the day because this man, probably 5′8″ to expect to be treated fairly. This percent in July; 10 percent in August; tall, kind of chubby cheeks, red cheeks country is not just about people at the 11 percent in September; 12 percent by and a handlebar mustache, walked to top; this is about people at the top and November. the front of the room of the House and the bottom and everything in between. So will the Senator from North Da- the applause began. It went on and on In my part of the country, we under- kota help me clear up my thinking on and on and on. stood a century and a half ago, as the

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00023 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2970 CONGRESSIONAL RECORD — SENATE March 23, 2004 wagon trains moved across the land- vanced two things: No. 1, the respect Dakota for the eloquence of his state- scape in North Dakota heading west, for the rights of American workers; ment and I thank Senator DORGAN for that one does not move a wagon train and, No. 2, we will have forced the cre- his unwavering support through all the ahead by leaving some wagons behind. ation of additional jobs in this country, years I have been privileged to know We understood that long ago. The same something that is desperately needed him and be his friend, his unwavering is true with respect to policies in this at a time when we see far too many support for the common man and country, especially economic policies. jobs going overseas. woman in this country, for working The things that represented the root I don’t know what the time situation families, for our farmers and ranchers and the core of belief for Lech Walesa is of the Senator from Iowa, but I want out in the West and the Midwest. of Poland was represented on the to make one more comment. I talk Senator DORGAN is always eloquent streets of America 75 to 100 years ago about jobs overseas because it is the in his remarks. As you listen to Sen- about the rights of workers. core of this issue about jobs that brings ator DORGAN speak, you can hear the Business has rights, workers have me to the floor to talk about overtime. voice of that average man and that av- rights, investors have rights. I under- I have spoken a good number of times erage woman out there who are not big stand all of that. Now we are talking about this issue and I am going to talk time lobbyists down here on K Street; about the right of people who for 60 one more time for a minute. as Senator DORGAN said, they don’t years have understood the rules, and The symbol of outsourcing of jobs is have the shiny shoes and suspenders the rules are that if one’s employer for me Huffy bicycles. We all know and whatever else. They are out there wants to work a person more than 40 about Huffy bicycles. They are 20 per- working every day, feeding and cloth- hours a week, they have a right to ex- cent of the American marketplace. Buy ing their families. They have a decent pect to be paid overtime. a good Huffy bicycle, buy it at Sears, life. They give their kids a good edu- All of a sudden, for millions of fami- Kmart, buy it at Wal-Mart. It used to cation. They do what they can to make lies, law enforcement folks, firefighters be made in Ohio by American workers. sure their kids have a little bit better and others, this administration wants I am sure they were proud of their jobs. life than they have had. It is called the to say: We are changing that rule; we I don’t know any of them. Eleven dol- American dream. And no one has been believe employers have a right to tell lars an hour they were paid to make a stronger supporter of ensuring that you to work 50 or 60 hours and they do Huffy bicycles. American dream for our working fami- not need to pay you overtime. Between the handlebar and the fend- lies than the Senator from North Da- As I said before, that is a quick way er they put a little decal on Huffy bicy- kota, Mr. DORGAN. to say we do not need to create new cles and the decal was the American I thank him for all that support jobs. We will just overwork existing flag. But Huffy bicycles are not made through all the years and for carrying workers. It is not fair. There is a basic there anymore. They are made in on the fight for overtime and making sense of fairness in this Congress. That China. The decal isn’t an American flag sure our workers are paid the overtime is why when this is voted on, as it was anymore. They changed the decal. In that is due them when they work over before, it will pass. fact, I was told it was the last job the 40 hours a week. The basic contention of Senator HAR- workers in Ohio had to do, was replace Earlier today I pointed out the chair- KIN is that this is, at its root, unfair. It on existing inventory the American man of the House Ways and Means changes the rules of the game. flag decal with a decal of the globe. Committee, Congressman THOMAS from You can talk a lot about this country Huffy bicycles are made in China by California, according to the Congres- of ours. I suppose in political cam- people making 33 cents an hour, work- sional Quarterly, told a business group paigns there is way too much negative ing 7 days a week, 12 to 14 hours a day. yesterday he thinks this foreign tax talk about our country. But there is a The workers in Ohio can’t compete bill we have before us is doomed. Those lot right about our country, and much with 33 cents an hour. That is the were his words. He pointed the finger of what has been right about our coun- struggle of American workers these at the business community, according try has been manifested by people who days. It is a big struggle. We have big to today’s issue of the national journal have gone to the streets and gone to questions to answer. We have trade Congress Daily. Mr. THOMAS, in other the ballot boxes and effected positive policies we must try to set right. We words, was blaming K Street lobbyists change that has improved the lives of have to deal with all these issues. We for this bill’s likely demise in the working people and raised an entire have to find some way to stand up for House. middle class in this country which did the interests of American jobs and It seems to me what we have is a bill not previously exist. American workers. that is already being slow-walked by This is a big issue and an important This overtime issue is just one piece some of the majority leadership in the issue. It is probably not as big or im- of that, just one piece. But to some Senate because the leaders on the portant to anybody in this Senate who families it is everything. It is the way other side don’t want to vote on over- doesn’t get paid overtime. But there they send their kids to school; it is the time. I hope we don’t hear anything are millions of families who rely on way they help pay their mortgage; it is from the other side saying somehow we overtime, who work hard every day to the way they help provide the income are to blame for slowing down this bill. get the extra hours and get the over- to raise their families. So this is a big We had a unanimous consent agree- time pay because that is the way they deal to many families in this country. ment. My amendment was in line to be send their kids to school and buy their For the 6 to 8 million families, work- offered. I offered the amendment in schoolbooks and send their kids to col- ers who are affected by this, I think good faith. I was even asking if we lege or buy the spring clothing—to they owe a great debt of gratitude to could have a time agreement. Imagine those families, it is important. I come my friend, Senator HARKIN from Iowa. that. I offered the amendment. I of- back again to say those are the fami- I will stand with him as will many of fered a time agreement. I couldn’t even lies who know about second: Second my colleagues to say he has a right to be given a time agreement by the other choice, second mortgage, second shift, get this vote. When we get this vote we side. second job, and too often, in my judg- are going to win. We are going to do it Then the Republican side goes ahead ment, they get shortchanged here in not because we want to have a political and files this motion to recommit with Congress. argument with anybody; we are going an amendment on it and then they But they will not, I repeat not, be to do it because this is very important filed cloture and all this gobbledygook shortchanged if the Senator from Iowa to millions of Americans families who, parliamentary stuff. What it means is and I and others who demand a vote on all too often, are left behind in public we will not vote today. We will have a this provision get a vote because we policy here in this Congress. cloture vote tomorrow. They will not will win that vote. We won it before in I yield the floor. get cloture. Then I hear rumors the the Senate. We will win it again. When The PRESIDING OFFICER. The Sen- leadership on the Republican side will we win that vote, we will stop the De- ator from Iowa. then pull the bill and somehow blame partment of Labor from doing this, and Mr. HARKIN. Mr. President, I thank Democrats, blame Democrats, us, our we will, in my judgment, have ad- my friend and colleague from North side, for not getting this bill through.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00024 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2971 I will tell you, talk about chutzpah. I would like to get this bill through. become an engineer technician with a career That is like the person who went before The other side, though, simply because ladder that gave me a yearly boost in in- the judge for having killed his parents they do not want a vote on overtime, is come. It seemed, though, that even with a and then threw himself on the mercy of saying they are going to go ahead and decent raise every year, I really relied on overtime income to help make ends meet. the court because he was an orphan. pay these tariffs. It seems to me what I am a working single parent. There are The other side is responsible for kill- they are saying is they would rather many more single parents today with the ing this bill. Have no doubt. Make no pay tariffs to Europe than overtime to same problem. How does one pay for the car bones about it. They are responsible workers. That is exactly what is hap- that broke down or the braces for the chil- because they don’t want to vote on pening. Pay the tariffs to Europe but dren’s teeth? Overtime income has been the overtime. They don’t want to vote. don’t pay overtime to our workers. lifesaver to many of us. They get kind of wobbly in the knees. A lot has been said about the Amer- When I as a working mother leave my 8- Their ankles get weak. They break out hour day job and go home, my second shift ican worker and working families. I begins. There is dinner to cook, dishes to in a cold sweat when they think they wonder how many people know that wash, laundry and all the other housework might have to vote on whether to up- right now American workers work that must be done which adds another 3 to 4 hold the administration’s proposed longer per year than anyone else in the hours to your workday. When one has to put rules that will take overtime pay away industrialized world. This chart shows in extra hours at work, it takes away from from hard-working American families. it. For the years 2002 and 2003, Amer- the time needed to take care of our personal They have to vote against the adminis- ican workers are working in the United needs. tration. States almost 2,000 hours a year—more Listen to Sheila Perez who is from Sometimes we are called upon to rep- than Australia, Japan, Spain, Canada, Bremerton, WA, a single parent. She resent our constituents. As hard as the United Kingdom, Italy, Sweden, or says: that may be to believe by some, some- Germany. Not only are we working It only seems fair that one should be com- times we are called upon to represent longer hours per year, we are now pensated for that extra effort of working our constituents, not the administra- being told if we work overtime we will overtime. Overtime is a sacrifice of one’s tion but to represent our people. not get paid for it. time, energy, physical and mental well- The administration may want to being. Compensation should be commensu- Do you know what is going to happen rate in the form of premium pay as it is a take away overtime pay. That may be if these rules go into effect? This bar their position. But at least we ought to premium of one’s personal time, energy and will go way up because then employers expertise that is being used. have the right to vote on whether we will work their employees longer be- ought to uphold that decision. If I might interpret what Sheila cause they don’t have to pay them I know it may come as a shock to Perez is saying, she says: I am a single overtime. We already work longer. many Americans, but sometimes we parent. I work hard. I rely on overtime. What is the history of this bill? This are not allowed to vote in the Senate. When I get home from work, I have an- kind of gets to the crux again of what We are not allowed to vote on an other job taking care of my kids, doing is happening here with the proposed amendment. I have my amendment all of my laundry. My time with my rules on overtime. I said last summer pending. They won’t let us vote on it kids at home on the weekends is my when I offered this amendment and it because they filed this cloture motion, premium time. If I am being asked to this parliamentary device. was adopted by the Senate, the biggest give up my premium time to work on As the Senator from North Dakota impact of taking away overtime pay the job, I ought to be given premium said, I don’t care how many times we protection would be on women. People pay. have to be here. We will be back, we wondered why I said that. Why would I can’t say it any better than Sheila will be back, we will be back to vote on women be impacted most? For two rea- Perez. Again, it is another example whether we are going to take overtime sons: One, because the annual hours why this is going to hit working pay away from American workers. worked by middle-income wives with women the hardest. If we don’t vote on it tomorrow, we children in 1979 were 895 hours a year. I am just notified that will vote on it some other time, or my By the year 2000, that had gone to 1,308 CongressDaily, as of 3 p.m., which was friends on the other side will continue hours a year. Women with children are only about 40 minutes ago, had this to pull bill after bill after bill because working more—not quite double but al- statement. CongressDaily comes out they don’t want to vote on it. Maybe most—than what they were a mere 21 during the day, and at 3 p.m. said: they think they can just go ahead and years ago. A senior GOP leadership aide reiterated issue the final regulations. Then it will Most of these jobs are in certain today that GOP leaders will refuse a floor be sort of a fait accompli. Evidently, types of clerical positions in which vote on the amendment from Senator Tom we will not do anything. women have been engaged. Some of Harkin, D–Iowa, to strike a labor provision I am sorry, Mr. President. If that is them are in positions which are going involving overtime pay for white-collar the case, we will be back with an to be reclassified under the proposed workers. amendment to say they will not go rules as ‘‘professions.’’ These are the I don’t know if that is true. It is into effect until we have had open and kinds of jobs that are mostly held by being reported in CongressDaily at 3 public hearings on these regulations. working women, and mostly by work- p.m. that they will refuse a floor vote We will have a vote on it. My friends ing mothers. The biggest impact will on my amendment; refuse it. Why is it on the other side of the aisle are just be on working women. The initial wave they get so wobbly in the knees, with putting off the inevitable. Maybe for of impact will be on working women. weak ankles, and break out in a cold one reason or another they don’t want I have a statement from Susan Moore sweat? Maybe they are just afraid of this bill to go through anyway. That is of Chicago. She said: George Bush. Maybe they are afraid of kind of an odd position, as I said to the I am currently entitled to time and a half the administration downtown. Senator from North Dakota. As the under Federal law. I know for a fact that is I say to my friends on the other side chairman of the committee said this the reason I am not required to work long of the aisle, don’t be afraid of them; be morning, under the international hours like the project managers who are not afraid of the people you represent. agreements we have on trade, the entitled to overtime pay. My supervisor has They are the ones who pay your salary. World Trade Organization rules that to think hard about whether to assign over- They are the ones who vote to send you time to me because he has to pay for my our pretax policy is an illegal export time. That means more time for my family here. They are the ones whose overtime subsidy, and consequently the WTO has and that time is important to me. If the law is being assaulted, not the President authorized Europe to go up to $4 billion changes and I lose my right to overtime pay, and the people down at the White a year against certain U.S. exports. I will be faced with the impossible choice of House. The sanctions began on March 1. They losing time with my family or losing my job. Last summer in August, Peter Hart started at 5 percent. Then they go up 1 This is a statement from Sheila Research Associates, a well-known na- percent a month, all the way up to 17 Perez of Bremerton, WA. She said: tional pollster, did a poll. This was the percent over the course of a year. I I began my career as a supply clerk earn- question: There is now a proposal to don’t want to pay those tariffs. I don’t ing $3.10 an hour in 1976. I entered an upward change the Federal law that deter- want to pay those penalties. mobility program and received training to mines which employees have the legal

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00025 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2972 CONGRESSIONAL RECORD — SENATE March 23, 2004 right to overtime pay. This proposal classify them as being professional and speak as he made the point—how can would eliminate the right to overtime therefore exempt from overtime. you do a jobs bill and not look at the pay for 7 million employees who now Again, they have done this without issue of overtime, which if the adminis- have that right. Do you favor or oppose having one public hearing. I think they tration has its way will be taken away this proposal? In favor, 14 percent; op- thought they could get by with it; just from probably 8 million people? As my pose,74 percent. issue these rules and that would be the friend, Senator HARKIN, relayed the That is not even close. I can under- end of it. The American people have history, it is a stunning situation that stand why the other side would not spoken loudly and strongly, saying we find ourselves refighting the issue want to vote on this. Maybe they feel they are not going to sit down and let of overtime in the 21st century. dutybound, politically bound, party their rights to overtime pay be taken I wish to share with my colleague bound to support their President. away. something that is very interesting, a Therefore, they would not want to vote Congress Daily, today at 3 p.m. says, bit of correspondence that has gone because they know 74 percent of the quoting a senior GOP leadership aide, back and forth. When I saw Secretary American people are opposed to this GOP leaders will refuse a floor vote on Chao—by the way, I find her to be a proposal to take away their overtime my amendment. very nice person. I like her. We have a pay, the right to overtime pay. As I said a week or so ago—and I see very nice personal relationship. This is This is an issue that strikes, as so my colleague from California—and I not personal. I asked her about the reg- many before me have said, at the heart am not in the habit of quoting the ulation. I said: My people at home are of fairness and equity to American present Governor of California, the very afraid of this regulation because workers. What could be more fair than movie actor, but I will quote him in they think they will be denied over- if you have to work over 40 hours a saying ‘‘I’ll be back.’’ We’ll be back. time. week, you have to be paid time-and-a- This is not going to go away. If the She said: Oh, it’s hardly going to af- half overtime? That is the Fair Labor other side thinks by doing these par- fect anybody. Standards Act, 1938. liamentary tricks that somehow we I said: All right. Instead of asking What is a little known fact is that a will give up, they are wrong. you about every category, let me tell debate raged in this country for a long Mrs. BOXER. Will the Senator yield? you that my police men and women, period of time—I would say almost 40 Mr. HARKIN. We will not give up be- my firefighters, and my paramedics— years from the end of the 19th century cause we are fighting for the rights of my first responders—are very con- to the middle of the 20th century, at American workers to have justice and cerned about losing their overtime. least until 1938—on restricting the fairness in their working conditions. She said: Senator BOXER, not a number of hours that an American As Sheila Perez said, from Bremerton, chance. This is not even going to hap- worker had to work without getting WA, if she is forced to give up her pre- pen. some kind of extra pay. Remember, in mium time, her time with her family, So I wrote her a letter, and I said: those days we even had child labor; we she ought to get premium pay. Secretary Chao, you know I oppose got rid of that. The American workers We will continue to fight for this. this. I am very worried about it. Can were working 50, 60, 70 hours a week Mrs. BOXER. Will the Senator yield? you please explain to me why I should with no protection by labor unions, no Mr. HARKIN. I am delighted to yield. not be worried? So she writes back a rights whatever. Finally, slowly but Mrs. BOXER. I was hoping my friend letter. I wrote her on February 9, and surely, organized labor grew, more and would stay. I would like to ask a series on February 26 I was very pleased that more rights were attained by our work- of questions and give him some infor- she answered the letter, and she ex- ers, and then the debate ensued about mation. Does the Senator have the plains why, in her opinion, firefighters how many hours a week should a work- time to stay? and first responders and policemen will er work without being paid overtime. Mr. HARKIN. Why don’t I yield the not be impacted. A little known fact: In 1937, this Sen- floor so the Senator can be recognized. Mr. President, I ask unanimous con- ate, in this very Chamber in which we Before I do, let me thank my col- sent to have printed in the RECORD my find ourselves today, right here in this league from California, Senator BOXER, letter to Secretary Chao and her re- Chamber, the Senate, in 1937, voted to for her longtime unyielding support for sponse. establish a 30-hour workweek. Imagine, our working families. No one has There being no objection, the mate- right here in the Senate where we are fought harder, more consistently, and rial was ordered to be printed in the standing, the Senate, in 1937, voted for with such eloquence than the Senator RECORD, as follows: a 30-hour workweek. The debate en- from California. I know the people of U.S. SENATE, sued, and finally, by 1938 they com- California recognize in Senator BOXER HART SENATE OFFICE BUILDING, promised. The compromise was a 40- they have a fighter who will not give Washington, DC, February 9, 2004. hour week with time-and-a-half over- up and who will not back down in Secretary ELAINE L. CHAO, time. Think about that: the Senate, in fighting for their families’ rights. U.S. Department of Labor, 1937, actually voted to establish a 30- I yield the floor. Washington, DC. hour workweek. Today, we cannot even The PRESIDING OFFICER. The Sen- DEAR SECRETARY CHAO: As you know, I ob- ator from California. ject to the Department’s proposed regula- get a vote in the Senate on whether we tions on ‘‘white collar’’ overtime exemptions will pay people overtime to work over Mrs. BOXER. Mr. President, I thank to the Fair Labor Standards Act. The pro- 40 hours a week. We cannot get a vote my friend, Senator HARKIN, for his posed changes threaten overtime pay protec- on it. wonderful words. It means so much to tions for millions of Americans. I oppose any That says something about the dif- me coming from him, someone who has proposal that threatens overtime pay for ference of the Senate in 1937 from the been in this Senate for so many years, vast numbers of hardworking Americans. Senate in 2004. I wonder how many a voice of the working people. By the I have heard from a variety of profes- votes the Senate would get today if way, that is most of the people in this sionals with concerns about this rule. I am country who have to work for a living. particularly concerned that the Inter- someone offered a vote to establish a national Union of Police Associations (IUPA) 30-hour workweek. Do you think it In many families, as we know, two peo- estimates that 50% of police officers would would get 10 votes? In 1937 they got a ple are working, and in many families lose overtime protection under the current majority of the votes, right here in the they work overtime to be able to pay DOL proposal. And, according to the Amer- Senate. Yet now they are working the bills and college tuition and health ican Nurses Association, ‘‘this proposed rule longer and longer hours every year. care, and on and on. This issue is cru- could virtually eliminate every registered More and more people are being made cial. nurse in an ‘administrative position’ from to work over 40 hours a week and not I also thank Senator BAUCUS for overtime pay.’’ According to the Economic being so strong in his support of allow- Policy Institute, 234,000 licensed practical being paid for it. nurses would lose their overtime protection The reason I hear so much is we need ing a vote on this amendment. under your proposal. to reclassify workers. The reclassifica- It is very important because, as my I know that you disagree with that conclu- tion they are talking about basically friend said today at lunch—I had the sion. You testified before the Senate in Jan- would hit women the hardest, would re- honor of listening to Senator HARKIN uary that the Department’s overtime reform

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00026 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2973 proposal ‘‘will not eliminate protections for lected over $200,000 in back wages for RNs in most talented officers would choose not to be police officers, firefighters, paramedics, and New Jersey who had been wrongly denied promoted (to the detriment of the Depart- other first responders.’’ You went on to add overtime pay. ment) due to monetary concerns. other professions that would not be affected We disagree with the Economic Policy In- So with all due respect to Secretary including nurses. stitute’s estimate that 234,000 licensed prac- Chao, who is, as I say, a friend, her First responders themselves disagree with tical nurses (LPNs) would lose their right to your claim. I write to ask you to explicitly overtime pay. LPNs, with all due respect for comment that they are not white-col- exclude these categories of workers from their skills and service, would not meet the lar employees is not at all clear. So your final rule. That would provide the cer- test for exempt professional under either that is one difference. tainty our first responders need to ease their current law or the proposed regulation. Now let’s go on to the other dif- fears of losing overtime pay. They stand The final regulations are still in develop- ferences. This is why my police officers ready to respond to another crisis resulting ment. I can assure you, however, that it is are absolutely in favor of what Senator from everything from the spread of a deadly not our intention to deny overtime pay to HARKIN wants to do, which is to reverse virus to a terrorist attack. As they stand police officers, fire fighters, paramedics, or the move of the administration. prepared to protect us, the least we can do is LPNs, or to change the current rules with re- protect the overtime pay they deserve. spect to RNs. You and many others have rec- Secretary Chao’s letter says: Sincerely, ommended that we make this intent explicit; Second, a large number of such employ- BARBARA BOXER and, of course, we will take this and all the ees—such as those represented by the Inter- U.S. Senator. other comments and opinions that have been national Union of Police Associations—are put forward into careful consideration. covered by collective bargaining agreements, SECRETARY OF LABOR Sincerely, which are not affected by the current or pro- Washington, DC, Feb 26, 2004. ELAINE L. CHAO. posed regulations. We also believe it is unre- alistic for unions to claim that overtime pay Hon. BARBARA BOXER, Mrs. BOXER. Well, it did not end U.S. Senate, Washington, DC. granted under a current collective bar- DEAR SENATOR BOXER: Thank you for your there, I say to my friend from Iowa. I gaining agreement is likely to be revoked letter dated February 9, 2004, regarding the got a visit from police officers in my during a new negotiation. Department of Labor’s proposal to update office here in Washington, and what is So that is her second point. First, Part 541 of the Fair Labor Standards Act reg- on their agenda, the first thing? Over- they say they never do white-collar ulations, known as the ‘‘white collar exemp- time. I said: Well, look, I am going to work. Wrong. Now she says their col- tions.’’ You expressed particular concern do everything I can to protect you. I lective bargaining agreements could about the impact of the proposed regulations raised this issue with Secretary Chao. never be overturned. on police officers, fire fighters, paramedics, She answered my letter. She says you and nurses. I appreciate the opportunity to Let’s see what the California police respond. have nothing to worry about. Will you officers say: As I testified on January 20, in a hearing please go over her answers, and can The clout of independent police associa- before the Senate Labor-HHS Appropriations you please comment back to me as to tions varies widely. Some would be able to Subcommittee, we take strong issue with the what you think of her opinion on protect their contract-required overtime, claim that these reforms—even as proposed— whether you will lose overtime? others would not. Many overtime provisions would take away overtime pay from rank So I have blown up for you to see, I in collective bargaining agreements refer to and file public safety employees. say to Senator HARKIN and Senator the regulations or statutory requirements. First, police officers, fire fighters, para- Those overtime provisions would end with BAUCUS, something you might be inter- medics, and other first responders are not statutory or regulatory changes and would white collar employees. They do not perform ested in. These quotes go side by side. not even extend to the next negotiations. office or non-manual work. By definition, Secretary Chao says in her letter to To assume that it is ‘‘unrealistic’’ that they are not covered by Part 541. me: contract provisions once granted would not Second, a large number of such employ- First, police officers, firefighters, para- be revoked is simply ignorant. ees—such as those represented by the Inter- medics, and other first responders are not Those are strong statements. national Union of Police Associations—are white collar employees. They do not perform Contract provisions are frequently revoked covered by collective bargaining agreements, office or non-manual work. which are not affected by the current or pro- during the collective bargaining process. The posed regulations. We also believe it is unre- So, therefore, she is essentially say- regulatory or statutory requirements cur- alistic for unions to claim that overtime pay ing they will not fit into this revision rently in place have held at bay any attack granted under a current collective bar- of the rules because they are not white- of the overtime agreement. gaining agreement is likely to be revoked collar employees. This is what she says Regulatory and statutory requirements during a new negotiation. That would imply about police officers. have been a major contributing factor in the that the union could not obtain any wage or This is what my police officers write successful recovery of moneys owed and withheld by employers in violation of respec- benefit for members outside of what is re- back: quired by law. For example, that is clearly tive collective bargaining agreements. Many police officers do not drive black and not the case for registered nurses rep- Mr. HARKIN. Will my colleague white patrol vehicles and perform only en- resented by a union. forcement/patrol duties. Police officers also yield? Third, many public safety employees, as Mrs. BOXER. Yes, I yield to my well as nurses, are paid on an hourly basis. serve in investigative and other capacities. As such they do not wear uniforms and a friend. Hourly workers are not affected by Part 541 Mr. HARKIN. I thank my colleague under either the current or proposed rules. great deal of their work is performed in an Moreover, those public safety employees office. for pointing this out. I think this does who are paid on a salary basis and may be So here she is saying they are not clarify it. Because who better to re- earning less than $22,100 a year will imme- white-collar employees and they say spond than the people being affected, diately gain overtime protection under our many times their work is in the office. the police officers? proposed rule. They would be among the esti- In cold case units— Mrs. BOXER. Exactly. mated 1.3 million low-salaried workers who Mr. HARKIN. I say to my friend from would gain overtime protection who do not You know what a cold case is: an old California that this, right here, is very have it today. The Fraternal Order of Police case. They call it a cold case. They just instructive: (FOP), the nation’s largest police union, and put it aside— the International Association of Fire Fight- We also believe it is unrealistic for unions The vast preponderance of their duties en- to claim that overtime pay granted under a ers (IAFF) have stated that they do not op- tail reviewing files and records in the office. pose the Department’s rule. They believe current collective bargaining agreement is With the increased use of technology many likely to be revoked during a new negotia- many of their members would benefit by it. officers are spending more and more of their Registered nurses (RNs) can already be tion. time performing office, non-manual type classified as exempt professionals under cur- work to facilitate the detection and basis for I ask the Senator, am I correct that rent law, based on their education and du- apprehension of criminal suspects. what she is actually saying is, how- ties. The proposed regulation makes no Without an explicit non-exempt status— ever, now overtime pay will be a nego- change in this regard for registered nurses. tiable item? The fact is, however, that many RNs are paid This is the key point— on an hourly basis, or are covered by a col- Local agencies interpreting the regulation Mrs. BOXER. Exactly. lective bargaining agreement, and therefore may well determine that those employees Mr. HARKIN. See, now it is nonnego- would be entitled to overtime pay under cur- are white collar and perform office work— tiable. rent law. You may be interested to know and then exclude them from overtime cov- Mrs. BOXER. Exactly the point. that the Department of Labor recently col- erage. If this were to occur, many of the Mr. HARKIN. Am I right on that?

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00027 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2974 CONGRESSIONAL RECORD — SENATE March 23, 2004 Mrs. BOXER. Right. They say right You keep saying they are not affected. fiscally. To eliminate the Federal non-ex- here: Why don’t you change your rule and empt provision at this time when dollars are scarce would be akin to placing a huge bull’s If it was such a foregone conclusion that simply exempt first responders, and eye on the already beleaguered morale of our represented employees could negotiate and then at least my police and firefighters members. We are currently stretched further maintain overtime protections absent statu- and nurses and paramedics will not be than is prudent. To give our employers the tory and regulatory requirements, the law so upset. opportunity possibly of stretching us even and regulations would never have been made Mr. HARKIN. The Senator has done further to save an extra buck or two could be applicable to any workers under a collective something of great value to all of us by devastating to a profession already facing re- bargaining agreement. bringing this out. A lot of the time we cruitment and retention problems. Mr. HARKIN. I thank the Senator hear these things, but this puts it in We are a profession that works 24 hours a from California. This really does point focus. day, seven days a week, 365 days a year. I personally left a salaried position to join po- out what is very important. The Secretary says: Again, I ask the Senator if I am cor- lice work. Being compensated for extra work Hourly workers not affected by part 541 at the overtime rate was a big factor in my rect in my interpretation, because I under either the current or proposed rules. decision. We are continually required to ex- want to make sure I am clear on this, But is there anything in the proposed tend our workday or return to work from off that right now, for these certain class- rules that would prevent an employer duty time. This is a difficult enough job, es that are not being reclassified as it from saying: OK, you were an hourly with its disruptions and hardships placed on exists, if you work over 40 hours a worker. We have now reclassified you. our members and our families. To even allow for the possibility that police officers could week, you have a contract negotiation You are now a professional. Don’t you that is not even negotiable because you lose their non-exempt status and overtime feel good? You are now a professional. provisions is irresponsible. are covered by overtime law. And guess what. You don’t get over- Mrs. BOXER. That is right. You have I thank my friend. I know he has to time. go to other Senate business. I will ask the statutory protection, which they There is nothing to stop them from are now going to take away from these for a quorum call in a moment. But I doing that. will yield to him for one more com- workers. They are taking it away and Mrs. BOXER. Even more to the point, ment. I just say thank you on behalf of saying: Well, you can fix it with your collective bargaining agreements gen- collective bargaining. my police officers, my nurses, my first erally do not state that employees are responders. I can’t thank you enough. Mr. HARKIN. See, that is it. hourly. So it is very easy for an em- Mrs. BOXER. And she says, you have Mr. HARKIN. The Senator, basically, ployer to say: Show me in your con- is thanking the wrong person. The Sen- it anyway in your collective bar- tract where it says you are hourly, ator should look in the mirror if she gaining, which is not always the case. even if you formally are. So people are wants to thank someone. The people of I think what the police officers have going to be stuck, and they are not California are privileged to have a done, in dissecting this, is to be the going to get their overtime pay. fighter like BARBARA BOXER rep- truth tellers here. At the end of the day we have to get resenting them in the Senate. I mean There is one more chart. Secretary back to this bottom line. The Sec- that. Not only is the Senator a per- Chao says in her letter: retary says: sonal friend of mine but someone I ad- Third, many public safety employees, as I can assure you, however, it is not our in- mire so much because she never backs well as nurses, are paid on an hourly basis. tention to deny overtime pay to police offi- down. When Senator BOXER speaks, you Hourly workers are not affected by Part 541 cers, fire fighters, paramedics. . .. under either the current or proposed rules. hear clearly the voices of the common I say to my friend, put it in writing. man and woman, the person who This is what the California police of- I think that is pretty obvious. They doesn’t have a voice here, individuals ficers say: will not put it in writing. who will never set foot on the Senate Employers have made determinations on I am so happy that my friend brought floor, who never will be privileged to who is exempt based on the totality of the this up. When I first approached Sec- regulatory requirements. Some will view any speak in this hallowed Chamber. The retary Chao, we had a very friendly Senator from California speaks for modification as a basis to reconsider exempt conversation. It was right out here. status. Collective bargaining agreements them. I said to her: My people are up in Mrs. BOXER. I thank the Senator. He generally do not state that employees are arms. Talk to me. What are you doing? ‘‘hourly’’ employees. Employers would chal- made my day. I am so privileged that Well, it is hardly going to affect any- lenge that assertion. he would say such words to me. On this body, she said. So that is another point. I said: Well, if it is going to affect issue, we will not back down. We will Then Secretary Chao says: hardly anybody, why bother? That stand together with many of our col- Moreover, those public safety employees doesn’t make any sense. leagues. Interestingly, a majority of who are paid on a salary basis and may be Then I said: My policemen, my fire- the Senate already voted with the Sen- earning less than $22,100 a year will imme- men, my first responders are really ator. All we are asking is give us a vote diately gain overtime protection under our on behalf of the policemen, the police- proposed rule. over the top on this. And she said: They are not affected. women, the first responders, the fire- They say: That is why I wrote to her and said fighters, the nurses, the paramedics. Fine. But this does not apply to and will put it in writing. She said: It is not Let us make sure we do not take away not affect any California public safety offi- necessary, they are exempt because their overtime pay because to do so cers. they are not white collar, and all the would be an enormous hardship on Thank God we pay them more than rest. them and on their families at a time $22,100 to protect our lives and our chil- Here we find out from the police offi- when we should be elevating them in dren’s lives. So that is a useless deal in cers themselves how silly the Depart- status and saying to them, thank you, this category of workers. ment of Labor position is because of not only in pictures that we love to Lastly, she writes: the fact that many of our criminal show with our arms around them—and I can assure you, however, that it is not cases are solved now on computers in we all do that—but in deeds. We really our intention to deny overtime pay to police the office, doing investigatory work. mean what we say, and we say you will officers, fire fighters, paramedics, or LPNs, I don’t know exactly what is going on not lose your overtime pay. or to change the current rules with respect except an effort to undermine working I hope we can get a vote on this im- to RNs. conditions and pay for millions of peo- portant amendment and move on to Here is what the police officers say: ple. the rest of the bill which is quite im- We in police work subscribe to a common I want to read one more letter and portant. rule: Say what you mean, mean what you then I will leave the floor. This is from I thank the Chair and suggest the ab- say and memorialize it in print. If the intent SGT Mark Nichols, President of the sence of a quorum. is not to deny overtime, then put it in writ- Santa Ana Police Officers Association The PRESIDING OFFICER (Mr. ing. in Orange County: CHAFEE). The clerk will call the roll. By the way, that was in my first let- Public safety in California is facing a The legislative clerk proceeded to ter I sent to Secretary Chao. I said: major crisis as we try to get back on our feet call the roll.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00028 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2975 Mr. REID. Mr. President, I ask unan- week. Under the proposal we have from force in our country regularly works imous consent that the order for the the President, they won’t be able to get longer than a 40-hour week. Twenty quorum call be rescinded. their overtime. Anyone making more percent, 2 out of every 10 workers in The PRESIDING OFFICER. Without than $22,000 a year is, in effect, pre- America, work up to 50 hours a week. objection, it is so ordered. vented from getting overtime. The Fair Labor Standards Act recog- Mr. REID. Mr. President, last week, I Clerical workers: Why would you nized employers would take advantage was in Nevada and I visited a number want to take the ability of somebody of employees if they were not required of police stations and fire stations. Let required by virtue of their work to put to pay overtime. That is why the Fair me direct our attention to the Hender- in extra time and not be paid for it? Labor Standards Act was passed. son Police Department that I met with. Mr. President, the Fair Labor Stand- The principle of overtime pay for The chief, the deputy chief, and a num- ards Act, more than 50 years ago, said those who work more than 40 hours a ber of police officers were there. It was if a person works more than 8 hours a week was part of that act. It was the time for a shift change. A number of day, more than 40 hours a week, except main purpose of that act. This legisla- hard-working police officers were under contractor situations, and some tion recognized hard work rewarded there. I expected them to talk about other exemptions—few in number— those who worked the hardest. Fami- homeland security and their obliga- they are to be paid extra, time and a lies who work hard depend on overtime tions as first responders. They wanted half, and for working holidays, double pay. In fact, families that work over- to talk about that, of course, about the time, meaning they work 1 day and get time earn 25 percent of their pay in unfunded mandate passed on to police paid as if they worked 2. overtime. The administration’s pro- departments in Nevada and all over the Physical therapists, reporters—that posal would cut their pay by 25 per- country. Henderson, NV, is the second is a strange way to punish reporters, cent. largest city in Nevada. By most stand- but I guess you can do it that way. If It would also mean fewer jobs. Why? ards, it is not really large—about you are in the middle of something big, Of course it would be fewer jobs, be- 250,000 people. It is a suburb of Las you can just say ‘‘stop’’ because you cause why would an employer bother Vegas, where I went to high school. are not going to get paid. hiring somebody else when they can They didn’t want to talk about Paralegals, dental hygienists, graph- just have whoever is working—a nurse, homeland security and first responders ic artists, bookkeepers, lab techni- a clerical worker, a reporter, a graphic initially; they wanted to know what is cians, and social workers—these are artist, a social worker—why hire an- happening to their overtime. That is the people included in the 8 million other one? Just make them work more what is on the minds of firefighters and Americans who would lose overtime hours. They may not have to work a police officers all over America. As has protection under the proposal of Presi- full shift, just have them work 2 or 3 been established on the Senate floor in dent Bush. That is a shame. It is too hours a day. That way they will not the last 2 days during the pendency of bad and it is not fair. have to hire a new person. the Harkin amendment and efforts to When these police officers and fire- Of course, it would mean fewer jobs deprive us of a vote on that, people in fighters ask me about overtime—when because companies would simply force our country are very concerned about you go to these kinds of meetings, you their employees to work longer hours what this administration is doing re- don’t want to be partisan. That takes instead of hiring new workers. In the garding overtime. This affects about 8 away the purpose of your being there. current economic condition, when mil- million working men and women in What was I to say? I could only respond lions of Americans are out of work dur- this country. Specifically, it is directed that our President has suggested—I ing this administration, the last 3 to police officers, who I talked about; should not say suggested—he has di- years, there have been almost 3 million firefighters, who I have talked about; rected this. There is now, of course, a jobs lost. It does not make sense to do and nurses. rule in effect, which is working its way something that will stifle the creation A group of young people visited me through the process, to take away the of new jobs when in the private sector today in my office upstairs. They were ability of people who make more than we have already lost almost 3 million here representing a group of young $21,000 a year to make overtime pay. I jobs. Even for the workers who would Jewish leaders from Las Vegas. I asked told them that. still qualify for overtime, this is a bad them what they were going to do and They are worried about their over- rule, because some by contract would what they were doing. One young lady time pay. Families depend on over- allow people to be paid overtime. Why? said she was a student studying to be a time. It is not just the firefighters I Because big companies would force nurse. She had less than 2 years to go saw in Reno or the police officers I met overtime-exempt workers to put in to complete her degree. I didn’t say at Henderson whom I spoke about. It is longer hours and cut the hours of those anything, but what I wanted to say is, families all over the country who de- qualified for overtime. Do you know what has happened with pend on overtime. This rule is bad for so many reasons. this administration? They are trying As I have indicated, it is not only the It punishes working families by cutting to take away your overtime. They are firefighters, not only the police offi- their pay. It prevents the creation of trying to make it so that if you are cers, nurses, flight attendants, pre- new jobs and dishonors hard work, working in a hospital and there is work school teachers, cooks, secretaries, which is one of the things I have talked that needs to be done, you can do it, fast-food shift managers, but 8 million about, one of those things that has but you won’t get paid for it. I didn’t others will lose their right to overtime made this country great. Well, these say that to her, but that is what I felt pay under the new rules the adminis- are strong, convincing arguments, not like saying. tration wants to adopt. because I made them, but because they Being a chef now is very in vogue. We hear speeches on this floor, we are common sense. That is what has When I was younger, to have somebody hear speeches at high school gradua- been said on this floor during the last say they were going to go to school to tions, we hear lectures given to us from 2 days. be a cook, you didn’t hear much about the time we are kids until the time we Last night, I asked, why are my col- that. Now there are a lot of young men pass on that this country is built upon leagues going to try to invoke cloture? and women who go to school to learn hard work, that hard work has enabled I heard they were going to file a peti- to be a chef. That is the thing to do; it generations of Americans to own a tion for cloture. I asked that question is one of the things to do. They work home, buy a car, do things to make a when we were doing our closing, when very hard. People don’t realize how stronger community and give their the distinguished majority whip said hard they work. As their jobs require, children a good education. They say if he was sending a petition to the desk especially when big things are going on one works hard in America, that is all to invoke cloture. I asked, why would in the restaurants and they get a con- it takes. he do that? vention or some kind of a wedding or Americans have been willing to work I cannot understand why he would do anniversary, they are required, because hard and reach their goals. We are that. I asked why, because the House they have a lot of work to do, to work working longer now than we ever have overwhelmingly said they wanted to more than 8 hours a day, 40 hours a before. Almost one-third of the labor have this overtime rule rescinded, and

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00029 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2976 CONGRESSIONAL RECORD — SENATE March 23, 2004 in the Senate we voted to rescind this America has a right to be heard. In something we are going to vote on. The rule. order for the people to be heard, the responsibility for this bill being taken My distinguished friend, the senior votes of those who represent them down is not at the hands of the Demo- Senator from Kentucky, said we voted must count for something in Congress. crats. It is at the hands of the majority on it once. Why do we need to vote on Unfortunately, the conference com- party, the Republican Party, which re- it again? mittee that stripped Senator HARKIN’s fuses to have a vote on repealing a de- Let me show my colleagues what we overtime amendment out of the Omni- cision made by the President of the are talking about. The majorities in bus appropriations bill said our votes United States that takes away over- the Senate and in the House voted do not count; the voice of the people time pay for people who make more against the Bush overtime proposal on does not count; the voice of the people than $22,000 a year, as I have listed on September 10 of last year. Yes, we had does not matter. Meeting behind closed this chart. It is wrong. a vote on it once before. My distin- doors, the committee disregarded the I told people twice yesterday that guished friend is right, September, Oc- will of Congress and ignored the voice seeking to do away with this amend- tober, November, December, January, of the American people. So we have to ment by a parliamentary maneuver is February, March—yes, we had one. I have another vote on this. not going to accomplish anything. We counted it on my fingers. It was more We have had those on the other side are wasting time. I can just see it now. than 6 months ago when we had a vote of the aisle say this is an important The majority leader is going to come in the Senate, 54 to 45. It did not go bill. Why are we doing this? here and say we don’t have time to do party-line votes, but it was close. Senator HARKIN has said he would these important pieces of legislation; There were some courageous Repub- take a time agreement. What does this we are so busy. We are busy wasting time. That is licans who voted against the party mean? We have unlimited debate in the what we are doing. We wasted yester- line, one of whom is sitting in the Senate. I think Senator HARKIN would day. We wasted all day today. We are chair. They voted against this issue, take 15 minutes, give the majority 15 having a cloture vote tomorrow. Clo- and it passed. minutes, and then vote, an up-or-down ture will be defeated. But to even show Not long after that, less than a vote on whether we want to have a rule the complicity of what is happening month after that, the House, by a in the United States that police offi- here by my friends on the other side of party-line vote said, no, we do not cers, nurses, cooks, clerical workers, the aisle, they were unwilling—they want to rescind it, they knew they firefighters, physical therapists, re- didn’t have the nerve to file cloture on were wrong because of what I have said porters, paralegals, dental hygienists, the underlying bill. Why? Because it today, that it punishes working fami- graphic artists, bookkeepers, lab tech- would show directly what they were lies, it prevents the creation of new nicians, and social workers and on and on—8 million people are not going to be doing with the Harkin amendment. So jobs, it dishonors hard work, and they able to get overtime. I want a vote they have developed this very inter- recognized that. So by a vote of 221 to here. We want a vote. We are entitled esting procedure where they have a 203, the House voted to have the in- to a vote. The only vote we had, the motion here to recommit. The only struction go to the conferees to take voice of the people, was stricken in the reason they are doing it this way is so what happened in the Senate and re- middle of the night. If this is an impor- they do not have a direct attack on the scind what the President had done. tant bill, can’t we afford 15 minutes to FSC/ETI bill, the underlying bill here, In the middle of the night, the Re- vote on this amendment? and the Harkin amendment. They are publican majorities in the House and The reason they don’t want a vote on going around that and saying we have Senate, without a single Democrat this amendment is because they know this motion to recommit. If cloture is being present, took the Harkin-Ken- this amendment of Senator HARKIN will invoked, the bill comes back in its reg- nedy amendment—that is this amend- pass and the Secretary of Labor will ular form. ment right here, passed by a vote of 54 have to issue new directions. Say whatever you want to say in to 45—out of the omnibus bill. It comes The purpose of the underlying however many ways you want to say it, to the floor and it is not in the bill. amendment is to protect the jobs of this is an attempt to stop Senator HAR- Surprise, surprise. Even though it American workers. It is a measure that KIN from having a vote on this over- passed, they took it out. protects the overtime pay of 8 million time issue. It is wrong. No matter how Yes, my friend from Kentucky is people, 8 million people who have fami- many times people say we are going to right; we had a vote on it over 6 lies. Remember, 20 percent of these be able to vote on it some other time, months ago, and by some phantom-like people work up to 50 hours a week; 25 the record is replete with our cooper- work in the middle of the night, con- percent of them depend on this over- ating in the first few months of this trary to what I think are rules of fair- time pay to make car payments, house legislative session. ness, and just brute power, they payments, furniture payments, to send We have said to Senator HARKIN on stripped this from the bill. their kids to school. The voices of the many occasions, Let us go ahead and By recorded votes, the House and the American people are clear, just as the do this legislation. Let us work on this Senate said they wanted this rule voices of the police officers and fire- legislation. You can offer it on the next changed, but in spite of our constitu- fighters I met in Nevada last week piece of legislation. And then the next tional framework, in spite of the rules were clear. They want us to protect the piece of legislation. we have in the Senate and House and overtime pay their families depend on. We are at the end of the rope. The the rules that work to keep the two We have a duty as legislators, national American people will no longer let us bodies working together, they were ab- legislators, to stand and speak for the avoid this issue. This is an issue that rogated and we came up with this people we represent. must be addressed and we are going to strange situation. This bill, which is an important tax address the issue because it is the right No, the conferees did not follow these bill, the majority is willing to take thing to do. Eight million Americans heavy votes. When this bill was rolled down. The majority is willing to take are depending on us, and $22,000—it is into the omnibus, the conference com- down this important tax bill that we as if somebody who makes $22,000 a mittee struck it. I repeat, the con- support on our side. They are willing to year and then gets overtime pay is ference committee, which excluded take it down, to have it go into limbo committing some type of crime. Is that Democrats, ignored the votes of Con- as so many other things do, like the ruining our country? As I established gress and in doing so ignored the voice gun legislation, like other bills. We here statistically, no, it is not. It is of the American people. can’t seem to have closure on much of good for our country. Overtime pay I respect the opinions and views of anything around here because the ma- creates more jobs. It rewards hard every Member of the Senate, whether jority is unwilling to take tough votes. work. It allows people to maintain or not I agree with those views, be- If it is something they disagree with, their standard of living—which isn’t cause I know every Senator was elected procedurally they just block us from very high. Remember the starting by the citizens of their State. Every voting on it. point is $22,000 a year. Member’s opinion carries weight with This matter, that is, overtime pay I hope in the days and weeks to come me because I believe every person in for 8 million people, is going to be and the few months we have left in this

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00030 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2977 legislative session, where we have 13 suing this proposed rule, which clari- make it very clear that in most of the appropriations bills to pass and many fies something called the white-collar situations I have heard described that other items, people remember the exemption from the FLSA overtime just is not true. wasted time this week. All we want is rules, or the Fair Labor Standards Act Employees who earn more than a simple vote on overtime. Fifteen rules. $65,000 annually would be exempted minutes of debate and vote. They will What it has to do with is the require- from the overtime pay requirements if not let us do that because they know it ment that non-white-collar workers their job involves executive, adminis- would show the President of the United are entitled to overtime under certain trative, or professional duties. Now, States is wrong, wrong in trying to circumstances. The question is, how do again, we are talking about time-and- take away overtime pay from people we define the non-white-collar workers a-half pay. When one is making over who make $22,000 a year or more. It is as opposed to the white-collar workers $65,000 a year and they are in an execu- wrong. to understand who is entitled to re- tive position, the theory is that they They will not let us vote on this. We ceive compensation for the overtime can negotiate their own salary, that are going to continue coming back as and who is not. The proposed changes they are not in the situation in which often as we have the opportunity. They would actually guarantee payments to they would be getting time and a half will not be able to escape this. I feel 1.3 million low-wage workers who were for the time they put in, and that is really bad about this bill, which is im- not entitled to overtime before. I think the reason for this particular exemp- portant to our country. The majority is this is the key point. It does not take tion. willing to take down a bill that is im- away people; it adds to the number of Those who earn between $22,100 and portant to the competitive nature of people who would qualify for overtime. $65,000 will remain eligible for overtime our country. They are willing to take This is one of the ways in which that pay if they meet what is called the this bill down because they don’t want occurs: It would raise the minimum short test. That determines whether a vote on overtime pay because it salary level at which workers are en- they are exempted white-collar work- makes the President look bad. I should sured overtime pay from $155 to $425 a ers. That test basically includes defini- tell them the President looks bad any- week, $22,100 annually. So it raises the tions such as whether one supervises way on this issue. They are not going level at which this kicks in, which two or more employees, whether they to take away the damage done here. would be the largest increase since the have the authority to hire and fire or Why not let us vote and get rid of that law was enacted in 1938. So we are they need an advanced degree or some ridiculous rule he has issued and get making the availability to a much kind of specialized training. One would back to allowing people to be rewarded larger group of people, people at a have to clearly be in one of those cat- for working hard and creating new higher salary level, than has ever been egories in order not to be guaranteed jobs? It is an issue we need, to make the case. the protection of this time and a half sure people are honored for hard work, It will actually ensure that the low- for overtime. That is between $22,100 rewarded for hard work, not punished. est 20 percent of all salaried workers and $65,000. I suggest the absence of a quorum. get pay of time and a half for overtime There is a study out that I think also The PRESIDING OFFICER. The work. Now, that is a substantial in- has some faulty data in it which have clerk will call the roll. crease in the number of American skewed the effect of the proposed rule The assistant legislative clerk pro- workers who will be ensured overtime that has been used by the opponents of ceeded to call the roll. pay. This is so important because I the proposed regulation and by the sup- Mr. KYL. Mr. President, I ask unani- have heard from workers who have per- porters of the amendment that would mous consent that the order for the sonally spoken to me and they are very prevent the regulation from going into quorum call be rescinded. frightened about this. They believe effect. The claim is that 8 million The PRESIDING OFFICER (Mr. that somehow or another these pro- workers would become exempt from BOND). Without objection, it is so or- posed rules are going to make it more overtime pay requirements based on dered. difficult for them to get overtime pay. this so-called EPI study. One of the Mr. KYL. Mr. President, I would like The reality is that a lot more people reasons that the number is so large is to speak about the Harkin amendment. are going to be ensured that they will because the study counts part-time I wasn’t here for the earlier conversa- receive overtime pay. First, as I said, workers who do not work 40 hours a tion, but I was advised about some of because we are raising the level of peo- week and therefore do not receive over- the arguments that have been made. It ple who would be covered. That is the time pay. concerns me because people are con- largest reason why we can make that Well, we have to extract all of those cerned about the proposed rules that claim. workers in order to have a relevant co- have been promulgated by the Depart- Another thing that this proposed rule hort because one has to work 40 hours ment of Labor. I think it is incumbent does is to clarify the definitions of who a week in order to qualify for overtime upon us to clarify the situation so is actually covered and who is not cov- pay. American workers are not frightened of ered. In recent years, there have been a The study also includes individuals these proposed rules because of the large number of class action lawsuits who are not affected by the rule. mischaracterization by certain people. that have been brought over this defi- Again, I do not see how one can have a The amendment here would stop the nition of white-collar status; therefore, valid study that allegedly shows how rules from going into effect. I fear the question of whether they are ex- many people would no longer qualify if there are things being said about these empt from overtime requirements. a lot of people are included in the rules that are very inaccurate, mis- This has actually surpassed the Equal study who do not qualify in the first leading, and therefore are frightening Employment Opportunity class action instance. So it is very unclear what the people into thinking somehow the rules lawsuits in number, and there are a lot actual number of people would be who would prevent them from receiving of those. The trial lawyers end up mak- would not qualify for the overtime pay. overtime pay, when the reality is more ing millions of dollars off of this confu- Clearly, this study is fatally flawed people would be ensured they could sion in the current system over the def- in those two significant respects and qualify for overtime pay than is the inition. This law would eliminate all of therefore it should not be used to scare case today. that cost and all of the wasted energy people into suggesting they would no I want to speak for a few moments to in litigation and paying a lot of trial longer be covered. try to allay the fears of people so they lawyers by clarifying who is covered I will give some other examples of are not concerned about these pro- and who is not covered. different professions in which there posals and they embrace them, because Now let’s talk a little bit about that have been questions raised, and I think the possibility of overtime extends to a definition because, once again, people it is important we allay the fears of larger universe of people than it does are asking whether they are going to these people. Cooks are concerned, peo- today. I will talk about this for a mo- be covered anymore; they will be ex- ple who cook in restaurants, for exam- ment. The amendment would prohibit empt from this guarantee of overtime ple. Well, all cooks are not exempted the Department of Labor from pur- pay with the new definitions. I want to from the overtime pay in the proposal.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00031 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2978 CONGRESSIONAL RECORD — SENATE March 23, 2004 Only chefs who have college degrees in necessary due to the increased burdens the floor of the Senate concerning the pro- the culinary arts will be deemed white- placed on public safety officers following the posed regulations governing the exemptions collar workers and therefore exempt terrorist attacks of 11 September 2001. from overtime pay under the Fair Labor Since the beginning, it has been clear from from this requirement. So when one Standards Act, and to renew our opposition our dialogue with Secretary of Labor Elaine to any such effort which would have the ef- hears the conversation about all of the L. Chao and Department officials that it was fect of delaying or hindering the Department cooks who are no longer going to be en- never their intention to cut overtime for of Labor’s ability to issue a final rule. titled to time and a half because that public safety employees. Thus, we decided The reason I quote that letter is to is—I mean, when a person is working in that the interests of our members could best make the point that this is the FOP, a a restaurant, for example, there is a lot be served by working cooperatively with the Department. Based on our dialogue with very large and important union in our of time and a half involved in that and Nation today, which would like to see here we are not talking about most of DOL, we are confident that when the final regulations are issued, that overtime pay this rule issued. It is an illustration of the people. The people who would be will be available to even more police officers, one of the groups that has been in- exempted are only those who have a firefighters and EMTs than is possible under volved in the process that understands college degree in culinary arts, which the current regulations. what the Department of Labor is doing does not represent most of the people The F.O.P. believes that amendments such and appreciates the positive effect of who are actually doing the cooking. as the one which may be offered on Tuesday do not take into consideration the police of- the rule that has been proposed. One of the arguments is as to the I also want to make it clear that this process, and there has been a sugges- ficers, firefighters and EMTs who are cur- rently exempt, who must work longer hours is only a proposed regulation. After the tion that this rule was just passed in when the terrorist threat level goes up, and rule is promulgated by the Depart- the middle of the night and somehow who are ineligible to receive overtime com- ment, obviously there would be a final people are not aware of it. Nothing pensation. Nor do we think it is the best pos- implementation of the rule. At the ear- could be further from the truth. Prior sible result that Congress should reaffirm liest, that would come out next year to the drafting of the rule, the Depart- that the existing executive, administrative, sometime, and clearly the Senate ment of Labor held over 40 meetings of and professional exemptions are acceptable for our nation’s first responders. Instead, our would have the ability at that time to stakeholders, people who had an inter- address any complaints about the final est in the proposed rule, 50 different in- efforts with the Department of Labor and others have been geared towards ensuring rule. The agency, I am advised, has re- terest groups, including, by the way, 16 that overtime compensation is available to ceived over 80,000 comments with re- labor unions. Some of the labor unions all those public safety employees whose con- spect to its proposed rule and is cur- have raised questions, I think some tinued performance of overtime work is vital rently working its way through those will support it, but the bottom line is to the security of our nation. comments. So this is not something they were included in the consulta- These regulations offer an important op- that is going to be happening tomor- tions. portunity to correct the application of the overtime provisions of the FLSA to public row. Once they get through all of those I am advised that the Department of comments, they will promulgate the Labor invited 80 groups to participate safety officers. We are therefore concerned that the adoption of any amendment with re- final rule, again perhaps coming out in these stakeholder meetings. So I do spect to the Department’s revisions to the sometime next year. The Senate, in not think anybody can claim this was Part 541 regulations will undermine our ef- any event, would have plenty of time done in the middle of the night. forts to successfully protect overtime com- to work on it. I ask unanimous consent that a let- pensation for more than 1 million public That is essentially what I wanted to ter which was provided to me—it was safety officers, and hinder DOL’s ability to say, to make the point that those who sent to the majority leader and minor- issue a final rule. During the public com- have been scared or frightened by some ity leader from the Grand Lodge Fra- ment period on the proposal, the Department of the comments about this proposed ternal Order of Police—be printed in received nearly 80,000 comments from indi- viduals across the nation. The purpose was rule should stop and get more informa- the RECORD. tion about the rule. They should listen There being no objection, the mate- to solicit feedback and suggested changes to the original proposal before issuing final reg- to some of the debate we are trying to rial was ordered to be printed in the ulations. None can say with any degree of bring to the floor and contact the De- RECORD, as follows: certainty what changes DOL has made to partment of Labor if they have a ques- GRAND LODGE, their proposed rule and what its final scope tion, or contact our offices so we can ®, FRATERNAL ORDER OF POLICE will be. In essence, all of the concerns which clarify what this proposed rule really Washington, DC, March 22, 2004. have been expressed to this point are based Hon. WILLIAM H. FRIST, does. We can make it clear it is not solely on the pre-public comment draft pro- being put into effect to take a bunch of Majority Leader, U.S. Senate, posal, and on conjecture over what is feared Washington, DC will or will not be part of the final regula- people out of the market for time-and- Hon. THOMAS A. DASCHLE, tion. That is why the F.O.P. believes that a-half guarantee of overtime, but in Minority Leader, U.S. Senate, the regulatory process should be allowed to point of fact it would actually guar- Washington, DC. move forward unimpeded, and that Congress antee that more people would have the DEAR MR. MAJORITY LEADER AND SENATOR should reserve acting on this issue until ability to get overtime, and because of DASCHLE: I am writing on behalf of the mem- after the regulations have been promulgated the clarification of definitions, it bership of the Fraternal Order of Police to as a final rule. would remove the potential for even advise you of our concerns regarding an On behalf of the more than 311,000 members more litigation that simply raises con- amendment which is expected to be offered of the Fraternal Order of Police, we respect- tomorrow on the floor of the Senate con- fully request your assistance in opposing the fusion about whether people are cov- cerning the proposed regulations governing adoption of any amendment which would ered. the exemptions from overtime pay under the delay the issuance of a final rule. I cannot We can make it clear we are talking Fair Labor Standards Act (FLSA), and to express to you the critical importance of this about people who make a lot of money, renew our opposition to any such effort issue to our membership. Thank you in ad- who have a lot of control over the ne- which would have the effect of delaying or vance, and please do not hesitate to contact gotiation of their salaries, who have hindering the Department of Labor’s (DOL) me, or Executive Director Jim Pasco, supervision over other employees, and ability to issue a final rule. through our Washington office if we can be so on. Those are the people who are On 31 March, DOL published a Notice of of any assistance whatsoever. Proposed Rulemaking in the Federal Reg- Sincerely, being exempt. It is not the people who ister to revise and update the exemptions CHUCK CANTERBURY, are just regular workers, who don’t su- from overtime under the FLSA for executive, National President. pervise a lot of people, who don’t hire administrative and professional employees. Mr. KYL. The author of the letter in and fire people, and so on. Those folks The F.O.P. was the first union to weigh in on the first paragraph—I will not cite the may or may not wear white collars to behalf of America’s law enforcement commu- work, but the bottom line is they are nity regarding the proposed change and rec- entire letter but the national president of the Fraternal Order of Police, whose not exempt from the requirements ommended the exclusion of public safety per- under the Fair Labor Standards Act to sonnel from the Part 541 or ‘‘white collar’’ name is Chuck Canterbury, wrote this: exemptions from overtime—including those I am writing on behalf of the membership provide them time and a half for over- employees who are classified as exempt of the Fraternal Order of Police to advise time for the hours they actually work. under the existing regulations. We argued you of our concerns regarding an amendment It is important to get that message out that the exclusion of these employees was which is expected to be offered tomorrow on to folks; that it is not something about

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00032 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2979 which they should be concerned. Rath- imagine the litigation and problems it dent Bush wants to deny you your er, the intention behind the rule is to is going to cause in the workforce— overtime and you can’t get overtime clarify and expand the number of peo- who is a chef, who is a cook, who is a anymore, and they can stir this up and ple eligible for it. physical therapist? make these complaints, then they I hope folks who have concerns about This is an issue that is important to think some people might believe it. that will be in touch with us so we can millions and millions of working men But it is not right. What is being said allay those concerns. Perhaps the and women in this country. We believe is not right. It is not fair. amendment I am talking about will the rule is not right for the American The Department of Labor has pro- come up for a vote, perhaps it will not. people. We believe people should be re- posed changes to the regulations gov- If it does, I hope it is defeated because warded for hard work. We believe we erning the overtime exemption under we need to move forward with the regu- should create more jobs, not take away the Fair Labor Standards Act, also lations the Department is working on jobs. This proposal will not reward known as the white-collar exemption. right now and see them promulgated. hard work, and it will take away peo- The regulations defining which work- Once that occurs, you will see labor ple’s honest efforts to be rewarded for ers are entitled to overtime were writ- unions and workers all over the coun- hard work. ten in 1954 and have not been updated try looking at the final product and We are willing to vote, as had been to reflect the ongoing changes in the saying, yes, that is fair. That is protec- done last September when we voted in workplace. Today’s workers are oper- tive of me. It clarifies the situation, this body by a large margin to rescind ating under the rules that are 50 years and we can support it. the rule. The House of Representatives, old. Mr. President, I suggest the absence by more than 220 Members, said they These rules include job descriptions of a quorum. wanted to do what the Senate did, the like ‘‘gang leader,’’ ‘‘ratesetter,’’ and The PRESIDING OFFICER. The same thing. We voted on it twice. It ‘‘Linotype operator.’’ Therefore, it is clerk will call the roll. was taken out in the middle of the easy to understand why many busi- The legislative clerk proceeded to night in a secret conference, with no nesses have trouble identifying which call the roll. workers qualify for overtime and which Mr. REID. Mr. President, I ask unan- Democrats present. Why can’t we vote are exempt under current law. imous consent the order for the on it again? We believe that is what we The proposed rule increases the min- quorum call be rescinded. should do. Let’s vote on whether the imum salary requirements for over- The PRESIDING OFFICER (Mr. COR- President and his people are right or time from as low as $155 a week to $425 NYN). Without objection, it is so or- wrong. dered. We are willing to debate this issue in a week. Mr. REID. Mr. President, the junior public, not secretly. We are willing to Let me talk about that. Let us get Senator from Arizona is someone for state our position and simply go for- this straight. whom I have the highest regard. He is ward as the Senate and the House have A worker making as little as $155 a articulate. He always makes a good already spoken and get rid of this rule, week today could be denied overtime if presentation. I am glad he is a neigh- which is unfair. they are classified in a supervisor ca- bor of the great State of Nevada. I suggest the absence of a quorum. pacity. Under the rules of the Sec- But I have to say the one question he The PRESIDING OFFICER. The retary of Labor, if you made $425 a didn’t answer is, Why don’t we just clerk will call the roll. week or less, you are automatically en- vote on this? Why don’t we just have a The legislative clerk proceeded to titled to overtime no matter what job vote on this overtime issue? We have call the roll. title some business might give you. agreed to have Senator HARKIN spend Mr. SESSIONS. Mr. President, I ask That is going to help a lot of people, I 15 or 20 minutes summarizing his argu- unanimous consent that the order for submit. According to the Department ments, the majority can take whatever the quorum call be rescinded. of Labor, this change would result in time they believe appropriate, and then The PRESIDING OFFICER. Without 1.3 million Americans who earn less we can vote on this issue and move on objection, it is so ordered. than $22,100 per year being guaranteed to this most important underlying bill. Mr. SESSIONS. Mr. President, I want overtime compensation. That is not so My friend from Arizona, who is the to continue to discuss the white-collar now. A worker can be classified as first person who has come to try to de- exemptions on the overtime legislation some sort of supervisor making $18,000 fend the overtime proposal of the and the amendment we are dealing or $20,000 a year and not get overtime. President, says the study is faulty, with. I want to express how frustrating Under the current regulations, a per- that it is really not 8 million people, it is to see a very carefully constructed son earning $14,300 annually who works and some are part-time. proposal by the Secretary of Labor, behind the counter at a restaurant, for Let’s say it is faulty, which I don’t Elaine Chao, being mischaracterized, example, and is called a manager could think it is, but let’s say it is only 6 therefore placing fear in the American be denied overtime compensation. The million people. people through the misrepresentation new regulations would guarantee over- I would also say, of course, more peo- of the nature of these regulations. time pay to this person and others ple would qualify for overtime pay be- First of all, Secretary Chao is one of making less than $22,100. They would cause whatever they are doing is allow- the finest public servants I know. From be guaranteed it. That is a lot of peo- ing people who now are not entitled to the time she gets to work in the morn- ple. It means a lot to those people. overtime pay, people who really don’t ing until the time she gets home late Additionally, the Department of make much money—we would allow at night, she is committed to making Labor projects 10.7 million workers them to have overtime pay under the this a better country, a good country who currently qualify for overtime will proposed rule. to live and work in. She wants to do have all of those protections strength- Let them do it. Let them have over- something about these regulations that ened, including nurses, chefs, secre- time. No one is trying to stop them have not been changed since 1954 in any taries, unionized workers, and first re- from having overtime. What we criti- significant way. They need to be up- sponders. cize is why would we want to make one dated. Her proposed rule changes have Following discussions with the De- group of workers disadvantaged to try received 70,000 comments. The Depart- partment of Labor, the Fraternal Order to advantage another group of work- ment of Labor is considering those, and of Police, a major organization rep- ers? Let’s let them all be entitled to they ought to be able to update these resenting thousands of police officers overtime, time and a half. That seems regulations. There is no doubt about it. who we deal with from the Judiciary to be the fair thing to do. I see nothing It is time to do that. Committee on a regular basis and who wrong with giving people who are not The impact has been completely mis- is actively engaged in defending the in- making much money now the ability to represented. We need to talk about it. terests of their members, released a get overtime. We support that. But I think the reason, frankly, is that we statement recognizing the fact that po- why disadvantage others? are in a political season. People want lice officers will still receive overtime Of course, we are told it is in the def- to make this a political issue. If they compensation under these new regula- inition of ‘‘white collar.’’ Can you can go around and say, Mean old Presi- tions. The President of the National

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00033 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2980 CONGRESSIONAL RECORD — SENATE March 23, 2004 Fraternal Order of Police, Chuck Can- to defend the lawsuit. But this kind of nonexempt employees. By clarifying terbury, said: thing happens too much. the line—who is a salaried employee Thanks to the leadership of Secretary I represented one more overtime and who is not—we can reduce the Chao, we have no doubt that overtime pay case. She was a clerical person at an number of lawsuits brought under this will continue to be available to those officers entity, and she thought she was being section, and we can make sure more currently receiving it and, if the new rules unfairly treated. I looked at her case people get paid overtime properly from are approved, even more of our Nation’s po- and it was not a lot of money. I talked the very beginning. If you make less lice officers, firefighters, and EMTs will be eligible for overtime. This development was to her and I thought she was right. We than $22,100 a year, you get overtime. possible because this is an Administration filed a lawsuit. They agreed eventually That is a bright line. That is what we that listens to the concerns of the FOP, and to pay her overtime after some hag- ought to have more of, more bright because of their commitment to our Nation’s gling and discussion back and forth. lines in this Congress so there is a lot first responders. Do you know where she worked? Do less confusion. If you make less than I think that is a strong statement. you know who her employer was? It that, you get overtime. That will pick And for months now we have been was a union local. They agreed to pay up a tremendous number of people hearing how these regulations are and they admitted she was not prop- today who have been classified as some going to hurt policemen, firemen, and erly paid overtime. If we make it clear- sort of manager or supervisor but have emergency medical technicians. er so that it is indisputable what over- made much less than $22,100 and, as a That is not true. It is false. In fact, it time is and what it is not, we will see result of these changes, they are going is going to guarantee a lot of people less confusion. to gain benefits. I believe far more will overtime who are not receiving it Lawsuits over violations of the Fair benefit than will lose under these pro- today. Labor Standards Act are increasing posed regulations. By clarifying that, According to the Human Resource each year. According to the HR Policy we can reduce lawsuits. Policy Association, the proposed Association, in 2001 the number of Fair In 1938, when the Fair Labor Stand- changes would impact about 12.6 mil- Labor Standards Act class action law- ards Act was passed, the Congress in- lion workers—it sounds like a lot—12.6 suits actually exceeded the number of structed the Secretary of Labor to million workers out of 134 million Equal Employment Opportunity class make changes to the white-collar ex- workers. About 10 percent of workers action lawsuits. emption rules. That was part of the would be affected. Of that 12.6 million In Carpenter v. R.M. Shoemaker congressional instruction, to make affected, 12 million would now qualify Company, the court ruled that a changes in the white-collar exemption for overtime or have their current project superintendent making around rules. It was understood, I assume, at overtime protections strengthened— $90,000 annually was not an exempt em- that time that they had not worked ev- not reduced, strengthened—12 million ployee and was thus entitled to over- erything out fully and more work need- out of 12.6 million who are affected will time even though the employee super- ed to be done on these regulations. have their protections strengthened. vised three large construction projects The other 644,000 workers—highly edu- for a construction management com- The Department of Labor has now cated individuals earning an average of pany. issued these proposed regulations. $50,000 per year—might be subject to These laws are complex. If I were a They issued them in March of last reclassification under these regula- plaintiff and I were representing some- year. Everyone has seen them. They tions. That is what it is focusing on. one, I would try to figure out a way to have been published. They have re- The proposed rules would clarify the get my client in there and get them ceived in response to these proposed regulations affecting millions of work- overtime, too. But I don’t think that is regulations over 70,000 comments dur- ers. what Congress had in mind when it cre- ing the 90-day comment period. Sec- By updating these rules, the Depart- ated a statute where a guy making retary Chao is doing her job. She is ment of Labor would ease the burden $90,000 a year that supervises three seeking to update and modernize these on employees and employers who find large construction projects can receive regulations to make them fit the con- it difficult to navigate the often con- overtime compensation. That sounds temporary needs of America today. We fusing and outdated regulations gov- like a supervisor to me. I bet the com- do not have gang leaders being paid erning proper compensation, including pany did not lose the lawsuit for any wages today. I don’t think that job de- overtime pay. Additionally, the De- other reason than there was probably a scription any longer exists. There is a partment will be better able to enforce violation of the complex Federal law lot of need for improvement and the law once clarifications are made. written in 1954, 50 years ago. change. Secretary Chao is on the right I know the Presiding Officer is a law- In Hashop v. Rockwell Space Oper- track. They will continue to refine yer, a former attorney general and jus- ations, the court decided that ‘‘net- these regulations if there is a problem. tice of the Texas Supreme Court, and work communications systems instruc- There is no plot here to try to under- knows litigation. As a lawyer in pri- tors’’ who had advanced degrees in mine the right of working Americans vate practice not too many years ago— physics, mathematics, and engineering, to receive overtime. That is a com- maybe not long before I came to the and trained personnel were not exempt pletely bogus and political argument Senate in the mid 1990s—I represented because they used technical manuals we are in at this time. Frankly, poli- a friend I grew up with who is a bull- and made decisions in groups. These tics is intervening too much in our de- dozer operator, a heavy equipment op- things are pretty complicated. bate of late. I guess that is the nature erator. He is a good guy. He had a dis- Under the current rule we have em- of American government. We will have pute with his employer. He thought ployees earning $90,000 a year or pos- to put up with it. I am getting a belly- maybe he was entitled to overtime pay sessing advanced degrees qualifying for ful of it and think we need to set the because he ran heavy equipment. The overtime. This is not the low-wage record straight whenever possible. company said, No, you are a con- worker we keep hearing about in our I am looking at another group that tractor. I said, Friend, I think you are debate. Fundamentally that is what has been asserted would lose benefits right. We filed a lawsuit, and we had to Secretary Chao’s regulations are fo- under this, the Non-Commissioned Offi- go to court. We eventually settled be- cused on, these high-wage employees cers Association of the United States fore trial, and we got him overtime. I who are supervisors and are slipping in of America. They wrote a letter to BILL think he was legally entitled to over- and claiming overtime when that was FRIST, the majority leader in the Sen- time under current Federal regula- not the intention of Congress. ate. They said: tions. Whether he should have been, I Many employers worry about incur- do not know. But it makes it clear that ring large unexpected litigation costs It is a blinding glimpse of the obvious that these rules and regulations are con- due to their inability to properly inter- neither the current rules nor the revised pro- posal will negatively impact those who serve fusing. He had to pay me a lawyer’s fee pret these confusing rules. Even law- or have served in the [United States] uni- to represent him. I do not know how yers and Department of Labor inves- formed services. In fact, this association’s di- much it cost the court or how much it tigators can have difficulty deci- rect discussions with DOL leads us to the cost the company to pay their lawyer phering the line between exempt and conclusion that the proposed rule relative to

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00034 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2981 the revised ceiling for annual income (in- that have created jobs and provided pion in a time when we need to be fis- creased from $8,060 to $13,000) will greatly ex- basic workplace skills to a segment of cally responsible. These are efficient pand the pool of eligible workers for over- the population that is badly in need of and low cost public-private partner- time compensation. these resources with the efficiency and ships that have as their goal to provide I ask unanimous consent to have this low cost of WOTC and W-t-W. I can also a means by which individuals can tran- letter printed in the RECORD. think of few jobs programs that have sition from welfare to a lifetime of There being no objection, the mate- as positive an impact as these have on work and dignity. rial was ordered to be printed in the scarce state welfare resources. I am Under present law, WOTC provides a RECORD, as follows: also pleased that Senator BAYH joined 40-percent tax credit on the first $6,000 NCOA, me as a cosponsor of this bipartisan of wages for those working at least 200 Alexandria, VA, January 29, 2004. amendment. I would also like to thank hours, or a partial credit of 25 percent Hon. BILL FRIST, Chairman GRASSLEY and Senator BAU- for those working 120–399 hours. W-t-W Majority Leader, U.S. Senate, provides a 35-percent tax credit on the Washington, DC. CUS for their support of this important initiative as part of a larger package of first $10,000 of wages for those working DEAR SENATOR FRIST: The Non Commis- 400 hours in the first year. In the sec- sioned Officers expresses its grave concern extenders. that America’s military personnel and vet- WOTC and W-t-W are also key ele- ond year, the W-t-W credit is 50 percent erans are being used as an ‘‘emotional’’ ploy ments of welfare reform. Employers in of the first $10,000 of wages earned. to delay the Department of Labor implemen- the retail, health care, hotel, financial WOTC and W-t-W are key elements of tation of the Fair Labor Standards Act rel- services, and food industries have in- welfare reform. A growing number of ative ‘‘white collar’’ exemptions. Claims corporated this program into their hir- employers use these programs in the that military members involved in the War ing practices and through these pro- retail, health care, hotel, financial on Terrorism and this Nation’s veterans will services, food, and other industries. grams, more than 2,700,000 previously have their employment status elevated to These programs have helped over ‘‘exempt’’ based on military training and ex- dependent persons have found work. A recent report issued by the New 2,200,000 previously dependent persons perience and lose opportunity for overtime to find jobs. compensation are patently incorrect. The York State Department of Labor bears Eligibility for WOTC is currently Association regrets that some would wrong- this out in economic terms. Comparing limited to: (1) Recipients of Temporary fully use such false allegations concerning the cost of WOTC credits taken by New impact to America’s service members to gar- Assistance to Needy Families in 9 of York State employers during the pe- the 18 months ending on the hiring ner emotional and legislative support to riod 1996–2003—for a total of $192.59 mil- delay the final rules for implementation of date; (2) individuals receiving Supple- FLSA. lion—with savings achieved through mental Security Income, SSI, benefits; It is a blinding glimpse of the obvious that closed welfare cases and reductions in (3) disabled individuals with vocational neither the current nor the revised proposal vocational rehabilitation programs and rehabilitation referrals; (4) veterans on will negatively impact those who serve or jail spending—for a total of $199,89 mil- food stamps; (5) individuals aged 18–24 have served in the Uniformed Services. In lion—the State of New York concluded in households receiving food stamp fact, this association’s direct discussions that WOTC provided net benefits to the benefits; (6) qualified summer youth with DOL leads us to the conclusion that the taxpayers even without taking into ac- proposed rule relative the revised ceiling for employees; (7) low-income ex-felons; annual income (increased from $8,060 to count the additional economic benefits and (8) individuals ages 18–24 living in $13,000) will greatly expand the eligibility resulting from the addition of new empowerment zones or renewal com- pool for worker overtime compensation. wages to the GDP or reductions in munities. Eligibility for W-t-W is lim- It is outrageous that unsubstantiated other social spending such as Medicaid. ited to individuals receiving welfare claims are reaching America’s Soldiers, Sail- In that regard, the New York State benefits for 18 consecutive months end- ors, Marines, and Airmen currently in analysis concluded that the roughly $90 ing on the hiring date. More than 80 harm’s way that their future return to civil- million in wages paid to WOTC workers ian jobs will result in a reclassification of percent of WOTC and W-t-W hires were since 1996 generated roughly $225 mil- previously dependent on public assist- their employment status. It is clear from our lion in increased economic activity. discussions with the Department of Labor ance programs. These credits are both that the proposed rule makes no changes Perhaps even more importantly, the a hiring incentive, offsetting some of from the current regulation and case law re- study found that roughly 58 percent of the higher costs of recruiting, hiring, garding military training and eligibility for the TANF recipients who entered pri- and retaining public assistant recipi- overtime payments. vate sector employment with the as- ents and other low-skilled individuals, NCOA will continue to monitor the rights sistance of WOTC stayed off welfare. and a retention incentive, providing a of all service members and pursue DOL inter- I mention the New York State study vention if the intent of any program or in- higher reward for those who stay because it is the first of its kind; how- longer on the job. terpretation of the published rules would ever, I am certain that similar conclu- negatively impact those who have served in Despite the considerable success of the Uniformed Service of this Nation. NCOA sions would be reached in the Common- WOTC and W-t-W, many vulnerable in- will remain vigilant to ensure their employ- wealth of Pennsylvania or any of the dividuals still need a boost in finding ment rights. other 48 States and the District of Co- employment. This is particularly true Sincerely, lumbia. These programs work and do so during periods of high unemployment. GENE OVERSTREET, at a net savings to taxpayers. In fact, There are several legislative changes President/CEO. over a 7-year period there were more that would strengthen these programs, Mr. SESSIONS. We need to let this than 111,000 certifications for both expand employment opportunities for process work, allow the Secretary of WOTC and W-t-W in Pennsylvania needy individuals, and make the pro- Labor to evaluate these comments and alone enabling many to leave welfare grams more attractive to employers. continue her process of establishing and find private sector work. The legis- These changes are reflected in legisla- fair and modernized overtime regula- lation is supported by hundreds of em- tion which I introduced along with tions. ployers throughout Pennsylvania and Senator BAUCUS, S. 1180, and these I yield the floor. around the country. changes are as follows: Mr. SANTORUM. Mr. President, I WOTC and W-t-W have received high The administration’s budget proposes rise to commend the Senate for the praise as well from the Federal Govern- to simplify these important employ- passage yesterday by unanimous con- ment. A 2001 GAO study concluded that ment incentives by combining them sent an amendment to extend for 2 employers have significantly changed into one credit and making the rules years the Work Opportunity and Wel- their hiring practices because of WOTC for computing the combined credits fare to Work tax credits, and to make by providing job mentors, longer train- simpler. The credits would be combined certain improvements to these pro- ing periods, and significant recruiting by creating a new welfare-to-work tar- grams that will make them even more outreach efforts. get group under WOTC. The minimum effective in helping Americans transi- Mr. President, WOTC and W-t-W are employment periods and credit rates tion from welfare to work. These cred- not traditional government jobs pro- for the first year of employment under its clearly belong in a bill whose name grams. Instead they are precisely the the present work opportunity tax cred- is JOBS; I can think of few programs type of program that we should cham- it would apply to W-t-W employees.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00035 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2982 CONGRESSIONAL RECORD — SENATE March 23, 2004 The maximum amount of eligible States, that benefit greatly from the Now we are facing an attempt to de- wages would continue to be $10,000 for reduction in welfare that these pro- feat this bipartisan measure by inject- W-t-W employees and $6,000 for other grams generate, deserve quick action ing politically charged amendments target groups—$3,000 for summer by the Senate on this bill. I urge all of into the JOBS bill regarding an issue youth. In addition, the second year 50- my colleagues to support its passage. that is not even dealt with in this bill. percent credit under W-t-W would con- Ms. COLLINS. Mr. President, I am Somebody wants to write a law. tinue to be available for W-t-W employ- pleased today to rise in support of the Why does the other side insist on ees under the modified WOTC. amendment offered by Senators GRASS- amending this important bill for a Under current law, only those ex-fel- LEY and BAYH that would extend cer- matter that is not even the subject of ons whose annual family income is 70 tain tax provisions to prevent their ex- this legislation? We need to focus on percent or less than the Bureau of piration. what is in this bill and what will be Labor Statistics lower living standard The Grassley-Bayh amendment con- killed if we do not get cloture approval during the 6 months preceding the hir- tains a number of useful provisions, tomorrow. ing date are eligible for WOTC. The ad- but one in particular that I commend We know the only way this bill can ministration’s budget also proposes to to my colleagues would extend for two pass is by a ‘‘yes’’ vote tomorrow on eliminate the family income attribu- more years the $250 deduction provided stopping debate and moving to finality. tion rule. to teachers who purchase supplies for But will the Democrats say no to clo- Current WOTC eligibility rules heav- their classrooms out of their own pock- ture? Will they go on record opposing ily favor the hiring of women because ets. Senator WARNER and I were the the provisions that are in this bill— single mothers are much more likely to principal authors of this law. very important provisions for creating be on welfare or food stamps. Women This is a modest, but appropriate, jobs in America, preserving jobs in constitute about 80 percent of those step toward recognizing the invaluable manufacturing, answers to concerns hired under the WOTC program, but services that teachers provide each and that the people of this body have ex- men from welfare households face the every day to our children and to our pressed about outsourcing, about not same or even greater barriers to find- communities. So often teachers in enough manufacturing jobs being cre- ing work. Increasing the age ceiling in Maine, and throughout the country, ated? the ‘‘food stamp category’’ would spend their own money to improve the If you look at this bill, you will find, greatly improve the job prospects for classroom experiences of their stu- then, that there is very important pro- many absentee fathers and other ‘‘at dents. While many of us are familiar visions for creating jobs that the other risk’’ males. This change would be with the National Education Associa- side is preparing to kill, so, in a sense, completely consistent with program tion’s estimate that teachers spend, on their vote tomorrow will be a vote con- objectives because many food stamp average, $400 a year on classroom sup- trary to what they have been com- households include adults who are not plies, a more recent survey dem- plaining about for a long period of time working, and more than 90 percent of onstrates that they are spending even about this recovery not providing more than that. According to a report those on food stamps live below the enough jobs, and particularly about released last year by Quality Edu- poverty line. jobs going overseas. I am very pleased that President cation Data, the average teacher This bill will prevent that. I do not Bush proposed a 2-year extension for spends more than $520 a year out of understand why people would not vote these programs in his budget, as well pocket on school supplies. to move a bill along that is going to I have visited more than 100 schools as some useful modifications and im- solve a lot of the problems about our in Maine, and everywhere I go, I find provements. The administration along not creating enough jobs in manufac- teachers who are spending their own with all of us in Congress are eager to money to improve the educational ex- turing. If this bill does not move along, continue our efforts to create jobs in periences of their students by actually the situation is going to get America. The amendment would pro- supplementing classroom supplies. worse, and we are going to lose jobs vide for a 1-year extension of current The teacher tax relief we passed over- that we presently have in manufac- law to facilitate a transition period whelmingly in the last Congress was a turing. and then in the second year implement step in the right direction. As Tyler So why would they be prepared to these important changes. Nutter, a middle school math and read- kill this bill? This bill will end $4 bil- I would prefer a permanent extension ing teacher from North Berwick, ME, lion a year of tariffs put on U.S. ex- which would provide these important told me, ‘‘It’s a nice recognition of the ports by Europe. Those tariffs are al- programs with greater stability, there- contributions that many teachers have ready being imposed against U.S. ex- by encouraging more employers to par- made.’’ I commend the authors of this ports of grain, timber, paper, and man- ticipate, make investment in expand- amendment for including the extension ufactured goods. We can end those tar- ing outreach to identify potential of the Collins-Warner Teacher Tax iffs now at 5 percent, growing 1 percent workers from the targeted groups, and Credit on this important piece of legis- a month into the future. We can end avoid the wasteful disruption of termi- lation, and I invite all of my colleagues them with this bill. But will the Demo- nation and renewal. A permanent ex- to join us in recognizing our teachers crats say no? tension would also encourage the state for a job well done. A vote against the JOBS bill is a vote job services to invest the resources The PRESIDING OFFICER (Mr. in favor of that 5-percent tariff going needed to make the certification proc- ALEXANDER). The Senator from Iowa. up 1 percent a month into the future. ess more efficient and employer-friend- Mr. GRASSLEY. Is our situation And that goes up very fast, making our ly. Yet the cost is a significant consid- such that we are on the JOBS bill? business, our American manufacturing eration in the current budget environ- The PRESIDING OFFICER. The Sen- uncompetitive. ment even though this is an excellent ator is correct. The Congressional Budget Office says use of tax incentives which ultimately Mr. GRASSLEY. We have a very im- we have lost 3 million manufacturing saves government resources while ex- portant vote tomorrow. That vote is jobs since the manufacturing downturn panding opportunity for Americans. cloture to stop an effort to bring non- started 6 months before President Bush Finally, I commend the Senate for germane issues into and stall this bill. became President. This bill provides acting on this amendment and encour- I spoke this morning, spending a $75 billion of tax relief to our manufac- age support for cloture tomorrow and great deal of time explaining how the turing sector to promote rehiring in quick completion of this important un- JOBS bill is a fully bipartisan bill built U.S.-based manufacturing. But will the derlying jobs bill. WOTC and W-t-W ex- from the ground up in a bipartisan Democrats say no? pired at the end of last year, and even manner. We cannot get anything The Democrats claim they are wor- though the extension we propose is ret- through the Senate that is not bipar- ried about the scope of the proposed roactive, these programs will not be tisan. We can get a lot of things overtime regulations. The regulations fully effective until they become law. through the House of Representatives are not even final yet. But how can you The individuals who enter the work- that are partisan but not through the worry about overtime if you do not force under these programs, and our Senate. have a job in the first place? Shouldn’t

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00036 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2983 we first worry about creating manufac- have a chance to move up the economic against helping those homeowners with turing jobs and take care of overtime ladder? Over here, in welfare, you never their mortgage insurance costs. on another bill instead of slowing this have a chance to move up. We have tax This bill includes a tax credit to em- one up? Or will the Democrats say no? credits to help. Will the Democrats say ployers for wages paid to reservists The money from the FSC/ETI repeal no to these tax credits to help low-in- who have been called to active duty. gives a 3-percentage point tax rate cut come people get into the world of work, Would Democrats say no to the guards- on all income derived from manufac- to move above, to improve themselves, men and reservists who are defending turing in the United States. It is not to get out of poverty? our country, helping us win this war, for manufacturing done offshore. We There is a provision also in this bill by voting no tomorrow? start this tax relief immediately. on net operating losses that will accel- We have extended and enhanced the This manufacturing rate cut relief erate tax relief to companies that need Liberty Zone bonds for rebuilding New applies to sole proprietors, partner- it to continue operations and recover York City. The two Senators from New ships, farmers, individuals, family from recent difficulties. The reason for York have talked to me about them. businesses, multinational corporations, doing that is they have some tax cred- Are they going to vote no tomorrow even foreign companies that set up its. They do not have income to write and say no to the Liberty Zone bonds manufacturing plants in the United it off against. This gives them some helping New York City at a time when States to manufacture here with Amer- benefit helping them to enhance their Ground Zero begs for help? Will they ican workers. This should keep the recovery. tie up funding for the Liberty Zone in Government out of their pockets while We have enhanced depreciation pro- order to prove a political point for a they try to recover from the economic visions to help the ailing airline indus- Labor Department overtime regulation downturn. That is what this bill is all try, the manufacture of airplanes— that has not yet been finalized? If it about: helping these manufacturing Boeing, in my State where avionics are had been finalized, there is an oppor- companies recover from the economic made for airplanes, Rockwell Collins— tunity for an expedited procedure for downturn. Now, will the Democrats say because you cannot, under existing de- congressional veto of those very same no to the opportunity to help American preciation laws, get something into regulations they don’t want. This is manufacturing? completion by this deadline because it not the last train out of the station. This bill includes international tax takes so long to build an airplane. This There are other opportunities to fight reforms, most of which benefit Amer- will extend provisions that were meant these battles and probably in a more appropriate way than a nongermane ican manufacturing, to keep it com- to help industry a year ago if they got amendment on legislation that ought petitive in the global marketplace. long timelines to get something fin- to pass, that is going to preserve and This bill also includes the Homeland ished. Reinvestment Act, which has broad There are new homestead provisions. create jobs in manufacturing. Where support in both the House and the Sen- This provides special assistance for are the priorities of the other side of ate. It has both Republican and Demo- businesses in counties that are losing the aisle? We also have in this bill increased in- crat sponsors. But will the Democrats population. This is rural economic de- dustrial development bond levels to say no? velopment, providing incentives for spur economic development. We have This bill extends the research and de- newly constructed rural investment bonds for rebuilding school infrastruc- velopment tax credit through the end buildings, for starting or expanding a ture. We have included tribal bonds of 2005, something very necessary to rural business in a rural high-out- which apply the same rules to Native keep our industry ahead of the curve, migration county. Will the Democrats American tribes issuing tax exempt building for the next product, building say no to that rural economic develop- bonds to finance facilities on a Native for the next service, particularly in the ment? American reservation that apply to tax technical areas. This is a domestic tax This bill includes brownfields revital- exempt bonds that we allow State and benefit that incentivizes research and ization. The bill waives taxes for tax- local governments to use. Are Senators development, translating into good, exempt investors who invest in the of the other party going to vote high-paying jobs for workers here in cleanup and remediation of qualified against the Native American Indian America, not across the ocean. But will brownfields sites. Will the Democrats provisions of this bill? the Democrats say no tomorrow on the say no to helping clean up the environ- We have a tribal new markets tax cloture vote? ment? Would that vote comport with credit. This amendment would add $50 In addition, there are several addi- the rhetoric you hear on the environ- million annually in the new markets tional provisions that are important to ment from the other side of the aisle? tax credit dedicated to community de- this bill. Senators BUNNING and STABE- Mortgage revenue bonds: This pro- velopment entities serving Native NOW sought to accelerate the manufac- posal would repeal the current rule American reservations, if there is a turing deduction. This ensures that the that mortgage revenue bond payments poverty rate of over 40 percent. Are tax relief and related economic bene- received after the bond has been out- they going to say no to helping those fits of the bill are provided more quick- standing for 10 years must be used to needy Americans? ly to those hurt by the repeal of FSC/ pay off the bond, rather than issue new We have included a Civil Rights Tax ETI. mortgages. Fairness Act so when people have been The bill extends, for 2 years, tax pro- There are 70 Senate cosponsors to harmed in violation of their civil visions that expired in 2003, last year. this bill. Would the Democrats justify rights, they can go to court and get Some of them already expired. Some of voting no on cloture to kill a provision justice. Do you know what happens them are expiring this year. They need that 70 of their colleagues support? when they get justice? We have some to be included because those incentives We allow deductions for private people paying income tax on what they are very important to the prosperity of mortgage insurance for people strug- pay their lawyers so when it is all said companies that rely upon these tax in- gling to afford a home. Anyone plan- and done, a big settlement, sometimes centives. This would include items ning to vote no on this one? Would the people who have been harmed get such as the work opportunity tax cred- they vote no on allowing the cost of nothing because of the unfair taxation it, helping young people, helping low- mortgage insurance to be written off as of that award. Are the Democrats income people to get jobs, to get job one writes off interest on a mortgage? going to say no to those people who training. It helps to move people from That is helping a lot of young people to have had their civil rights violated? welfare to work because we have tax get a home that they would not other- They can’t get justice in court. That credits that do that. wise be able to afford. I know home doesn’t sound like the other party, Why would any Democrat vote ownership is the highest it has been in does it? against the extension of the welfare-to- the history of our country. Maybe they Is it worth killing off these impor- work tax credits, moving people out of are saying: We have enough Americans tant priorities over a regulatory issue welfare, where they are assured a life owning homes. Why help some other that has already been voted on by the of poverty, into the mainstream of people this way? It is in this bill. If Senate? How many times do we have to America, the world of work where you they vote no tomorrow, they are voting express our view on something?

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00037 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2984 CONGRESSIONAL RECORD — SENATE March 23, 2004 We also have in this bill a special facilities development, and environ- ate back to work and move the JOBS dividends allocation rule that benefits mental review and impact mitigation. bill forward. agricultural cooperatives. We have States may transfer credits directly I yield the floor. other farm provisions that help cattle- to short-line and regional railroads. The PRESIDING OFFICER. The Sen- men receive tax free treatment if they They are going to say no to that? ator from New Jersey. replace livestock with other farm prop- Finally—here is something for the TRIP TO THE MIDDLE EAST erty where there has been drought, New York Senators—the proposal Mr. LAUTENBERG. Mr. President, I flood, or other weather-related condi- makes $100 million in tax credits avail- wish to talk about a trip I took last tions within 2 years from the date the able to New York to be used on rail in- week to the Middle East. I was privi- livestock has been sold. Last year we frastructure projects in the New York leged to travel with a group of col- heard a lot from the other side of the Liberty Zone. leagues to Israel, the Palestinian terri- aisle about not helping the farmers Will the Democrats say no? Will they tories, Jordan, Syria, Iraq, Kuwait, and who have been hurt by drought. Here is vote against cloture tomorrow and Qatar. I will discuss it in two parts. an opportunity to help some people thereby kill these measures? Will they One part is what we saw happening in through tax problems they have as a do this over a proposed regulation Iraq and the apprehension, the con- result of something beyond the control which, as Senator KYL and Senator cerns we all had with the confusion, of the family farmer. Are they not SESSIONS just explained, is being mis- the chaos that exists there, the contin- going to give those farmers an oppor- represented and used as a political ued loss of life among our troops, and tunity to have help? scare tactic? the inability to cope with a relatively We have a provision that allows pay- All of these benefits are being held new form or a new mode of warfare ment under the National Health Serv- hostage because the other side is push- where remote bombs are set off by peo- ice Corps loan repayment program to ing a politically motivated vote on an ple who are some distance away from be exempt from tax. Every Senator issue that is not even in this bill. the place of the explosion, seeing a tar- here has rural America in their State. The leadership on the other side get they particularly want to get to, We are always saying there is not ade- doesn’t really want to debate the sub- and the prospect that will continue to quate health delivery services in some stance of this bill. Sometimes I get be an ever-increasing part of the mech- parts of our country in rural America. that feeling. They would prefer to turn anism of war. It is so tough to fight We set up the National Health Service this bipartisan bill into a political against that kind of weaponry, that Corps to provide services there. They football. kind of a remote attack. still have a hard time getting adequate This is inexcusable because we have The people are courageous. They are service, but we have provisions in here worked very hard throughout this dedicated. I had a chance to meet with for additional incentives for people to process to make sure everyone’s con- some of our troops. I particularly met serve rural America. I hear from my cerns, both Republican and Democrat, with a group from New Jersey. I got colleagues that we have to do some- were incorporated into this bill. I re- the same impression from all with thing about health care in rural Amer- lated all of those. There is no reason whom I met. These are people who real- ica. We have an opportunity tomorrow this bill should not get almost unani- ly want to do the right thing. They are in this legislation to do something mous support. In fact, it was voted out not mercenaries. They are there be- about it. Will the Democrats vote no of committee 19 to 2. Now we have op- cause of the obligation they feel to- tomorrow? position from the other side. I don’t ward resurrecting or helping the revi- We have a proposal to allow the understand. talizing of Iraq and turning over to itemized deduction for unreimbursed Anyone who votes against cloture to- them their own responsibilities for gov- vehicle use for rural letter carriers. morrow is effectively voting against all erning. Why does that come before us? Because of the items I just listed. This should Our people are young. Frankly, even every time you drive a quarter of a not happen on a bill that is meant to though I served in World War II and mile and you stop at a rural mailbox to create jobs in America, with an empha- was myself young—I was 18 when I en- leave mail, and then go on to the next sis upon manufacturing jobs. listed—our military personnel today farmer’s box to leave mail, that vehicle Several weeks ago, there was an arti- look different. They seem to be more has higher costs than if it was going cle in the Washington Post quoting a educated. They seem to be more down the road 60 miles an hour and Democratic tax aide—unidentified— thoughtful. Their bravery is unques- never stopping. The Tax Code ought to saying, ‘‘There’s not a lot of incentives tioned. They are out there doing their reflect a little bit different business de- for us to figure out this problem.’’ duty even though there are risks all duction for that automobile as opposed The Democratic aide went on to say over the place which we saw in abun- to a business vehicle that doesn’t stop that allowing the extraterritorial in- dance. at every mailbox. come controversy to fester would yield We left Iraq about an hour before the We have provisions in this bill to en- increased sanctions—increased tariffs— explosion took place at the hotel. We hance broadband expensing provisions. on American products going to Europe, were not at the hotel, but we were We always hear from the other side which would benefit the Democrats in nearby. We were in the air when the that the quality of life in rural Amer- November. bomb went off. It was simply, if I can ica can never be equal to that of cities That is a very appalling statement. I say that, a replay of what happens if they don’t have the same IT access. don’t think that staff of either party every day there, whether it is Iraqis This gives that IT access. I hear Mem- are paid to think in terms of politics. being killed or Americans being killed bers of the other side of the aisle talk They ought to be paid to think in or coalition troops being killed. The to me about broadband tax credits. We terms of policy and, in the end, if they death and the violence is ever present. have an opportunity to do that now. think about policy, they have good pol- I believe we are on a path to try to Are they going to say no to what they itics. make it right, but what we have to rec- have been asking me to do for the last Efforts to delay this bipartisan bill ognize is that we are not free to leave, 2 or 3 years? with unrelated measures is a poor ex- even though there is a proposal that We provide real infrastructure tax cuse. So let’s get on with the business goes into place on July 1 for a gov- credits, the so-called short-line credits. at hand and finish this bill. Vote on erning council made up of Iraqis that This bill provides $500 million over 3 cloture tomorrow, approve cloture, will purportedly take over. I say ‘‘pur- years in Federal tax credits to States have finality on the bill, and when we portedly’’ not because I am disdainful for intercity passenger rail capital do all that, we are going to put a jobs of the effort—I am not at all—but for projects. Eligible intercity passenger creation bill ahead of partisan politics, the lack of readiness for governing. rail projects include planning, track put these important benefits I just list- They need 73,000 policemen, for in- rehabilitation, upgrade, development ed ahead of some concern that we have stance, and they have in the low and relocation, security and safety about an administrative regulation twenties in uniform now. It is very projects, passenger equipment acquisi- that hasn’t even been issued yet. Let’s hard to control the chaos, the turbu- tion, station improvement, intermodal stop playing politics and put the Sen- lence, and the confrontations that

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00038 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2985 occur with such a small police force. It The other visit was taking place with 2 young Palestinian kids, 17 years old, is going to take a long time, maybe a the Prime Minister of Israel and a few to be capable of perpetrating such couple of years, to get the police force people from his staff. Suddenly activ- atrocities against innocents? to the size they need. They also need ity took place and people were running One of the main reasons that takes an army. out and coming back with notes. The place, in my view, is the Palestinian What is the conclusion? The conclu- Prime Minister of Israel reported to us: Authority Chairman Yasser Arafat has sion is we cannot leave there, and we We have just had a suicide bombing in not only failed to rein in the terrorists have to face up to it. There are 130,000 Ashdod, which is a port community in but he is actively supporting a culture troops coming in to replace existing Israel, and 10 people were killed and that incites young people to commit personnel on the ground who have been many more wounded. such acts. Arafat’s Al Aqsa Martyrs there long enough to be rotated. No- I watched this man, who I have Brigade claimed responsibility for the body believes we are going to be able to known over the years, deflate and age attack, along with Hamas. They take pack our bags on July 2 and start to go in years in just a few minutes, whipped pleasure in this. Large crowds of Pal- home. We are going to be there a long by the knowledge that more of his citi- estinians in the West Bank celebrated time, and I hope we will have the cour- zens, innocent civilians, had been the attacks by honking their car horns, age to face up to the funding necessary killed. firing guns into the air and distrib- and put it in the budget and say what I volunteered the notion that he may uting candy to passersby for the killing it is we are doing there. want to adjourn the meeting and take of innocent people. The Palestinian Au- We are adding to the total indebted- care of the business he had to take care thority did nothing to stop these cele- ness of the country, but yet we hide it. of, the duties he had to deal with. He brations. We appropriated $166 billion thus far, said, no, as Prime Minister of the Jew- By the way, I have never heard of a and it looks as if we are going to have ish state, unfortunately, we learn to celebration taking place, with all the a supplemental request for $50 billion live with adversity and we must carry violence that has been visited upon to $75 billion in the not too distant fu- on, so we will carry on the meeting. Israel, when they killed some Palestin- ture, and it is on the side. It was a painful thing to witness. It ians, never. As a matter of fact, there We have to support our people. You happens so frequently. We are in a are times when soldiers in the Israeli have no idea how disappointing it is state of shock when we hear it and see army have refused to serve, saying when I talk to young people who are it, and I know the pain that must go their conscience disturbed them such serving. I said: If you can be totally through their community because it af- they did not want to serve in those ter- candid with me, tell me what your fects so many people. It is the dead, the ritories. complaint is. Is it the accommoda- injured, their friends, their families, There have been many times when tions? Is it where you live? Is it how their fellow workers, and those with Israeli civilians or soldiers have been you live? Is it the food you get? No, no, whom they serve in the military. The punished for attacks on Palestinians no. pain is an excruciating whirlpool, it within their community. That is the One young man, a captain, said to touches so many people. When we look difference in the cultures. One culture me: Mr. Senator, I will tell you what at that, we say, what is it that permits celebrates death and destruction, and bothers me. I see some of our coalition this kind of slaughter of innocent peo- the other mourns the victims on both friends, people who are helping us in ple to take place? sides of the boundary. this quest of ours, who have the latest Now we hear the shrieking about the The reality is Yasser Arafat has in- in bulletproof vests. The ones we have assassination, we will call it that di- stituted a deliberate policy of preach- are not as good and they do not protect rectly, of Sheikh Yassin, the man who ing and encouraging hate. Books they us as well as they should. invented Hamas and all the horrible have in the school system teach them We have seen that in the papers, but deeds they carried out. This is after the to hate the Israelis, to hate the Jews. here when you come face to face, you third suicide bombing attack in Israel For example, on March 13, 2004, Pales- see the faces of people who are wearing in the year 2004. The death toll now tinian Authority-controlled television those vests, who are trying to protect stands at 941 Israelis killed by ter- carried a speech by a sheikh in Gaza in themselves while they do their duty, I rorism since the start of the intifada in which he said the Jews are the sons of can tell you this: Five Senators—all of September of 2000. apes and pigs and the extremists and us—were wearing the latest in flak Israel is a tiny country with a small terrorists who deserve death while we gear. It was a sad commentary on population of 6.3 million people. To put deserve life since we have a just cause. where things are to hear them say they the terrorist toll in perspective, if the I was on a TV program one day with do not have it. United States were to suffer such a a representative of the Arab organiza- They point to their weapons. I think wave of terror attacks, over 50,000 tion here, and I said this violence has they were M–16s. I carried a Carbine Americans would be dead, almost the to stop; you have to come to some when I was in the Army, so that is not same number we lost over 10 years in peaceful arrangement, some detente. a familiar weapon to me. They said the Vietnam, 58,000. In Britain, it would He said: Not as long as the occupation coalition people had better, newer ri- have translated into approximately continues. fles, lighter, more efficient. Why 9,000 fatalities. Imagine the impact He was an American of Palestinian should that happen? They needed that has in this single day when 10 peo- heritage. So I said, well, would you say trucks and armored vehicles, and they ple are killed from that attack. It is Native Americans living in America, did not have them. Why should that the equivalent of 500 people. If we had people who had their country wrested happen? When we look in the paper, a killing in 1 day of 500 people by ter- from them in the late 1600s, early 1700s, just yesterday, and see the problem is rorists, we would be, as we were in would have the justification to strap in the transportation of the materials Vietnam, in national mourning. These bombs on their backs and go into the to Iraq, that the manufacture of these relative numbers underscore the im- Federal Reserve Bank or the Supreme products has taken place but we can’t pact of terrorism on the Israelis. Court or places such as that and blow get the materials there, it is very dis- Israel has seen 130 attempted suicide them up and say this is an occupation? appointing. I hope we will be able to do bombings since September 2000. In the The Presiding Officer is a man of something to accelerate the pace of latest incident, 10 Israelis lost their learning and experience, and I would providing the protective gear and the lives, leaving behind dozens of chil- ask: How many times have borders equipment they need. dren, grandchildren, spouses, parents moved as a result of combat, as a re- Today I want to discuss another part and, as I said, friends and workers and sult of war? It has happened many of the trip. The volatile situation in those with whom they served in the times. Those adjustments remain in Israel—the Middle East altogether— military. many instances. was difficult to witness. We went to As I looked at the pictures in the pa- When we look at the reason for this Israel and the other places I men- pers of the 10 victims, most of whom killing, instead of saying stop it, once tioned—the Palestinian territories, et were under 40, with families to support, and for all, Arafat should speak out cetera. I asked myself: What could it take for and say, stop the killing. We should

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00039 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2986 CONGRESSIONAL RECORD — SENATE March 23, 2004 not lend him a hand of help, not a nick- prevent Hamas and the Islamic Jihad siphon off the wealth of their countries el’s worth of assistance or anything from overrunning the Gaza Strip. while their people in those commu- else until he gives up that post and I also encouraged the Israeli Prime nities starve and have no opportunity turns it over to people. Minister to work with the inter- for themselves. We met with the finance minister national community to resume That is the interest I see we have in from the Palestinian Authority. He progress on the roadmap and to begin a strong Israel. It is not just the infor- was a reasonable individual, wanting to looking at how to withdraw remote mational exchange. That is important. make peace, wanting to stop the vio- Jewish settlements from the West But it is the fact of Israel sitting there lence. The Palestinians cry as much as Bank as well as from the Gaza Strip. as a reminder to those corrupt coun- the Israelis cry when they lose a son or Yet any real progress on the roadmap tries, and it is an extension of democ- a daughter. The false belief they are depends on the speedy emergence of racy. It is not an extension of the going to some kind of martyrdom does new Palestinian leaders who realize United States. It is not the 51st State. not relieve them of the sadness of the that a healthy Palestinian state can- It is an extension of democracy, and it loss of a family member. not be built on a foundation of terror shows what people can do when they We learned something else. There and violence. On this point, there can take a malaria-ridden nation and was an emergency meeting in Yasser should be no concessions, no flexibility, change it into a thriving agricultural Arafat’s compound in Ramallah fol- no turning a blind eye. and scientific nation. That is the exam- lowing the suicide bombing at the Today we see pictures of angry mobs ple that has to be set and that is the Ashdod port. Arafat refused his cabi- in the Arab world protesting the death one that has to be understood and we net’s call to use Palestinian security of Sheik Yassin, the head of Hamas. ought not to equivocate and say there forces against terror organizations. The Israeli military’s strategy of tar- is violence on both sides. That is the Palestinian cabinet ministers, such geted assassinations is questionable wrong message. You can’t say that be- as the interior minister and the com- and controversial. But I have to ask cause that only encourages terrorism. mander of the national security forces, my colleagues, if someone is standing It says violence on one side begets vio- pleaded with him to act against Hamas in your kid’s schoolyard with a gun in lence on the other side. and Fatah’s military wing, the Al Aqsa his hand, what would you do? Would I said it before. I have never heard an Martyrs Brigade. He refused to inter- you meet with him and confer about Israeli, and I know many, nor have I vene. He is an accomplice in these what he ought to do or would you take ever seen the country, celebrate the killings no matter how they try to advantage of the opportunity of the death of children on the other side of deny it. He provides no useful service moment and abolish the threat? Do the boundary. I have never seen them to his ‘‘leadership in the Palestinian you eliminate the threat immediately celebrate when men, women, and chil- community.’’ He incites them to vio- or abide by the Marquis of Queensbury dren who are innocent are killed— lence. rules when dealing with terrorists? never. We went to Syria, and all President These are difficult questions, but given But in the Palestinian community Assad wanted to talk about was the the lack of real leadership on the Pal- they celebrate by shooting off guns and Israeli-Palestinian conflict. There are estinian side, the Israelis are trying to handing out candy to kids and parad- borders, 600-mile borders. He couldn’t find the best way to protect their popu- ing, happy that they have taken some- stop the people from crossing the bor- lation from terror. one out of the family, a child, a sister der. We know who is crossing the bor- Peace in the Middle East begins with or brother, mother, father—out- der. He didn’t know. He said there were the removal of Arafat from power. It is rageous. Outrageous. people in innocent travel, business, a step the Palestinians must take if We have to stand steadfast in our recreation, family, et cetera. Mean- they want to move their nation for- support of Israel. We have to insist while, terrorists are flooding into Iraq, ward. Peace will not be obtained that Arafat step aside and provide many of them coming across the Syr- through terror but only through peace- them the right leadership, and there is ian border. ful negotiation. It is something Yasser leadership there but they don’t have a That is what happens there. It is the Arafat clearly does not understand, but chance to operate because he robs them corrupt leadership that has people be- we have to help him understand. We of that opportunity. lieving the way out is to kill them- can’t give him any other help of any It was a wonderful opportunity we selves and to kill Israelis and other in- kind. As a matter of fact, whatever had to see what was taking place there nocent people. We don’t know what the sanctions we can put on him and his and be able to report back and shape reach is. To the train bombing in Spain corrupt government, we ought to do it. our thinking based on the need. or other acts of violence in other parts It is very painful to witness, I under- Support our troops. Commend them of the world? But this notion that vio- stand, for those who are engaged in the for what it is that they do in accord- lence is an acceptable form of behavior innocent pursuit of life, to suddenly ance with the tenets of democracy and is outrageous, and Arafat is allowing come face to face with someone who ultimately decency. We can argue Palestinian society to be undermined has been encouraged to give up his life. whether we should be there or we and destroyed by a reign of terror. He What kind of false notion is this, that should not be there, but we are there has chosen to allow terrorism to flour- somehow or other you get rewarded for and we have to support those people as ish. Because of Arafat’s lack of action, losing a son or daughter and get a fi- fully as we can, everyone who wears a not only are Israeli children being or- nancial reward? I think what we ought uniform. We have to be proud of them. phaned and Israeli society terrorized, to do is try to trace those financial re- They do their duty splendidly. but also the Palestinian people’s dream wards to the countries that offer them. With those thoughts, Mr. President, I of living in a secure, free, and vibrant Maybe friends like Saudi Arabia ought yield the floor and suggest the absence state is being destroyed. to step up and do their share to not of a quorum. I still believe all roads and roadmaps permit this to happen, to not permit The PRESIDING OFFICER (Mr. TAL- lead to a two-state solution. When I these militant groups to exist in their ENT). The clerk will call the roll. was in the region last week, I urged the society. The legislative clerk proceeded to Israeli leadership to try to meet and I can tell you one thing. After our call the roll. resume direct contacts with Pales- visit there, I am more convinced than Mr. FRIST. Mr. President, I ask tinian officials in order to try to make ever that we must protect Israel no unanimous consent that the order for progress toward a settlement. I told matter what we have to do to see that the quorum call be rescinded. Prime Minister Sharon that his plan to she survives. It is not because we just The PRESIDING OFFICER. Without withdraw from the Gaza Strip was a love those people. It is because we love objection, it is so ordered. good start. Such a withdrawal, how- the American people. It is because we f ever, must be done in coordination want to protect America’s interests. It with Palestinian and international offi- is because we don’t want to have Amer- MORNING BUSINESS cials to ensure there is a viable infra- ican troops in the middle of that mad Mr. FRIST. Mr. President, I ask structure to govern the people and to world, with corrupt governments who unanimous consent that the Senate

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00040 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2987 now proceed to a period of morning lion. It has subsequently been in- economy needs to be stimulated and business, with Senators permitted to creased. The thrust was to create a also looks for an answer. speak for up to 10 minutes each. schedule of payments very much like I ask unanimous consent that the The PRESIDING OFFICER. Without workers’ compensation, where there memorandum from Senior Chief Judge objection, it is so ordered. would not have to be proof of causality, Edward R. Becker, dated March 16, f proof of liability; but once the damages 2004, be printed in the RECORD. were established coming from asbestos, There being no objection, the mate- ASBESTOS LEGISLATION the payments would follow this sched- rial was ordered to be printed in the Mr. SPECTER. Mr. President, I have ule. RECORD, as follows: sought recognition to comment briefly The situation has been compounded, MEMORANDUM on the bill, S. 1125, which provides for as I say, by the bankruptcy pro- Date: March 16, 2004. relief on the serious problem facing ceedings and the reorganization of To: Senator Arlen Specter. America involving asbestos. some 67 companies. The law has been From: Judge Edward R. Becker. I have had a number of inquiries on that workers, or others exposed to as- Re: Pending Asbestos Legislation S. 1125 the status of the bill. I recently re- bestos, could be compensated for the (Fairness in Asbestos Injury Resolution ceived a comprehensive memorandum full range of their potential injuries Act) (Status Report on Progress of our by former Chief Judge Edward R. Beck- even if they had not yet sustained Mediation). er for the Court of Appeals for the You have asked that I memorialize my those injuries—a result which I submit evaluation of the current status of our ongo- Third Circuit. I thought it would be does not make good sense in a context ing efforts to achieve a consensus among the useful to comment as to the status of where many people who have serious manufacturers and other defendant compa- this bill at the present time. injuries, mesothelioma, asbestosis, and nies, the insurers, the reinsurers, organized Asbestos litigation has caused some others who are not being compensated labor, and the trial lawyers, i.e., the stake- 67 bankruptcies in America, and the in- at all. This seeks to correct those in- holders concerned with S. 1125, so as to fa- juries from asbestos have left workers equities. cilitate consideration of the legislation by without compensation and suffering We have wrestled with a great many the Senate and make possible its ultimate from mesothelioma, asbestosis, and passage in a form satisfactory to the stake- of the problems, and we have solved a holders and the Senate. This is an interim other very serious ailments. In July, great many issues. Enormous progress evaluation. I will be in better position to the Judiciary Committee passed out S. has been made on others. We have had evaluate the situation after the weekly 1125. I voted for it. It was a vote pretty the cooperation of many Senators. Sen- meeting this Thursday, March 18, 2004. That much along party lines. We passed it ator HATCH has had representatives at is because at our meeting of March 11, it was out of committee so we could take the the meeting. Senator LEAHY, the rank- represented to us that draft legislative lan- next step looking toward floor action. ing Democrat, has had representatives guage with respect to a number of key But the bill required a great deal of there. The majority leader, Senator issues, including ‘‘start-up’’ of the National Trust Fund, on which the stakeholders are evaluation, analysis, and significant FRIST, and the Democratic leader, Sen- changes. I contacted senior Circuit apparently close to consensus, will be pre- ator DASCHLE, have had representatives sented on March 18. The start-up consensus, Judge Edward R. Becker, who had been there. Senators DODD, CARPER, FEIN- as I understand it, is to have the insurers chief judge of the Court of Appeals for STEIN and NELSON have also partici- and manufacturers put up substantial sums the Third Circuit until May 5 of last pated with representatives present. on ‘‘day one’’ so that the Fund can be jump- year. Since he had been involved in Judge Becker prepared a very com- started and exigent claims can come right major asbestos litigation, I thought he prehensive memorandum, dated March into the Fund and not have to linger in the would have special insights into this 16, outlining the evaluation of the cur- tort system. I have urged that language be drafted to authorize Bankruptcy Courts to issue and this problem. He is one of rent status of ongoing efforts to America’s leading Federal jurists, if approve immediate payments by the Tier 1 achieve a consensus among the manu- (Chapter XI) companies into the Trust Fund. not the leading Federal jurist. He re- facturers and insurers, the trial law- I will give you a follow-up evaluation after ceived the Devitt award last year as yers, and the AFL–CIO. the March 18 meeting. the author of many scholarly opinions. It is my view that this is the kind of As you know we have made enormous He was a district judge from 1970 to bill that cannot be enacted unless progress over the last few months on quite a 1982. He has been on the Court of Ap- there is a consensus. Unless there is number of issues, and already have a clean peals for the Third Circuit from 1982 agreement among all of the stake- consensus draft of a comprehensive adminis- trative structure for processing claims until the present time. holders or parties, I think we will not I think bringing in a Federal jurist to which, subject to review by Senate Legisla- be able to enact this important legisla- tive Counsel, can go right into the bill. help on a legislative matter is unprece- tion. If this legislation were to be en- Based on representations at recent meetings, dented. During the month of August, acted, it would be an enormous stim- I believe that we can expect (consensus) bill when the Senate was in recess, 2 full ulus to the economy and would take language in the next week or two, tying up days were spent in Judge Becker’s these many companies that are in the few loose ends on the administrative chambers in Philadelphia, where I at- bankruptcy proceedings out of those structure, particularly the statute of limita- tended, and we had representatives proceedings so that they become again tions issue and the definition of exigent claims. The issue of limits on attorney’s fees from the manufacturers of asbestos; in- productive. surance companies, which insured as- will also have to be resolved, but I think Many of those companies are in my that is do-able. I also expect very shortly bestos manufacturers; reinsurers, who home State of Pennsylvania and many consensus bill language covering non-dis- reinsured the insurers; representatives across the country. crimination by health insurers with respect of the AFL–CIO, representing the in- That is a very brief summary as to to coverage against workers receiving bene- jured parties; and trial lawyers, also where we stand. We will be back at fits under S. 1125; and engrafting into S. 1125 representing the injured parties. work on Thursday. We are determined Health Insurance Portability & Account- Since those two meetings in August, to solve these problems. I am opti- ability Act (HIPAA) presumptions regarding there have been a series of additional mistic they can be solved. The major- exposure criteria; i.e., rebuttable presump- meetings in Washington in my office, ity leader has stated his intention to tions concerning the extent to which em- ployment (a) in specific industries, (b) in spe- where Judge Becker has attended. One bring this matter to the floor for a vote cific occupations within those industries, meeting involved Majority Leader BILL some time next month. I think we are and/or (c) during specific time periods con- FRIST. Another meeting involved rep- very close to knowing whether we can stitutes ‘‘significant occupational exposure.’’ resentatives of the Department of resolve these issues, and we will con- There are quite a number of other issues Labor. In total, there have been some tinue to try to do that. on which the stakeholders represent that 15 meetings. We are scheduled to have I repeat, I am optimistic we can re- they are close to agreement including: our 16th one on Thursday of this week. solve the issues. The stakes are very 1. Values as a range 2. Timing of payments The bill—the product of very inven- high. We have many injured workers 3. Exclusivity for all asbestos related tive thinking by the chairman of the who are relying upon some answer to claims (silica, etc.) committee, Senator HATCH—has cre- their just compensation. The compa- 4. The anatomy of medical monitoring ated a fund, funded initially at $104 bil- nies are looking for an answer, and the 5. Collusive default judgment

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00041 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2988 CONGRESSIONAL RECORD — SENATE March 23, 2004 6. The smoking matrix. holders to work on a redraft on the Asbestos holders with ascertaining the dollar amounts These matters can, I believe, be put into Insurer’s Commission language, § 219 et seq., involved. I suspect that they are not as great consensus bill form quickly, and I will seek which is presently cumbersome, and they as imagined, especially in view of the num- to establish a timetable at Thursday’s meet- have agreed to do so. At the very least, the ber of workers with asbestos disease who are ing. requirement of 100% agreement seems too retired. These appears to be a will to work Another key area on which the parties high. I note that the creation of a Commis- this out. seem close to agreement is the status of set- sion is not a matter of great urgency because The second issue is ‘‘transparency’’—the tlements and pending cases. The views that it is anticipated that the start-up payment need to assure Labor and the claimants that you expressed—that a case that has been set- of both the insurers and reinsurers will be the funding formula (for insurers and espe- tled should be out of the National Trust— very substantial, postponing the need for a cially manufacturers and other defendants) seemed to be accepted by all. There were two Commission decision on allocation. We also will yield the sums projected by the bill’s caveats. One related to partial settlements— discussed last week mechanisms for assuring sponsors. Labor maintains that on the with some but not all potential defendants, the contributions (and collecting of con- present record there is no way to know this. but I believe that a formula can be worked tributions) from offshore reinsurers. A num- Business concedes that there is no extant out to deal with that situation. The second ber of potential statutory provisions were list of the companies who will be in the var- related to generalized agreements between discussed, and I think that this aspect of the ious tiers, and that there will not be one. plaintiffs’ counsel with large inventory of matter can be resolved. The companies acknowledge that they must cases and insurance carriers as to the terms We had a good deal of discussion last week come up with a solution to the transparency of settlement when the cases become ripe. I about what to do with pending bankruptcies. problem, whether it is joint or several liabil- do not believe that such ‘‘settlements’’ I expressed the view, based upon a conversa- ity, or guarantees, or surcharges, or some- should qualify. I believe that other pending tion that morning with the bankruptcy thing else, or there can be no consensus. cases should go into the S. 1125 National judge who is handing most of the asbestos They have promised to come up with some- Trust. I note, however, that there are 300,000 bankruptcy cases, that it will be quite some thing. pending cases, and unless start-up can be time, at least a year and probably a good The final—and most difficult issue—is the quite effective Labor would prefer that they deal longer, before the major bankruptcies funding level. Labor claims that the pro- be processed in the tort system. I still be- can be resolved; even if plans are agreed jected $114 billion is grossly inadequate to lieve that the pending claim issue is resolv- upon and are confirmed, the insurers will ap- pay the needed compensation to the injured able. peal. Consequently, I urged that the pending workers. This matter is well beyond my Another critical area where much progress bankruptcies be folded into the National portfolio. I believe that Labor must come has been made is ‘‘sunset.’’ Based on rep- Trust. The Tier 1 (Chapter XI) companies are down considerably from the Leahy-Kennedy resentations at last week’s meeting, I believe liable under S. 1125 for roughly 20% of the values, and that business must ‘‘sweeten’’ that we are in striking distance of an agree- Trust funding, so that their participation in considerably the Frist values. If all the other ment on sunset, including the timing of sun- the National Trust is essential. Additionally, issues can be worked out, perhaps the Senate set; program review (so as to anticipate the it appears that, with fast start up, the claim- leadership can prevail on the stakeholders to need for sunset); and return to the tort sys- ants will receive compensation from the reach agreement on the projected dollars. tem. There is some disagreement as to Trust Fund much more quickly then they One final comment. I cannot praise too whether the return to the tort system should would from the bankruptcy trusts. I believe highly the representatives of the stake- be in state or federal court. I understand that the stakeholders are comfortable with holders who have participated in our dia- that your position is that the return should this view. Drafting is simple. logue. They are working assiduously, con- be to federal court, so as to avoid the ex- It appears that Labor feels that the Tier 1 stantly (two or three meetings per week), cesses of certain state jurisdictions. I agree, companies should pay more than S. 1125 pro- and, in my view, earnestly, and in a spirit of and believe that the stakeholders, with the vides, i.e. what they would pay on bank- cooperation and in good faith to try to reach exception of the trial lawyers, will be satis- ruptcy. The Tier 1 companies, however, point consensus. Senate staff has also been of very fied with that result. Another sunset-related out that they will already pay a signifi- great help. I believe that if we can keep up issue that is under discussion and needs reso- cantly greater percentage then the non- the current pace for another four weeks, five lution is whether, in the event of sunset, the bankrupt companies, and further argue that at the most, we can get the job done. I may Tier 1 companies (those presently in Chapter any effort to make them pay into the Trust be wrong. The dollars may be the final stum- XI) go back to the Bankruptcy Court, so as Fund the amount they might have to pay in bling bloc, However, I am prepared to give it to assure that funds dedicated to Bank- bankruptcy is not sound, because: (1) in most my ‘‘best shot,’’ and to come to your office ruptcy not be dispersed (disbursed) at large. cases these amounts are at present specula- every week to work with you to keep the I believe that issue too to be capable of early tive (usually agreed to by only one class of ball rolling. resolution. creditors), and, at all events, subject to ap- In our recent meeting with high officials of proval of the Bankruptcy Court (in one case f the railroad industry and the rail unions, we the Court disapproved); (2) the deal under S. discussed in depth the treatment of rail 1125 is different because in bankruptcy they TRIBUTE TO HANH THAI DUONG workers with asbestos disease under S. 1125. are forever discharged whereas under S. 1125 Mr. MCCONNELL. Mr. President, I It was the position of the rail unions that they may be back in the tort system; and (3) rise today to pay tribute to Hanh Thai the preemption by S. 1125 of the right of rail companies such as Armstrong would be dealt workers to file claims under the Federal Em- a body blow by such a provision. Since the Duong, a woman who epitomizes the ployers Liability Act (FELA) is unfair be- increment is at most $1 billion, I do not American dream. Duong is the owner of cause non-rail workers maintain their full think that this is a ‘‘deal breaker.’’ a restaurant in my hometown of Louis- rights to seek workers’ compensation from I turn now to the few remaining issues. ville, KY, The Lemongrass Cafe´. their employers for asbestos related diseases. Medical screening and education for high Duong’s journey from Vietnam to However, our discussion revealed that the risk workers must be resolved. I do not think America is a miraculous one. In 1979, supposed discrimination was largely illusory that one is too tough. Some technical bank- when she was only 10 years old, the Vi- because 95% of the rail workers with asbes- ruptcy issues such as the problematic float- etnamese government told her family tos disease are retired and would have no ing Chapter XI lien and some points raised traditional workers’ compensation claims. It by the Bankruptcy Administration Division that they would be able to leave Viet- was acknowledged by all that the scheme of of the Administrative Office of the United nam because of her father’s Chinese an- S. 1125 does leave non-retired rail workers States Courts must be resolved. These are cestry, but only if they gave up all of modestly worse off than their non-rail coun- just drafting problems. There are, however, their possessions and paid a sum in terparts, and we charged the stakeholders three critical issues remaining, the second gold to the Vietnamese government. with coming up with a formula that would and third of which will make or break the They decided the trip would be worth create parity. We are awaiting the results of bill, and they are related. the risk, so they left everything behind The first is subrogation of workers’ com- their deliberations. If they do not reach and boarded a fishing boat that took agreement, the Senate could settle it. pensation payments (health insurer subroga- The insurers and reinsurers are struggling tion is apparently not a problem). Labor them to a new life in Hong Kong. to come up with an allocation formula that firmly believes there should be no subroga- A year later, with the help of a rel- would obviate the need for an Asbestos In- tion; it represents that no similar federal ative in Louisville and a number of surer’s Commission (appointed by the Presi- program provides for it. The insurers and Catholic charities, Duong and her fam- dent). If they cannot, the Commission can business think there should be subrogation ily left Hong Kong for Kentucky. remain in the bill (as a kind of ‘‘club’’—for S. to avoid ‘‘double dipping.’’ One major manu- Duong’s unwavering determination and 1125 already provides that if an allocation facturer represented at the talks did not see a belief in the importance of an edu- formula is agreed to by all participants in failure to provide for workers comp subroga- each insurer group and approved by the Com- tion as a problem, but others thought that cation, helped her work her way mission and the House-Senate Judiciary the failure to mention subrogation in the bill through the University of Louisville Committees, the Commission will terminate. would alter future behavior by encouraging and earn a degree in finance and inter- Section 212(2). I have entreated the stake- more comp claims. We charged the stake- national business.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00042 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2989 After her parents retired, Duong fol- working in business. Another sister owns a is to strike the right midpoint. Our constitu- lowed in their footsteps and opened her nail salon and her youngest sister is working tional checks and balances are intended to own restaurant, The Lemongrass Cafe´;, her way through college. help us do that. bringing a taste of her native land to ‘‘You think about your parents’ sacrifice The video technologies you are discussing for you and you don’t want to fail,’’ she said. today offer tools that are better, faster and her new home. I ask my colleagues in ‘‘You don’t take things for granted and you smarter, on scales of magnitude that are un- the Senate to recognize and pay tribute don’t give up easily.’’ precedented. As an advocate of emerging to this remarkable woman. Duong has forgotten much of her early life technologies who also has a keen interest in Mr. President, I ask unanimous con- in Vietnam, but a few vivid memories re- them, I watch these breakthroughs with sent that the article, ‘‘Restaurant a main: one of her parents running with her for great interest. testament to Vietnamese family’s shelter as bombs exploded nearby, and her I have sought to find ways to encourage drive’’ from The Courier-Journal, be mother being wounded by a stray bullet near the commercial sector to create new prod- their home in Saigon (now known as Ho Chi printed in the RECORD. ucts and opportunities, and I have promoted There being no objection, the mate- Minh City). use of new technologies by law enforcement Today, Duong works hard in the rial was ordered to be printed in the agencies, while also protecting consumer pri- Lemongrass Cafe, on Bardstown Road to vacy and constitutional freedoms. That was RECORD, as follows: make happier memories for her children—a the balance I sought to strike in my work on [From the Louisville Courier-Journal, Feb. daughter, Cheryl, 17, a senior at Male High CALEA and in other legislation that blends 22, 2004] School and a Governor’s Scholar who will law enforcement’s needs, the needs of our ro- RESTAURANT A TESTAMENT TO VIETNAMESE enter the University of Kentucky next fall, bust technology sector, and the privacy in- FAMILY’S DRIVE and a son, Nick, 9, a student at Greathouse/ terests of the American people. The hands- (By Byron Crawford) Shryock Traditional Elementary School. off approach to the Internet that I have fa- Many of their grandmother’s favorite recipes vored is another example, and right now I The Lemongrass Cafe in Louisville’s High- are helping to lure customers to their moth- am working with others to extend the Inter- lands neighborhood is more than a quaint er’s cafe. net tax moratorium, to keep the Internet oasis for Thai, Vietnamese and Chinese cui- ‘‘Other than the delicious food, I guess it free from discriminatory and multiple state sine. It is a monument to one Vietnamese was just the simplicity of Lemongrass and and local taxes. family’s appetite for freedom and oppor- the personality of Hanh that I like about the ON THE CUSP OF A MICRO-MONITORING tunity. place,’’ said Jeannie Treitz, a frequent cus- The cafe’s proprietor, Hanh Thai Duong, 34, REVOLUTION tomer. was 10 years old in 1979 when the Vietnamese A few years ago, Hanh said, she took her The marriage of information-gathering government told her parents that because of children to Vietnam to show them the coun- technology with information storing tech- her father’s Chinese ancestry the family try their parents and grandparents had fled. nology, manipulated in increasingly sophis- would be allowed to leave Vietnam—if they ‘‘They were raised here and they don’t ticated databases, is beginning to produce gave up all their possessions and paid the know how people have to struggle in Viet- the defining privacy challenge of the infor- government a sum in gold. nam,’’ she said. ‘‘I took them back so they mation age. Modern databases, networks and ‘‘You really leave empty-handed, but my could understand that they have bundles of the Internet allow us to easily collect, store, mom and dad were thinking for a better fu- opportunities here, and that they should distribute and combine video, audio and ture for their children,’’ Duong said. ‘‘My work hard and never give up on anything.’’ other digital trails of our daily transactions. parents always said that the United States We are on the verge of a revolution in micro- was the land of opportunity. We left on a f monitoring the capability for the highly de- fishing boat for Hong Kong.’’ RFIDS AND THE DAWNING MICRO tailed, largely automatic, widespread sur- Such voyages were treacherous. The boats MONITORING REVOLUTION veillance of our daily lives. were small and often unsafe. The trips sometimes took weeks. Twenty Mr. LEAHY. Mr. President, today I RFIDS to 30 passengers jammed into tight quarters outlined some of the privacy chal- And one of the most dramatic and dazzling and often went days without food. Pirates lenges we will soon face as new micro new challenges we all will be facing soon is roamed the South China Sea, sometimes monitoring technologies begin to pro- the emergence of a relatively new, surveil- boarding the fishing vessels, killing, raping lance-related technology called radio fre- and taking women and children captives. liferate in our society. I spoke in par- quency identification—R–F–I–D for short. ‘‘We were lucky. It only took us four or ticular about breakthroughs in Radio RFID tags are tiny computer chips that five days to reach Hong Kong, but my aunt Frequency Identification, also known can be attached to physical items in order to and her twins did not get to Hong Kong . . . as RFID. provide identification and tracking by radio. for like a month or so, and one of the twins My remarks were offered at George- Their potential invasiveness is obvious from died of hunger and they ended up burying her town University Law Center, during a their size, which already is surprisingly out at sea,’’ Duong said. ‘‘As soon as my conference on the legal and techno- small. And they will only get smaller. aunt stepped on the ground in Hong Kong, logical challenges of video surveil- In their basic function, RFID chips are like she passed away, too.’’ lance. Micro monitoring is a subject barcodes, which by now are ubiquitous in our Duong’s baby sister was badly burned in an stores and offices and crime labs and manu- accident soon after the fishing boat reached that deserves the attention of the Sen- facturing plants. Hong Kong Harbor and was taken to the ate and of the American people, and I BARCODES ON STEROIDS mainland for treatment. The family lost ask unanimous consent the text of my track of the child for months but finally address be printed in the RECORD in the But RFID chips are like supercharged found her in a refugee camp. Duong’s moth- interest of advancing this discussion. barcodes—barcodes on steroids, if you will. They are so small they can be tagged onto er, not having seen the baby for months, did There being no objection, the mate- not immediately recognize her. almost any object. They do not have to be in Another of Duong’s aunts, who then lived rial was ordered to be printed in the open view; RFID receivers just have to be in Louisville, sponsored the family to immi- RECORD as follows: within the vicinity—at a security check- point, in a doorway, inside a mailbox, atop a grate in 1980, and they were flown to Amer- THE DAWN OF MICRO MONITORING: IT’S PROM- traffic light. And RFID chips can carry a lot ica by Catholic Charities, which they later ISE, AND ITS CHALLENGES TO PRIVACY AND more information than barcodes. Some repaid. Duong’s father, Trung Thai, had SECURITY owned a successful grocery-supply business versions are recordable so that they can In our post-9/11 world, technology often has carry along the object’s entire history. in Vietnam, and her mother, Nga, was a good been our crucial but silent partner in helping RFID chips are more powerful than today’s cook. They opened a small restaurant from us to ramp up our law enforcement and na- video surveillance technology. RFIDs are which they have since retired. tional security capabilities. We in this city Duong married at an early age but was de- more reliable, they are 100 percent auto- are profoundly aware of the new risks we termined to get an education, and she matic, and they are likely to become more face. But we also need to do it right. The worked her way through the University of pervasive because they are significantly less public does not want false assurances, nor do Louisville to earn a degree in finance and expensive, and there are many business ad- they want to be unduly alarmed. What the international business. She and her husband, vantages to using them. RFIDs seem poised American people want is to actually be safer. Edward Duong—who had twice been captured to become the catalyst that will launch the And we still have a way to go in accom- while trying to leave Vietnam in violation of age of micro-monitoring. plishing that. government orders—later lived in New York I have followed RFID technology for some City. But they soon decided that they pre- TENSION BETWEEN LIBERTY AND SECURITY time and have welcomed its potential for ferred Louisville, where Edward Duong now In our constitutional system there is al- many constructive uses. I have supported the works at Ford’s Kentucky Truck Plant. ways tension between liberty and security use of RFIDs in a Vermont pilot program for Hanh Duong’s older brother and younger and never more so than since September tracking cattle to curtail outbreaks, like sister both earned degrees from UofL and are 11th. One of the difficult challenges we face mad cow disease, and our Vermont program

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00043 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2990 CONGRESSIONAL RECORD — SENATE March 23, 2004 is now being emulated for a national track- sider how it will be used, and will it be effec- Homeland Security on all of these issues and ing system. RFID technology may also help tive. What information will it gather, and am waiting for their responses. thwart prescription drug counterfeiting, a how long will that data be kept? Who will I want to make sure that mistakes like use the FDA encouraged in a recent report. have access to those data banks, and under those are not repeated, especially with RFID Leading retailers like Wal-Mart and Tar- what checks-and-balances? Will the public technology, where there is so much potential get—as well as the Department of Defense— have appropriate notice, opportunity to con- value. That is why I asked to speak with you are requiring its use by suppliers for inven- sent and due process in the case mistakes are today, to begin the process of encouraging tory control. Fifty million pets around the made? How will the data be secured from public dialogue in both the commercial and world have embedded RFID chips. Of course, theft, negligence and abuse, and how will ac- public sectors before the RFID genie is let many of us already have experience with curacy be ensured? In what cases should law fully out of its bottle. simpler versions of the technology in ‘‘smart enforcement agencies be able to use this in- This is a dialogue that should cut across tags’’ at toll booths and ‘‘speed passes’’ at formation, and what safeguards should the political spectrum, and it should include gas stations. apply? There should be a general presump- the possibility of constructive, bipartisan But this is just the beginning. RFID tech- tion that Americans can know when their congressional hearings. The earlier we begin nology is on the brink of widespread applica- personal information is collected, and to see, this discussion, the greater the prospects for check and correct any errors. tions in manufacturing, distribution, retail, success in reaching consensus on a set of These are all questions we need to con- healthcare, safety, security, law enforce- guiding principles. sider, and it is entirely possible that Con- ment, intellectual property protection and When several of us from both parties band- gress may decide that enacting general pa- many other areas, including mundane appli- ed together years ago to found the Congres- rameters would be constructive. It is impor- cations like keeping track of personal pos- sional Internet Caucus, we were united by sessions. Some visionaries imagine, quote, tant that we let RFID technology reach its potential without unnecessary constraints. our appreciation for what the Internet would ‘‘an internet of objects’’—a world in which do for our society. Years later, we remain billions of objects will report their location, But it is equally important that we ensure protections against privacy invasions and united, we remain optimistic, and partisan- identity, and history over wireless connec- ship has never interfered in the Caucus’s tions. Those days of long hunts around the other abuses. Technology may also help with the answers—for example, ‘‘blockers’’ that work. house for lost keys and remote controls That is the spirit in which I hope a discus- might be a frustration of the past. deactivate RFID tags, and software that thwarts spyware. sion can now begin on micro-monitoring. These all raise exciting possibilities, but Thank you for your interest in these cut- BEGINNING A NATIONAL DIALOGUE they also raise potentially troubling tan- ting-edge issues, and thanks for this oppor- gents. While it may be a good idea for a re- There is no downside to a public dialogue tunity to share some ideas with you. tailer to use RFID chips to manage its inven- about these issues, but there are many dan- tory, we would not want a retailer to put gers in waiting too long to start. We need f those tags on goods for sale without con- clear communication about the goals, plans BUDGET SCOREKEEPING REPORT sumers’ knowledge, without knowing how to and uses of the technology, so that we can deactivate them, and without knowing what think in advance about the best ways to en- Mr. NICKLES. Mr. President, I here- information will be collected and how it will courage innovation, while conserving the by submit to the Senate the budget be used. While we might want the Pentagon public’s right to privacy. scorekeeping report prepared by the to be able to manage its supplies with RFID We have seen this time and time again Congressional Budget Office under Sec- tags, we would not want an al Qaeda opera- where a potentially good approach is ham- tive to find out about our resources by sim- pered because of lack of communication with tion 308(b) and in aid of Section 311 of ply using a hidden RFID scanner in a war sit- Congress, the public and lack of adequate the Congressional Budget Act of 1974, uation. consideration for privacy and civil liberties. as amended. This report meets the re- DRAWING LINES Take for example the so-called CAPPS II quirements for Senate scorekeeping of program. No doubt in a post-9/11 world, we Of course these are just some of the fore- Section 5 of S. Con. Res. 32, the First should have an effective airline screening seeable possibilities, and a lot depends on en- Concurrent Resolution on the Budget system. But the Administration quietly put for 1986. hancements in the technology, reductions in this program together, collected passengers’ costs, and developments in voluntary stand- information without their knowledge and pi- This report shows the effects of con- ard-setting, systems and infrastructure to loted this program without communicating gressional action on the 2004 budget manage RFID-collected information. But the with us and before privacy protections were through March 22, 2004. The estimates RFID train is beginning to leave the station, in place. The result was a recent GAO anal- of budget authority, outlays, and reve- and now is the right time to begin a national ysis that showed pervasive problems in the nues are consistent with the technical discussion about where, if at all, any lines screening program and admissions that we will be drawn to protect privacy rights. and economic assumptions of the 2004 are now set back in our efforts to create an Concurrent Resolution on the Budget, The need to draw some lines is already be- effective screening system. coming clear. Recent reports revealed clan- As another example, the Administration H. Con. Res. 95, as adjusted. destine tests at a Wal-Mart store where recently funded the MATRIX program to The estimates show that current RFID tags were inserted in packages of Max provide law enforcement access to state gov- level spending is above the budget reso- Factor lipsticks, with RFID scanners hidden ernment and commercial databases. This was lution by $14.1 billion in budget author- on nearby shelves. The radio signals trig- potentially a useful crime-fighting tool. But ity and under the budget resolution by gered nearby surveillance cameras to allow there was insufficient information about the researchers 750 miles away to watch those $222 million in outlays in 2004. Current program and about potentially intrusive level for revenues is $244 million below consumers in action. A similar test occurred data mining capabilities, and there were with Gillette razors at another Wal-Mart unaddressed concerns about privacy protec- the budget resolution in 2004. store. tions. Now 11 out of 16 states participating in This is my first report for the second These excesses suggest that Congress may the program have pulled out—many, citing session of the 108th Congress. need to step in at some point. When privacy privacy concerns—thus hampering the effec- I ask unanimous consent that the re- intrusions reach the point of behavior that is tiveness of the information sharing program. port be printed in the RECORD. absurdly out of bounds, we find ourselves Again, had some of these issues been vetted There being no objection, the mate- having to deal with such issues as the ‘‘Video in advance, we may have been able to en- Voyeurism Prevention Act,’’ a bill now be- hance law enforcement intelligence. rial was ordered to be printed in the fore Congress that would ban the use of cam- Just recently, there were reports about the RECORD, as follows: era to spy in bathrooms and up women’s FBI’s new Strategic Medical Intelligence U.S. CONGRESS, skirts, a practice that by now has even been program, in which doctors have been enlisted CONGRESSIONAL BUDGET OFFICE, given a name, ‘‘upskirting,’’ which I’m sure to report to the FBI ‘‘any suspicious event,’’ Washington, DC, March 23, 2004. is as new to you as it is to most of us in Con- such as an unusual rash or a lost finger. The Hon. DON NICKLES, gress. goal of preventing bio-terrorism is impor- Chairman, Committee on the Budget, Other powerful new technologies are on the tant. But there are many unanswered ques- U.S. Senate, Washington, DC. horizon, like sensor technology and nano- tions about the program’s privacy protec- DEAR MR. CHAIRMAN: The enclosed tables technology. All the more reason to think tions and its ability to identify truly sus- show the effects of Congressional action on about these issues broadly and to establish picious events and not unrelated personal the 2004 budget and are current through guiding principles serving the twin goals of medical situations. Hopefully, this program March 22, 2004 (the last day that the Senate fostering useful technologies while keeping will not be hampered by lack of communica- was in session before the recent recess). This them from overtaking our civil liberties. tion and oversight. report is submitted under section 308(b) and With RFID technology as with many other I have written oversight letters to the Jus- in aid of section 311 of the Congressional surveillance technologies, we need to con- tice Department and to the Department of Budget Act, as amended.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00044 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2991 The estimates of budget authority, out- TABLE 1.—SENATE CURRENT-LEVEL REPORT FOR SPEND- TABLE 1.—SENATE CURRENT-LEVEL REPORT FOR SPEND- lays, and revenues are consistent with the ING AND REVENUES FOR FISCAL YEAR 2004, AS OF ING AND REVENUES FOR FISCAL YEAR 2004, AS OF technical and economic assumptions of H. MARCH 22, 2004 MARCH 22, 2004—Continued Con. Res. 95, the Concurrent Resolution on [In billions of dollars] [In billions of dollars] the Budget for Fiscal Year 2004, as adjusted. Current Current This is my first report for the second ses- Budget res- Current level over Budget res- Current level over sion of the 108th Congress. olution level 1 under (-) olution level 1 under (-) Sincerely, resolution resolution OUGLAS OLTZ AKIN D H -E , On-budget: Social Security Revenues ..... 557.8 557.8 * Director. Budget Authority ...... 1,873.5 1,887.5 14.1 1 ¥ Current level is the estimated effect on revenue and spending of all leg- Enclosures. Outlays ...... 1,897.0 1,896.8 0.2 islation that the Congress has enacted or sent to the President for his ap- Revenues ...... 1,331.0 1,330.8 ¥0.2 proval. In addition, full-year funding estimates under current law are in- Off-budget: cluded for entitlement and mandatory programs requiring annual appropria- Social Security Outlays ...... 380.4 380.4 0 tions even if the appropriations have not been made. Note.—* = less than $50 million. Source: Congressional Budget Office. TABLE 2.—SUPPORTING DETAIL FOR THE SENATE CURRENT-LEVEL REPORT FOR ON-BUDGET SPENDING AND REVENUES FOR FISCAL YEAR 2004, AS OF MARCH 22, 2004 [In millions of dollars]

Budget authority Outlays Revenues

Enacted in previous sessions: Revenues ...... (3) (3) 1,330,756 Permanents and other spending legislation 1 ...... 1,117,071 1,077,878 (3) Appropriation legislation ...... 1,152,537 1,183,200 (3) Offsetting receipts ...... ¥368,484 ¥368,484 (3) Total, enacted in previous sessions ...... 1,901,124 1,892,594 1,330,756

Enacted this session: Authorizing Legislation: Surface Transportation Extension Act of 2004 (P.L. 108–202) ...... 7,880 0 0 Social Security Protection Act of 2003 (P.L. 108–203) ...... 685 685 0 Total, authorizing legislation ...... 8,565 685 0

Entitlements and mandatories: Difference between enacted levels and budget resolution estimates for appropriated entitlements and other mandatory programs ...... ¥22,156 3,472 (3) Total Current Level 12 ...... 1,887,533 1,896,751 1,330,756 Total Budget Resolution ...... 1,873,459 1,896,973 1,331,000 Current Level Over Budget Resolution ...... 14,074 (3) (3) Current Level Under Budget Resolution ...... (3) 222 244 1 Per section 502 of H. Con. Res. 95, the Concurrent Resolution on the Budget for Fiscal Year 2004, provisions designated as emergency requirements are exempt from enforcement of the budget resolution. As a result, the current level excludes $82,433 million in budget authority and $36,782 million in outlays from previously enacted bills. 2 Excludes administrative expenses of the Social Security Administration, which are off-budget. 3 Not applicable. Note.—P.L. = Public Law: * = less than $500,000. Source: Congressional Budget Office.

INTERNATIONAL WOMEN’S DAY with warfare. At home, in flight or in HIV-positive adult population in this Mr. FEINGOLD. Mr. President, I rise refugee camps, they are frequently region, as compared to 50 percent today to commemorate International threatened by rape and sexual exploi- worldwide. Young women and girls are Women’s Day, which is celebrated tation. Far too many victims of domes- especially at risk. The United Nations around the world on March 8. For near- tic violence and of human trafficking. reports that in this region 6 to 11 per- ly a century, women’s groups world- In some countries, women fall victim cent of girls age 15–24 are infected with wide have paused on this day to cele- to ‘‘honor killings,’’ a deplorable prac- HIV, whereas infection among boys of brate the achievements and contribu- tice whereby women are murdered by the same age group is 3 to 6 percent. male relatives for actions that are per- tions of women around the globe. This International efforts to fight AIDS will ceived to bring dishonor to the family. day is also an opportunity to reflect on not succeed unless we make a sus- Other countries tolerate the burning of the challenges that women continue to tained and serious effort to address the thousands of brides a year due to insuf- face in their daily lives. factors that make women and girls so ficient dowries. vulnerable to exposure. This means Despite the progress women have While I am pleased that the United made in many countries, women world- more than talking about legal rights, States has begun to address the global and more than talking about economic wide continue to confront discrimina- HIV/AIDS crisis, the pandemic con- tion, violence and even slavery. In cen- empowerment. It means that we must tinues to exact a terrible human toll take action. tral Africa and, specifically, in the on communities around the world, and Democratic Republic of the Congo, Despite these difficulties for women, in sub-Saharan Africa, it is having a encouraging signs of women’s progress DRC, sexual violence has increasingly particularly devastating effect on are also in evidence around the world. been used as a weapon against women women. As the ranking member of the In Western and Central Africa, inter- and girls. These horrific acts cannot be Senate Foreign Relations Committee’s national courts are holding those re- tolerated, and those responsible for Subcommittee on African Affairs, I sponsible for crimes against humanity, these atrocities must be held account- have had the opportunity to travel to including the use of rape as a weapon able. At the same time, the inter- numerous countries in Africa and see of war, accountable for their actions national community must reach out to firsthand the devastating toll that In Mexico, indigenous women, who help provide medical and psycho-social HIV/AIDS and other infectious diseases once lived in the shadows of a deeply support to women and girls affected by are taking on the people of this con- patriarchal society, are increasing these horrors, and must work vigor- tinent. According to United Nations re- their influence in local communities. ously with civil society and local au- ports, over 25 million adults and chil- These women are increasingly buying thorities to prevent these abuses in the dren in Africa are infected with the small businesses and owning their own future. HIV virus, the majority of them in sub- land, taking an aggressive stance Sadly, these violent acts are not iso- Saharan Africa. against domestic violence and contrib- lated instances. Rather, they are indic- Sub-Saharan Africa is the only re- uting to decision-making in their com- ative of the violence occurring against gion in which women are infected with munities. women in many conflict zones. Experts the virus at a higher rate than men. In Afghanistan, women are finally note that women and girls are most af- UNAIDS, the United Nations Program back in school. The new Afghan Con- fected by violence, economic insta- on HIV/AIDS, reports that women stitution, approved on January 4, 2004, bility, and displacement associated make up an estimated 58 percent of the provides equal rights and duties under

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00045 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2992 CONGRESSIONAL RECORD — SENATE March 23, 2004 the law to women and includes special Unfortunately, violence against European Commission will hand down provisions to encourage women’s ac- women is still all too prevalent in our a formal decision finding that Micro- cess to education and government. Re- country. Domestic violence is the lead- soft is in violation of European Union storing human rights, and, in par- ing cause of injury among women of antitrust laws. ticular, women’s rights, is key to Af- child-bearing age. One out of every six By imposing harsh, unprecedented ghanistan’s successful reconstruction American women have been victims of penalties upon Microsoft, the Commis- and transition to democracy. a rape or an attempted rape. Many sion has extended its view of competi- Women of all cultures are being rec- rapes go unreported, and more than tion and regulation beyond Europe and ognized on an international stage for half of the women attacked know their onto the United States—to the det- their contributions. Notably, Shiri assailant. We must continue to ade- riment of U.S. laws, industry and con- Edadi won the 2003 Nobel Peace Prize quately fund state and local programs, sumers. for her efforts to promote democracy including support shelters for women For many years, the European Union and human rights in Iran, particularly suffering from violent abuse in their and its member states have criticized for women and children. homes. These safe havens deserve the United States for adopting laws The U.S. Senate can work toward and regulations that, in the view of Eu- strong support and funding for the in- protecting women’s rights and improv- ropean policymakers, have had an valuable work they provide for women ing the status of women domestically extraterritorial reach. The European and communities around the country. and internationally by acting upon the Commission in particular has consist- As we honor women and celebrate United Nations Convention on the ently urged the United States to en- their accomplishments and contribu- Elimination of Discrimination against sure that its legal determinations do tions, we must recognize that there is Women, or CEDAW. CEDAW is a com- not intrude into European affairs. We still much more to be done in the prehensive treaty on women’s human now have a clear example of the Euro- struggle for gender equity. Discrimina- rights addressing almost all forms of pean Union not practicing what they discrimination in areas such as edu- tion and violence against women con- preach. cation, employment, marriage and tinue to exist at home and abroad. The If the Commission rules that Micro- family, health care, politics and law. It United States and the rest of the inter- soft is in violation of European Union has been over two decades since the national community must reaffirm antitrust laws, it will undercut the set- United States signed this treaty, and it their commitment to promote gender tlement that was so carefully and still awaits consideration before the equality and human rights around the painstakingly crafted with Microsoft Senate. Once again, I urge the Com- world. by the U.S. Department of Justice and mittee on Foreign Relations to take up f several state antitrust authorities. this treaty and allow the Senate the LOCAL LAW ENFORCEMENT ACT There can be no question that the U.S. opportunity to offer its advice and con- OF 2003 Government was entitled to take the sent on this important convention. lead in this matter—Microsoft is a U.S. International Women’s Day cele- Mr. SMITH. Mr. President, I rise company, many if not all of the com- brates the progress women have made today to speak about the need for hate plaining companies in the EU case are in the face of adversity and pays trib- crimes legislation. On May 1, 2003, Sen- American, and all of the relevant de- ute to women fighting against dis- ator KENNEDY and I introduced the sign decisions took place here. I would crimination and other injustices. This Local Law Enforcement Enhancement hope that if the Commission were cog- year, Congress recognized Dorothy Act, a bill that would add new cat- nizant of America’s legitimate inter- Height for her tremendous work for egories to current hate crimes law, ests in this matter, it would act in a women’s rights. Ms. Height, who sending a signal that violence of any manner that complemented the U.S. fought against racism and violence to- kind is unacceptable in our society. settlement. I fear the Commission has ward African Americans, also battled In Stafford, VA, Thomas Rivers selected a path that places its resolu- for women’s full and equal employ- heard that another boy thought he was tion of this case in direct conflict with ment, increased educational opportuni- cute. Rivers responded by shouldering ours. ties, and institutions for women in the the classmate in hallways at school, This is not the only example of the United States. This year, she was shouting slurs and spitting on him. The Commission’s overreaching in this awarded a congressional gold medal for next year, 18-year-old Rivers attacked case. In recent negotiations with her contributions to our nation. the boy by bashing him in the back of Microsoft, the European Commission Women have made tremendous the head with a metal pole, nearly kill- demanded that Microsoft agree to en- strides in the last century. In the ing him. sure that computer manufacturers who United States, more and more women I believe that Government’s first sell pre-installed versions of Windows are attending college and earning post- duty is to defend its citizens, to defend also install three competing media graduate degrees. Worldwide, women them against the harms that come out players—an obligation that the Com- are becoming increasingly active in the of hate. The Local Law Enforcement mission insisted on imposing not just political process—more women are Enhancement Act is a symbol that can within the EU, but globally. In spite of being elected to office and appointed to become substance. I believe that by its objections to these requirements, positions of power than ever before. In passing this legislation and changing Microsoft agreed to the Commission’s the year 2000, 11 countries were led by current law, we can change hearts and approach in order to reach a settle- women. minds as well. ment. I understand the Commission While I recognize that women in the f proposes to impose a fine of over $610 U.S. continue to make great advances, million on Microsoft—higher than any THE EUROPEAN COMMISSION AND work remains to narrow the wage dis- fine in the Commission’s history. It has MICROSOFT parity between men and women. Al- been suggested that the amount of this though some progress has been made in Mr. ALLEN. Mr. President, I rise to fine was based not only on Microsoft’s narrowing the gender wage-gap since address the European Commission’s conduct in the EU, but in the United Congress enacted the Equal Pay Act in antitrust action against Microsoft. It States and elsewhere as well. One can 1963, unfair wage disparities continue. I is my understanding that antitrust au- only conclude that the Commission am proud to support legislative efforts thorities for the European Union mem- was not satisfied with how U.S. anti- to correct his discrepancy. In addition, ber nations have given European Com- trust authorities and courts resolved I encourage the Senate to consider leg- petition Commissioner Mario Monti the case against Microsoft, and there- islation to reauthorize the TANF pro- their unanimous backing for a formal fore decided to act as a kind of supra- gram. I believe that any welfare reau- commission finding that Microsoft national competition authority by thorization bill that passes the Senate abused its market share of its Windows fining Microsoft for its conduct world- should help to ensure that we are not operating system for personal com- wide. just reducing the welfare rolls, but are puters to leverage its way into related The Commission’s proposed ruling, as also helping current and former TANF markets for networking and multi- well as its negotiation tactics, is un- recipients break the cycle of poverty. media software. It is expected that the precedented in its scope. By proposing

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00046 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2993 to fine Microsoft for purported anti- Enabling veterans to continue their plishments include being named to the competitive conduct and injuries in the education is in the best tradition of our OIA First-team and State Second-team United States, the European Commis- country. that same year. In addition to her suc- sion is directly challenging the ade- These are very difficult days in our cess on the field, Natasha also excelled quacy of the United States’ own anti- history. As our service men and women in the classroom and was an honor stu- trust laws, including the settlement return to civilian life, education can dent. As one of the most highly re- that Microsoft and U.S. authorities often have an essential and prominent cruited female athletes in the State, reached in the U.S. proceedings. In role in their futures, and in the Na- Natasha decided to stay and pursue her fact, the obligations proposed to be im- tion’s future too. Veterans Upward athletic endeavors at the University of posed on Microsoft by the Commission Bound programs are an important part Hawaii at Manoa. are precisely the type that the U.S. of a nationwide grassroots effort to en- As a forward on the soccer field, District Court and the U.S. Depart- able our veterans to improve their own Natasha is known for her explosive ment of Justice rejected as under- lives and continue to keep our Nation speed and skill when evading defenders mining consumer welfare. strong in many different ways. and scoring goals. During her freshman It is incumbent on the Departments The talented professionals who carry year with the UH Wahine Rainbow soc- of State and Justice to stand up not out these programs so well deserve our cer team, she started 16 of the 17 games only for an important American com- gratitude. On this special anniversary, she appeared in and broke eight school pany but more importantly for legiti- I commend them for all they do so well records. Natasha was named the 2002 mate U.S. jurisdiction over alleged to make college a reality for our vet- Western Athletic Conference (WAC) anticompetitive behavior in the United erans.∑ freshman of the year and WAC player of the year, and captured all-WAC first States. The U.S. and the EU are sig- f natories to a 1991 comity agreement on team honors. As a 2002 UH Scholar ath- UNIVERSITY OF HAWAII WAHINE lete, she was also selected for the Soc- antitrust issues which requires that SOCCER PLAYER NATASHA KAI one government defer to the other if cer Buzz freshman All-West region first ∑ the principal issues being investigated Mr. AKAKA. Mr. President, It is with team and All-American third team. The freshman scored two hat tricks involve companies of one of the par- great pride that I rise to recognize against Tulsa and Boise State during ties. Here, the EU is investigating a Natasha Kai of Kahuku, HI, for her ex- conference play and was named WAC U.S. company based on complaints traordinary athletic achievements. As Offensive Player of the Week three from other U.S. companies. If the U.S. a forward for the University of Hawaii times. Last season as a sophomore, Government does not make a clear and Rainbow Wahine soccer team, Natasha Natasha led the Nation in scoring with strong statement objecting to the EU’s was recently named to the 2004 Wom- 29 goals and again received her second extraterritorial approach, we will lose en’s Under 21 National Soccer team. WAC player of the year and All-Amer- influence and credibility for years to This achievement marks the first time ican honors. With the help of this come to the detriment of all U.S. in- any female athlete from the State of skilled athlete, UH won a record 13 dustry, as well as to U.S. consumers. Hawaii has acquired a position on this prestigious, nationally recognized matches and secured its first con- f team. After attending two training ference title in 2003. ADDITIONAL STATEMENTS camps within the last month, Natasha The athletic accolades of Natasha competed amongst 40 of the country’s speak volumes of her character, love of top female athletes to earn a coveted the sport of soccer, and dedication to 25TH ANNIVERSARY OF VETERANS spot on the national team. the game. I am confident that all the UPWARD BOUND The national team is currently in people of Hawaii, particularly her fam- ∑ Mr. KENNEDY. Mr. President, it is a China and competing in a tournament ily and friends, take great pride in her privilege to take this opportunity to with the hopes of making it to the 2004 great accomplishments. I wish Natasha commend the Veterans Upward Bound Nordic Cup, the premier tournament to and her teammates the best of luck Program and all those associated with be held in Iceland later this summer. A while competing in the tournament it on its 25th anniversary. few days ago, the national team se- and a safe journey home. Win or lose, I Hundreds of students at the Univer- cured its first exhibition match win extend the support of the country and sity of Massachusetts have benefited triumphing over the Shanghai SVA especially the support of all Hawaii. I from the program and gone on to earn team. Natasha made her international thank Natasha for serving as a role bachelors, masters, and doctorate de- debut during that match and scored model and for reminding us all that grees. These veterans are using the the first goal within the first three through hard work and determination, even what seems like a distant dream same enthusiasm and drive that made minutes of play. The national team is can be realized.∑ them exemplary members of our off to a successful start and has two Armed Forces, and are now vital forces more exhibition matches before they f for positive change in their commu- return home. NATIONAL PUBLIC SAFETY nities. I am doubly proud that Natasha hails TELECOMMUNICATORS WEEK, from Kahuku High School, which is one For many years, the TRIO programs ∑ Mrs. BOXER. Mr. President, I take have been available to help more young of the schools where I first entered the this opportunity to recognize National men and women in our society to un- classroom as a teacher. As a multi-tal- Public Safety Telecommunicators derstand that college is within their ented athlete at Kahuku, Natasha re- Week. reach. The Veterans Upward Bound ceived four varsity letters each in soc- In 1981, a 9–1–1 public safety dis- Program does the same for veterans. It cer and track, as well as two in patcher from the Contra Costa County provides a bridge to help those who volleyball, and one each in basketball Sheriff’s Office, in my home State of have served our country so well make and cross country. Natasha was a two- California, first had the idea to des- the transition into college. Veterans time Oahu Interscholastic Association ignate one week each year to honor the learn how to use the benefits available (OIA) All-Star soccer player, as well as work of public safety telecommunica- from the Veterans Administration and a 2001 All-State player of the year. tors. In 1991, Congress issued a formal from veterans’ associations and State During her senior season, she led the proclamation acknowledging National and local veterans programs to obtain Red Raider soccer team to a OIA divi- Public Safety Telecommunicators the information and skills they need to sion title win, a first for the school. Week. In 1994, National Public Safety qualify for college. Every year, nearly Natasha earned State track and field Telecommunicators Week became a 5,000 veterans are served by this im- honors in the 110 meter hurdles, high permanent, federally designated week, pressive program and go on to college. jump, and long jump, and was the two- observed annually during the second Many of us share a strong commit- time record holder and State champion week of April. ment to the belief that each of us can in the 300 meter hurdles. In 2001, as a I commend our Nation’s public safety make a difference in improving the volleyball player she was voted to the telecommunicators, usually the first world around us, and all of us must try. OIA-East first team. Basketball accom- and most critical contact our Nation’s

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00047 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2994 CONGRESSIONAL RECORD — SENATE March 23, 2004 citizens have when they need emer- utilized his collaborative relationships, Mrs. Kurz began her career with the gency services. Over 500,000 9–1–1 calls both nationally and internationally, to Department of Veterans Affairs in No- are made every day across the country. strengthen his department’s curricula vember 1965 as a research chemist in Telecommunicators provide the best and lectures and thereby provided a renal hypertension research at the St. emergency assistance they can to each military and academically unique envi- Louis VA Medical Center. of the callers. People depend on the ronment for the over 3,400 USUHS med- During her illustrious government skill, expertise and commitment of ical school graduates and thousands career, Mrs. Kurz was the administra- telecommunicators who help save lives more future uniformed medical stu- tive assistant to the Associate Director by responding to emergency calls, dis- dents. in Hines, IL; Associate Director of the patching emergency professionals and Dr. Rich can take pride in having de- VA Medical Center in Tomah, WI; As- equipment and providing support to veloped an academically sound cur- sociate Deputy Regional Director for citizens in distress. Telecommunica- riculum, recruiting competent faculty the Northeastern Region in Albany, tors also serve as the vital link for our with military unique expertise, meet- NY; Associate Director of the VA Med- police officers, sheriffs and firefighters ing the initial and on-going accredita- ical Center in Marion, IL; Director of by providing them with information tion requirements for the School of Construction Project Coordination and and insuring their safety. Medicine, and creating a sound na- Budget at VA Headquarters in Wash- Public safety telecommunicators tional and global reputation for the ington, DC; and Director of the VA have a tremendous responsibility to re- university. His efforts have aided the Medical Center in Marion, IL. She left School of Medicine in attaining full ac- main calm while handling stressful sit- the Marion VA Medical Center to ac- creditation and he has helped shape uations. Amid panic and fear from a cept the position of Director at the St. USUHS graduates into what the Sec- caller, public safety telecommunica- Louis VA Medical Center. tors obtain the necessary information, retary of Defense has dubbed ‘‘the backbone of the Military Health Sys- Mrs. Kurz served as the Director of make critical decisions and quickly the St. Louis VA for 5 years and 8 dispatch the assistance that saves lives tem.’’ Indeed, his efforts are reflected in the continued success of USUHS and months, a term spanning from May and property. Although they may be 1998 thru January 2004. The St. Louis anonymous to callers, each of these its graduates and in the continued health of the millions of uniformed VA is one of the largest and most com- men and women deserve praise and rec- plex facilities in the nation and it has ognition for their hard work, not only personnel and their families who have benefited from his extraordinary exper- steadily improved under her guidance. during National Public Safety Tele- Mrs. Kurz provided leadership for communicators Week but every day. tise. During the course of his career, Dr. this dual division hospital by facili- I am proud of the heroic work of pub- Rich has published over 300 manu- tating care for more than 36,000 vet- lic safety telecommunicators, and I scripts and authored or co-authored erans annually. The primary service offer my sincerest thanks for their five books. Among these is the inter- area of metropolitan St. Louis includes compassion and professionalism.∑ nationally recognized ‘‘Vascular Trau- 9 counties in Missouri and 14 counties f ma.’’ He has served on 10 editorial in West Central Illinois. During her TRIBUTE TO NORMAN M. RICH, boards, including the major peer-re- tenure in St. Louis she led a care team M.D. viewed journals focusing upon his spe- of 1900 full time employee equivalents. ∑ Mr. SARBANES. Mr. President, cialty. His recent awards include: the Mrs. Kurz’s stellar career includes a today I pay tribute to Dr. Norman M. 2003 National Safety Council Surgeons’ number of achievements. Rich, M.D., Professor and Chairman, Award for Distinguished Service in As a leader in the field of health care Department of Surgery, F. Edward Safety presented by the American Col- management she served as a mentor for He´bert School of Medicine at the Uni- lege of Surgeons, the American Asso- executive career field director trainees formed Services University of the ciation for the Surgery of Trauma, and and VHA Health Care management Health Sciences—USUHS. This week, the National Safety Council; recogni- trainees. She also achieved the status tion as a Citizen & Apothecary of Lon- on March 26, 2004, Dr. Rich will mark of diplomat in the American College of don in 2001; and, the J.E. Wallace Ster- the end of his 44-year career in Federal Healthcare Executives. ling Lifetime Alumni Achievement service. Mrs. Kurz was listed as one of the top Dr. Rich’s Federal career began in Award from the Stanford Medical female directors in the Missouri Hos- the U.S. Army where he served for 20 Alumni Association. pital Association Newsletter, Summer Our Nation can be proud of Dr. Rich’s years as a career officer and physician 2003 Edition, and in Who’s Who Among long and distinguished career of service from 1960 through 1980. As a military Top Executives in 1998–1999. In 1999, and I am pleased to join with his fam- during her tenure as Director of the St. surgeon with academic interests in the ily, friends and colleagues in express- management of injured patients and Louis VA Medical Center, she was rec- ing appreciation for the significant ognized with the Vice-Presidential vascular surgery, he earned inter- contributions he has made to the national recognition; his military ‘‘Hammer and Scissors’’ award for her health of the uniformed services and efforts in piloting the first Department awards include the Legion of Merit, the that of all citizens. I certainly wish Bronze Star, the Meritorious Service of Veterans Affairs Canteen Integra- him continued success and happiness in tion. Award and Vietnam Medals. the years to come.∑ Dr. Rich was appointed as the Found- During her time at the St. Louis VA, ing Chairman of the USUHS School of f Mrs. Kurz worked tirelessly to improve Medicine’s Department of Surgery in SIEGLINDE KURZ veterans’ access to care and she opened August of 1977 and held that position ∑ Mr. BOND. Mr. President, today I three new health clinics. She also sup- until October of 2002. For the past 16 would like to commend Mrs. Sieglinde ported her employees by providing edu- months, he has continued to serve as Kurz on her outstanding career as a cational opportunities for mid-level an advisor and mentor to the Acting public servant. Mrs. Kurz received her managers through programs such as Department Chairman. Bachelor of Arts degree from mini-MBA. She promoted an open pol- As Founding Chairman, Dr. Rich was Fontbonne College, in St. Louis, MO in icy that allowed staff at all levels to faced with the difficult task of estab- 1961 and her Masters Degree in Health communicate through employee and lishing a Department of Surgery at a Care Management from Northwestern supervisory forums. university where the campus had not University, in Evanston, IL in 1976. After 37 years of government service, yet been constructed. From the outset, I have worked with Mrs. Kurz on nu- Mrs. Kurz retired on January 31, 2004, Dr. Rich and his considerable reputa- merous occasions and I have always having devoted countless hours to the tion gave credibility to the newly es- been impressed by her consummate welfare of American Veterans. On be- tablished Uniformed Services Univer- professionalism. Her selfless attitude half of all veterans in the St. Louis sity of the Health Sciences and enabled and intense work ethic have consist- area, I would like to thank her for her the recruitment of a competent faculty ently led her to do great things within tireless efforts and wish her well in her for its new Department of Surgery. He the field of veterans’ health care. retirement.∑

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00048 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2995 IN RECOGNITION OF DAN TERRY ticide Tolerances Fees; Suspension of Collec- a rule entitled ‘‘Endangered and Threatened ∑ tion’’ (FRL#7349–7) received on March 16, Wildlife and Plants; Designation of Critical Mrs. BOXER. Mr. President, I today 2004; to the Committee on Agriculture, Nu- Habitat for Cirsium Loncholepis (La honor of Dan Terry, who will be retir- trition, and Forestry. Graciosa Thistle)’’ (RIN1018–AG88) received ing this May after 31 years of service as EC–6709. A communication from the Under on March 15, 2004; to the Committee on En- president of the California Professional Secretary of Defense, Comptroller, Depart- ergy and Natural Resources. Firefighters, CPF, a statewide organi- ment of the Defense, transmitting, pursuant EC–6721. A communication from the Dep- zation representing more than 30,000 to law, a report relative to the assessment of uty Associate Administrator, Environmental career firefighters in over 150 affiliated desktop computer management services; to Protection Agency, transmitting, pursuant the Committee on Armed Services. to law, the report of a rule entitled ‘‘Revi- local unions. EC–6710. A communication from the Gen- sions to the California State Implementation America’s firefighters are the heroes eral Counsel, Department of Defense, trans- Plan, South Coast Air Quality Management of our times. We know that they are al- mitting, pursuant to law, the National De- District’’ (FRL#7628–3) received on March 16, ways going to be there protecting us fense Authorization Bill for Fiscal Year 2005; 2004; to the Committee on Environment and through any challenge. to the Committee on Armed Services. Public Works. For more than three decades, as fire- EC–6711. A communication from the Assist- EC–6722. A communication from the Dep- fighters have protected us, Dan Terry ant Secretary, Department of the Army, De- uty Associate Administrator, Environmental partment Defense, transmitting, pursuant to Protection Agency, transmitting, pursuant has been protecting them. He has law, a report relative to a project for eco- to law, the report of a rule entitled ‘‘Ap- fought for safer working conditions and system restoration for Villas and Vicinity, proval and Promulgation of Air Quality Im- worked to increase firefighter edu- Cape May County, New Jersey; to the Com- plementation Plans; Maine; Approval of cation, training, and staffing. mittee on Armed Services. State Implementation Plan Revision to Thanks largely to his extraordinary EC–6712. A communication from the Sec- PM10 PSD Increments’’ (FRL#7625–3) re- efforts, California firefighters are now retary of Agriculture, transmitting, pursu- ceived on March 16, 2004; to the Committee covered by statewide legislation that ant to law, a report of a violation of the on Environment and Public Works. EC–6723. A communication from the Dep- guarantees binding interest arbitra- Antideficiency Act within the Research and Education account and the Extension Activi- uty Associate Administrator, Environmental tion, enhanced retirement benefits, ties account; to the Committee on Appro- Protection Agency, transmitting, pursuant survivor benefits, and firefighter ill- priations. to law, the report of a rule entitled ‘‘Ap- ness presumption laws. Dan Terry has EC–6713. A communication from the Archi- proval and Promulgation of Air Quality Im- also fought to protect firefighters’ tect of the Capitol, transmitting, pursuant plementation Plans: Kentucky Update to right to earn overtime pay as well as to law, a report of all expenditures during Materials Incorporated by Reference; Tech- disability and workers’ compensation the period April 1, 2003 through September nical Correction’’ (FRL#7636–9) received on benefits. 30, 2003 from moneys appropriated to the Ar- March 16, 2004; to the Committee on Environ- chitect; to the Committee on Appropria- ment and Public Works. A retired fire captain with more than tions. EC–6724. A communication from the Dep- 20 years of service on the front lines, EC–6714. A communication from the Sec- uty Associate Administrator, Environmental Dan Terry was elected CPF president retary of the Treasury, transmitting, pursu- Protection Agency, transmitting, pursuant in May 1973. After 31 years in office, he ant to law, a report required by Executive to law, the report of a rule entitled ‘‘Ap- remains passionate and dedicated to Order 12957 relative to the national emer- proval and Promulgation of Implementation the cause of improving the lives of gency with respect to Iran; to the Committee Plans; Indiana’’ (FRL#7626–7) received on California firefighters and their fami- on Banking, Housing, and Urban Affairs. March 16, 2004; to the Committee on Environ- EC–6715. A communication from the Acting ment and Public Works. lies. Even after leaving the presidency Director, Office of Sustainable Fisheries, Na- EC–6725. A communication from the Dep- of CPF, he will remain active in the or- tional Marine Fisheries Service, transmit- uty Associate Administrator, Environmental ganization and in the service of Cali- ting, pursuant to law, the report of a rule en- Protection Agency, transmitting, pursuant fornia families and the courageous fire- titled ‘‘Prohibiting Directed Fishing for Pa- to law, the report of a rule entitled ‘‘Commu- fighters who protect them every day. cific Cod by Vessels Catching Pacific Cod for nity-Based Urban and Peri-Urban Drinking On behalf of the people of California, Processing by the Inshore Component in Water Capacity-Building in Africa’’ received I express our profound gratitude and Western Regulatory Area of the Gulf of Alas- on March 16, 2004; to the Committee on Envi- ka’’; to the Committee on Commerce, ronment and Public Works. admiration to Dan Terry for his out- EC–6726. A communication from the Dep- ∑ Science, and Transportation. standing service to our State. EC–6716. A communication from the Gen- uty Associate Administrator, Environmental f eral Counsel, Consumer Product Safety Com- Protection Agency, transmitting, pursuant mission, transmitting, pursuant to law, the to law, the report of a rule entitled ‘‘Na- MESSAGES FROM THE PRESIDENT report of a rule entitled ‘‘Metal-Cored tional Emission Standards for Hazardous Air Messages from the President of the Candlewicks Containing Lead and Candles Pollutants: Plywood and Composite Wood United States were communicated to with Such Wicks’’ (68 FR 19142) received on Products; Effluent Limitations Guidelines and Standards for the Timber Products the Senate by Ms. Evans, one of his March 16, 2004; to the Committee on Com- merce, Science, and Transportation. Point Source Category List of Hazardous Air secretaries. EC–6717. A communication from the Sec- Pollutants; Lesser Quantity Designations, f retary of Homeland Security, transmitting, Source Category List’’ (FRL#7634–1) received pursuant to law, a report relative to the on March 16, 2004; to the Committee on Envi- EXECUTIVE MESSAGES REFERRED United States Coast Guard’s implementa- ronment and Public Works. As in executive session the Presiding tions of regulations under Public Law 104–55; f Officer laid before the Senate messages to the Committee on Commerce, Science, and Transportation. INTRODUCTION OF BILLS AND from the President of the United EC–6718. A communication from the Under JOINT RESOLUTIONS States submitting sundry nominations Secretary for Commerce and Industry, Bu- The following bills and joint resolu- and a withdrawal which were referred reau of Industry and Security, Department tions were introduced, read the first to the appropriate committees. of Commerce, transmitting, pursuant to law, and second times by unanimous con- (The nominations received today are the report of a rule entitled ‘‘Export Admin- sent, and referred as indicated: printed at the end of the Senate pro- istration Regulations: Penalty Guidance in ceedings.) the Settlement of Administrative Enforce- By Mr. DASCHLE: ment Cases’’ (RIN0694–AC92) received on S. 2223. A bill to expand the list of entities f March 16, 2004; to the Committee on Com- eligible to establish and maintain a qualified merce, Science, and Transportation. tuition program under section 529 of the In- EXECUTIVE AND OTHER EC–6719. A communication from the Ad- ternal Revenue Code of 1986; to the Com- COMMUNICATIONS ministrator, Office of Information and Regu- mittee on Finance. The following communications were latory Affairs, Executive Office of the Presi- By Mr. BROWNBACK (for himself and laid before the Senate, together with dent, transmitting, pursuant to law, a report Mr. ROBERTS): relative to the Federal Government’s use of S. 2224. A bill to establish the Bleeding accompanying papers, reports, and doc- voluntary consensus standards; to the Com- Kansas and the Enduring Struggle for Free- uments, and were referred as indicated: mittee on Commerce, Science, and Transpor- dom National Heritage Area, and for other EC–6708. A communication from the Dep- tation. purposes; to the Committee on Energy and uty Associate Administrator, Environmental EC–6720. A communication from the Assist- Natural Resources. Protection Agency, transmitting, pursuant ant Secretary for Fish, Wildlife, and Parks, By Mr. BURNS (for himself, Mr. BAU- to law, the report of a rule entitled ‘‘Pes- transmitting, pursuant to law, the report of CUS, and Mr. CAMPBELL):

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00049 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2996 CONGRESSIONAL RECORD — SENATE March 23, 2004 S. 2225. A bill to authorize an exchange of at Hispanic-serving institutions, and (Mr. FEINGOLD) was added as a cospon- mineral rights by the Secretary of the Inte- for other purposes. sor of S. 2141, a bill to amend the Farm rior in the State of Montana; to the Com- S. 1645 Security and Rural Investment Act of mittee on Energy and Natural Resources. 2002 to enhance the ability to produce By Mr. CORZINE: At the request of Mr. CRAIG, the S. 2226. A bill to extend the period for name of the Senator from Connecticut fruits and vegetables on soybean base COBRA coverage for recipients of trade ad- (Mr. DODD) was added as a cosponsor of acres. justment assistance; to the Committee on S. 1645, a bill to provide for the adjust- S. 2157 Health, Education, Labor, and Pensions. ment of status of certain foreign agri- At the request of Mr. BAUCUS, the By Mr. BIDEN (for himself, Mr. HOL- cultural workers, to amend the Immi- name of the Senator from Minnesota LINGS, Mrs. MURRAY, Mr. SMITH, and gration and Nationality Act to reform (Mr. DAYTON) was added as a cosponsor Mr. ALLEN): the H–2A worker program under that S. 2227. A bill to prevent and punish coun- of S. 2157, a bill to amend the Trade terfeiting and copyright piracy, and for Act, to provide a stable, legal agricul- Act of 1974 to extend the trade adjust- other purposes; to the Committee on the Ju- tural workforce, to extend basic legal ment assistance program to the serv- diciary. protections and better working condi- ices sector, and for other purposes. By Mr. ALLEN: tions to more workers, and for other S. 2158 S. 2228. A bill to authorize the issuance of purposes. At the request of Ms. COLLINS, the a certificate of documentation with appro- S. 1786 names of the Senator from Tennessee priate endorsement for employment in the At the request of Mr. ALEXANDER, the (Mr. ALEXANDER) and the Senator from coastwise trade and fisheries for the vessel name of the Senator from Maine (Ms. CROYANCE; to the Committee on Com- Kentucky (Mr. BUNNING) were added as SNOWE) was added as a cosponsor of S. merce, Science, and Transportation. cosponsors of S. 2158, a bill to amend 1786, a bill to revise and extend the f the Public Health Service Act to in- Community Services Block Grant Act, crease the supply of pancreatic islet SUBMISSION OF CONCURRENT AND the Low-Income Home Energy Assist- cells for research, and to provide for SENATE RESOLUTIONS ance Act of 1981, and the Assets for better coordination of Federal efforts Independence Act. The following concurrent resolutions and information on islet cell transplan- S. 1944 and Senate resolutions were read, and tation. referred (or acted upon), as indicated: At the request of Mr. ENSIGN, the S. 2165 By Mr. FRIST (for himself and Mr. name of the Senator from Georgia (Mr. At the request of Mr. REED, the name DASCHLE): CHAMBLISS) was added as a cosponsor of S. Res. 323. A resolution to authorize legal S. 1944, a bill to enhance peace between of the Senator from New York (Mr. representation in United States of America the Israelis and Palestinians. SCHUMER) was added as a cosponsor of v. Elena Ruth Sassower; considered and S. 1992 S. 2165, a bill to specify the end agreed to. At the request of Mr. KENNEDY, the strength for active duty personnel of f name of the Senator from California the Army as of September 30, 2005. ADDITIONAL COSPONSORS (Mrs. BOXER) was added as a cosponsor S. 2182 of S. 1992, a bill to amend the Medicare At the request of Mr. NELSON of Ne- S. 595 Prescription Drug, Improvement, and braska, the name of the Senator from At the request of Mr. HATCH, the Modernization Act of 2003 to eliminate Nebraska (Mr. HAGEL) was added as a name of the Senator from Delaware privatization of the medicare program, cosponsor of S. 2182, a bill to amend the (Mr. BIDEN) was added as a cosponsor of to improve the medicare prescription Farm Security and Rural Investment S. 595, a bill to amend the Internal drug benefit, to repeal health savings Act of 2002 to permit the planting of Revenue Code of 1986 to repeal the re- accounts, and for other purposes. chicory on base acres. quired use of certain principal repay- S. 1998 S. 2193 ments on mortgage subsidy bond At the request of Mr. BINGAMAN, the At the request of Ms. CANTWELL, her financings to redeem bonds, to modify name of the Senator from Utah (Mr. the purchase price limitation under name was added as a cosponsor of S. HATCH) was added as a cosponsor of S. mortgage subsidy bond rules based on 2193, a bill to improve small business 1998, a bill to amend title 49, United loan programs, and for other purposes. median family income, and for other States Code, to preserve the essential purposes. At the request of Ms. SNOWE, the air service program. name of the Senator from Kansas (Mr. S. 641 S. 2054 ROBERTS) was added as a cosponsor of At the request of Mrs. LINCOLN, the At the request of Mr. JOHNSON, the S. 2193, supra. name of the Senator from Washington name of the Senator from Wyoming At the request of Mr. LEVIN, his name (Ms. CANTWELL) was added as a cospon- (Mr. THOMAS) was added as a cosponsor was added as a cosponsor of S. 2193, sor of S. 641, a bill to amend title 10, of S. 2054, a bill to require the Federal supra. United States Code, to support the forfeiture funds be used, in part, to S. 2194 Federal Excess Personal Property pro- clean up methamphetamine labora- gram of the Forest Service by making tories. At the request of Mr. CORNYN, the name of the Senator from Georgia (Mr. it a priority of the Department of De- S. 2059 CHAMBLISS) was added as a cosponsor of fense to transfer to the Forest Service At the request of Mr. FITZGERALD, S. 2194, a bill to amend part D of title excess personal property of the Depart- the name of the Senator from Illinois IV of the Social Security Act to im- ment of Defense that is suitable to be (Mr. DURBIN) was added as a cosponsor prove the collection of child support, loaned to rural fire departments . of S. 2059, a bill to improve the govern- and for other purposes. S. 976 ance and regulation of mutual funds At the request of Mr. WARNER, the under the securities laws, and for other S. 2208 names of the Senator from Arkansas purposes. At the request of Mr. ROCKEFELLER, (Mr. PRYOR) and the Senator from S. 2076 the name of the Senator from Indiana Georgia (Mr. MILLER) were added as co- At the request of Mr. BAUCUS, the (Mr. BAYH) was added as a cosponsor of sponsors of S. 976, a bill to provide for name of the Senator from Oregon (Mr. S. 2208, a bill to amend the Surface the issuance of a coin to commemorate WYDEN) was added as a cosponsor of S. Mining Control and Reclamation Act of the 400th anniversary of the James- 2076, a bill to amend title XI of the So- 1977 to reduce the amounts of reclama- town settlement. cial Security Act to provide direct con- tion fees, to modify requirements re- S. 1190 gressional access to the office of the lating to transfers from the Abandoned At the request of Mr. BINGAMAN, the Chief Actuary in the Centers for Medi- Mine Reclamation Fund, and for other name of the Senator from New York care & Medicaid Services. purposes. (Mrs. CLINTON) was added as a cospon- S. 2141 S. CON. RES. 14 sor of S. 1190, a bill to expand and en- At the request of Mr. LUGAR, the At the request of Mr. SMITH, the hance postbaccalaureate opportunities name of the Senator from Wisconsin name of the Senator from Arkansas

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00050 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2997 (Mrs. LINCOLN) was added as a cospon- (Mr. PRYOR) and the Senator from Ar- tion program established after the date of sor of S. Con. Res. 14, a concurrent res- kansas (Mrs. LINCOLN) were added as the enactment of this Act. olution expressing the sense of Con- cosponsors of amendment No. 2873 in- gress regarding the education cur- tended to be proposed to S. 1637, a bill By Mr. BROWNBACK (for himself riculum in the Kingdom of Saudi Ara- to amend the Internal Revenue Code of and Mr. ROBERTS): bia. 1986 to comply with the World Trade S. 2224. A bill to establish the Bleed- ing Kansas and the Enduring Struggle S. CON. RES. 81 Organization rulings on the FSC/ETI for Freedom National Heritage Area, At the request of Mrs. FEINSTEIN, the benefit in a manner that preserves jobs and for other purposes; to the Com- names of the Senator from Illinois (Mr. and production activities in the United mittee on Energy and Natural Re- DURBIN), the Senator from New Hamp- States, to reform and simplify the sources. shire (Mr. SUNUNU) and the Senator international taxation rules of the Mr. BROWNBACK. Mr. President, the from Arkansas (Mrs. LINCOLN) were United States, and for other purposes. great story of Kansas can be summed added as cosponsors of S. Con. Res. 81, AMENDMENT NO. 2880 up in the State motto, ‘‘Ad Astra per a concurrent resolution expressing the At the request of Mr. DURBIN, the Aspera,’’ to the stars through difficul- deep concern of Congress regarding the names of the Senator from Washington ties. Though only a short phrase com- failure of the Islamic Republic of Iran (Mrs. MURRAY) and the Senator from prised of four words, the meaning and to adhere to its obligations under a Nevada (Mr. REID) were added as co- passion behind the Kansas State motto safeguards agreement with the Inter- sponsors of amendment No. 2880 in- are as profound as they are descriptive national Atomic Energy Agency and tended to be proposed to S. 1637, a bill of a State that though smaller than the engagement by Iran in activities to amend the Internal Revenue Code of some, was a catalyst for racial equality that appear to be designed to develop 1986 to comply with the World Trade in this Nation. nuclear weapons. Organization rulings on the FSC/ETI From inception, Kansas was born in S. RES. 168 benefit in a manner that preserves jobs controversy—a controversy that helped At the request of Mr. CAMPBELL, the and production activities in the United to shape a Nation and end the egre- names of the Senator from Arkansas States, to reform and simplify the gious practice of chattel slavery that (Mr. PRYOR) and the Senator from international taxation rules of the brutalized an entire race of individuals Delaware (Mr. CARPER) were added as United States, and for other purposes. in this country. I cannot think of a cosponsors of S. Res. 168, a resolution AMENDMENT NO. 2888 more noble or more important con- designating May 2004 as ‘‘National Mo- At the request of Mrs. HUTCHISON, the tribution provided to our Nation— torcycle Safety and Awareness names of the Senator from Texas (Mr. through arguably it was one of the Month’’. CORNYN) and the Senator from Wash- most turbulent and darkest hours of AMENDMENT NO. 2667 ington (Mrs. MURRAY) were added as our history. Without this struggle how- At the request of Mr. SMITH, the cosponsors of amendment No. 2888 in- ever, the battle to end persecution and name of the Senator from Maine (Ms. tended to be proposed to S. 1637, a bill transform our country into a symbol of COLLINS) was added as a cosponsor of to amend the Internal Revenue Code of freedom and democracy throughout the amendment No. 2667 intended to be pro- 1986 to comply with the World Trade world would not have been realized. posed to S. 1637, a bill to amend the In- Organization rulings on the FSC/ETI This year marks the sesquicentennial ternal Revenue Code of 1986 to comply benefit in a manner that preserves jobs of the signing of the Kansas-Nebraska with the World Trade Organization rul- and production activities in the United bill which repealed the Missouri com- ings on the FSC/ETI benefit in a man- States, to reform and simplify the promise, allowed States to enter into ner that preserves jobs and production international taxation rules of the the Union with or without slavery. activities in the United States, to re- United States, and for other purposes. This piece of legislation, which was form and simplify the international f passed in May 1854, set the stage for taxation rules of the United States, what is now referred to as, ‘‘Bleeding and for other purposes. STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS Kansas.’’ During this time, our State, AMENDMENT NO. 2683 then a territory, was thrown into chaos At the request of Mr. SANTORUM, the By Mr. DASCHLE: with Kansans fighting passionately to name of the Senator from South Caro- S. 2223. A bill to expand the list of en- ensure that the territory would enter lina (Mr. GRAHAM) was added as a co- tities eligible to establish and main- the Union as a free State and not con- sponsor of amendment No. 2683 in- tain a qualified tuition program under done or legalize slavery in any capac- tended to be proposed to S. 1637, a bill section 529 of the Internal Revenue ity. At the end of a very difficult and to amend the Internal Revenue Code of Code of 1986; to the Committee on Fi- bloody struggle, Kansas entered the 1986 to comply with the World Trade nance. Union as a free State and helped to Organization rulings on the FSC/ETI Mr. DASCHLE. Mr. President, I ask spark the issue of slavery on a national benefit in a manner that preserves jobs unanimous consent that the text of the level. However, Kansas’ contributions and production activities in the United bill be printed in the RECORD. to the realization of freedom in this States, to reform and simplify the There being no objection, the bill was Nation did not stop with the Kansas- international taxation rules of the ordered to be printed in the RECORD, as Nebraska Act. United States, and for other purposes. follows: Keeping true to the motto, ‘‘to the AMENDMENT NO. 2690 S. 2223 stars through difficulties.’’ Kansas At the request of Mrs. FEINSTEIN, the Be it enacted by the Senate and House of Rep- opened up her arms to a newly freed names of the Senator from Hawaii (Mr. resentatives of the United States of America in people after the Civil War ended. Many INOUYE) and the Senator from Virginia Congress assembled, African Americans looked to Kansas (Mr. ALLEN) were added as cosponsors SECTION 1. ADDITIONAL ELIGIBLE ENTITIES FOR for solace and prosperity when the of amendment No. 2690 intended to be QUALIFIED TUITION PROGRAMS. South was still an uncertain place. proposed to S. 1637, a bill to amend the (a) IN GENERAL.—For purposes of section 529 of the Internal Revenue Code of 1986, an Perhaps one of the best examples of Ad Internal Revenue Code of 1986 to com- eligible educational institution shall be Astra per Aspera was the founding of a ply with the World Trade Organization deemed to include a corporation— town in Kansas by African Americans rulings on the FSC/ETI benefit in a (1) which is a transferee corporation (with- coming to our State to begin their life manner that preserves jobs and produc- in the meaning of section 150(d)(3) of such of freedom and prosperity. tion activities in the United States, to Code) of a corporation described in section Founded in 1877, Nicodemus, which reform and simplify the international 150(d) of such Code, and was named after a legendary slave who taxation rules of the United States, (2) a majority of the outstanding stock of purchased his freedom, is the most rec- and for other purposes. which is owned by an employee stock owner- ship plan (as defined in section 4975(d)(7) of ognized historically black town in Kan- AMENDMENT NO. 2873 such Code). sas. Nicodemus was established by a At the request of Mr. THOMAS, the (b) EFFECTIVE DATE.—Subsection (a) shall group of colonists from Lexington, KY names of the Senator from Arkansas take effect with respect to any qualified tui- and grew to a population of 600 by 1879.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00051 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S2998 CONGRESSIONAL RECORD — SENATE March 23, 2004 However, Nicodemus is not the only Enduring Struggle for Freedom Na- poses of preserving, interpreting, developing, Kansas contribution that shaped a tional Heritage Area, we will ensure promoting and, making available to the pub- more tolerant Nation. Kansas was also that this magnificent legacy lives on lic the story and resources related to the one of the first States to house an Afri- and serves as a stirring reminder of the story of Bleeding Kansas and the Enduring sacrifices and triumphs that created Struggle for Freedom. can American military regiment in the (11) Territorial Kansas Heritage Alliance 1800s, the Buffalo Soldiers. this Nation—a Nation united in free- has completed a study that— The Buffalo Soldiers were, and still dom for all people. (A) describes in detail the role, operation, are, considered one of the most distin- I ask unanimous consent that the financing, and functions of Territorial Kan- guished and revered African American text of the bill be printed in the sas Heritage Alliance, the management enti- military regiments in our Nation’s his- RECORD. ty; and tory. One of those regiments, the 10th There being no objection, the bill was (B) provides adequate assurances that Ter- Cavalry, was stationed at Fort Leaven- ordered to be printed in the RECORD, as ritorial Kansas Heritage Alliance, the man- worth, KS. In July 1866, Congress follows: agement entity, is likely to have the finan- passed legislation establishing two cav- S. 2224 cial resources necessary to implement the Be it enacted by the Senate and House of Rep- management plan for the Heritage Area, in- alry and four infantry regiments that cluding resources to meet matching require- were to be solely comprised of African resentatives of the United States of America in Congress assembled, ment for grants. Americans. The mounted regiments SECTION 1. SHORT TITLE. (12) There are at least 7 National Historic were the 9th and 10th Cavalries, soon This Act may be cited as the ‘‘Bleeding Landmarks, 32 National Register properties, nicknamed ‘‘Buffalo Soldiers’’ by the Kansas National Heritage Area Act’’. 3 Kansas Register properties, and 7 prop- Cheyenne and Comanche tribes. Lt. SEC. 2. FINDINGS AND PURPOSE. erties listed on the National Underground Henry O. Flipper, the first African (a) FINDINGS.—Congress finds the fol- Railroad Network to Freedom that con- American to graduate from the United lowing: tribute to the Heritage Area as well as other States Military Academy in 1877 and (1) The Bleeding Kansas National Heritage significant properties that have not been designated at this time. commanded the 10th Calvary unit Area is a cohesive assemblage of natural, historic, cultural, and recreational resources (13) There is an interest in interpreting all where he proved that African Ameri- that— sides of the Bleeding Kansas story that re- cans possessed the quality of military (A) together represent distinctive aspects quires further work with several counties in leadership. Until the early 1890s, the of American heritage worthy of recognition, Missouri interested in joining the area. Buffalo Soldiers constituted 20 percent conservation, interpretation, and continuing (14) In 2004, the State of Kansas is com- of all cavalry forces on the American use; memorating the Sesquicentennial of the frontier. Their invaluable service on (B) are best managed through partnerships signing of the Kansas-Nebraska Act, opening the western frontier still remains one between private and public entities; the territory to settlement. (C) will build upon the Kansas rural devel- (b) PURPOSES.—The purposes of this Act of the most exemplary services per- opment policy and the new homestead act to formed by a regiment in the U.S. recognize inherent strengths of small towns are as follows: Army. and rural communities—close-knit commu- (1) To designate a region in eastern Kansas These are just a few examples of why nities, strong local business networks, and a and western Missouri containing nationally I am pleased to join with my colleague tradition of entrepreneurial creativity. important natural, historic, and cultural re- sources and recreational and educational op- from Kansas, Senator PAT ROBERTS, (2) The Bleeding Kansas National Heritage Area reflects traditions, customs, beliefs, portunities that are geographically assem- today and introduce the Bleeding Kan- bled and thematically related as areas that sas National Heritage Area Act, which folk life, or some combination thereof, that are a valuable part of the heritage of the provide unique frameworks for under- will not only serve to educate Kansans United States. standing the great and diverse character of but the Nation on the important con- (3) The Bleeding Kansas National Heritage the United States and the development of tributions—and in many cases the sac- Area provides outstanding opportunities to communities and their surroundings as the rifices—made in order to establish this conserve natural, cultural, or historic fea- Bleeding Kansas National Heritage Area. proud State. The creation of this herit- tures, or some combination thereof. (2) To strengthen, complement, and sup- age area will ensure that this legacy is (4) The Bleeding Kansas National Heritage port the Fort Scott, Brown v. Board of Edu- not only commemorated but celebrated Area provides outstanding recreational and cation, Nicodemus and Tallgrass Prairie interpretive opportunities. sites through the interpretation and con- on a national level. servation of the associated living landscapes Specifically, the Bleeding Kansas Na- (5) The Bleeding Kansas National Heritage Area has an identifiable theme, and re- outside of the boundaries of these units of tional Heritage Area Act will designate sources important to the theme retain integ- the National Park System. 24 counties in Kansas as the ‘‘Bleeding rity capable of supporting interpretation. (3) To describe the extent of Federal re- Kansas and the Enduring Struggle for (6) Residents, nonprofit organizations, sponsibilities and duties in regard to the Freedom National Heritage Area.’’ other private entities, and units of local gov- Heritage Area. Each of these counties will be eligible ernment throughout the Bleeding Kansas (4) To further collaboration and partner- to apply for the heritage area grants National Heritage Area demonstrate support ships among Federal, State, and local gov- administered by the National Park for designation of the Bleeding Kansas Na- ernments, nonprofit organizations, and the Service. tional Heritage Area as a national heritage private sector, or combinations thereof, to The heritage area will add to local area and for management of the Bleeding conserve and manage the resources and op- Kansas National Heritage Area as appro- portunities in the Heritage Area through economies within the State by increas- priate for such designation. grants, technical assistance, training and ing tourism and will encourage col- (7) Capturing these interconnected stories other means. laboration between interests of diverse through partnerships with National Park (5) To authorize Federal financial and units of government, businesses, tour- Service sites, Kansas State Historical Soci- technical assistance to management entity ism officials, private property owners, ety sites, local organizations, and citizens to assist in the conservation and interpreta- and nonprofit groups within the herit- will augment the story opportunities within tion of the Heritage Area. age area. Finally, the bill protects pri- the prospective boundary for the educational (6) To empower communities and organiza- vate property owners by requiring that and recreational benefit of this and future tions in Kansas to preserve the special his- generations of Americans. toric identity of Bleeding Kansas and with it they provide in writing consent to be (8) Communities throughout this region the identity of the Nation. included in any request before they are know the value of their Bleeding Kansas leg- (7) To provide for the management, preser- eligible to receive Federal funds from acy, but require expansion of the existing co- vation, protection, and interpretation of the the heritage area. The bill also author- operative framework to achieve key preser- natural, historical, and cultural resources izes $10,000,000.00 over a 10 year period vation, education, and other significant within the region for the educational and in- to carry out this act and states that no goals by working more closely together. spirational benefit of current and future gen- more than $1,000,000.00 may be appro- (9) The State of Kansas officially recog- erations. priated to the heritage area for any fis- nized the national significance of the Bleed- (8) To provide greater community capacity ing Kansas story when it designated the her- through inter-local cooperation. cal year. itage area development as a significant stra- (9) To provide a vehicle, particularly in the Kansas has much to be proud of in its tegic goal within the statewide economic de- four counties with high out-migration of history and it is vital that this history velopment plan. population, to recognize that self-reliance be shared on a national level. By estab- (10) Territorial Kansas Heritage Alliance is and resilience will be the keys to their eco- lishing the Bleeding Kansas and the a nonprofit corporation created for the pur- nomic future.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00052 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S2999 (10) To build upon the Kansas rural devel- of Kansas, recognized by the Secretary, in (B) conduct an annual audit with a neutral opment policy, the Kansas agritourism ini- consultation with the chief executive officer auditing firm and make available for audit tiative and the new homestead act to recog- of the State of Kansas, that agrees to per- by Congress, the Secretary, and appropriate nize inherent strengths of small towns and form the duties of a local coordinating enti- units of government, all records pertaining rural communities—close-knit communities, ty under this Act. to the expenditure of the funds and any strong local business networks, and a tradi- SEC. 5. AUTHORITIES, DUTIES, AND PROHIBI- matching funds; and tion of entrepreneurial creativity. TIONS OF THE MANAGEMENT ENTI- (C) require, for all agreements authorizing (11) To educate and cultivate among its TY. expenditure of Federal funds by any entity, citizens, particularly its youth, the stories (a) AUTHORITIES.—The management entity that the receiving entity make available for and cultural resources of the region’s legacy may, for purposes of preparing and imple- audit all records pertaining to the expendi- that— menting the management plan, use funds ture of their funds. (A) reflect the popular phrase ‘‘Bleeding made available under this Act to— (c) PROHIBITION OF ACQUISITION OF REAL Kansas’’ describing the conflict over slavery (1) prepare a management plan for the Her- PROPERTY.—The management entity shall that became nationally prominent in Kansas itage Area; not use Federal funds received under this just before and during the American Civil (2) prepare reports, studies, interpretive Act to acquire real property or an interest in War; exhibits and programs, historic preservation real property. (B) reflect the commitment of American projects, and other activities recommended (d) OTHER SOURCES.—Nothing in this Act settlers who first fought and killed to uphold in the management plan for the Heritage precludes the management entity from using their different and irreconcilable principles Area; Federal funds from other sources for author- of freedom and equality during the years of (3) pay for operational expenses of the ized purposes. the Kansas Conflict; management entity incurred within the first (C) reflect the struggle for freedom, experi- 10 fiscal years beginning after the date of the SEC. 6. MANAGEMENT PLAN. enced during the ‘‘Bleeding Kansas’’ era, enactment of this Act designating the Herit- (a) REQUIREMENTS.—The management enti- that continues to be a vital and pressing age Area; ty shall: issue associated with the real problem of (4) make grants or loans to entities defined (1) MANAGEMENT PLAN.—Not later than 3 democratic nation building; and in the management plan; years after the date funds are made available (D) recreate the physical environment re- (5) enter into cooperative agreements with for this purpose, prepare and submit a man- vealing its impact on agriculture, transpor- the State of Kansas, its political subdivi- agement plan reviewed by participating tation, trade and business, and social and sions, nonprofit organizations, and other or- units of local government within the bound- cultural patterns in urban and rural set- ganizations; aries of the proposed Heritage Area. tings. (6) hire and compensate staff; (2) COLLABORATION.—Collaborate with and (12) To interpret the effect of the era’s (7) obtain money from any source under consider the interests of diverse units of gov- democratic ethos on the development of any program or law to be used for a regrant ernment, businesses, tourism officials, pri- America’s distinctive political culture. program requiring the recipient of such vate property owners, and nonprofit groups SEC. 3. DEFINITIONS. money to make a contribution in order to re- within the geographic area of the Heritage For the purposes of this Act: ceive it; Area in developing and implementing such a (1) MANAGEMENT ENTITY.—The term ‘‘man- (8) contract for goods and services; and management plan. agement entity’’ means Territorial Kansas (9) offer a competitive grants program to (3) PUBLIC INVOLVEMENT.—Ensure regular Heritage Alliance, recognized by the Sec- contributing partners requiring a dollar-for- public involvement, including public meet- retary, in consultation with the chief execu- dollar match of Federal funds. ings at least annually, regarding the imple- tive officer of the State of Kansas, that (b) DUTIES OF THE MANAGEMENT ENTITY.— mentation of the management plan. agrees to perform the duties of a local co- In addition to developing the management (b) CONTENTS OF MANAGEMENT PLAN.—The ordinating entity under this Act. plan, the management entity shall— management plan prepared for the Heritage (2) HERITAGE AREA.—The term ‘‘Heritage (1) give priority to the implementation of Area shall— Area’’ means the Bleeding Kansas and the actions, goals, strategies, and standards set (1) present a comprehensive program for Enduring Struggle for Freedom National forth in the management plan, including as- the conservation, interpretation, funding, Heritage Area in eastern Kansas and western sisting units of government and other per- management, and development of the Herit- Missouri. sons in— age Area, in a manner consistent with the (3) SECRETARY.—The term ‘‘Secretary’’ (A) encouraging economic viability in the existing local, State, and Federal land use means the Secretary of the Interior. Heritage Area in accordance with the goals laws and compatible economic viability of (4) UNIT OF LOCAL GOVERNMENT.—The term of the management plan; the Heritage Area; ‘‘unit of local government’’ means the gov- (B) establishing interpretive exhibits in (2) establish criteria or standards to meas- ernment of a State, a political subdivision of the Heritage Area; ure what is selected for conservation, inter- a State, or an Indian tribe. (C) increasing public awareness of and ap- pretation, funding, management, and devel- SEC. 4. BLEEDING KANSAS AND THE ENDURING preciation for the cultural, historical, and opment; STRUGGLE FOR FREEDOM NA- natural resources of the Heritage Area; (3) involve residents, public agencies, and TIONAL HERITAGE AREA. (D) supporting the restoration of historic private organizations working in the Herit- (a) ESTABLISHMENT.—There is established buildings that are— age Area; in the State of Kansas the Bleeding Kansas (i) located in the Heritage Area; and (4) specify and coordinate, as of the date of and the Enduring Struggle for Freedom Na- (ii) related to the themes of the Heritage the management plan, existing and potential tional Heritage Area. Area; sources of technical and financial assistance (b) BOUNDARIES.—The Heritage Area shall (E) the conservation of contributing land- under this and other Federal laws to protect, include the following: scapes and natural resources; and manage, and develop the Heritage Area; and (1) An area located in eastern Kansas and (F) the installation throughout the Herit- (5) include— western Missouri, consisting currently of age Area of signs identifying public access (A) actions to be undertaken by units of Allen, Anderson, Bourbon, Cherokee, Clay, points and sites of interest; government and private organizations to Coffey, Crawford, Douglas, Franklin, Geary, (2) prepare and implement the manage- protect, conserve, and interpret the re- Johnson, Labette, Leavenworth, Linn, ment plan while considering the interests of sources of the Heritage Area; Miami, Neosho, Pottawatomie, Riley, Shaw- diverse units of government, businesses, pri- (B) an inventory of the resources contained nee, Wabaunsee, Wilson, Woodson, Wyan- vate property owners, and nonprofit groups in the Heritage Area, including a list of any dotte Counties in Kansas and tentatively in- within the Heritage Area; property in the Heritage Area that is related cluding additional counties in Kansas and (3) conduct public meetings in conjunction to the themes of the Heritage Area and that western Missouri to be included in the devel- with training and skill building workshops meets the establishing criteria (such as, but opment of the management plan. regarding the development and implementa- not exclusive to, visitor readiness) to merit (2) Contributing sites, buildings, and dis- tion of the management plan; and preservation, restoration, management, de- tricts within the area will be recommended (4) for any fiscal year for which Federal velopment, or maintenance because of its by the management plan. funds are received under this Act— natural, cultural, historical, or recreational (c) MAP.—Final boundary will be defined (A) submit to the Secretary a report that significance; during the management plan development. A describes, for the year— (C) policies for resource management in- map of the Heritage Area shall be included in (i) accomplishments of the management cluding the development of intergovern- the management plan. The map shall be on entity; mental cooperative agreements, private sec- file in the appropriate offices of the National (ii) expenses and income of the manage- tor agreements, or any combination thereof, Park Service, Department of the Interior. ment entity; to protect the historical, cultural, rec- (d) MANAGEMENT ENTITY.—The manage- (iii) each entity to which a grant was reational, and natural resources of the Herit- ment entity for the Heritage Area shall be made; and age Area in a manner consistent with sup- Territorial Kansas Heritage Alliance, a non- (iv) an accounting of matching funds ob- porting appropriate and compatible eco- profit organization established in the State tained to meet grant guidelines; nomic viability;

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00053 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3000 CONGRESSIONAL RECORD — SENATE March 23, 2004

(D) a program for implementation of the lic and private organizations to carry out (b) LANDOWNER WITHDRAW.—Any owner of management plan by the designated manage- this subsection. private property included within the bound- ment entity, in cooperation with its partners (b) OTHER FEDERAL AGENCIES.—Any Fed- ary of the Heritage Area, and not notified and units of local government; eral entity conducting or supporting an ac- under subsection (a), shall have their prop- (E) evidence that relevant State, county, tivity that directly affects the Heritage Area erty immediately removed from the bound- and local plans applicable to the Heritage shall— ary by submitting a written request to the Area have been taken into consideration; (1) consider the potential effect of the ac- management entity. (F) an analysis of ways in which local, tivity on the purposes of the Heritage Area SEC. 10. SAVINGS PROVISIONS. State, and Federal programs may best be co- and the management plan; (a) RULES, REGULATIONS, STANDARDS, AND ordinated to promote the purposes of this (2) consult with the management entity re- PERMIT PROCESSES.—Nothing in this Act Act; and garding the activity; and shall be construed to impose any environ- (G) a business plan that— (3) to the maximum extent practicable, mental, occupational, safety, or other rule, (i) describes in detail the role, operation, conduct or support the activity to avoid ad- regulation, standard, or permit process in financing, and functions of the management verse effects on the Heritage Area. the Heritage Area that is different from entity for each activity included in the rec- (c) OTHER ASSISTANCE NOT AFFECTED.—This those that would be applicable if the Herit- ommendations contained in the management Act does not affect the authority of any Fed- age Area had not been established. plan; and eral official to provide technical or financial (b) WATER AND WATER RIGHTS.—Nothing in (ii) provides, to the satisfaction of the Sec- assistance under any other law. this Act shall be construed to authorize or OTIFICATION OF OTHER FEDERAL AC- retary, adequate assurances that the man- (d) N imply the reservation or appropriation of TIVITIES.—The head of each Federal agency agement entity is likely to have the finan- water or water rights. shall provide to the Secretary and the man- cial resources necessary to implement the (c) NO DIMINISHMENT OF STATE AUTHOR- agement entity, to the extent practicable, management plan for the Heritage Area, in- ITY.—Nothing in this Act shall be construed cluding resources to meet matching require- advance notice of all activities that may to diminish the authority of the State to ment for grants awarded under this Act. have an impact on the Heritage Area. manage fish and wildlife, including the regu- (c) PUBLIC NOTICE.—The management enti- SEC. 8. PRIVATE PROPERTY PROTECTION. lation of fishing and hunting within the Her- ty shall place a notice of each of its public (a) ACCESS TO PRIVATE PROPERTY.—Noth- itage Area. meetings in a newspaper of general circula- ing in this Act shall be construed to require (d) EXISTING NATIONAL HERITAGE AREAS.— tion in the Heritage Area and shall make the any private property owner to permit public Nothing in this Act shall affect any national minutes of the meeting available to the pub- access (including Federal, State, or local heritage area so designated before the date lic. government access) to such private property. of the enactment of this Act. (d) DISQUALIFICATION FROM FUNDING.—If a Nothing in this Act shall be construed to SEC. 11. AUTHORIZATION OF APPROPRIATIONS. proposed management plan is not submitted modify any provision of Federal, State, or (a) IN GENERAL.—There is authorized to be to the Secretary within 4 years of the date of local law with regard to public access to or appropriated to carry out this Act $10,000,000, the enactment of this Act, the management use of private lands. of which not more than $1,000,000 may be au- entity shall be ineligible to receive addi- (b) LIABILITY.—Designation of the Heritage tional funding under this title until the date Area shall not be considered to create any li- thorized to be appropriated for any fiscal on which the Secretary receives the proposed ability, or to have any effect on any liability year. management plan. under any other law, of any private property (b) COST-SHARING REQUIREMENT.—The Fed- (e) APPROVAL AND DISAPPROVAL OF MAN- owner with respect to any persons injured on eral share of the total cost of any activity AGEMENT PLAN.—The Secretary shall approve such private property. assisted under this Act shall be not more or disapprove the proposed management plan (c) RECOGNITION OF AUTHORITY TO CONTROL than 50 percent. submitted under this title not later than 90 LAND USE.—Nothing in this Act shall be con- SEC. 12. TERMINATION OF AUTHORITY. days after receiving such proposed manage- strued to modify any authority of Federal, The authority of the Secretary to provide ment plan. State, or local governments to regulate land assistance under this Act terminates on the (f) ACTION FOLLOWING DISAPPROVAL.—If the use. date that is 10 years after the date of the en- Secretary disapproves a proposed manage- (d) PARTICIPATION OF PRIVATE PROPERTY actment of this Act. ment plan, the Secretary shall advise the OWNERS IN HERITAGE AREAS.—Nothing in this Mr. ROBERTS. Mr. President, I am management entity in writing of the reasons Act shall be construed to require the owner pleased to introduce, along with my for the disapproval and shall make rec- of any private property located within the ommendations for revisions to the proposed boundaries of the Heritage Area to partici- distinguished colleague Senator management plan. The Secretary shall ap- pate in or be associated with the Heritage BROWNBACK, a bill designating the prove or disapprove a proposed revision with- Area. Bleeding Kansas and the Enduring in 90 days after the date it is submitted. (e) LAND USE REGULATION.— Struggle for Freedom National Herit- (g) APPROVAL OF AMENDMENTS.—The Sec- (1) IN GENERAL.—The management entity age Area. This project has joined com- retary shall review and approve substantial shall provide assistance and encouragement munities throughout eastern Kansas in amendments to the management plan. Funds to State and local governments, private or- an effort to document, preserve and appropriated under this title may not be ex- ganizations, and persons to protect and pro- celebrate Kansas’ significant role in pended to implement any changes made by mote the resources and values of the Herit- such amendment until the Secretary ap- age Area. the political struggle that led to the proves the amendment. (2) EFFECT.—Nothing in this Act— Civil War and in other historic strug- SEC. 7. TECHNICAL AND FINANCIAL ASSISTANCE; (A) affects the authority of the State or gles for equality that took place in our OTHER FEDERAL AGENCIES. local governments to regulate under law any state. (a) TECHNICAL AND FINANCIAL ASSIST- use of land; or Designated by Congress, National ANCE.— (B) grants any power of zoning or land use Heritage Areas are places where nat- (1) IN GENERAL.—On the request of the to the management entity. ural, cultural, historic and recreational management entity, the Secretary may pro- (f) PRIVATE PROPERTY.— resources combine to form complete vide technical and financial assistance for (1) IN GENERAL.—The management entity the development and implementation of the shall be an advocate for land management and distinct landscape. Our State, management plan. practices consistent with the purposes of the which has a proud heritage and compel- (2) PRIORITY FOR ASSISTANCE.—In providing Heritage Area. ling story, will benefit from this na- assistance under paragraph (1), the Secretary (2) EFFECT.—Nothing in this Act— tional designation that helps preserve shall give priority to actions that assist in— (A) abridges the rights of any person with and celebrate America’s defining land- (A) conserving the significant cultural, his- regard to private property; scapes. By enhancing and developing toric, and natural resources of the Heritage (B) affects the authority of the State or historic sites throughout eastern Kan- Area; and local government regarding private prop- (B) providing educational, interpretive, erty; or sas, we will ensure that the traditions and recreational opportunities consistent (C) imposes any additional burden on any that evolved there are preserved. with the purposes of the Heritage Area. property owner. During the Civil War, William (3) SPENDING FOR NON-FEDERAL PROPERTY.— SEC. 9. REQUIREMENTS FOR INCLUSION OF PRI- Quantrill, the head of an infamous The management entity may expend Federal VATE PROPERTY. gang of Confederate sympathizers, lead funds made available under this Act on non- (a) NOTIFICATION AND CONSENT OF PROP- a raid on Lawrence, KS. Though far Federal property that— ERTY OWNERS REQUIRED.—No privately from the main campaigns, this mas- (A) meets the criteria in the approved owned property shall be governed by the sacre caused Bleeding Kansas to be- management plan; or management plan for the Heritage Area (B) is listed or eligible for listing on the until the owner of that private property has come a prominent symbol in the fight National Register of Historic Places. been notified in writing by the management for the freedom of all people, and the (4) OTHER ASSISTANCE.—The Secretary may entity and has given written consent for territory would become a battleground enter into cooperative agreements with pub- such inclusion to the management entity. over the question of slavery. After

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00054 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3001 these attacks, the abolitionist senator sure that displaced workers whose jobs (1) in the subparagraph heading, by insert- Charles Sumner delivered his famous have moved overseas have access to af- ing ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and speech called ‘‘The Crime Against Kan- fordable health care coverage. (2) in clause (ii)— sas,’’ in which he brought the esca- Under the Trade Assistance Adjust- (A) in the clause heading, by inserting ment Act, unemployed workers who ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; lating situation into sharper focus for (B) by striking ‘‘and shall’’ and inserting ‘‘, the Nation. have seen their manufacturing jobs shall’’; and Almost 100 years later, Kansas be- shipped overseas are eligible for Fed- (C) by inserting ‘‘, and in no event shall the came the battleground once again, as eral subsidies to help them maintain maximum period required under paragraph Oliver L. Brown fought to prove that their employer-based health coverage (2)(B)(i) be less than the period during which separate among the people of this great through COBRA. Unfortunately, while the individual is a TAA-eligible individual’’ Nation is not equal. In fact, we will these workers have access to these before the period at the end. (c) PUBLIC HEALTH SERVICE ACT.—Section soon celebrate the 50th anniversary of Federal subsidies for 24 months, they only have access to COBRA coverage 2205(b) of the Public Health Service Act (42 the Brown v. Topeka Board of Edu- U.S.C. 300bb–5(b)) is amended— cation Supreme Court decision, which for 18 months. This discrepancy means (1) in the subsection heading, by inserting was a landmark victory in the civil that displaced workers are unable to ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and rights movement. These are but two of fully utilize these subsidies. Indeed, the (2) in paragraph (2)— the many stories that will make up discrepancy creates the anomalous sit- (A) in the paragraph heading, by inserting this heritage area, marking an impor- uation in which displaced workers can ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; tant era in our Nation’s history. remain in their COBRA plan for 18 (B) by striking ‘‘and shall’’ and inserting ‘‘, shall’’; and I’d like to commend the Lawrence months, using the Federal subsidy to help defray their costs, but once their (C) by inserting ‘‘, and in no event shall the City Commission, the Douglas County maximum period required under section Commission, and the Lawrence Cham- COBRA coverage runs out, they have 2202(2)(A) be less than the period during ber of Commerce, who have worked six additional months of Federal sub- which the individual is a TAA-eligible indi- diligently on Federal heritage area des- sidy available but lose their existing vidual’’ before the period at the end. ignation. And I encourage the Senate’s health coverage. This leaves them no (d) RETROACTIVE EFFECTIVE DATE.—The swift passage of this important piece of choice but to seek coverage in the ex- amendments made by this section shall take effect as if included in the enactment of the legislation. pensive individual market where they are not guaranteed coverage and where Trade Act of 2002 (Public Law 107–210; 116 Stat. 933). By Mr. BURNS (for himself, Mr. their subsidy may not be sufficient to BAUCUS, and Mr. CAMPBELL): help them afford coverage. By Mr. BIDEN (for himself, Mr. S. 2225. A bill to authorize an ex- My legislation would fix this problem HOLLINGS, Mrs. MURRAY, Mr. change of mineral rights by the Sec- by making COBRA coverage available SMITH, and Mr. ALLEN): retary of the Interior in the State of for the full 24 months that the subsidy S. 2227. A bill to prevent and punish Montana; to the Committee on Energy is available. This will ensure that dis- counterfeiting and copyright piracy, and Natural Resources. placed workers can take full advantage and for other purposes; to the Com- Mr. BAUCUS. Mr. President, I am of the assistance that Congress made mittee on the Judiciary. pleased to introduce today the Mon- available to them in 2002. Mr. BIDEN. Mr. President, I rise tana Mineral Exchange Act with Sen- As more and more Americans see today to introduce the ators BURNS and CAMPBELL. their jobs outsourced overseas, many Anticounterfeiting Act of 2004, along This bill will enable the Northern struggle to provide health insurance with Senators MURRAY, HOLLINGS, Cheyenne Tribe and eastern Montana for their families. We have lost 3,000 SMITH, and ALLEN. to create jobs and provide a shot in the manufacturing jobs in February alone Two years ago, I held a hearing enti- arm for a local economy that has been and have lost a total of 2.8 million tled, ‘‘Theft of American Intellectual creative in forging its own destiny. since 2000. Congress took a critical step Property: Fighting Crime Abroad and The Montana Mineral Exchange Act in authorizing Federal assistance for At Home,’’ and I issued a report on the is the result of years of working to- those who have lost these jobs. Now we status of our fight against this crime. gether. President Geri Small has been must ensure that displaced workers Today, I attended a hearing chaired by a true advocate for the Northern Chey- have access to health coverage so that Senator SPECTER on a similar topic, again driving home for me the serious enne Tribe as she has worked tirelessly they can utilize this assistance. My problems encountered in today’s world on this project for years. legislation will ensure this. I ask unanimous consent that the by American intellectual property. The Montana Mineral Exchange Act What I have learned is that every is a positive step forward in creating text of the legislation be printed in the RECORD. day, thieves steal millions of dollars of good-paying jobs and boosting eco- American intellectual property from nomic development in Montana. This There being no objection, the bill was ordered to be printed in the RECORD, as its rightful owners. Over a hundred shows what Montana can do when we— thousand American jobs are lost as a the congressional delegation, the gov- follows. S. 2226 result. ernor’s office, the private sector, and American innovation and creativity Be it enacted by the Senate and House of Rep- the Northern Cheyenne—work together need to be protected by our govern- to develop our resources while creating resentatives of the United States of America in Congress assembled, ment no less than our personal prop- jobs and protecting our quality of life. SECTION 1. EXTENSION OF COBRA COVERAGE erty, our homes and our streets. The Development of this high-quality coal PERIOD FOR TAA-ELIGIBLE INDIVID- Founding Fathers had the foresight to will allow Montana to move forward UALS. provide for protection of intellectual economically and compete with other (a) ERISA.—Section 605(b) of the Employee property, giving Congress the power to energy producing states for jobs and Retirement Income Security Act of 1974 (29 ‘‘promote the progress of science and market share. I’m glad I could work to- U.S.C. 1165(b)) is amended— useful arts’’ by providing copyrights (1) in the subsection heading, by inserting gether with Governor Martz, Senator ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and and patents. BURNS, Congressman REHBERG, Senator (2) in paragraph (2)— American intellectual property rep- CAMPBELL and all of the parties in- (A) in the paragraph heading, by inserting resents the largest single sector of the volved to make this bill happen. ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; American economy, employing 4.7 mil- (B) by striking ‘‘and shall’’ and inserting ‘‘, lion Americans. It has been estimated By Mr. CORZINE: shall’’; and that software piracy alone cost the S. 2226. A bill to extend the period for (C) by inserting ‘‘, and in no event shall the U.S. economy over 118,000 jobs and $5.7 COBRA coverage for recipients of trade maximum period required under section billion in wage losses in the year 2000. adjustment assistance; to the Com- 602(2)(A) be less than the period during which Even more, the International Planning mittee on Health, Education, Labor, the individual is a TAA-eligible individual’’ before the period at the end. and Research Corporation estimates and Pensions. (b) INTERNAL REVENUE CODE OF 1986.—Sec- that the government loses more than a Mr. CORZINE. Mr. President, I rise tion 4980B(f)(5)(C) of the Internal Revenue billion dollars worth of revenue every today to introduce legislation to en- Code of 1986 is amended— year from intellectual property theft.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00055 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3002 CONGRESSIONAL RECORD — SENATE March 23, 2004 To put that in perspective, with a bil- statute to include other copyrighted (8) in order to strengthen Federal enforce- lion dollars in additional revenue, the works, such as books. As published ment against counterfeiting of copyrighted American government could pay for books and ebooks begin to be subject to works, Congress must enact legislation child care services for more than the piracy already witnessed by motion that— (A) prohibits trafficking in, and tampering 100,000 children annually. Alter- picture, softward and recording indus- with, authentication features of copyrighted natively, $1 billion could be used to tries, they need the same protection. works; and fund a Senate proposal to assist This issue is not going way; to the (B) permits aggrieved parties an appro- schools nationally with emergency contrary, it is growing, and Congress priate civil cause of action. school renovations and repairs. continues to focus on potential solu- SEC. 3. PROHIBITION AGAINST TRAFFICKING IN There is another problem. Counter- tions, as evidenced by today’s hearing ILLICIT AUTHENTICATION FEA- feiters of software, music CDs and mo- in the Senate Judiciary Committee, TURES. tion pictures are now tampering with and an upcoming hearing in the For- (a) IN GENERAL.—Section 2318 of title 18, authentication features. Holograms, eign Relations Committee. The 2002 United States Code, is amended— (1) by striking the heading and inserting certificates of authenticity, water- version of this bill did not manage to ‘‘TRAFFICKING IN COUNTERFEIT LABELS, marks and other security features secure passage and enactment into law, ILLICIT AUTHENTICATION FEATURES, OR allow the copyright owners to distin- but there is reason for optimism that COUNTERFEIT DOCUMENTATION OR guish genuine works from counterfeits. this year its fate will be different. PACKAGING’’; But now, highly sophisticated counter- America’s content providers, and the (2) by striking subsection (a) and inserting feiters have found ways to tamper with many jobs that depend on them, could the following: these features to make counterfeit certainly use the help. ‘‘(a) Whoever, in any of the circumstances products appear genuine and to in- America is a place where we must en- described in subsection (c), knowingly traf- crease the selling price of genuine courage diverse ideas, and with that fics in— products and licenses. Put another ‘‘(1) a counterfeit label affixed to, or de- encouragement we must protect those signed to be affixed to— way, not only do crooks illegally copy ideas. They are the source of our ‘‘(A) a phonorecord; American intellectual property, they music, our art, our novels, our movies, ‘‘(B) a copy of a computer program; also now illegally fake or steal the our software, our products, all that is ‘‘(C) a copy of a motion picture or other very features property owners use to American culture and American know- audiovisual work; or prevent that theft. how. The Anticounterfeiting Act of ‘‘(D) documentation or packaging; Copyrights mean nothing if govern- 2004 gives our ideas the protection they ‘‘(2) an illicit authentication feature af- ment authorities fail to enforce the deserve. fixed to or embedded in, or designed to be af- protections they provide intellectual fixed to or embedded in— I ask unanimous consent that the ‘‘(A) a phonorecord; property owners. The criminal code has text of this bill be printed in the ‘‘(B) a copy of a computer program; not kept up with the counterfeiting op- RECORD. ‘‘(C) a copy of a motion picture or other erations of today’s high-tech pirates, There being no objection, the bill was audiovisual work; or and it’s time to make sure that it does. ordered to be printed in the RECORD, as ‘‘(D) documentation or packaging; or The Anticounterfeiting Act of 2004 up- follows: ‘‘(3) counterfeit documentation or pack- dates and strengthens the Federal S. 2227 aging, shall be fined under this title or im- prisoned for not more than 5 years, or criminal code, which currently makes Be it enacted by the Senate and House of Rep- it a crime to traffic in counterfeit la- both.’’; resentatives of the United States of America in (3) in subsection (b)— bels or copies of certain forms of intel- Congress assembled, (A) in paragraph (2), by striking ‘‘and’’ at lectual property, but not authentica- SECTION 1. SHORT TITLE. the end; tion features. For example, we can cur- This Act may be cited as the (B) in paragraph (3)— rently prosecute someone for traf- ‘‘Anticounterfeiting Act of 2004’’. (i) by striking ‘‘and ‘audiovisual work’ ficking in fake labels for a computer SEC. 2. FINDINGS. have’’ and inserting the following: ‘‘, ‘audio- program, but we cannot go after them Congress finds that— visual work’, and ‘copyright owner’ have’’; for faking the hologram that the soft- (1) American innovation, and the protec- and ware maker uses to ensure that copies tion of that innovation by the government, (ii) by striking the period at the end and has been a critical component of the eco- inserting a semicolon; and of the software are genuine. nomic growth of this Nation throughout the (C) by adding at the end the following: In addition, many actions that vio- history of the Nation; ‘‘(4) the term ‘authentication feature’ late current law go unprosecuted in (2) copyright-based industries represent means any hologram, watermark, certifi- this day and age when priorities, such one of the most valuable economic assets of cation, symbol, code, image, sequence of as the fight against terrorism and life- this country, contributing over 5 percent of numbers or letters, or other physical feature threatening crimes, necessarily take the gross domestic product of the United that either individually or in combination priority over crimes of property, be States and creating significant job growth with another feature is used by the respec- they intellectual or physical. More- and tax revenues; tive copyright owner to verify that a phono- over, the victims of this theft often do (3) the American intellectual property sec- record, a copy of a computer program, a copy tor employs approximately 4,300,000 people, of a motion picture or other audiovisual not have a way to recover their losses representing over 3 percent of total United work, or documentation or packaging is not from this crime. For this reason, the States employment; counterfeit or otherwise infringing of any Anticounterfeiting Act of 2004 also pro- (4) the proliferation of organized criminal copyright; vides a private cause of action, to per- counterfeiting enterprises threatens the eco- ‘‘(5) the term ‘documentation or pack- mit the victims of these crimes to pur- nomic growth of United States copyright in- aging’ means documentation or packaging sue the criminals themselves and re- dustries; for a phonorecord, copy of a computer pro- cover damages in federal court. (5) the American intellectual property sec- gram, or copy of a motion picture or other Current law criminalizes trafficking tor has invested millions of dollars to de- audiovisual work; and in counterfeit documentation and velop highly sophisticated authentication ‘‘(6) the term ‘illicit authentication fea- features that assist consumers and law en- ture’ means an authentication feature, packaging, but only for software pro- forcement in distinguishing genuine intellec- that— grams. The Anticounterfeiting Act of tual property products and packaging from ‘‘(A) without the authorization of the re- 2003 updates and expands these provi- counterfeits; spective copyright owner has been tampered sions to include documentation and (6) in order to thwart these industry ef- with or altered so as to facilitate the repro- packaging for phonorecords, motion forts, counterfeiters traffic in, and tamper duction or distribution of— pictures, other audiovisual works, and with, genuine authentication features, for ‘‘(i) a phonorecord; copies of other copyrighted works. example, by obtaining genuine authentica- ‘‘(ii) a copy of a computer program; The existing provision with regard to tion features through illicit means and then ‘‘(iii) a copy of a motion picture or other counterfeiting addresses certain items commingling these features with counterfeit audiovisual work; or software or packaging; ‘‘(iv) documentation or packaging; of intellectual property, including mo- (7) Federal law does not provide adequate in violation of the rights of the copyright tion pictures, software, and civil and criminal remedies to combat tam- owner under title 17; phonorecords. The Anticounterfeiting pering activities that directly facilitate ‘‘(B) is genuine, but has been distributed, Act of 2004 updates the coverage of this counterfeiting crimes; and or is intended for distribution, without the

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00056 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3003 authorization of the respective copyright ‘‘(ii) the retail value of an authorized copy tended to be proposed by him to the bill S. owner; or of a copyrighted computer program; or 1637, to amend the Internal Revenue Code of ‘‘(C) appears to be genuine, but is not.’’; ‘‘(iii) the retail value of a copy of a copy- 1986 to comply with the World Trade Organi- (4) in subsection (c)— righted motion picture or other audiovisual zation rulings on the FSC/ETI benefit in a (A) by striking paragraph (3) and inserting work. manner that preserves jobs and production the following: ‘‘(4) STATUTORY DAMAGES.—The injured activities in the United States, to reform ‘‘(3) the counterfeit label or illicit authen- party may elect, at any time before final and simplify the international taxation rules tication feature is affixed to, is embedded in, judgment is rendered, to recover, instead of of the United States, and for other purposes; or encloses, or is designed to be affixed to, to actual damages and profits, an award of stat- which was ordered to lie on the table. be embedded in, or to enclose— utory damages for each violation of this sec- SA 2892. Mr. BREAUX (for himself and Mr. ‘‘(A) a phonorecord of a copyrighted sound tion in a sum of not less than $2,500 or more HATCH) submitted an amendment intended to recording; than $25,000, as the court considers appro- be proposed by him to the bill S. 1637, supra; ‘‘(B) a copy of a copyrighted computer pro- priate. which was ordered to lie on the table. gram; ‘‘(5) SUBSEQUENT VIOLATION.—The court SA 2893. Mr. REID (for himself and Mr. ‘‘(C) a copy of a copyrighted motion pic- may increase an award of damages under DAYTON) submitted an amendment intended ture or other audiovisual work; or this subsection by 3 times the amount that to be proposed by him to the bill S. 1637, ‘‘(D) documentation or packaging; or’’; and would otherwise be awarded, as the court supra; which was ordered to lie on the table. (B) in paragraph (4), by striking ‘‘for a considers appropriate, if the court finds that SA 2894. Mr. KYL (for himself and Mr. computer program’’; a person has subsequently violated this sec- NICKLES) submitted an amendment intended (5) in subsection (d)— tion within 3 years after a final judgment to be proposed to amendment SA 2886 sub- (A) by inserting ‘‘or illicit authentication was entered against that person for a viola- mitted by Mr. MCCONNELL (for Mr. FRIST) features’’ after ‘‘counterfeit labels’’ each tion of this section. to the bill S. 1637, supra; which was ordered place it appears; ‘‘(6) LIMITATION ON ACTIONS.—A civil action to lie on the table. (B) by inserting ‘‘or illicit authentication may not be commenced under this section SA 2895. Mr. DASCHLE submitted an features’’ after ‘‘such labels’’; and unless it is commenced within 3 years after amendment intended to be proposed by him (C) by inserting before the period at the the date on which the claimant discovers the to the bill S. 1637, supra; which was ordered end the following: ‘‘, and of any equipment, violation. to lie on the table. device, or materials used to manufacture, re- ‘‘(g) OTHER RIGHTS NOT AFFECTED.—Noth- SA 2896. Mr. DASCHLE submitted an produce, or assemble the counterfeit labels ing in this section shall enlarge, diminish, or amendment intended to be proposed by him or illicit authentication features’’; and otherwise affect liability under section 1201 to the bill S. 1637, supra; which was ordered (6) by adding at the end the following: or 1202 of title 17.’’. to lie on the table. (b) TECHNICAL AND CONFORMING AMEND- SA 2897. Mrs. CLINTON submitted an ‘‘(f) CIVIL REMEDIES FOR VIOLATION.— MENT.—The item relating to section 2318 in amendment intended to be proposed by her ‘‘(1) IN GENERAL.—Any copyright owner the table of sections at the beginning of to the bill S. 1637, supra; which was ordered who is injured by a violation of this section chapter 113 of title 18, United States Code, is to lie on the table. or is threatened with injury, may bring a amended by inserting ‘‘or illicit authentica- SA 2898. Mr. GRASSLEY proposed an civil action in an appropriate United States tion features’’ after ‘‘counterfeit labels’’. amendment to amendment SA 2886 sub- district court. f mitted by Mr. MCCONNELL (for Mr. FRIST) ‘‘(2) DISCRETION OF COURT.—In any action to the bill S. 1637, supra. brought under paragraph (1), the court— SUBMITTED RESOLUTIONS SA 2899. Mr. GRASSLEY proposed an ‘‘(A) may grant 1 or more temporary or amendment to amendment SA 2898 proposed permanent injunctions on such terms as the by Mr. GRASSLEY to the amendment SA court determines to be reasonable to prevent SENATE RESOLUTION 323—TO AU- 2886 submitted by Mr. MCCONNELL (for Mr. or restrain violations of this section; THORIZE LEGAL REPRESENTA- FRIST) to the bill S. 1637, supra. ‘‘(B) at any time while the action is pend- TION IN UNITED STATES OF SA 2900. Mr. THOMAS (for himself and Mr. ing, may order the impounding, on such AMERICA V. ELENA RUTH DASCHLE) submitted an amendment intended terms as the court determines to be reason- SASSOWER to be proposed by him to the bill S. 1637, able, of any article that is in the custody or supra; which was ordered to lie on the table. control of the alleged violator and that the Mr. FRIST (for himself and Mr. SA 2901. Mr. MILLER (for himself, Mr. court has reasonable cause to believe was in- DASCHLE) submitted the following reso- ALLARD, Mrs. CLINTON, Mr. SCHUMER, and volved in a violation of this section; and lution; which was considered and Mr. CHAMBLISS) submitted an amendment in- ‘‘(C) may award to the injured party— agreed to: tended to be proposed by him to the bill S. ‘‘(i) reasonable attorney fees and costs; and S. RES. 323 1637, supra; which was ordered to lie on the ‘‘(ii)(I) actual damages and any additional Whereas, in the case of United States of table. profits of the violator, as provided by para- America v. Elena Ruth Sassower, Crim. No. M– SA 2902. Mr. BOND submitted an amend- graph (3); or 4113–3, pending in the Superior Court of the ment intended to be proposed to amendment ‘‘(II) statutory damages, as provided by District of Columbia, the defendant has SA 2886 submitted by Mr. MCCONNELL (for paragraph (4). served subpoenas for testimony and docu- Mr. FRIST) to the bill S. 1637, supra; which ‘‘(3) ACTUAL DAMAGES AND PROFITS.— ments upon Senators Orrin Hatch, Patrick was ordered to lie on the table. ‘‘(A) IN GENERAL.—The injured party is en- Leahy, Saxby Chambliss, Hillary Rodham SA 2903. Mr. BOND (for himself and Mr. titled to recover— Clinton, and Charles Schumer, and on Senate TALENT) submitted an amendment intended ‘‘(i) the actual damages suffered by the in- employees Tamera Luzzatto, Chief of Staff to be proposed to amendment SA 2886 sub- jured party as a result of a violation of this to Senator Clinton, Leecia Eve, Counsel to mitted by Mr. MCCONNELL (for Mr. FRIST) section, as provided by subparagraph (B); and Senator Clinton, Joshua Albert, Legislative to the bill S. 1637, supra; which was ordered ‘‘(ii) any profits of the violator that are at- Correspondent to Senator Clinton, and Mi- to lie on the table. tributable to a violation of this section and chael Tobman, Director of Intergovern- SA 2904. Mr. BOND submitted an amend- are not taken into account in computing the mental Affairs for Senator Schumer; and, ment intended to be proposed by him to the actual damages. Whereas, pursuant to sections 703(a) and bill S. 1637, supra; which was ordered to lie ‘‘(B) CALCULATION OF DAMAGES.—The court 704(a)(2) of the Ethics in Government Act of on the table. shall calculate actual damages by multi- 1978, 2 U.S.C. §§ 288b(a) and 288c(a)(2), the SA 2905. Mr. NICKLES (for himself and plying— Senate may direct its counsel to represent Mrs. LINCOLN) submitted an amendment in- ‘‘(i) the value of the phonorecords or copies Members, officers, and employees of the Sen- tended to be proposed by him to the bill S. to which counterfeit labels, illicit authen- ate with respect to any subpoena, order, or 1637, supra; which was ordered to lie on the tication features, or counterfeit documenta- request for testimony or documents relating table. tion or packaging were affixed or embedded, to their official responsibilities: Now, there- SA 2906. Mr. CORNYN submitted an or designed to be affixed or embedded; by fore, be it amendment intended to be proposed by him ‘‘(ii) the number of phonorecords or copies Resolved That the Senate Legal Counsel is to the bill S. 1637, supra; which was ordered to which counterfeit labels, illicit authen- authorized to represent the above-listed Sen- to lie on the table. tication features, or counterfeit documenta- ators and Senate employees who are the sub- SA 2907. Mr. MCCONNELL submitted an tion or packaging were affixed or embedded, ject of subpoenas and any other Member, of- amendment intended to be proposed by him or designed to be affixed or embedded, unless ficer, or employee who may be subpoenaed in to the bill S. 1637, supra; which was ordered such calculation would underestimate the this case. to lie on the table. actual harm suffered by the copyright owner. f SA 2908. Mr. SMITH submitted an amend- ‘‘(C) DEFINITION.—For purposes of this AMENDMENTS SUBMITTED AND ment intended to be proposed by him to the paragraph, the term ‘value of the phono- bill S. 1637, supra; which was ordered to lie record or copy’ means— PROPOSED on the table. ‘‘(i) the retail value of an authorized pho- SA 2891. Mr. BREAUX (for himself and Mrs. SA 2909. Mr. GRASSLEY submitted an norecord of a copyrighted sound recording; FEINSTEIN) submitted an amendment in- amendment intended to be proposed by him

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Mr. SPECTER submitted an activities in the United States, to re- in clause (i) were an underpayment for the amendment intended to be proposed to form and simplify the international taxable year of the deduction. amendment SA 2886 submitted by Mr. ‘‘(5) LIMITATION ON CONTROLLED FOREIGN MCCONNELL (for Mr. FRIST) to the bill S. taxation rules of the United States, CORPORATIONS IN POSSESSIONS.—In computing 1637, supra; which was ordered to lie on the and for other purposes; which was or- the excess qualified foreign distribution table. dered to lie on the table; as follows: amount under paragraph (1) and the base div- SA 2911. Mr. SPECTER submitted an On page 137, between lines 8 and 9, insert: idend amount under paragraph (2), there amendment intended to be proposed to ‘‘(4) DOLLAR LIMITATION.— shall not be taken into account dividends re- amendment SA 2886 submitted by Mr. ‘‘(A) IN GENERAL.—Notwithstanding para- ceived from any controlled foreign corpora- MCCONNELL (for Mr. FRIST) to the bill S. graph (1), the excess qualified foreign dis- tion created or organized under the laws of 1637, supra; which was ordered to lie on the tribution amount shall not exceed the lesser any possession of the United States. table. of— SA 2912. Mrs. HUTCHISON submitted an ‘‘(i) the amount shown on the applicable fi- SA 2892. Mr. BREAUX (for himself amendment intended to be proposed to nancial statement as earnings permanently and Mr. HATCH) submitted an amend- amendment SA 2886 submitted by Mr. reinvested outside the United States, or ment intended to be proposed by him MCCONNELL (for Mr. FRIST) to the bill S. ‘‘(ii) the excess (if any) of— to the bill S. 1637, to amend the Inter- 1637, supra; which was ordered to lie on the ‘‘(I) the estimated aggregate qualified ex- nal Revenue Code of 1986 to comply table. penditures of the corporation for taxable SA 2913. Mr. NICKLES (for himself and with the World Trade Organization rul- years ending in 2005, 2006, and 2007, over ings on the FSC/ETI benefit in a man- Mrs. LINCOLN) submitted an amendment in- ‘‘(II) the aggregate qualified expenditures tended to be proposed to amendment SA 2886 of the corporation for taxable years ending ner that preserves jobs and production submitted by Mr. MCCONNELL (for Mr. in 2001, 2002, and 2003. activities in the United States, to re- FRIST) to the bill S. 1637, supra; which was ‘‘(B) EARNINGS PERMANENTLY REINVESTED form and simplify the international ordered to lie on the table. OUTSIDE THE UNITED STATES.— taxation rules of the United States, SA 2914. Mr. COLEMAN submitted an ‘‘(i) IN GENERAL.—If an amount on an appli- and for other purposes; which was or- amendment intended to be proposed to cable financial statement is shown as Fed- dered to lie on the table; as follows: amendment SA 2886 submitted by Mr. eral income taxes not required to be reserved MCCONNELL (for Mr. FRIST) to the bill S. On page 179, after line 25, add the fol- by reason of the permanent reinvestment of lowing: 1637, supra; which was ordered to lie on the earnings outside the United States, subpara- table. graph (A)(i) shall be applied by reference to SEC. ll. REPEAL OF 10 YEAR RULE FOR QUALI- SA 2915. Mr. COLEMAN submitted an FIED MORTGAGE BONDS; HOLIDAY the earnings to which such taxes relate. FOR USE OF CERTAIN REPAYMENTS. amendment intended to be proposed by him O STATEMENT OR STATED AMOUNT ‘‘(ii) N .—If (a) REPEAL.—Subparagraph (A) of section to the bill S. 1637, supra; which was ordered there is no applicable financial statement or to lie on the table. 143(a)(2) (relating to qualified mortgage issue such a statement fails to show a specific defined) is amended by striking the last sen- SA 2916. Mr. WYDEN (for himself and Mr. amount described in subparagraph (A)(i) or COLEMAN) submitted an amendment intended tence thereof. clause (i), such amount shall be treated as (b) HOLIDAY FOR PREPAYMENTS.—Subpara- to be proposed by him to the bill S. 1637, being zero. supra; which was ordered to lie on the table. graph (A) of section 143(a)(2) is amended by ‘‘(iii) APPLICABLE FINANCIAL STATEMENT.— adding at the end the following flush sen- SA 2917. Mr. FEINGOLD submitted an For purposes of this paragraph, the term ‘ap- amendment intended to be proposed by him tence: ‘‘Clause (iv) shall not apply to plicable financial statement’ means the most amounts received during 2004, 2005, and to the bill S. 1637, supra; which was ordered recently audited financial statement (includ- to lie on the table. 2006.’’. ing notes and other documents which accom- (c) EFFECTIVE DATES.— SA 2918. Mrs. CLINTON submitted an pany such statement)— (1) SUBSECTION (a).—The amendment made amendment intended to be proposed by her ‘‘(I) which is certified on or before March by subsection (a) shall apply to bonds issued to the bill S. 1637, supra; which was ordered 31, 2003, as being prepared in accordance with after the date of the enactment of this Act. to lie on the table. generally accepted accounting principles, (2) SUBSECTION (b).—The amendment made SA 2919. Mr. DORGAN submitted an and by subsection (b) shall apply to amounts re- amendment intended to be proposed by him ‘‘(II) which is used for the purposes of a ceived after December 31, 2003. to the bill S. 1637, supra; which was ordered statement or report to creditors, to share- SEC. ll. MODIFICATION OF PURCHASE PRICE to lie on the table. holders, or for any other substantial nontax SA 2920. Mr. DORGAN submitted an LIMITATION UNDER MORTGAGE purpose. SUBSIDY BOND RULES BASED ON amendment intended to be proposed by him In the case of a corporation required to file MEDIAN FAMILY INCOME. to the bill S. 1637, supra; which was ordered a financial statement with the Securities (a) IN GENERAL.—Paragraph (1) of section to lie on the table. and Exchange Commission, such term means 143(e) (relating to purchase price require- SA 2921. Mr. DORGAN submitted an the most recent such statement filed on or ment) is amended to read as follows: amendment intended to be proposed by him before March 31, 2003. ‘‘(1) IN GENERAL.—An issue meets the re- to the bill S. 1637, supra; which was ordered ‘‘(C) QUALIFIED EXPENDITURES.—For pur- quirements of this subsection only if the ac- to lie on the table. poses of this paragraph, the term ‘qualified quisition cost of each residence the owner-fi- SA 2922. Mr. DORGAN (for himself, Ms. MI- expenditures’ means— nancing of which is provided under the issue KULSKI, Mr. KOHL, Mr. KENNEDY, Mr. ‘‘(i) wages (as defined in section 3121(a)), does not exceed the greater of— EDWARDS, Mr. FEINGOLD, and Mr. HARKIN) ‘‘(ii) additions to capital accounts for prop- ‘‘(A) 90 percent of the average area pur- submitted an amendment intended to be pro- erty located within the United States (in- chase price applicable to the residence, or posed by him to the bill S. 1637, supra; which cluding any amount which would be so added ‘‘(B) 3.5 times the applicable median family was ordered to lie on the table. but for a provision of this title providing for income (as defined in subsection (f)).’’. SA 2923. Mr. DORGAN submitted an the expensing of such amount), (b) EFFECTIVE DATE.—The amendment amendment intended to be proposed by him ‘‘(iii) qualified research expenses (as de- made by this section shall apply to financing to the bill S. 1637, supra; which was ordered fined in section 41(b)) and basic research pay- provided, and mortgage credit certificates to lie on the table. ments (as defined in section 41(e)(2)), and issued, after the date of the enactment of SA 2924. Mr. DORGAN (for himself, Mr. ‘‘(iv) irrevocable contributions to a quali- this Act. COLEMAN, Ms. CANTWELL, Mrs. MURRAY, Mr. fied employer plan (as defined in section SEC. ll. DETERMINATION OF AREA MEDIAN BINGAMAN, and Mr. NELSON, of Nebraska) 72(p)(4)) but only if no deduction is allowed GROSS INCOME FOR LOW-INCOME submitted an amendment intended to be pro- under this chapter with respect to such con- HOUSING CREDIT PROJECTS. posed by him to the bill S. 1637, supra; which tributions. (a) IN GENERAL.—Paragraph (4) of section was ordered to lie on the table. ‘‘(D) RECAPTURE.—If the taxpayer’s esti- 42(g) (relating to certain rules made applica- f mate of qualified expenditures under sub- ble) is amended by striking the period at the paragraph (A)(ii)(I) is greater than the ac- end and inserting ‘‘and in areas designated TEXT OF AMENDMENTS tual expenditures, then the tax imposed by by the housing credit agency as requiring this chapter for the taxpayer’s last taxable higher income limits to support development SA 2891. Mr. BREAUX (for himself year ending in 2007 shall be increased by the costs and project feasibility, the term ‘area sum of— median gross income’ means the amount and Mrs. FEINSTEIN) submitted an ‘‘(i) the increase (if any) in tax which equal to the greater of— amendment intended to be proposed by would have resulted in the taxable year for ‘‘(A) the area median gross income deter- him to the bill S. 1637, to amend the In- which the deduction under this section was mined under section 142(d)(2)(B), or ternal Revenue Code of 1986 to comply allowed if the actual expenditures were used ‘‘(B) the statewide median gross income for with the World Trade Organization rul- in lieu of the estimated expenditures, plus the State in which the project is located.’’.

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(b) CONFORMING AMENDMENT.—Subpara- other waste materials and which is derived cility shall be an amount equal to the graph (B) of section 142(d)(2) (relating to in- from— amount determined without regard to this come of individuals; area median gross in- ‘‘(I) any of the following forest-related re- clause multiplied by the ratio of the thermal come) is amended— sources: mill and harvesting residues, content of the closed-loop biomass used in (1) by striking ‘‘.—The income’’ and insert- precommercial thinnings, slash, and brush, such facility to the thermal content of all ing ‘‘.— ‘‘(II) solid wood waste materials, including fuels used in such facility, and ‘‘(i) IN GENERAL.—Except as provided in waste pallets, crates, dunnage, manufac- ‘‘(iii) if the owner of such facility is not clause (ii), the income’’, and turing and construction wood wastes (other the producer of the electricity, the person el- (2) by adding at the end the following new than pressure-treated, chemically-treated, or igible for the credit allowable under sub- clause: painted wood wastes), and landscape or section (a) shall be the lessee or the operator ‘‘(ii) AREA MEDIAN GROSS INCOME FOR LOW- right-of-way tree trimmings, but not includ- of such facility. INCOME HOUSING CREDIT PROJECTS.—In the ing municipal solid waste, gas derived from ‘‘(3) BIOMASS FACILITY.— case of any building which receives a low-in- the biodegradation of solid waste, or paper ‘‘(A) IN GENERAL.—In the case of a facility come housing credit allocation under section which is commonly recycled, or using biomass (other than closed-loop bio- 42 in areas designated by the housing credit ‘‘(III) agriculture sources, including or- mass) to produce electricity, the term ‘quali- agency (as defined in section 42(h)(8)) as re- chard tree crops, vineyard, grain, legumes, quiring higher income limits to support de- sugar, and other crop by-products or resi- fied facility’ means any facility owned by velopment costs and project feasibility, the dues. the taxpayer which— ‘‘(i) in the case of a facility using agricul- term ‘area median gross income’ means the ‘‘(B) AGRICULTURAL LIVESTOCK WASTE NU- amount equal to the greater of— TRIENTS.— tural livestock waste nutrients, is originally ‘‘(I) the area median gross income deter- ‘‘(i) IN GENERAL.—The term ‘agricultural placed in service after September 30, 2004 and mined under clause (i), or livestock waste nutrients’ means agricul- before January 1, 2007, and ‘‘(II) the statewide median gross income tural livestock manure and litter, including ‘‘(ii) in the case of any other facility, is for the State in which the project is lo- wood shavings, straw, rice hulls, and other originally placed in service before January 1, cated.’’. bedding material for the disposition of ma- 2005. (c) EFFECTIVE DATE.—The amendments nure. ‘‘(B) SPECIAL RULES FOR PREEFFECTIVE made by this section shall apply to— ‘‘(ii) AGRICULTURAL LIVESTOCK.—The term DATE FACILITIES.—In the case of any facility (1) housing credit dollar amounts allocated ‘agricultural livestock’ includes bovine, described in subparagraph (A)(ii) which is after the date of the enactment of this Act, swine, poultry, and sheep. placed in service before October 1, 2004— and ‘‘(4) GEOTHERMAL ENERGY.—The term ‘geo- ‘‘(i) subsection (a)(1) shall be applied by (2) buildings placed in service after such thermal energy’ means energy derived from substituting ‘1.2 cents’ for ‘1.5 cents’, and date to the extent paragraph (1) of section a geothermal deposit (within the meaning of ‘‘(ii) the 5-year period beginning on Octo- 42(h) of the Internal Revenue Code of 1986 section 613(e)(2)). ber 1, 2004, shall be substituted for the 10- does not apply to any building by reason of ‘‘(5) SMALL IRRIGATION POWER.—The term year period in subsection (a)(2)(A)(ii). paragraph (4) thereof. ‘small irrigation power’ means power— ‘‘(C) CREDIT ELIGIBILITY.—In the case of ‘‘(A) generated without any dam or im- any facility described in subparagraph (A), if SA 2893. Mr. REID (for himself and poundment of water through an irrigation the owner of such facility is not the producer Mr. DAYTON) submitted an amendment system canal or ditch, and of the electricity, the person eligible for the intended to be proposed by him to the ‘‘(B) the installed capacity of which is less credit allowable under subsection (a) shall be bill S. 1637, to amend the Internal Rev- than 5 megawatts. the lessee or the operator of such facility. enue Code of 1986 to comply with the ‘‘(6) BIOSOLIDS AND SLUDGE.—The term ‘bio- ‘‘(4) GEOTHERMAL OR SOLAR ENERGY FACIL- World Trade Organization rulings on solids and sludge’ means the residue or solids ITY.— removed in the treatment of commercial, in- ‘‘(A) IN GENERAL.—In the case of a facility the FSC/ETI benefit in a manner that dustrial, or municipal wastewater. preserves jobs and production activi- using geothermal or solar energy to produce ‘‘(7) MUNICIPAL SOLID WASTE.—The term electricity, the term ‘qualified facility’ ties in the United States, to reform and ‘municipal solid waste’ has the meaning means any facility owned by the taxpayer simplify the international taxation given the term ‘solid waste’ under section which is originally placed in service after rules of the United States, and for 2(27) of the Solid Waste Disposal Act (42 September 30, 2004, and before January 1, other purposes; which was ordered to U.S.C. 6903).’’. 2007. (b) EXTENSION AND EXPANSION OF QUALIFIED lie on the table; as follows: ‘‘(B) SPECIAL RULE.—In the case of any fa- FACILITIES.— Beginning on page 179, after line 25, add cility described in subparagraph (A), the 5- (1) IN GENERAL.—Section 45 is amended by the following: year period beginning on the date the facil- redesignating subsection (d) as subsection (e) ity was originally placed in service shall be SEC. ll. EXTENSION AND EXPANSION OF CRED- and by inserting after subsection (c) the fol- IT FOR ELECTRICITY PRODUCED substituted for the 10-year period in sub- lowing new subsection: FROM CERTAIN RENEWABLE RE- section (a)(2)(A)(ii). SOURCES. ‘‘(d) QUALIFIED FACILITIES.—For purposes of this section— ‘‘(5) SMALL IRRIGATION POWER FACILITY.—In (a) EXPANSION OF QUALIFIED ENERGY RE- the case of a facility using small irrigation SOURCES.—Subsection (c) of section 45 (relat- ‘‘(1) WIND FACILITY.—In the case of a facil- ity using wind to produce electricity, the power to produce electricity, the term ing to electricity produced from certain re- ‘qualified facility’ means any facility owned newable resources), as amended by section term ‘qualified facility’ means any facility by the taxpayer which is originally placed in 514 of this Act (as added by amendment no. owned by the taxpayer which is originally service after September 30, 2004, and before 2687, as agreed to) is amended to read as fol- placed in service after December 31, 1993, and January 1, 2007. lows: before January 1, 2007. ‘‘(c) QUALIFIED ENERGY RESOURCES.—For ‘‘(2) CLOSED-LOOP BIOMASS FACILITY.— ‘‘(6) BIOSOLIDS AND SLUDGE FACILITY.—In purposes of this section— ‘‘(A) IN GENERAL.—In the case of a facility the case of a facility using waste heat from ‘‘(1) IN GENERAL.—The term ‘qualified en- using closed-loop biomass to produce elec- the incineration of biosolids and sludge to ergy resources’ means— tricity, the term ‘qualified facility’ means produce electricity, the term ‘qualified facil- ‘‘(A) wind, any facility— ity’ means any facility owned by the tax- ‘‘(B) closed-loop biomass, ‘‘(i) owned by the taxpayer which is origi- payer which is originally placed in service ‘‘(C) biomass (other than closed-loop bio- nally placed in service after December 31, after September 30, 2004, and before January mass), 1992, and before January 1, 2007, or 1, 2007. Such term shall not include any prop- ‘‘(D) geothermal energy, ‘‘(ii) owned by the taxpayer which before erty described in section 48(a)(6) the basis of ‘‘(E) solar energy, January 1, 2007, is originally placed in serv- which is taken into account for purposes of ‘‘(F) small irrigation power, ice and modified to use closed-loop biomass the energy credit under section 46. ‘‘(G) biosolids and sludge, and to co-fire with coal, with other biomass, or ‘‘(7) MUNICIPAL SOLID WASTE FACILITY.— ‘‘(H) municipal solid waste.’’. with both, but only if the modification is ap- ‘‘(A) IN GENERAL.—In the case of a facility ‘‘(2) CLOSED-LOOP BIOMASS.—The term proved under the Biomass Power for Rural or unit incinerating municipal solid waste to ‘closed-loop biomass’ means any organic ma- Development Programs or is part of a pilot produce electricity, the term ‘qualified facil- terial from a plant which is planted exclu- project of the Commodity Credit Corporation ity’ means any facility or unit owned by the sively for purposes of being used at a quali- as described in 65 Fed. Reg. 63052. taxpayer which is originally placed in serv- fied facility to produce electricity. ‘‘(B) SPECIAL RULES.—In the case of a ice after September 30, 2004, and before Janu- ‘‘(3) BIOMASS.— qualified facility described in subparagraph ary 1, 2007. ‘‘(A) IN GENERAL.—The term ‘biomass’ (A)(ii)— ‘‘(B) SPECIAL RULE.—In the case of any fa- means— ‘‘(i) the 10-year period referred to in sub- cility or unit described in subparagraph (A), ‘‘(i) any agricultural livestock waste nutri- section (a) shall be treated as beginning no the 5-year period beginning on the date the ents, or earlier than October 1, 2004, facility or unit was originally placed in serv- ‘‘(ii) any solid, nonhazardous, cellulosic ‘‘(ii) the amount of the credit determined ice shall be substituted for the 10-year period waste material which is segregated from under subsection (a) with respect to the fa- in subsection (a)(2)(A)(ii).

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‘‘(C) CREDIT ELIGIBILITY.—In the case of ‘‘(III) a public utility (as defined in section (2) CONFORMING AMENDMENTS.— any qualified facility described in subpara- 136(c)(2)(B)), which is exempt from income (A) Paragraph (2)(A)(ii)(II) of section 38(c) graph (A), if the owner of such facility is not tax under this subtitle, of such Code is amended by striking ‘‘or’’ the producer of the electricity, the person el- ‘‘(IV) any State or political subdivision and inserting a comma and by inserting ‘‘, igible for the credit allowable under sub- thereof, the District of Columbia, any pos- and the section 45 credit’’ after ‘‘employee section (a) shall be the lessee or the operator session of the United States, or any agency credit’’. of such facility.’’. or instrumentality of any of the foregoing, (B) Paragraph (3)(A)(ii)(II) of section 38(c) (2) NO CREDIT FOR CERTAIN PRODUCTION.— or of such Code is amended by inserting ‘‘and Section 45(e) (relating to definitions and spe- ‘‘(V) any Indian tribal government (within the section 45 credit’’ after ‘‘employee cred- cial rules), as redesignated by paragraph (1), the meaning of section 7871) or any agency or it’’. is amended by striking paragraph (6) and in- instrumentality thereof. (g) EFFECTIVE DATES.— serting the following new paragraph: ‘‘(B) TRANSFER OF CREDIT.— (1) IN GENERAL.—Except as otherwise pro- ‘‘(6) OPERATIONS INCONSISTENT WITH SOLID ‘‘(i) IN GENERAL.—A person described in vided in this subsection, the amendments WASTE DISPOSAL ACT.—In the case of a quali- subparagraph (A)(ii) may transfer any credit made by this section shall apply to elec- fied facility described in subsection (d)(6)(A), to which subparagraph (A)(i) applies through tricity produced and sold— subsection (a) shall not apply to electricity an assignment to any other person not de- (A) with respect to facilities described in produced at such facility during any taxable scribed in subparagraph (A)(ii). Such transfer paragraphs (1) and (2)(A)(i) of section 45(d), year if, during a portion of such year, there may be revoked only with the consent of the as amended by this section, after December is a certification in effect by the Adminis- Secretary. 31, 2003, in taxable years ending after such trator of the Environmental Protection ‘‘(ii) REGULATIONS.—The Secretary shall date, and Agency that such facility was permitted to prescribe such regulations as necessary to (B) with respect to all other facilities de- operate in a manner inconsistent with sec- ensure that any credit described in clause (i) scribed in section 45(d), as amended by this tion 4003(d) of the Solid Waste Disposal Act is assigned once and not reassigned by such section, after September 30, 2004, in taxable (42 U.S.C. 6943(d)).’’. other person. years ending after such date. (3) CONFORMING AMENDMENT.—Section 45(e), ‘‘(iii) TRANSFER PROCEEDS TREATED AS ARIS- (2) CERTAIN BIOMASS FACILITIES.—With re- as so redesignated, is amended by striking ING FROM ESSENTIAL GOVERNMENT FUNCTION.— spect to any facility described in section ‘‘subsection (c)(3)(A)’’ in paragraph (7)(A)(i) Any proceeds derived by a person described 45(d)(3)(A)(ii) of the Internal Revenue Code of and inserting ‘‘subsection (d)(1)’’. in subclause (III), (IV), or (V) of subpara- 1986, as added by subsection (b)(1), which is graph (A)(ii) from the transfer of any credit (c) CREDIT RATE FOR ELECTRICITY PRO- placed in service before the date of the en- under clause (i) shall be treated as arising DUCED FROM NEW FACILITIES.—Section 45(a) actment of this Act, the amendments made is amended by adding at the end the fol- from the exercise of an essential government by this section shall apply to electricity pro- function. lowing new flush sentence: duced and sold after September 30, 2004, in ‘‘(C) USE OF CREDIT AS AN OFFSET.—Not- ‘‘In the case of electricity produced after taxable years ending after such date. withstanding any other provision of law, in September 30, 2004, at any qualified facility (3) CREDIT RATE FOR NEW FACILITIES.—The the case of a person described in subclause amendments made by subsection (c) shall originally placed in service after such date, (I), (II), or (V) of subparagraph (A)(ii), any apply to electricity produced and sold after paragraph (1) shall be applied by substituting credit to which subparagraph (A)(i) applies September 30, 2004, in taxable years ending ‘1.8 cents’ for ‘1.5 cents’.’’. may be applied by such person, to the extent after such date. (d) ELIMINATION OF CERTAIN CREDIT REDUC- provided by the Secretary of Agriculture, as (4) NONAPPLICATION OF AMENDMENTS TO TIONS.—Section 45(b)(3)(A) (relating to credit a prepayment of any loan, debt, or other ob- PREEFFECTIVE DATE POULTRY WASTE FACILI- reduced for grants, tax-exempt bonds, sub- ligation the entity has incurred under sub- TIES.—The amendments made by this section sidized energy financing, and other credits) chapter I of chapter 31 of title 7 of the Rural shall not apply with respect to any poultry is amended— Electrification Act of 1936 (7 U.S.C. 901 et (1) by striking clause (ii), seq.), as in effect on the date of the enact- waste facility (within the meaning of section (2) by redesignating clauses (iii) and (iv) as ment of the Energy Tax Incentives Act. 45(c)(3)(C), as in effect on September 30, 2004) placed in service on or before such date. clauses (ii) and (iii), ‘‘(D) CREDIT NOT INCOME.—Any transfer (3) by inserting ‘‘(other than proceeds of an under subparagraph (B) or use under sub- issue of State or local government obliga- paragraph (C) of any credit to which sub- SA 2894. Mr. KYL (for himself and tions the interest on which is exempt from paragraph (A)(i) applies shall not be treated Mr. NICKLES) submitted an amendment tax under section 103, or any loan, debt, or as income for purposes of section 501(c)(12). intended to be proposed to amendment other obligation incurred under subchapter I ‘‘(E) TREATMENT OF UNRELATED PERSONS.— SA 2886 submitted by Mr. MCCONNELL of chapter 31 of title 7 of the Rural Elec- For purposes of subsection (a)(2)(B), sales of (for Mr. FRIST) to the bill S. 1637, to trification Act of 1936 (7 U.S.C. 901 et seq.), as electricity among and between persons de- in effect on the date of the enactment of the amend the Internal Revenue Code of scribed in subparagraph (A)(ii) shall be treat- 1986 to comply with the World Trade Energy Tax Incentives Act)’’ after ‘‘project’’ ed as sales between unrelated parties.’’. in clause (ii) (as so redesignated), (f) CREDIT ALLOWED AGAINST REGULAR AND Organization rulings on the FSC/ETI (4) by adding at the end the following new MINIMUM TAX.— benefit in a manner that preserves jobs sentence: ‘‘This paragraph shall not apply (1) IN GENERAL.—Subsection (c) of section and production activities in the United with respect to any facility described in sub- 38 (relating to limitation based on amount of States, to reform and simplify the section (d)(2)(A)(ii).’’, and tax) is amended by redesignating paragraph international taxation rules of the (5) by striking ‘‘TAX-EXEMPT BONDS,’’ in the (4) as paragraph (5) and by inserting after United States, and for other purposes; heading and inserting ‘‘CERTAIN’’. paragraph (3) the following new paragraph: which was ordered to lie on the table; (e) TREATMENT OF PERSONS NOT ABLE TO ‘‘(4) SPECIAL RULES FOR SECTION 45 CREDIT.— USE ENTIRE CREDIT.—Section 45(e) (relating ‘‘(A) IN GENERAL.—In the case of any sec- as follows: to definitions and special rules), as redesig- tion 45 credit— In lieu of the amendment contained in the nated by subsection (b)(1), is amended by ‘‘(i) this section and section 39 shall be ap- instructions insert the following: adding at the end the following new para- plied separately with respect to such credit, SECTION 1. SHORT TITLE; AMENDMENT OF 1986 graph: and CODE; TABLE OF CONTENTS. ‘‘(8) TREATMENT OF PERSONS NOT ABLE TO ‘‘(ii) in applying paragraph (1) to such cred- (a) SHORT TITLE.—This Act may be cited as USE ENTIRE CREDIT.— it— the ‘‘Jumpstart Our Business Strength ‘‘(A) ALLOWANCE OF CREDIT.— ‘‘(I) the tentative minimum tax shall be (JOBS) Act’’. ‘‘(i) IN GENERAL.—Except as otherwise pro- treated as being zero, and (b) AMENDMENT OF 1986 CODE.—Except as vided in this subsection— ‘‘(II) the limitation under paragraph (1) (as otherwise expressly provided, whenever in ‘‘(I) any credit allowable under subsection modified by subclause (I)) shall be reduced this Act an amendment or repeal is ex- (a) with respect to a qualified facility owned by the credit allowed under subsection (a) for pressed in terms of an amendment to, or re- by a person described in clause (ii) may be the taxable year (other than the section 45 peal of, a section or other provision, the ref- transferred or used as provided in this para- credit). erence shall be considered to be made to a graph, and ‘‘(B) SECTION 45 CREDIT.—For purposes of section or other provision of the Internal ‘‘(II) the determination as to whether the this subsection, the term ‘section 45 credit’ Revenue Code of 1986. credit is allowable shall be made without re- means the credit determined under section 45 (c) TABLE OF CONTENTS.— gard to the tax-exempt status of the person. to the extent that such credit is attributable Sec. 1. Short title; amendment of 1986 Code; ‘‘(ii) PERSONS DESCRIBED.—A person is de- to electricity produced— table of contents. scribed in this clause if the person is— ‘‘(i) at a facility which is originally placed ‘‘(I) an organization described in section in service after the date of the enactment of TITLE I—PROVISIONS RELATING TO RE- 501(c)(12)(C) and exempt from tax under sec- this paragraph, and PEAL OF EXCLUSION FOR tion 501(a), ‘‘(ii) during the 4-year period beginning on EXTRATERRITORIAL INCOME ‘‘(II) an organization described in section the date that such facility was originally Sec. 101. Repeal of exclusion for 1381(a)(2)(C), placed in service.’’. extraterritorial income.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00060 Fmt 4624 Sfmt 0655 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3007 TITLE II—REDUCTION OF TOP Subtitle D—Provisions to Discourage Sec. 483. Doubling of certain penalties, fines, CORPORATE TAX RATE Expatriation and interest on underpayments Sec. 201. Reduction in corporate income tax Sec. 441. Tax treatment of inverted cor- related to certain offshore fi- rate. porate entities. nancial arrangement. TITLE III—ALTERNATIVE MINIMUM TAX Sec. 442. Imposition of mark-to-market tax Sec. 484. Partial payment of tax liability in RELIEF on individuals who expatriate. installment agreements. Sec. 485. Extension of customs user fees. Sec. 301. Reduction in corporate AMT rate. Sec. 443. Excise tax on stock compensation Sec. 486. Deposits made to suspend running Sec. 302. Increase in exemption from AMT of insiders in inverted corpora- of interest on potential under- for small corporations. tions. payments. Sec. 303. Foreign tax credit under alter- Sec. 444. Reinsurance of United States risks Sec. 487. Qualified tax collection contracts. native minimum tax. in foreign jurisdictions. PART V—MISCELLANEOUS PROVISIONS TITLE IV—ADDITIONAL PROVISIONS Sec. 445. Reporting of taxable mergers and acquisitions. Sec. 491. Addition of vaccines against hepa- Subtitle A—Provisions Designed To Curtail titis A to list of taxable vac- Tax Shelters Subtitle E—International Tax cines. Sec. 401. Clarification of economic substance Sec. 451. Clarification of banking business Sec. 492. Recognition of gain from the sale doctrine. for purposes of determining in- of a principal residence ac- Sec. 402. Penalty for failing to disclose re- vestment of earnings in United quired in a like-kind exchange portable transaction. States property. within 5 years of sale. Sec. 403. Accuracy-related penalty for listed Sec. 452. Prohibition on nonrecognition of Sec. 493. Clarification of exemption from tax transactions and other report- gain through complete liquida- for small property and casualty able transactions having a sig- tion of holding company. insurance companies. nificant tax avoidance purpose. Sec. 453. Prevention of mismatching of in- Sec. 494. Definition of insurance company Sec. 404. Penalty for understatements at- terest and original issue dis- for section 831. tributable to transactions lack- count deductions and income Sec. 495. Limitations on deduction for chari- ing economic substance, etc. table contributions of patents Sec. 405. Modifications of substantial under- inclusions in transactions with related foreign persons. and similar property. statement penalty for non- Sec. 496. Repeal of 10-percent rehabilitation Sec. 454. Effectively connected income to in- reportable transactions. tax credit. Sec. 406. Tax shelter exception to confiden- clude certain foreign source in- Sec. 497. Increase in age of minor children tiality privileges relating to come. whose unearned income is taxed taxpayer communications. Sec. 455. Recapture of overall foreign losses as if parent’s income. Sec. 407. Disclosure of reportable trans- on sale of controlled foreign corporation. TITLE I—PROVISIONS RELATING TO RE- actions. PEAL OF EXCLUSION FOR Sec. 408. Modifications to penalty for failure Sec. 456. Minimum holding period for for- EXTRATERRITORIAL INCOME to register tax shelters. eign tax credit on withholding Sec. 409. Modification of penalty for failure taxes on income other than SEC. 101. REPEAL OF EXCLUSION FOR to maintain lists of investors. dividends. EXTRATERRITORIAL INCOME. (a) IN GENERAL.—Section 114 is hereby re- Sec. 410. Modification of actions to enjoin Subtitle F—Other Revenue Provisions certain conduct related to tax pealed. (b) CONFORMING AMENDMENTS.— shelters and reportable trans- PART I—FINANCIAL INSTRUMENTS (1)(A) Subpart E of part III of subchapter N actions. Sec. 461. Treatment of stripped interests in Sec. 411. Understatement of taxpayer’s li- bond and preferred stock funds, of chapter 1 (relating to qualifying foreign ability by income tax return etc. trade income) is hereby repealed. preparer. Sec. 462. Application of earnings stripping (B) The table of subparts for such part III Sec. 412. Penalty on failure to report inter- rules to partnerships and S cor- is amended by striking the item relating to ests in foreign financial ac- porations. subpart E. counts. Sec. 463. Recognition of cancellation of in- (2) The table of sections for part III of sub- Sec. 413. Frivolous tax submissions. debtedness income realized on chapter B of chapter 1 is amended by strik- Sec. 414. Regulation of individuals prac- satisfaction of debt with part- ing the item relating to section 114. ticing before the Department of nership interest. (3) The second sentence of section Treasury. Sec. 464. Modification of straddle rules. 56(g)(4)(B)(i) is amended by striking ‘‘114 or’’. Sec. 415. Penalty on promoters of tax shel- Sec. 465. Denial of installment sale treat- (4) Section 275(a) is amended— ters. ment for all readily tradeable (A) by inserting ‘‘or’’ at the end of para- Sec. 416. Statute of limitations for taxable debt. graph (4)(A), by striking ‘‘or’’ at the end of years for which required listed paragraph (4)(B) and inserting a period, and transactions not reported. PART II—CORPORATIONS AND PARTNERSHIPS by striking subparagraph (C), and Sec. 417. Denial of deduction for interest on Sec. 466. Modification of treatment of trans- (B) by striking the last sentence. underpayments attributable to fers to creditors in divisive re- (5) Paragraph (3) of section 864(e) is amend- nondisclosed reportable and organizations. ed— noneconomic substance trans- Sec. 467. Clarification of definition of non- (A) by striking: actions. qualified preferred stock. ‘‘(3) TAX-EXEMPT ASSETS NOT TAKEN INTO Sec. 418. Authorization of appropriations for Sec. 468. Modification of definition of con- ACCOUNT.— tax law enforcement. trolled group of corporations. ‘‘(A) IN GENERAL.—For purposes of’’; and Subtitle B—Other Corporate Governance Sec. 469. Mandatory basis adjustments in inserting: Provisions connection with partnership ‘‘(3) TAX-EXEMPT ASSETS NOT TAKEN INTO Sec. 421. Affirmation of consolidated return distributions and transfers of ACCOUNT.—For purposes of’’, and regulation authority. partnership interests. (B) by striking subparagraph (B). Sec. 422. Increase in criminal monetary pen- PART III—DEPRECIATION AND AMORTIZATION (6) Section 903 is amended by striking ‘‘114, alty limitation for the under- Sec. 471. Extension of amortization of intan- 164(a),’’ and inserting ‘‘164(a)’’. payment or overpayment of tax gibles to sports franchises. (7) Section 999(c)(1) is amended by striking due to fraud. Sec. 472. Class lives for utility grading costs. ‘‘941(a)(5),’’. (c) EFFECTIVE DATE.— Subtitle C—Enron-Related Tax Shelter Sec. 473. Expansion of limitation on depre- (1) IN GENERAL.—The amendments made by Provisions ciation of certain passenger this section shall apply to transactions oc- Sec. 431. Limitation on transfer or importa- automobiles. curring after the date of the enactment of tion of built-in losses. Sec. 474. Consistent amortization of periods this Act. Sec. 432. No reduction of basis under section for intangibles. (2) BINDING CONTRACTS.—The amendments 734 in stock held by partnership Sec. 475. Reform of tax treatment of leasing made by this section shall not apply to any in corporate partner. operations. transaction in the ordinary course of a trade Sec. 433. Repeal of special rules for FASITs. Sec. 476. Limitation on deductions allocable or business which occurs pursuant to a bind- Sec. 434. Expanded disallowance of deduc- to property used by govern- ing contract— tion for interest on convertible ments or other tax-exempt en- (A) which is between the taxpayer and a debt. tities. Sec. 435. Expanded authority to disallow tax person who is not a related person (as de- benefits under section 269. PART IV—ADMINISTRATIVE PROVISIONS fined in section 943(b)(3) of such Code, as in Sec. 436. Modification of interaction be- Sec. 481. Clarification of rules for payment effect on the day before the date of the en- tween subpart F and passive of estimated tax for certain actment of this Act), and foreign investment company deemed asset sales. (B) which is in effect on September 17, 2003, rules. Sec. 482. Extension of IRS user fees. and at all times thereafter.

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(d) REVOCATION OF SECTION 943(e) ELEC- spective portions of the taxable year in each ‘‘If taxable income is: The tax is: TIONS.— calendar year. Over $75,000...... $13,750, plus 33% of the excess over $75,000. (1) IN GENERAL.—In the case of a corpora- (C) SHORT TAXABLE YEAR.—The Secretary tion that elected to be treated as a domestic shall prescribe guidance for the computation ‘‘(2) FOR TAXABLE YEARS BEGINNING IN 2006, corporation under section 943(e) of the Inter- of the transition amount in the case of a 2007, 2008, OR 2009.—In the case of taxable years nal Revenue Code of 1986 (as in effect on the short taxable year. beginning in 2006, 2007, 2008, or 2009, the day before the date of the enactment of this (4) BASE PERIOD AMOUNT.—For purposes of amount of the tax imposed by subsection (a) Act)— this subsection, the base period amount is shall be determined in accordance with the (A) the corporation may, during the 1-year the FSC/ETI benefit for the taxpayer’s tax- following table: period beginning on the date of the enact- able year beginning in calendar year 2002. ‘‘If taxable income is: The tax is: ment of this Act, revoke such election, effec- (5) FSC/ETI BENEFIT.—For purposes of this Not over $50,000 ...... 15% of taxable income. tive as of such date of enactment, and subsection, the term ‘‘FSC/ETI benefit’’ Over $50,000 but not over $7,500, plus 25% of the ex- (B) if the corporation does revoke such means— $75,000. cess over $50,000. election— (A) amounts excludable from gross income Over $75,000 ...... $13,750, plus 33.5% of the excess over $75,000. (i) such corporation shall be treated as a under section 114 of such Code, and ‘‘(3) FOR TAXABLE YEARS BEGINNING IN 2005.— domestic corporation transferring (as of such (B) the exempt foreign trade income of re- lated foreign sales corporations from prop- In the case of taxable years beginning in date of enactment) all of its property to a 2005, the amount of the tax imposed by sub- foreign corporation in connection with an erty acquired from the taxpayer (determined without regard to section 923(a)(5) of such section (a) shall be determined in accordance exchange described in section 354 of such with the following table: Code, and Code (relating to special rule for military (ii) no gain or loss shall be recognized on property), as in effect on the day before the ‘‘If taxable income is: The tax is: such transfer. date of the enactment of the FSC Repeal and Not over $50,000 ...... 15% of taxable income. Over $50,000 but not over $7,500, plus 25% of the ex- (2) EXCEPTION.—Subparagraph (B)(ii) of Extraterritorial Income Exclusion Act of 2000). $75,000. cess over $50,000. paragraph (1) shall not apply to gain on any Over $75,000...... $13,750, plus 34% of the asset held by the revoking corporation if— In determining the FSC/ETI benefit there excess over $75,000. (A) the basis of such asset is determined in shall be excluded any amount attributable to ‘‘(4) FOR TAXABLE YEARS BEGINNING IN 2004.— whole or in part by reference to the basis of a transaction with respect to which the tax- In the case of taxable years beginning in such asset in the hands of the person from payer is the lessor unless the leased property 2004, the amount of the tax imposed by sub- whom the revoking corporation acquired was manufactured or produced in whole or in section (a) shall be determined in accordance such asset, significant part by the taxpayer. with the following table: (B) the asset was acquired by transfer (not (6) SPECIAL RULE FOR AGRICULTURAL AND as a result of the election under section HORTICULTURAL COOPERATIVES.—Determina- ‘‘If taxable income is: The tax is: Not over $50,000 ...... 15% of taxable income. 943(e) of such Code) occurring on or after the tions under this subsection with respect to an organization described in section 943(g)(1) Over $50,000 but not over $7,500, plus 25% of the ex- 1st day on which its election under section $75,000. cess over $50,000. 943(e) of such Code was effective, and of such Code, as in effect on the day before Over $75,000 but not over $13,750, plus 34% of the (C) a principal purpose of the acquisition the date of the enactment of this Act, shall $10,000,000. excess over $75,000. was the reduction or avoidance of tax (other be made at the cooperative level and the pur- Over $10,000,000...... $3,388,250, plus 34.5% of than a reduction in tax under section 114 of poses of this subsection shall be carried out the excess over such Code, as in effect on the day before the in a manner similar to section 199(h)(2) of $10,000,000. date of the enactment of this Act). such Code, as added by this Act. Such deter- ‘‘(5) PHASEOUT OF LOWER RATES FOR CER- TAIN TAXPAYERS.— (e) GENERAL TRANSITION.— minations shall be in accordance with such ‘‘(A) GENERAL RULE.—In the case of a cor- (1) IN GENERAL.—In the case of a taxable requirements and procedures as the Sec- year ending after the date of the enactment retary may prescribe. poration which has taxable income in excess of this Act and beginning before January 1, (7) CERTAIN RULES TO APPLY.—Rules similar of $100,000 for any taxable year, the amount 2007, for purposes of chapter 1 of such Code, to the rules of section 41(f) of such Code shall of tax determined under paragraph (1), (2), (3) a current FSC/ETI beneficiary shall be al- apply for purposes of this subsection. or (4) for such taxable year shall be increased lowed a deduction equal to the transition (8) COORDINATION WITH BINDING CONTRACT by the lesser of (i) 5 percent of such excess, amount determined under this subsection RULE.—The deduction determined under or (ii) $11,000 ($11,750 in the case of taxable with respect to such beneficiary for such paragraph (1) for any taxable year shall be years beginning before 2006 and $11,375 in the year. reduced by the phaseout percentage of any case of taxable years beginning after 2005 and FSC/ETI benefit realized for the taxable year before 2010). (2) CURRENT FSC/ETI BENEFICIARY.—The term ‘‘current FSC/ETI beneficiary’’ means by reason of subsection (c)(2) or section ‘‘(B) HIGHER INCOME CORPORATIONS.—In the any corporation which entered into one or 5(c)(1)(B) of the FSC Repeal and case of a corporation which has taxable in- more transactions during its taxable year be- Extraterritorial Income Exclusion Act of come in excess of $15,000,000 for taxable years 2000, except that for purposes of this para- ginning in calendar year 2002 with respect to beginning in 2004, the amount of the tax de- graph the phaseout percentage for 2004 shall which FSC/ETI benefits were allowable. termined under the foregoing provisions of be treated as being equal to 100 percent. this subsection shall be increased by an addi- (3) TRANSITION AMOUNT.—For purposes of (9) SPECIAL RULE FOR TAXABLE YEAR WHICH this subsection— tional amount equal to the lesser of (i) 3 per- INCLUDES DATE OF ENACTMENT.—In the case of cent of such excess, or (ii) $50,000.’’. (A) IN GENERAL.—The transition amount a taxable year which includes the date of the applicable to any current FSC/ETI bene- (b) CONFORMING AMENDMENTS.— enactment of this Act, the deduction allowed ficiary for any taxable year is the phaseout (1) Section 904(b)(3)(D)(ii) is amended to under this subsection to any current FSC/ percentage of the base period amount. read as follows: ETI beneficiary shall in no event exceed— ‘‘(ii) in the case of a corporation, section (B) PHASEOUT PERCENTAGE.— (A) 100 percent of such beneficiary’s base 1201(a) applies to such taxable year.’’. (i) IN GENERAL.—In the case of a taxpayer period amount for calendar year 2004, re- using the calendar year as its taxable year, (2) Section 1201(a) is amended by striking duced by ‘‘the last 2 sentences of section 11(b)(1)’’ and the phaseout percentage shall be determined (B) the FSC/ETI benefit of such beneficiary under the following table: inserting ‘‘section 11(b)(5)’’. with respect to transactions occurring dur- (3) Section 1561(a) is amended— The phaseout ing the portion of the taxable year ending on (A) by striking ‘‘the last 2 sentences of sec- Years: percentage is: the date of the enactment of this Act. tion 11(b)(1)’’ and inserting ‘‘section 2004 ...... 80 TITLE II—REDUCTION OF TOP 11(b)(5)’’, and 2005 ...... 80 CORPORATE TAX RATE (B) by striking ‘‘such last 2 sentences’’ and 2006 ...... 60. SEC. 201. REDUCTION IN CORPORATE INCOME inserting ‘‘section 11(b)(5)’’. (ii) SPECIAL RULE FOR 2004.—The phaseout TAX RATE. (c) EFFECTIVE DATE.—The amendments percentage for 2004 shall be the amount that (a) IN GENERAL.—Subsection (b) of section made by this section shall apply to taxable bears the same ratio to 100 percent as the 11 (relating to tax imposed on corporations) years beginning after December 31, 2003. number of days after the date of the enact- is amended by redesignating paragraph (2) as ment of this Act bears to 365. TITLE III—ALTERNATIVE MINIMUM TAX paragraph (6) and by striking paragraph (1) RELIEF (iii) SPECIAL RULE FOR FISCAL YEAR TAX- and inserting the following new paragraphs: SEC. 301. REDUCTION IN CORPORATE AMT RATE. PAYERS.—In the case of a taxpayer not using ‘‘(1) FOR TAXABLE YEARS BEGINNING AFTER the calendar year as its taxable year, the 2009.—In the case of taxable years beginning (a) IN GENERAL.—Section 55(b)(1)(B)(i) (re- phaseout percentage is the weighted average after 2009, the amount of the tax imposed by lating to amount of tentative tax for cor- of the phaseout percentages determined subsection (a) shall be determined in accord- porations) is amended by striking ‘‘20 per- under the preceding provisions of this para- ance with the following table: cent’’ and inserting ‘‘19 percent (19.5 percent graph with respect to calendar years any for taxable years beginning in 2004 or 2005)’’. ‘‘If taxable income is: The tax is: portion of which is included in the tax- Not over $50,000 ...... 15% of taxable income. (b) EFFECTIVE DATE.—The amendment payer’s taxable year. The weighted average Over $50,000 but not over $7,500, plus 25% of the ex- made by this section shall apply to taxable shall be determined on the basis of the re- $75,000. cess over $50,000. years beginning after December 31, 2003.

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SEC. 302. INCREASE IN EXEMPTION FROM AMT ‘‘(A) SPECIAL RULES FOR FINANCING TRANS- ‘‘SEC. 6707A. PENALTY FOR FAILURE TO INCLUDE FOR SMALL CORPORATIONS. ACTIONS.—The form of a transaction which is REPORTABLE TRANSACTION INFOR- (a) IN GENERAL.—Paragraph (1) of section in substance the borrowing of money or the MATION WITH RETURN OR STATE- 55(e) (relating to exemption for small cor- acquisition of financial capital directly or MENT. ‘‘(a) IMPOSITION OF PENALTY.—Any person porations) is amended— indirectly from a tax-indifferent party shall who fails to include on any return or state- (1) by striking ‘‘$7,500,000’’ in the heading not be respected if the present value of the ment any information with respect to a re- and the text of subparagraph (A) and insert- deductions to be claimed with respect to the portable transaction which is required under ing ‘‘$15,000,000’’, transaction is substantially in excess of the section 6011 to be included with such return (2) by striking subparagraph (B), and present value of the anticipated economic re- or statement shall pay a penalty in the (3) by redesignating subparagraphs (C) and turns of the person lending the money or amount determined under subsection (b). (D) as subparagraphs (B) and (C), respec- providing the financial capital. A public of- ‘‘(b) AMOUNT OF PENALTY.— tively. fering shall be treated as a borrowing, or an ‘‘(1) IN GENERAL.—Except as provided in (b) EFFECTIVE DATE.—The amendments acquisition of financial capital, from a tax- made by this section shall apply to taxable paragraphs (2) and (3), the amount of the indifferent party if it is reasonably expected penalty under subsection (a) shall be $50,000. years beginning after December 31, 2003. that at least 50 percent of the offering will be ‘‘(2) LISTED TRANSACTION.—The amount of SEC. 303. FOREIGN TAX CREDIT UNDER ALTER- placed with tax-indifferent parties. NATIVE MINIMUM TAX. the penalty under subsection (a) with respect ‘‘(B) ARTIFICIAL INCOME SHIFTING AND BASIS to a listed transaction shall be $100,000. (a) IN GENERAL.— ADJUSTMENTS.—The form of a transaction ‘‘(3) INCREASE IN PENALTY FOR LARGE ENTI- (1) Subsection (a) of section 59 is amended with a tax-indifferent party shall not be re- TIES AND HIGH NET WORTH INDIVIDUALS.— by striking paragraph (2) and by redesig- spected if— ‘‘(A) IN GENERAL.—In the case of a failure nating paragraphs (3) and (4) as paragraphs ‘‘(i) it results in an allocation of income or (2) and (3), respectively. under subsection (a) by— gain to the tax-indifferent party in excess of ‘‘(i) a large entity, or (2) Section 53(d)(1)(B)(i)(II) is amended by such party’s economic income or gain, or striking ‘‘and if section 59(a)(2) did not ‘‘(ii) a high net worth individual, ‘‘(ii) it results in a basis adjustment or the penalty under paragraph (1) or (2) shall apply’’. shifting of basis on account of overstating (b) EFFECTIVE DATE.—The amendments be twice the amount determined without re- the income or gain of the tax-indifferent gard to this paragraph. made by this section shall apply to taxable party. years beginning after December 31, 2004. ‘‘(B) LARGE ENTITY.—For purposes of sub- ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For TITLE IV—ADDITIONAL PROVISIONS paragraph (A), the term ‘large entity’ means, purposes of this subsection— with respect to any taxable year, a person Subtitle A—Provisions Designed To Curtail ‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.—The (other than a natural person) with gross re- Tax Shelters term ‘economic substance doctrine’ means ceipts in excess of $10,000,000 for the taxable SEC. 401. CLARIFICATION OF ECONOMIC SUB- the common law doctrine under which tax year in which the reportable transaction oc- STANCE DOCTRINE. benefits under subtitle A with respect to a curs or the preceding taxable year. Rules (a) IN GENERAL.—Section 7701 is amended transaction are not allowable if the trans- similar to the rules of paragraph (2) and sub- by redesignating subsection (n) as subsection action does not have economic substance or paragraphs (B), (C), and (D) of paragraph (3) (o) and by inserting after subsection (m) the lacks a business purpose. of section 448(c) shall apply for purposes of following new subsection: ‘‘(B) TAX-INDIFFERENT PARTY.—The term this subparagraph. ‘‘(n) CLARIFICATION OF ECONOMIC SUB- ‘tax-indifferent party’ means any person or ‘‘(C) HIGH NET WORTH INDIVIDUAL.—For pur- STANCE DOCTRINE; ETC.— entity not subject to tax imposed by subtitle poses of subparagraph (A), the term ‘high net ‘‘(1) GENERAL RULES.— A. A person shall be treated as a tax-indif- worth individual’ means, with respect to a ‘‘(A) IN GENERAL.—In any case in which a ferent party with respect to a transaction if reportable transaction, a natural person court determines that the economic sub- the items taken into account with respect to whose net worth exceeds $2,000,000 imme- stance doctrine is relevant for purposes of the transaction have no substantial impact diately before the transaction. this title to a transaction (or series of trans- on such person’s liability under subtitle A. ‘‘(c) DEFINITIONS.—For purposes of this sec- actions), such transaction (or series of trans- ‘‘(C) EXCEPTION FOR PERSONAL TRANS- tion— actions) shall have economic substance only ACTIONS OF INDIVIDUALS.—In the case of an ‘‘(1) REPORTABLE TRANSACTION.—The term if the requirements of this paragraph are individual, this subsection shall apply only ‘reportable transaction’ means any trans- met. to transactions entered into in connection action with respect to which information is ‘‘(B) DEFINITION OF ECONOMIC SUBSTANCE.— with a trade or business or an activity en- required to be included with a return or For purposes of subparagraph (A)— gaged in for the production of income. statement because, as determined under reg- ‘‘(i) IN GENERAL.—A transaction has eco- ‘‘(D) TREATMENT OF LESSORS.—In applying ulations prescribed under section 6011, such nomic substance only if— paragraph (1)(B)(ii) to the lessor of tangible transaction is of a type which the Secretary ‘‘(I) the transaction changes in a meaning- property subject to a lease— determines as having a potential for tax ful way (apart from Federal tax effects) the ‘‘(i) the expected net tax benefits with re- avoidance or evasion. taxpayer’s economic position, and spect to the leased property shall not include ‘‘(2) LISTED TRANSACTION.—Except as pro- ‘‘(II) the taxpayer has a substantial nontax the benefits of— vided in regulations, the term ‘listed trans- purpose for entering into such transaction ‘‘(I) depreciation, action’ means a reportable transaction and the transaction is a reasonable means of ‘‘(II) any tax credit, or which is the same as, or substantially simi- accomplishing such purpose. ‘‘(III) any other deduction as provided in lar to, a transaction specifically identified In applying subclause (II), a purpose of guidance by the Secretary, and by the Secretary as a tax avoidance trans- achieving a financial accounting benefit ‘‘(ii) subclause (II) of paragraph (1)(B)(ii) action for purposes of section 6011. shall not be taken into account in deter- shall be disregarded in determining whether ‘‘(d) AUTHORITY TO RESCIND PENALTY.— mining whether a transaction has a substan- any of such benefits are allowable. ‘‘(1) IN GENERAL.—The Commissioner of In- tial nontax purpose if the origin of such fi- ‘‘(4) OTHER COMMON LAW DOCTRINES NOT AF- ternal Revenue may rescind all or any por- nancial accounting benefit is a reduction of FECTED.—Except as specifically provided in tion of any penalty imposed by this section income tax. this subsection, the provisions of this sub- with respect to any violation if— ‘‘(ii) SPECIAL RULE WHERE TAXPAYER RELIES section shall not be construed as altering or ‘‘(A) the violation is with respect to a re- ON PROFIT POTENTIAL.—A transaction shall supplanting any other rule of law, and the portable transaction other than a listed not be treated as having economic substance requirements of this subsection shall be con- transaction, by reason of having a potential for profit un- strued as being in addition to any such other ‘‘(B) the person on whom the penalty is im- less— rule of law. posed has a history of complying with the re- ‘‘(I) the present value of the reasonably ex- ‘‘(5) REGULATIONS.—The Secretary shall quirements of this title, pected pre-tax profit from the transaction is prescribe such regulations as may be nec- ‘‘(C) it is shown that the violation is due to substantial in relation to the present value essary or appropriate to carry out the pur- an unintentional mistake of fact; of the expected net tax benefits that would poses of this subsection. Such regulations ‘‘(D) imposing the penalty would be be allowed if the transaction were respected, may include exemptions from the applica- against equity and good conscience, and and tion of this subsection.’’. ‘‘(E) rescinding the penalty would promote ‘‘(II) the reasonably expected pre-tax profit (b) EFFECTIVE DATE.—The amendments compliance with the requirements of this from the transaction exceeds a risk-free rate made by this section shall apply to trans- title and effective tax administration. of return. actions entered into after the date of the en- ‘‘(2) DISCRETION.—The exercise of authority ‘‘(C) TREATMENT OF FEES AND FOREIGN actment of this Act. under paragraph (1) shall be at the sole dis- TAXES.—Fees and other transaction expenses SEC. 402. PENALTY FOR FAILING TO DISCLOSE cretion of the Commissioner and may be del- and foreign taxes shall be taken into account REPORTABLE TRANSACTION. egated only to the head of the Office of Tax as expenses in determining pre-tax profit (a) IN GENERAL.—Part I of subchapter B of Shelter Analysis. The Commissioner, in the under subparagraph (B)(ii). chapter 68 (relating to assessable penalties) Commissioner’s sole discretion, may estab- ‘‘(2) SPECIAL RULES FOR TRANSACTIONS WITH is amended by inserting after section 6707 lish a procedure to determine if a penalty TAX-INDIFFERENT PARTIES.— the following new section: should be referred to the Commissioner or

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the head of such Office for a determination ‘‘(1) IN GENERAL.—The term ‘reportable transaction understatements and non- under paragraph (1). transaction understatement’ means the sum economic substance transaction understate- ‘‘(3) NO APPEAL.—Notwithstanding any of— ments. other provision of law, any determination ‘‘(A) the product of— ‘‘(2) COORDINATION WITH OTHER PENALTIES.— under this subsection may not be reviewed in ‘‘(i) the amount of the increase (if any) in ‘‘(A) APPLICATION OF FRAUD PENALTY.—Ref- any administrative or judicial proceeding. taxable income which results from a dif- erences to an underpayment in section 6663 ‘‘(4) RECORDS.—If a penalty is rescinded ference between the proper tax treatment of shall be treated as including references to a under paragraph (1), the Commissioner shall an item to which this section applies and the reportable transaction understatement and a place in the file in the Office of the Commis- taxpayer’s treatment of such item (as shown noneconomic substance transaction under- sioner the opinion of the Commissioner or on the taxpayer’s return of tax), and statement. the head of the Office of Tax Shelter Anal- ‘‘(ii) the highest rate of tax imposed by ‘‘(B) NO DOUBLE PENALTY.—This section ysis with respect to the determination, in- section 1 (section 11 in the case of a taxpayer shall not apply to any portion of an under- cluding— which is a corporation), and statement on which a penalty is imposed ‘‘(A) the facts and circumstances of the ‘‘(B) the amount of the decrease (if any) in under section 6662B or 6663. transaction, the aggregate amount of credits determined ‘‘(3) SPECIAL RULE FOR AMENDED RETURNS.— ‘‘(B) the reasons for the rescission, and under subtitle A which results from a dif- Except as provided in regulations, in no ‘‘(C) the amount of the penalty rescinded. ference between the taxpayer’s treatment of event shall any tax treatment included with ‘‘(5) REPORT.—The Commissioner shall an item to which this section applies (as an amendment or supplement to a return of each year report to the Committee on Ways shown on the taxpayer’s return of tax) and tax be taken into account in determining the and Means of the House of Representatives the proper tax treatment of such item. amount of any reportable transaction under- and the Committee on Finance of the Sen- For purposes of subparagraph (A), any reduc- statement or noneconomic substance trans- ate— tion of the excess of deductions allowed for action understatement if the amendment or ‘‘(A) a summary of the total number and the taxable year over gross income for such supplement is filed after the earlier of the aggregate amount of penalties imposed, and year, and any reduction in the amount of date the taxpayer is first contacted by the rescinded, under this section, and capital losses which would (without regard Secretary regarding the examination of the ‘‘(B) a description of each penalty re- to section 1211) be allowed for such year, return or such other date as is specified by scinded under this subsection and the rea- shall be treated as an increase in taxable in- the Secretary. sons therefor. come. ‘‘(4) NONECONOMIC SUBSTANCE TRANSACTION ‘‘(e) PENALTY REPORTED TO SEC.—In the ‘‘(2) ITEMS TO WHICH SECTION APPLIES.—This UNDERSTATEMENT.—For purposes of this sub- case of a person— section shall apply to any item which is at- section, the term ‘noneconomic substance ‘‘(1) which is required to file periodic re- tributable to— transaction understatement’ has the mean- ports under section 13 or 15(d) of the Securi- ‘‘(A) any listed transaction, and ing given such term by section 6662B(c). ties Exchange Act of 1934 or is required to be ‘‘(B) any reportable transaction (other ‘‘(5) CROSS REFERENCE.— than a listed transaction) if a significant consolidated with another person for pur- ‘‘For reporting of section 6662A(c) penalty purpose of such transaction is the avoidance poses of such reports, and to the Securities and Exchange Commission, or evasion of Federal income tax. ‘‘(2) which— see section 6707A(e).’’. ‘‘(c) HIGHER PENALTY FOR NONDISCLOSED ‘‘(A) is required to pay a penalty under this (b) DETERMINATION OF OTHER UNDERSTATE- LISTED AND OTHER AVOIDANCE TRANS- section with respect to a listed transaction, MENTS.—Subparagraph (A) of section ACTIONS.— ‘‘(B) is required to pay a penalty under sec- 6662(d)(2) is amended by adding at the end ‘‘(1) IN GENERAL.—Subsection (a) shall be tion 6662A with respect to any reportable the following flush sentence: transaction at a rate prescribed under sec- applied by substituting ‘30 percent’ for ‘20 percent’ with respect to the portion of any ‘‘The excess under the preceding sentence tion 6662A(c), or shall be determined without regard to items ‘‘(C) is required to pay a penalty under sec- reportable transaction understatement with respect to which the requirement of section to which section 6662A applies and without tion 6662B with respect to any noneconomic regard to items with respect to which a pen- substance transaction, 6664(d)(2)(A) is not met. ‘‘(2) RULES APPLICABLE TO ASSERTION AND alty is imposed by section 6662B.’’. the requirement to pay such penalty shall be COMPROMISE OF PENALTY.— (c) REASONABLE CAUSE EXCEPTION.— disclosed in such reports filed by such person ‘‘(A) IN GENERAL.—Only upon the approval (1) IN GENERAL.—Section 6664 is amended for such periods as the Secretary shall speci- by the Chief Counsel for the Internal Rev- by adding at the end the following new sub- fy. Failure to make a disclosure in accord- enue Service or the Chief Counsel’s delegate section: ance with the preceding sentence shall be at the national office of the Internal Rev- ‘‘(d) REASONABLE CAUSE EXCEPTION FOR RE- treated as a failure to which the penalty enue Service may a penalty to which para- PORTABLE TRANSACTION UNDERSTATEMENTS.— under subsection (b)(2) applies. graph (1) applies be included in a 1st letter of ‘‘(1) IN GENERAL.—No penalty shall be im- ‘‘(f) COORDINATION WITH OTHER PEN- proposed deficiency which allows the tax- posed under section 6662A with respect to ALTIES.—The penalty imposed by this section payer an opportunity for administrative re- any portion of a reportable transaction un- is in addition to any penalty imposed under view in the Internal Revenue Service Office derstatement if it is shown that there was a this title.’’. of Appeals. If such a letter is provided to the reasonable cause for such portion and that (b) CONFORMING AMENDMENT.—The table of taxpayer, only the Commissioner of Internal the taxpayer acted in good faith with respect sections for part I of subchapter B of chapter Revenue may compromise all or any portion to such portion. 68 is amended by inserting after the item re- of such penalty. ‘‘(2) SPECIAL RULES.—Paragraph (1) shall lating to section 6707 the following: ‘‘(B) APPLICABLE RULES.—The rules of para- not apply to any reportable transaction un- ‘‘Sec. 6707A. Penalty for failure to include re- graphs (2), (3), (4), and (5) of section 6707A(d) derstatement unless— portable transaction informa- shall apply for purposes of subparagraph (A). ‘‘(A) the relevant facts affecting the tax tion with return or state- ‘‘(d) DEFINITIONS OF REPORTABLE AND LIST- treatment of the item are adequately dis- ment.’’. ED TRANSACTIONS.—For purposes of this sec- closed in accordance with the regulations prescribed under section 6011, (c) EFFECTIVE DATE.—The amendments tion, the terms ‘reportable transaction’ and ‘‘(B) there is or was substantial authority made by this section shall apply to returns ‘listed transaction’ have the respective for such treatment, and and statements the due date for which is meanings given to such terms by section ‘‘(C) the taxpayer reasonably believed that after the date of the enactment of this Act. 6707A(c). ‘‘(e) SPECIAL RULES.— such treatment was more likely than not the SEC. 403. ACCURACY-RELATED PENALTY FOR ‘‘(1) COORDINATION WITH PENALTIES, ETC., ON proper treatment. LISTED TRANSACTIONS AND OTHER REPORTABLE TRANSACTIONS HAV- OTHER UNDERSTATEMENTS.—In the case of an A taxpayer failing to adequately disclose in ING A SIGNIFICANT TAX AVOIDANCE understatement (as defined in section accordance with section 6011 shall be treated PURPOSE. 6662(d)(2))— as meeting the requirements of subparagraph (a) IN GENERAL.—Subchapter A of chapter ‘‘(A) the amount of such understatement (A) if the penalty for such failure was re- 68 is amended by inserting after section 6662 (determined without regard to this para- scinded under section 6707A(d). the following new section: graph) shall be increased by the aggregate ‘‘(3) RULES RELATING TO REASONABLE BE- ‘‘SEC. 6662A. IMPOSITION OF ACCURACY-RE- amount of reportable transaction under- LIEF.—For purposes of paragraph (2)(C)— LATED PENALTY ON UNDERSTATE- statements and noneconomic substance ‘‘(A) IN GENERAL.—A taxpayer shall be MENTS WITH RESPECT TO REPORT- transaction understatements for purposes of treated as having a reasonable belief with re- ABLE TRANSACTIONS. determining whether such understatement is spect to the tax treatment of an item only if ‘‘(a) IMPOSITION OF PENALTY.—If a taxpayer a substantial understatement under section such belief— has a reportable transaction understatement 6662(d)(1), and ‘‘(i) is based on the facts and law that exist for any taxable year, there shall be added to ‘‘(B) the addition to tax under section at the time the return of tax which includes the tax an amount equal to 20 percent of the 6662(a) shall apply only to the excess of the such tax treatment is filed, and amount of such understatement. amount of the substantial understatement ‘‘(ii) relates solely to the taxpayer’s ‘‘(b) REPORTABLE TRANSACTION UNDER- (if any) after the application of subparagraph chances of success on the merits of such STATEMENT.—For purposes of this section— (A) over the aggregate amount of reportable treatment and does not take into account

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the possibility that a return will not be au- ‘‘Sec. 6662A. Imposition of accuracy-related (c) EFFECTIVE DATE.—The amendments dited, such treatment will not be raised on penalty on understatements made by this section shall apply to trans- audit, or such treatment will be resolved with respect to reportable actions entered into after the date of the en- through settlement if it is raised. transactions.’’. actment of this Act. ‘‘(B) CERTAIN OPINIONS MAY NOT BE RELIED (e) EFFECTIVE DATE.—The amendments SEC. 405. MODIFICATIONS OF SUBSTANTIAL UN- UPON.— made by this section shall apply to taxable DERSTATEMENT PENALTY FOR NON- ‘‘(i) IN GENERAL.—An opinion of a tax advi- years ending after the date of the enactment REPORTABLE TRANSACTIONS. sor may not be relied upon to establish the of this Act. (a) SUBSTANTIAL UNDERSTATEMENT OF COR- reasonable belief of a taxpayer if— SEC. 404. PENALTY FOR UNDERSTATEMENTS AT- PORATIONS.—Section 6662(d)(1)(B) (relating to ‘‘(I) the tax advisor is described in clause TRIBUTABLE TO TRANSACTIONS special rule for corporations) is amended to (ii), or LACKING ECONOMIC SUBSTANCE, read as follows: ‘‘(II) the opinion is described in clause (iii). ETC. ‘‘(B) SPECIAL RULE FOR CORPORATIONS.—In ‘‘(ii) DISQUALIFIED TAX ADVISORS.—A tax (a) IN GENERAL.—Subchapter A of chapter the case of a corporation other than an S advisor is described in this clause if the tax 68 is amended by inserting after section corporation or a personal holding company advisor— 6662A the following new section: (as defined in section 542), there is a substan- ‘‘(I) is a material advisor (within the mean- ‘‘SEC. 6662B. PENALTY FOR UNDERSTATEMENTS tial understatement of income tax for any ing of section 6111(b)(1)) who participates in ATTRIBUTABLE TO TRANSACTIONS taxable year if the amount of the understate- LACKING ECONOMIC SUBSTANCE, the organization, management, promotion, ETC. ment for the taxable year exceeds the lesser or sale of the transaction or who is related ‘‘(a) IMPOSITION OF PENALTY.—If a taxpayer of— (within the meaning of section 267(b) or has an noneconomic substance transaction ‘‘(i) 10 percent of the tax required to be 707(b)(1)) to any person who so participates, understatement for any taxable year, there shown on the return for the taxable year (or, ‘‘(II) is compensated directly or indirectly shall be added to the tax an amount equal to if greater, $10,000), or by a material advisor with respect to the 40 percent of the amount of such understate- ‘‘(ii) $10,000,000.’’. transaction, ment. (b) REDUCTION FOR UNDERSTATEMENT OF ‘‘(III) has a fee arrangement with respect ‘‘(b) REDUCTION OF PENALTY FOR DISCLOSED TAXPAYER DUE TO POSITION OF TAXPAYER OR to the transaction which is contingent on all TRANSACTIONS.—Subsection (a) shall be ap- DISCLOSED ITEM.— or part of the intended tax benefits from the plied by substituting ‘20 percent’ for ‘40 per- (1) IN GENERAL.—Section 6662(d)(2)(B)(i) (re- transaction being sustained, or cent’ with respect to the portion of any non- lating to substantial authority) is amended ‘‘(IV) as determined under regulations pre- economic substance transaction understate- to read as follows: scribed by the Secretary, has a disqualifying ment with respect to which the relevant ‘‘(i) the tax treatment of any item by the financial interest with respect to the trans- facts affecting the tax treatment of the item taxpayer if the taxpayer had reasonable be- action. are adequately disclosed in the return or a lief that the tax treatment was more likely ‘‘(iii) DISQUALIFIED OPINIONS.—For purposes statement attached to the return. than not the proper treatment, or’’. of clause (i), an opinion is disqualified if the ‘‘(c) NONECONOMIC SUBSTANCE TRANSACTION (2) CONFORMING AMENDMENT.—Section opinion— UNDERSTATEMENT.—For purposes of this sec- 6662(d) is amended by adding at the end the ‘‘(I) is based on unreasonable factual or tion— following new paragraph: legal assumptions (including assumptions as ‘‘(1) IN GENERAL.—The term ‘noneconomic ‘‘(3) SECRETARIAL LIST.—For purposes of to future events), substance transaction understatement’ this subsection, section 6664(d)(2), and sec- ‘‘(II) unreasonably relies on representa- means any amount which would be an under- tion 6694(a)(1), the Secretary may prescribe a tions, statements, findings, or agreements of statement under section 6662A(b)(1) if section list of positions for which the Secretary be- the taxpayer or any other person, 6662A were applied by taking into account lieves there is not substantial authority or ‘‘(III) does not identify and consider all rel- items attributable to noneconomic sub- there is no reasonable belief that the tax evant facts, or stance transactions rather than items to treatment is more likely than not the proper ‘‘(IV) fails to meet any other requirement which section 6662A would apply without re- tax treatment. Such list (and any revisions gard to this paragraph. as the Secretary may prescribe.’’. thereof) shall be published in the Federal ‘‘(2) NONECONOMIC SUBSTANCE TRANS- (2) CONFORMING AMENDMENT.—The heading Register or the Internal Revenue Bulletin.’’. ACTION.—The term ‘noneconomic substance for subsection (c) of section 6664 is amended (c) EFFECTIVE DATE.—The amendments transaction’ means any transaction if— by inserting ‘‘FOR UNDERPAYMENTS’’ after made by this section shall apply to taxable ‘‘(A) there is a lack of economic substance ‘‘EXCEPTION’’. years beginning after the date of the enact- (within the meaning of section 7701(n)(1)) for (d) CONFORMING AMENDMENTS.— ment of this Act. (1) Subparagraph (C) of section 461(i)(3) is the transaction giving rise to the claimed SEC. 406. TAX SHELTER EXCEPTION TO CON- amended by striking ‘‘section benefit or the transaction was not respected FIDENTIALITY PRIVILEGES RELAT- 6662(d)(2)(C)(iii)’’ and inserting ‘‘section under section 7701(n)(2), or ING TO TAXPAYER COMMUNICA- 1274(b)(3)(C)’’. ‘‘(B) the transaction fails to meet the re- TIONS. (2) Paragraph (3) of section 1274(b) is quirements of any similar rule of law. (a) IN GENERAL.—Section 7525(b) (relating ‘‘(d) RULES APPLICABLE TO COMPROMISE OF amended— to section not to apply to communications PENALTY.— (A) by striking ‘‘(as defined in section regarding corporate tax shelters) is amended ‘‘(1) IN GENERAL.—If the 1st letter of pro- 6662(d)(2)(C)(iii))’’ in subparagraph (B)(i), and to read as follows: posed deficiency which allows the taxpayer ‘‘(b) SECTION NOT TO APPLY TO COMMUNICA- (B) by adding at the end the following new an opportunity for administrative review in TIONS REGARDING TAX SHELTERS.—The privi- subparagraph: the Internal Revenue Service Office of Ap- lege under subsection (a) shall not apply to ‘‘(C) TAX SHELTER.—For purposes of sub- peals has been sent with respect to a penalty any written communication which is— paragraph (B), the term ‘tax shelter’ means— to which this section applies, only the Com- ‘‘(1) between a federally authorized tax ‘‘(i) a partnership or other entity, missioner of Internal Revenue may com- practitioner and— ‘‘(ii) any investment plan or arrangement, promise all or any portion of such penalty. ‘‘(A) any person, or ‘‘(2) APPLICABLE RULES.—The rules of para- ‘‘(B) any director, officer, employee, agent, ‘‘(iii) any other plan or arrangement, graphs (2), (3), (4), and (5) of section 6707A(d) or representative of the person, or if a significant purpose of such partnership, shall apply for purposes of paragraph (1). ‘‘(C) any other person holding a capital or entity, plan, or arrangement is the avoid- ‘‘(e) COORDINATION WITH OTHER PEN- profits interest in the person, and ance or evasion of Federal income tax.’’. ALTIES.—Except as otherwise provided in this ‘‘(2) in connection with the promotion of (3) Section 6662(d)(2) is amended by strik- part, the penalty imposed by this section the direct or indirect participation of the ing subparagraphs (C) and (D). shall be in addition to any other penalty im- person in any tax shelter (as defined in sec- (4) Section 6664(c)(1) is amended by strik- posed by this title. tion 1274(b)(3)(C)).’’. ing ‘‘this part’’ and inserting ‘‘section 6662 or ‘‘(f) CROSS REFERENCES.— (b) EFFECTIVE DATE.—The amendment 6663’’. ‘‘(1) For coordination of penalty with un- made by this section shall apply to commu- (5) Subsection (b) of section 7525 is amend- derstatements under section 6662 and other nications made on or after the date of the ed by striking ‘‘section 6662(d)(2)(C)(iii)’’ and special rules, see section 6662A(e). enactment of this Act. inserting ‘‘section 1274(b)(3)(C)’’. ‘‘(2) For reporting of penalty imposed (6)(A) The heading for section 6662 is SEC. 407. DISCLOSURE OF REPORTABLE TRANS- under this section to the Securities and Ex- ACTIONS. amended to read as follows: change Commission, see section 6707A(e).’’. (a) IN GENERAL.—Section 6111 (relating to ‘‘SEC. 6662. IMPOSITION OF ACCURACY-RELATED (b) CLERICAL AMENDMENT.—The table of registration of tax shelters) is amended to PENALTY ON UNDERPAYMENTS.’’. sections for part II of subchapter A of chap- read as follows: (B) The table of sections for part II of sub- ter 68 is amended by inserting after the item ‘‘SEC. 6111. DISCLOSURE OF REPORTABLE TRANS- chapter A of chapter 68 is amended by strik- relating to section 6662A the following new ACTIONS. ing the item relating to section 6662 and in- item: ‘‘(a) IN GENERAL.—Each material advisor serting the following new items: ‘‘Sec. 6662B. Penalty for understatements at- with respect to any reportable transaction ‘‘Sec. 6662. Imposition of accuracy-related tributable to transactions lack- shall make a return (in such form as the Sec- penalty on underpayments. ing economic substance, etc.’’. retary may prescribe) setting forth—

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00065 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3012 CONGRESSIONAL RECORD — SENATE March 23, 2004 ‘‘(1) information identifying and describing ‘‘SEC. 6708. FAILURE TO MAINTAIN LISTS OF SEC. 409. MODIFICATION OF PENALTY FOR FAIL- the transaction, ADVISEES WITH RESPECT TO RE- URE TO MAINTAIN LISTS OF INVES- ‘‘(2) information describing any potential PORTABLE TRANSACTIONS.’’. TORS. tax benefits expected to result from the (B) The item relating to section 6708 in the (a) IN GENERAL.—Subsection (a) of section transaction, and table of sections for part I of subchapter B of 6708 is amended to read as follows: ‘‘(3) such other information as the Sec- chapter 68 is amended to read as follows: ‘‘(a) IMPOSITION OF PENALTY.— retary may prescribe. ‘‘(1) IN GENERAL.—If any person who is re- ‘‘Sec. 6708. Failure to maintain lists of quired to maintain a list under section Such return shall be filed not later than the advisees with respect to report- 6112(a) fails to make such list available upon date specified by the Secretary. able transactions.’’. ‘‘(b) DEFINITIONS.—For purposes of this sec- written request to the Secretary in accord- (c) REQUIRED DISCLOSURE NOT SUBJECT TO ance with section 6112(b)(1)(A) within 20 busi- tion— CLAIM OF CONFIDENTIALITY.—Subparagraph ‘‘(1) MATERIAL ADVISOR.— ness days after the date of the Secretary’s (A) of section 6112(b)(1), as redesignated by request, such person shall pay a penalty of ‘‘(A) IN GENERAL.—The term ‘material ad- subsection (b)(2)(B), is amended by adding at visor’ means any person— $10,000 for each day of such failure after such the end the following new flush sentence: 20th day. ‘‘(i) who provides any material aid, assist- ‘‘For purposes of this section, the identity of ance, or advice with respect to organizing, ‘‘(2) REASONABLE CAUSE EXCEPTION.—No any person on such list shall not be privi- penalty shall be imposed by paragraph (1) managing, promoting, selling, implementing, leged.’’. or carrying out any reportable transaction, with respect to the failure on any day if such (d) EFFECTIVE DATE.— failure is due to reasonable cause.’’. and (1) IN GENERAL.—Except as provided in ‘‘(ii) who directly or indirectly derives (b) EFFECTIVE DATE.—The amendment paragraph (2), the amendments made by this made by this section shall apply to requests gross income in excess of the threshold section shall apply to transactions with re- amount for such aid, assistance, or advice. made after the date of the enactment of this spect to which material aid, assistance, or Act. ‘‘(B) THRESHOLD AMOUNT.—For purposes of advice referred to in section 6111(b)(1)(A)(i) SEC. 410. MODIFICATION OF ACTIONS TO ENJOIN subparagraph (A), the threshold amount is— of the Internal Revenue Code of 1986 (as ‘‘(i) $50,000 in the case of a reportable CERTAIN CONDUCT RELATED TO added by this section) is provided after the TAX SHELTERS AND REPORTABLE transaction substantially all of the tax bene- date of the enactment of this Act. TRANSACTIONS. fits from which are provided to natural per- (2) NO CLAIM OF CONFIDENTIALITY AGAINST (a) IN GENERAL.—Section 7408 (relating to sons, and DISCLOSURE.—The amendment made by sub- action to enjoin promoters of abusive tax ‘‘(ii) $250,000 in any other case. section (c) shall take effect as if included in shelters, etc.) is amended by redesignating ‘‘(2) REPORTABLE TRANSACTION.—The term the amendments made by section 142 of the subsection (c) as subsection (d) and by strik- ‘reportable transaction’ has the meaning Deficit Reduction Act of 1984. ing subsections (a) and (b) and inserting the given to such term by section 6707A(c). SEC. 408. MODIFICATIONS TO PENALTY FOR FAIL- following new subsections: ‘‘(c) REGULATIONS.—The Secretary may URE TO REGISTER TAX SHELTERS. ‘‘(a) AUTHORITY TO SEEK INJUNCTION.—A prescribe regulations which provide— (a) IN GENERAL.—Section 6707 (relating to civil action in the name of the United States ‘‘(1) that only 1 person shall be required to failure to furnish information regarding tax to enjoin any person from further engaging meet the requirements of subsection (a) in shelters) is amended to read as follows: in specified conduct may be commenced at cases in which 2 or more persons would oth- the request of the Secretary. Any action erwise be required to meet such require- ‘‘SEC. 6707. FAILURE TO FURNISH INFORMATION REGARDING REPORTABLE TRANS- under this section shall be brought in the ments, ACTIONS. district court of the United States for the ‘‘(2) exemptions from the requirements of ‘‘(a) IN GENERAL.—If a person who is re- district in which such person resides, has his this section, and quired to file a return under section 6111(a) principal place of business, or has engaged in ‘‘(3) such rules as may be necessary or ap- with respect to any reportable transaction— specified conduct. The court may exercise its propriate to carry out the purposes of this ‘‘(1) fails to file such return on or before jurisdiction over such action (as provided in section.’’. the date prescribed therefor, or section 7402(a)) separate and apart from any (b) CONFORMING AMENDMENTS.— ‘‘(2) files false or incomplete information other action brought by the United States (1) The item relating to section 6111 in the with the Secretary with respect to such against such person. table of sections for subchapter B of chapter transaction, ‘‘(b) ADJUDICATION AND DECREE.—In any ac- 61 is amended to read as follows: such person shall pay a penalty with respect tion under subsection (a), if the court finds— ‘‘Sec. 6111. Disclosure of reportable trans- to such return in the amount determined ‘‘(1) that the person has engaged in any actions.’’. under subsection (b). specified conduct, and (2)(A) So much of section 6112 as precedes ‘‘(b) AMOUNT OF PENALTY.— ‘‘(2) that injunctive relief is appropriate to subsection (c) thereof is amended to read as ‘‘(1) IN GENERAL.—Except as provided in prevent recurrence of such conduct, follows: paragraph (2), the penalty imposed under the court may enjoin such person from en- ‘‘SEC. 6112. MATERIAL ADVISORS OF REPORT- subsection (a) with respect to any failure gaging in such conduct or in any other activ- ABLE TRANSACTIONS MUST KEEP shall be $50,000. ity subject to penalty under this title. LISTS OF ADVISEES. ‘‘(2) LISTED TRANSACTIONS.—The penalty ‘‘(c) SPECIFIED CONDUCT.—For purposes of ‘‘(a) IN GENERAL.—Each material advisor imposed under subsection (a) with respect to this section, the term ‘specified conduct’ (as defined in section 6111) with respect to any listed transaction shall be an amount means any action, or failure to take action, any reportable transaction (as defined in sec- equal to the greater of— subject to penalty under section 6700, 6701, tion 6707A(c)) shall maintain, in such manner ‘‘(A) $200,000, or 6707, or 6708.’’. as the Secretary may by regulations pre- ‘‘(B) 50 percent of the gross income derived (b) CONFORMING AMENDMENTS.— scribe, a list— by such person with respect to aid, assist- (1) The heading for section 7408 is amended ‘‘(1) identifying each person with respect to ance, or advice which is provided with re- to read as follows: whom such advisor acted as such a material spect to the listed transaction before the ‘‘SEC. 7408. ACTIONS TO ENJOIN SPECIFIED CON- advisor with respect to such transaction, and date the return including the transaction is DUCT RELATED TO TAX SHELTERS ‘‘(2) containing such other information as AND REPORTABLE TRANSACTIONS.’’. filed under section 6111. the Secretary may by regulations require. (2) The table of sections for subchapter A Subparagraph (B) shall be applied by sub- This section shall apply without regard to of chapter 67 is amended by striking the item stituting ‘75 percent’ for ‘50 percent’ in the whether a material advisor is required to file relating to section 7408 and inserting the fol- case of an intentional failure or act de- a return under section 6111 with respect to lowing new item: scribed in subsection (a). such transaction.’’. ‘‘Sec. 7408. Actions to enjoin specified (B) Section 6112 is amended by redesig- ‘‘(c) CERTAIN RULES TO APPLY.—The provi- sions of section 6707A(d) shall apply to any conduct related to tax shelters nating subsection (c) as subsection (b). and reportable transactions.’’. (C) Section 6112(b), as redesignated by sub- penalty imposed under this section. paragraph (B), is amended— ‘‘(d) REPORTABLE AND LISTED TRANS- (c) EFFECTIVE DATE.—The amendment (i) by inserting ‘‘written’’ before ‘‘request’’ ACTIONS.—The terms ‘reportable transaction’ made by this section shall take effect on the in paragraph (1)(A), and and ‘listed transaction’ have the respective day after the date of the enactment of this (ii) by striking ‘‘shall prescribe’’ in para- meanings given to such terms by section Act. graph (2) and inserting ‘‘may prescribe’’. 6707A(c).’’. SEC. 411. UNDERSTATEMENT OF TAXPAYER’S LI- (b) CLERICAL AMENDMENT.—The item relat- (D) The item relating to section 6112 in the ABILITY BY INCOME TAX RETURN ing to section 6707 in the table of sections for PREPARER. table of sections for subchapter B of chapter part I of subchapter B of chapter 68 is (a) STANDARDS CONFORMED TO TAXPAYER 61 is amended to read as follows: amended by striking ‘‘tax shelters’’ and in- STANDARDS.—Section 6694(a) (relating to un- ‘‘Sec. 6112. Material advisors of reportable serting ‘‘reportable transactions’’. derstatements due to unrealistic positions) transactions must keep lists of (c) EFFECTIVE DATE.—The amendments is amended— advisees.’’. made by this section shall apply to returns (1) by striking ‘‘realistic possibility of (3)(A) The heading for section 6708 is the due date for which is after the date of being sustained on its merits’’ in paragraph amended to read as follows: the enactment of this Act. (1) and inserting ‘‘reasonable belief that the

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00066 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3013 tax treatment in such position was more ‘‘(A) is based on a position which the Sec- (D) by inserting after subparagraph (A)(ii) likely than not the proper treatment’’, retary has identified as frivolous under sub- (as so redesignated) the following: (2) by striking ‘‘or was frivolous’’ in para- section (c), or ‘‘(B) the issue meets the requirement of graph (3) and inserting ‘‘or there was no rea- ‘‘(B) reflects a desire to delay or impede clause (i) or (ii) of section 6702(b)(2)(A).’’. sonable basis for the tax treatment of such the administration of Federal tax laws. (3) STATEMENT OF GROUNDS.—Section position’’, and ‘‘(b) CIVIL PENALTY FOR SPECIFIED FRIVO- 6330(b)(1) is amended by striking ‘‘under sub- (3) by striking ‘‘UNREALISTIC’’ in the head- LOUS SUBMISSIONS.— section (a)(3)(B)’’ and inserting ‘‘in writing ing and inserting ‘‘IMPROPER’’. ‘‘(1) IMPOSITION OF PENALTY.—Except as under subsection (a)(3)(B) and states the (b) AMOUNT OF PENALTY.—Section 6694 is provided in paragraph (3), any person who grounds for the requested hearing’’. amended— submits a specified frivolous submission (c) TREATMENT OF FRIVOLOUS REQUESTS (1) by striking ‘‘$250’’ in subsection (a) and shall pay a penalty of $5,000. FOR HEARINGS UPON FILING OF NOTICE OF inserting ‘‘$1,000’’, and ‘‘(2) SPECIFIED FRIVOLOUS SUBMISSION.—For LIEN.—Section 6320 is amended— (2) by striking ‘‘$1,000’’ in subsection (b) purposes of this section— (1) in subsection (b)(1), by striking ‘‘under and inserting ‘‘$5,000’’. ‘‘(A) SPECIFIED FRIVOLOUS SUBMISSION.— subsection (a)(3)(B)’’ and inserting ‘‘in writ- (c) EFFECTIVE DATE.—The amendments The term ‘specified frivolous submission’ ing under subsection (a)(3)(B) and states the made by this section shall apply to docu- means a specified submission if any portion grounds for the requested hearing’’, and ments prepared after the date of the enact- of such submission— (2) in subsection (c), by striking ‘‘and (e)’’ ment of this Act. ‘‘(i) is based on a position which the Sec- and inserting ‘‘(e), and (g)’’. SEC. 412. PENALTY ON FAILURE TO REPORT IN- retary has identified as frivolous under sub- (d) TREATMENT OF FRIVOLOUS APPLICATIONS TERESTS IN FOREIGN FINANCIAL section (c), or FOR OFFERS-IN-COMPROMISE AND INSTALL- ACCOUNTS. ‘‘(ii) reflects a desire to delay or impede MENT AGREEMENTS.—Section 7122 is amended (a) IN GENERAL.—Section 5321(a)(5) of title the administration of Federal tax laws. by adding at the end the following new sub- 31, United States Code, is amended to read as ‘‘(B) SPECIFIED SUBMISSION.—The term section: follows: ‘specified submission’ means— ‘‘(e) FRIVOLOUS SUBMISSIONS, ETC.—Not- ‘‘(5) FOREIGN FINANCIAL AGENCY TRANS- ‘‘(i) a request for a hearing under— withstanding any other provision of this sec- ACTION VIOLATION.— ‘‘(I) section 6320 (relating to notice and op- tion, if the Secretary determines that any ‘‘(A) PENALTY AUTHORIZED.—The Secretary portunity for hearing upon filing of notice of portion of an application for an offer-in-com- of the Treasury may impose a civil money promise or installment agreement submitted lien), or penalty on any person who violates, or under this section or section 6159 meets the ‘‘(II) section 6330 (relating to notice and causes any violation of, any provision of sec- requirement of clause (i) or (ii) of section opportunity for hearing before levy), and tion 5314. 6702(b)(2)(A), then the Secretary may treat ‘‘(ii) an application under— ‘‘(B) AMOUNT OF PENALTY.— such portion as if it were never submitted ‘‘(I) section 6159 (relating to agreements ‘‘(i) IN GENERAL.—Except as provided in and such portion shall not be subject to any for payment of tax liability in installments), subparagraph (C), the amount of any civil further administrative or judicial review.’’. ‘‘(II) section 7122 (relating to com- penalty imposed under subparagraph (A) (e) CLERICAL AMENDMENT.—The table of promises), or shall not exceed $5,000. sections for part I of subchapter B of chapter ‘‘(III) section 7811 (relating to taxpayer as- ‘‘(ii) REASONABLE CAUSE EXCEPTION.—No 68 is amended by striking the item relating sistance orders). penalty shall be imposed under subparagraph to section 6702 and inserting the following ‘‘(3) OPPORTUNITY TO WITHDRAW SUBMIS- (A) with respect to any violation if— new item: SION.—If the Secretary provides a person ‘‘(I) such violation was due to reasonable with notice that a submission is a specified ‘‘Sec. 6702. Frivolous tax submissions.’’. cause, and frivolous submission and such person with- (f) EFFECTIVE DATE.—The amendments ‘‘(II) the amount of the transaction or the draws such submission within 30 days after made by this section shall apply to submis- balance in the account at the time of the such notice, the penalty imposed under para- sions made and issues raised after the date transaction was properly reported. graph (1) shall not apply with respect to such on which the Secretary first prescribes a list ‘‘(C) WILLFUL VIOLATIONS.—In the case of submission. under section 6702(c) of the Internal Revenue any person willfully violating, or willfully ‘‘(c) LISTING OF FRIVOLOUS POSITIONS.—The Code of 1986, as amended by subsection (a). causing any violation of, any provision of Secretary shall prescribe (and periodically SEC. 414. REGULATION OF INDIVIDUALS PRAC- section 5314— revise) a list of positions which the Sec- TICING BEFORE THE DEPARTMENT ‘‘(i) the maximum penalty under subpara- retary has identified as being frivolous for OF TREASURY. graph (B)(i) shall be increased to the greater purposes of this subsection. The Secretary (a) CENSURE; IMPOSITION OF PENALTY.— of— shall not include in such list any position (1) IN GENERAL.—Section 330(b) of title 31, ‘‘(I) $25,000, or that the Secretary determines meets the re- United States Code, is amended— ‘‘(II) the amount (not exceeding $100,000) quirement of section 6662(d)(2)(B)(ii)(II). (A) by inserting ‘‘, or censure,’’ after ‘‘De- determined under subparagraph (D), and ‘‘(d) REDUCTION OF PENALTY.—The Sec- partment’’, and ‘‘(ii) subparagraph (B)(ii) shall not apply. retary may reduce the amount of any pen- (B) by adding at the end the following new ‘‘(D) AMOUNT.—The amount determined alty imposed under this section if the Sec- flush sentence: under this subparagraph is— retary determines that such reduction would ‘‘The Secretary may impose a monetary pen- ‘‘(i) in the case of a violation involving a promote compliance with and administra- alty on any representative described in the transaction, the amount of the transaction, tion of the Federal tax laws. preceding sentence. If the representative was or ‘‘(e) PENALTIES IN ADDITION TO OTHER PEN- acting on behalf of an employer or any firm ‘‘(ii) in the case of a violation involving a ALTIES.—The penalties imposed by this sec- or other entity in connection with the con- failure to report the existence of an account tion shall be in addition to any other penalty duct giving rise to such penalty, the Sec- or any identifying information required to be provided by law.’’. retary may impose a monetary penalty on provided with respect to an account, the bal- (b) TREATMENT OF FRIVOLOUS REQUESTS such employer, firm, or entity if it knew, or ance in the account at the time of the viola- FOR HEARINGS BEFORE LEVY.— reasonably should have known, of such con- tion.’’. (1) FRIVOLOUS REQUESTS DISREGARDED.— duct. Such penalty shall not exceed the gross (b) EFFECTIVE DATE.—The amendment Section 6330 (relating to notice and oppor- income derived (or to be derived) from the made by this section shall apply to viola- tunity for hearing before levy) is amended by conduct giving rise to the penalty and may tions occurring after the date of the enact- adding at the end the following new sub- be in addition to, or in lieu of, any suspen- ment of this Act. section: sion, disbarment, or censure of the rep- SEC. 413. FRIVOLOUS TAX SUBMISSIONS. ‘‘(g) FRIVOLOUS REQUESTS FOR HEARING, resentative.’’. (a) CIVIL PENALTIES.—Section 6702 is ETC.—Notwithstanding any other provision (2) EFFECTIVE DATE.—The amendments amended to read as follows: of this section, if the Secretary determines made by this subsection shall apply to ac- ‘‘SEC. 6702. FRIVOLOUS TAX SUBMISSIONS. that any portion of a request for a hearing tions taken after the date of the enactment ‘‘(a) CIVIL PENALTY FOR FRIVOLOUS TAX RE- under this section or section 6320 meets the of this Act. TURNS.—A person shall pay a penalty of requirement of clause (i) or (ii) of section (b) TAX SHELTER OPINIONS, ETC.—Section $5,000 if— 6702(b)(2)(A), then the Secretary may treat 330 of such title 31 is amended by adding at ‘‘(1) such person files what purports to be a such portion as if it were never submitted the end the following new subsection: return of a tax imposed by this title but and such portion shall not be subject to any ‘‘(d) Nothing in this section or in any other which— further administrative or judicial review.’’. provision of law shall be construed to limit ‘‘(A) does not contain information on (2) PRECLUSION FROM RAISING FRIVOLOUS the authority of the Secretary of the Treas- which the substantial correctness of the self- ISSUES AT HEARING.—Section 6330(c)(4) is ury to impose standards applicable to the assessment may be judged, or amended— rendering of written advice with respect to ‘‘(B) contains information that on its face (A) by striking ‘‘(A)’’ and inserting any entity, transaction plan or arrangement, indicates that the self-assessment is substan- ‘‘(A)(i)’’; or other plan or arrangement, which is of a tially incorrect; and (B) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’; type which the Secretary determines as hav- ‘‘(2) the conduct referred to in paragraph (C) by striking the period at the end of the ing a potential for tax avoidance or eva- (1)— first sentence and inserting ‘‘; or’’; and sion.’’.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00067 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3014 CONGRESSIONAL RECORD — SENATE March 23, 2004 SEC. 415. PENALTY ON PROMOTERS OF TAX by adding at the end the following new sen- (but for this subsection) be an importation of SHELTERS. tence: ‘‘In prescribing such regulations, the a net built-in loss, the basis of each property (a) PENALTY ON PROMOTING ABUSIVE TAX Secretary may prescribe rules applicable to described in subparagraph (B) which is ac- SHELTERS.—Section 6700(a) is amended by corporations filing consolidated returns quired in such transaction shall (notwith- adding at the end the following new sen- under section 1501 that are different from standing subsections (a) and (b)) be its fair tence: ‘‘Notwithstanding the first sentence, other provisions of this title that would market value immediately after such trans- if an activity with respect to which a pen- apply if such corporations filed separate re- action. alty imposed under this subsection involves turns.’’. ‘‘(B) PROPERTY DESCRIBED.—For purposes a statement described in paragraph (2)(A), (b) RESULT NOT OVERTURNED.—Notwith- of subparagraph (A), property is described in the amount of the penalty shall be equal to standing subsection (a), the Internal Rev- this subparagraph if— 50 percent of the gross income derived (or to enue Code of 1986 shall be construed by treat- ‘‘(i) gain or loss with respect to such prop- be derived) from such activity by the person ing Treasury regulation § 1.1502–20(c)(1)(iii) erty is not subject to tax under this subtitle on which the penalty is imposed.’’. (as in effect on January 1, 2001) as being in- in the hands of the transferor immediately FFECTIVE DATE.—The amendment (b) E applicable to the type of factual situation in before the transfer, and made by this section shall apply to activities 255 F.3d 1357 (Fed. Cir. 2001). ‘‘(ii) gain or loss with respect to such prop- after the date of the enactment of this Act. (c) EFFECTIVE DATE.—The provisions of erty is subject to such tax in the hands of SEC. 416. STATUTE OF LIMITATIONS FOR TAX- this section shall apply to taxable years be- the transferee immediately after such trans- ABLE YEARS FOR WHICH REQUIRED ginning before, on, or after the date of the fer. LISTED TRANSACTIONS NOT RE- In any case in which the transferor is a part- PORTED. enactment of this Act. nership, the preceding sentence shall be ap- (a) IN GENERAL.—Section 6501(c) (relating SEC. 422. INCREASE IN CRIMINAL MONETARY to exceptions) is amended by adding at the PENALTY LIMITATION FOR THE UN- plied by treating each partner in such part- end the following new paragraph: DERPAYMENT OR OVERPAYMENT OF nership as holding such partner’s propor- TAX DUE TO FRAUD. tionate share of the property of such part- ‘‘(10) LISTED TRANSACTIONS.—If a taxpayer nership. fails to include on any return or statement (a) IN GENERAL.—Section 7206 (relating to ‘‘(C) IMPORTATION OF NET BUILT-IN LOSS.— for any taxable year any information with fraud and false statements) is amended— For purposes of subparagraph (A), there is an respect to a listed transaction (as defined in (1) by striking ‘‘Any person who—’’ and in- importation of a net built-in loss in a trans- section 6707A(c)(2)) which is required under serting ‘‘(a) IN GENERAL.—Any person who— action if the transferee’s aggregate adjusted section 6011 to be included with such return ’’, and bases of property described in subparagraph or statement, the time for assessment of any (2) by adding at the end the following new (B) which is transferred in such transaction tax imposed by this title with respect to subsection: would (but for this paragraph) exceed the such transaction shall not expire before the ‘‘(b) INCREASE IN MONETARY LIMITATION FOR UNDERPAYMENT OR OVERPAYMENT OF TAX DUE fair market value of such property imme- date which is 1 year after the earlier of— diately after such transaction. ‘‘(A) the date on which the Secretary is TO FRAUD.—If any portion of any under- ‘‘(2) LIMITATION ON TRANSFER OF BUILT-IN furnished the information so required; or payment (as defined in section 6664(a)) or LOSSES IN SECTION 351 TRANSACTIONS.— ‘‘(B) the date that a material advisor (as overpayment (as defined in section 6401(a)) of ‘‘(A) IN GENERAL.—If— defined in section 6111) meets the require- tax required to be shown on a return is at- tributable to fraudulent action described in ‘‘(i) property is transferred by a transferor ments of section 6112 with respect to a re- in any transaction which is described in sub- quest by the Secretary under section 6112(b) subsection (a), the applicable dollar amount under subsection (a) shall in no event be less section (a) and which is not described in relating to such transaction with respect to paragraph (1) of this subsection, and such taxpayer.’’. than an amount equal to such portion. A rule similar to the rule under section 6663(b) shall ‘‘(ii) the transferee’s aggregate adjusted (b) EFFECTIVE DATE.—The amendment bases of such property so transferred would made by this section shall apply to taxable apply for purposes of determining the por- tion so attributable.’’. (but for this paragraph) exceed the fair mar- years with respect to which the period for as- ket value of such property immediately after sessing a deficiency did not expire before the (b) INCREASE IN PENALTIES.— (1) ATTEMPT TO EVADE OR DEFEAT TAX.— such transaction, date of the enactment of this Act. then, notwithstanding subsection (a), the SEC. 417. DENIAL OF DEDUCTION FOR INTEREST Section 7201 is amended— (A) by striking ‘‘$100,000’’ and inserting transferee’s aggregate adjusted bases of the ON UNDERPAYMENTS ATTRIB- property so transferred shall not exceed the UTABLE TO NONDISCLOSED RE- ‘‘$250,000’’, PORTABLE AND NONECONOMIC SUB- (B) by striking ‘‘$500,000’’ and inserting fair market value of such property imme- STANCE TRANSACTIONS. ‘‘$1,000,000’’, and diately after such transaction. (a) IN GENERAL.—Section 163 (relating to (C) by striking ‘‘5 years’’ and inserting ‘‘10 ‘‘(B) ALLOCATION OF BASIS REDUCTION.—The deduction for interest) is amended by redes- years’’. aggregate reduction in basis by reason of subparagraph (A) shall be allocated among ignating subsection (m) as subsection (n) and (2) WILLFUL FAILURE TO FILE RETURN, SUP- the property so transferred in proportion to by inserting after subsection (l) the fol- PLY INFORMATION, OR PAY TAX.—Section 7203 lowing new subsection: is amended— their respective built-in losses immediately ‘‘(m) INTEREST ON UNPAID TAXES ATTRIB- (A) in the first sentence— before the transaction. UTABLE TO NONDISCLOSED REPORTABLE (i) by striking ‘‘misdemeanor’’ and insert- ‘‘(C) EXCEPTION FOR TRANSFERS WITHIN AF- TRANSACTIONS AND NONECONOMIC SUBSTANCE ing ‘‘felony’’, and FILIATED GROUP.—Subparagraph (A) shall not TRANSACTIONS.—No deduction shall be al- (ii) by striking ‘‘1 year’’ and inserting ‘‘10 apply to any transaction if the transferor lowed under this chapter for any interest years’’, and owns stock in the transferee meeting the re- paid or accrued under section 6601 on any un- (B) by striking the third sentence. quirements of section 1504(a)(2). In the case derpayment of tax which is attributable to— of property to which subparagraph (A) does (3) FRAUD AND FALSE STATEMENTS.—Section ‘‘(1) the portion of any reportable trans- 7206(a) (as redesignated by subsection (a)) is not apply by reason of the preceding sen- action understatement (as defined in section amended— tence, the transferor’s basis in the stock re- 6662A(b)) with respect to which the require- (A) by striking ‘‘$100,000’’ and inserting ceived for such property shall not exceed its ment of section 6664(d)(2)(A) is not met, or ‘‘$250,000’’, fair market value immediately after the ‘‘(2) any noneconomic substance trans- (B) by striking ‘‘$500,000’’ and inserting transfer.’’. action understatement (as defined in section (b) COMPARABLE TREATMENT WHERE LIQ- ‘‘$1,000,000’’, and 6662B(c)).’’. UIDATION.—Paragraph (1) of section 334(b) (re- (C) by striking ‘‘3 years’’ and inserting ‘‘5 (b) EFFECTIVE DATE.—The amendments lating to liquidation of subsidiary) is amend- years’’. made by this section shall apply to trans- ed to read as follows: (c) EFFECTIVE DATE.—The amendments actions in taxable years beginning after the ‘‘(1) IN GENERAL.—If property is received by made by this section shall apply to under- date of the enactment of this Act. a corporate distributee in a distribution in a payments and overpayments attributable to SEC. 418. AUTHORIZATION OF APPROPRIATIONS complete liquidation to which section 332 ap- actions occurring after the date of the enact- FOR TAX LAW ENFORCEMENT. plies (or in a transfer described in section ment of this Act. There is authorized to be appropriated 337(b)(1)), the basis of such property in the $300,000,000 for each fiscal year beginning Subtitle C—Enron-Related Tax Shelter hands of such distributee shall be the same after September 30, 2003, for the purpose of Provisions as it would be in the hands of the transferor; carrying out tax law enforcement to combat SEC. 431. LIMITATION ON TRANSFER OR IMPOR- except that the basis of such property in the tax avoidance transactions and other tax TATION OF BUILT-IN LOSSES. hands of such distributee shall be the fair shelters, including the use of offshore finan- (a) IN GENERAL.—Section 362 (relating to market value of the property at the time of cial accounts to conceal taxable income. basis to corporations) is amended by adding the distribution— Subtitle B—Other Corporate Governance at the end the following new subsection: ‘‘(A) in any case in which gain or loss is Provisions ‘‘(e) LIMITATIONS ON BUILT-IN LOSSES.— recognized by the liquidating corporation SEC. 421. AFFIRMATION OF CONSOLIDATED RE- ‘‘(1) LIMITATION ON IMPORTATION OF BUILT-IN with respect to such property, or TURN REGULATION AUTHORITY. LOSSES.— ‘‘(B) in any case in which the liquidating (a) IN GENERAL.—Section 1502 (relating to ‘‘(A) IN GENERAL.—If in any transaction de- corporation is a foreign corporation, the cor- consolidated return regulations) is amended scribed in subsection (a) or (b) there would porate distributee is a domestic corporation,

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00068 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3015 and the corporate distributee’s aggregate ad- the following new sentence: ‘‘For purposes of after paragraph (3) the following new para- justed bases of property described in section subparagraph (A), if more than 50 percent of graph: 362(e)(1)(B) which is distributed in such liq- the obligations transferred to, or purchased ‘‘(4) CAPITALIZATION ALLOWED WITH RESPECT uidation would (but for this subparagraph) by, the REMIC are originated by the United TO EQUITY OF PERSONS OTHER THAN ISSUER exceed the fair market value of such prop- States or any State (or any political subdivi- AND RELATED PARTIES.—If the disqualified erty immediately after such liquidation.’’. sion, agency, or instrumentality of the debt instrument of a corporation is payable (c) EFFECTIVE DATE.—The amendments United States or any State) and are prin- in equity held by the issuer (or any related made by this section shall apply to trans- cipally secured by an interest in real prop- party) in any other person (other than a re- actions after February 13, 2003. erty, then each obligation transferred to, or lated party), the basis of such equity shall be SEC. 432. NO REDUCTION OF BASIS UNDER SEC- purchased by, the REMIC shall be treated as increased by the amount not allowed as a de- TION 734 IN STOCK HELD BY PART- secured by an interest in real property.’’. duction by reason of paragraph (1) with re- NERSHIP IN CORPORATE PARTNER. (8)(A) Section 860G(a)(3)(A) is amended by spect to the instrument.’’. (a) IN GENERAL.—Section 755 is amended by striking ‘‘or’’ at the end of clause (i), by in- (c) EXCEPTION FOR CERTAIN INSTRUMENTS adding at the end the following new sub- serting ‘‘or’’ at the end of clause (ii), and by ISSUED BY DEALERS IN SECURITIES.—Section section: inserting after clause (ii) the following new 163(l), as amended by subsection (b), is ‘‘(c) NO ALLOCATION OF BASIS DECREASE TO clause: amended by redesignating paragraphs (5) and STOCK OF CORPORATE PARTNER.—In making ‘‘(iii) represents an increase in the prin- (6) as paragraphs (6) and (7) and by inserting an allocation under subsection (a) of any de- cipal amount under the original terms of an after paragraph (4) the following new para- crease in the adjusted basis of partnership obligation described in clause (i) or (ii) if graph: property under section 734(b)— such increase— ‘‘(5) EXCEPTION FOR CERTAIN INSTRUMENTS ‘‘(1) no allocation may be made to stock in ‘‘(I) is attributable to an advance made to ISSUED BY DEALERS IN SECURITIES.—For pur- a corporation (or any person which is related the obligor pursuant to the original terms of poses of this subsection, the term ‘disquali- (within the meaning of section 267(b) or fied debt instrument’ does not include in- 707(b)(1)) to such corporation) which is a the obligation, debtedness issued by a dealer in securities partner in the partnership, and ‘‘(II) occurs after the startup day, and (or a related party) which is payable in, or ‘‘(2) any amount not allocable to stock by ‘‘(III) is purchased by the REMIC pursuant by reference to, equity (other than equity of reason of paragraph (1) shall be allocated to a fixed price contract in effect on the the issuer or a related party) held by such under subsection (a) to other partnership startup day.’’. dealer in its capacity as a dealer in securi- property in such manner as the Secretary (B) Section 860G(a)(7)(B) is amended to ties. For purposes of this paragraph, the may prescribe. read as follows: Gain shall be recognized to the partnership ‘‘(B) QUALIFIED RESERVE FUND.—For pur- term ‘dealer in securities’ has the meaning to the extent that the amount required to be poses of subparagraph (A), the term ‘quali- given such term by section 475.’’. allocated under paragraph (2) to other part- fied reserve fund’ means any reasonably re- (c) CONFORMING AMENDMENTS.—Paragraph nership property exceeds the aggregate ad- quired reserve to— (3) of section 163(l) is amended— justed basis of such other property imme- ‘‘(i) provide for full payment of expenses of (1) by striking ‘‘or a related party’’ in the diately before the allocation required by the REMIC or amounts due on regular inter- material preceding subparagraph (A) and in- paragraph (2).’’. ests in the event of defaults on qualified serting ‘‘or any other person’’, and (b) EFFECTIVE DATE.—The amendment mortgages or lower than expected returns on (2) by striking ‘‘or interest’’ each place it made by this section shall apply to distribu- cash flow investments, or appears. tions after February 13, 2003. ‘‘(ii) provide a source of funds for the pur- (d) EFFECTIVE DATE.—The amendments SEC. 433. REPEAL OF SPECIAL RULES FOR chase of obligations described in clause (ii) made by this section shall apply to debt in- FASITS. or (iii) of paragraph (3)(A). struments issued after February 13, 2003. (a) IN GENERAL.—Part V of subchapter M of The aggregate fair market value of the as- SEC. 435. EXPANDED AUTHORITY TO DISALLOW chapter 1 (relating to financial asset sets held in any such reserve shall not exceed TAX BENEFITS UNDER SECTION 269. (a) IN GENERAL.—Subsection (a) of section securitization investment trusts) is hereby 50 percent of the aggregate fair market value 269 (relating to acquisitions made to evade or repealed. of all of the assets of the REMIC on the avoid income tax) is amended to read as fol- (b) CONFORMING AMENDMENTS.— startup day, and the amount of any such re- lows: (1) Paragraph (6) of section 56(g) is amend- serve shall be promptly and appropriately re- ‘‘(a) IN GENERAL.—If— ed by striking ‘‘REMIC, or FASIT’’ and in- duced to the extent the amount held in such serting ‘‘or REMIC’’. ‘‘(1)(A) any person or persons acquire, di- reserve is no longer reasonably required for rectly or indirectly, control of a corporation, (2) Clause (ii) of section 382(l)(4)(B) is purposes specified in clause (i) or (ii) of para- amended by striking ‘‘a REMIC to which or graph (3)(A).’’. ‘‘(B) any corporation acquires, directly or part IV of subchapter M applies, or a FASIT (9) Subparagraph (C) of section 1202(e)(4) is to which part V of subchapter M applies,’’ indirectly, property of another corporation amended by striking ‘‘REMIC, or FASIT’’ and the basis of such property, in the hands and inserting ‘‘or a REMIC to which part IV and inserting ‘‘or REMIC’’. of subchapter M applies,’’. of the acquiring corporation, is determined (10) Clause (xi) of section 7701(a)(19)(C) is by reference to the basis in the hands of the (3) Paragraph (1) of section 582(c) is amend- amended— ed by striking ‘‘, and any regular interest in transferor corporation, and (A) by striking ‘‘and any regular interest a FASIT,’’. ‘‘(2) the principal purpose for which such in a FASIT,’’, and (4) Subparagraph (E) of section 856(c)(5) is acquisition was made is evasion or avoidance (B) by striking ‘‘or FASIT’’ each place it amended by striking the last sentence. of Federal income tax, appears. (5)(A) Section 860G(a)(1) is amended by then the Secretary may disallow such deduc- (11) Subparagraph (A) of section 7701(i)(2) is adding at the end the following new sen- tion, credit, or other allowance. For purposes amended by striking ‘‘or a FASIT’’. tence: ‘‘An interest shall not fail to qualify of paragraph (1)(A), control means the own- (12) The table of parts for subchapter M of as a regular interest solely because the spec- ership of stock possessing at least 50 percent chapter 1 is amended by striking the item re- ified principal amount of the regular interest of the total combined voting power of all lating to part V. (or the amount of interest accrued on the classes of stock entitled to vote or at least 50 (c) EFFECTIVE DATE.— regular interest) can be reduced as a result percent of the total value of all shares of all (1) IN GENERAL.—Except as provided in of the nonoccurrence of 1 or more contingent classes of stock of the corporation.’’. paragraph (2), the amendments made by this payments with respect to any reverse mort- (b) EFFECTIVE DATE.—The amendment section shall take effect on February 14, 2003. made by this section shall apply to stock and gage loan held by the REMIC if, on the start- (2) EXCEPTION FOR EXISTING FASITS.—Para- property acquired after February 13, 2003. up day for the REMIC, the sponsor reason- graph (1) shall not apply to any FASIT in ex- ably believes that all principal and interest SEC. 436. MODIFICATION OF INTERACTION BE- istence on the date of the enactment of this TWEEN SUBPART F AND PASSIVE due under the regular interest will be paid at Act to the extent that regular interests FOREIGN INVESTMENT COMPANY or prior to the liquidation of the REMIC.’’. issued by the FASIT before such date con- RULES. (B) The last sentence of section 860G(a)(3) tinue to remain outstanding in accordance (a) LIMITATION ON EXCEPTION FROM PFIC is amended by inserting ‘‘, and any reverse with the original terms of issuance. RULES FOR UNITED STATES SHAREHOLDERS OF mortgage loan (and each balance increase on CONTROLLED FOREIGN CORPORATIONS.—Para- such loan meeting the requirements of sub- SEC. 434. EXPANDED DISALLOWANCE OF DEDUC- TION FOR INTEREST ON CONVERT- graph (2) of section 1297(e) (relating to pas- paragraph (A)(iii)) shall be treated as an ob- IBLE DEBT. sive foreign investment company) is amend- ligation secured by an interest in real prop- (a) IN GENERAL.—Paragraph (2) of section ed by adding at the end the following flush erty’’ before the period at the end. 163(l) is amended by inserting ‘‘or equity sentence: (6) Paragraph (3) of section 860G(a) is held by the issuer (or any related party) in ‘‘Such term shall not include any period if amended by adding ‘‘and’’ at the end of sub- any other person’’ after ‘‘or a related party’’. the earning of subpart F income by such cor- paragraph (B), by striking ‘‘, and’’ at the end (b) CAPITALIZATION ALLOWED WITH RESPECT poration during such period would result in of subparagraph (C) and inserting a period, TO EQUITY OF PERSONS OTHER THAN ISSUER only a remote likelihood of an inclusion in and by striking subparagraph (D). AND RELATED PARTIES.—Section 163(l) is gross income under section 951(a)(1)(A)(i).’’. (7) Section 860G(a)(3), as amended by para- amended by redesignating paragraphs (4) and (b) EFFECTIVE DATE.—The amendment graph (6), is amended by adding at the end (5) as paragraphs (5) and (6) and by inserting made by this section shall apply to taxable

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years of controlled foreign corporations be- ‘‘(2) ACQUIRED ENTITY.—For purposes of ‘‘(A) as part of the acquisition described in ginning after February 13, 2003, and to tax- this section— subsection (a)(2)(A) to which subsection (b) able years of United States shareholders ‘‘(A) IN GENERAL.—The term ‘acquired enti- applies, or with or within which such taxable years of ty’ means the domestic corporation or part- ‘‘(B) after such acquisition to a foreign re- controlled foreign corporations end. nership substantially all of the properties of lated person. Subtitle D—Provisions to Discourage which are directly or indirectly acquired in The Secretary may provide that income or Expatriation an acquisition described in subsection gain from the sale of inventories or other transactions in the ordinary course of a SEC. 441. TAX TREATMENT OF INVERTED COR- (a)(2)(A) to which this subsection applies. PORATE ENTITIES. ‘‘(B) AGGREGATION RULES.—Any domestic trade or business shall not be treated as in- version gain under subparagraph (B) to the (a) IN GENERAL.—Subchapter C of chapter person bearing a relationship described in 80 (relating to provisions affecting more than section 267(b) or 707(b) to an acquired entity extent the Secretary determines such treat- ment would not be inconsistent with the pur- one subtitle) is amended by adding at the shall be treated as an acquired entity with poses of this section. end the following new section: respect to the acquisition described in sub- ‘‘(5) COORDINATION WITH SECTION 172 AND ‘‘SEC. 7874. RULES RELATING TO INVERTED COR- paragraph (A). MINIMUM TAX.—Rules similar to the rules of PORATE ENTITIES. ‘‘(3) APPLICABLE PERIOD.—For purposes of paragraphs (3) and (4) of section 860E(a) shall ‘‘(a) INVERTED CORPORATIONS TREATED AS this section— apply for purposes of this section. DOMESTIC CORPORATIONS.— ‘‘(A) IN GENERAL.—The term ‘applicable pe- ‘‘(6) STATUTE OF LIMITATIONS.— ‘‘(1) IN GENERAL.—If a foreign incorporated riod’ means the period— ‘‘(A) IN GENERAL.—The statutory period for entity is treated as an inverted domestic cor- ‘‘(i) beginning on the first date properties the assessment of any deficiency attrib- are acquired as part of the acquisition de- poration, then, notwithstanding section utable to the inversion gain of any taxpayer scribed in subsection (a)(2)(A) to which this 7701(a)(4), such entity shall be treated for for any pre-inversion year shall not expire subsection applies, and purposes of this title as a domestic corpora- before the expiration of 3 years from the date ‘‘(ii) ending on the date which is 10 years tion. the Secretary is notified by the taxpayer (in ‘‘(2) INVERTED DOMESTIC CORPORATION.—For after the last date properties are acquired as such manner as the Secretary may prescribe) purposes of this section, a foreign incor- part of such acquisition. of the acquisition described in subsection porated entity shall be treated as an in- ‘‘(B) SPECIAL RULE FOR INVERSIONS OCCUR- (a)(2)(A) to which such gain relates and such verted domestic corporation if, pursuant to a RING BEFORE MARCH 21, 2002.—In the case of deficiency may be assessed before the expira- plan (or a series of related transactions)— any acquired entity to which paragraph tion of such 3-year period notwithstanding ‘‘(A) the entity completes after March 20, (1)(A) applies, the applicable period shall be the provisions of any other law or rule of law 2002, the direct or indirect acquisition of sub- the 10-year period beginning on January 1, which would otherwise prevent such assess- stantially all of the properties held directly 2003. ment. or indirectly by a domestic corporation or ‘‘(c) TAX ON INVERSION GAINS MAY NOT BE ‘‘(B) PRE-INVERSION YEAR.—For purposes of substantially all of the properties consti- OFFSET.—If subsection (b) applies— subparagraph (A), the term ‘pre-inversion tuting a trade or business of a domestic part- year’ means any taxable year if— nership, ‘‘(1) IN GENERAL.—The taxable income of an acquired entity (or any expanded affiliated ‘‘(i) any portion of the applicable period is ‘‘(B) after the acquisition at least 80 per- included in such taxable year, and cent of the stock (by vote or value) of the en- group which includes such entity) for any taxable year which includes any portion of ‘‘(ii) such year ends before the taxable year tity is held— in which the acquisition described in sub- ‘‘(i) in the case of an acquisition with re- the applicable period shall in no event be less than the inversion gain of the entity for section (a)(2)(A) is completed. spect to a domestic corporation, by former ‘‘(d) SPECIAL RULES APPLICABLE TO AC- the taxable year. shareholders of the domestic corporation by QUIRED ENTITIES TO WHICH SUBSECTION (b) ‘‘(2) CREDITS NOT ALLOWED AGAINST TAX ON reason of holding stock in the domestic cor- APPLIES.— INVERSION GAIN.—Credits shall be allowed poration, or ‘‘(1) INCREASES IN ACCURACY-RELATED PEN- against the tax imposed by this chapter on ‘‘(ii) in the case of an acquisition with re- ALTIES.—In the case of any underpayment of spect to a domestic partnership, by former an acquired entity for any taxable year de- tax of an acquired entity to which subsection partners of the domestic partnership by rea- scribed in paragraph (1) only to the extent (b) applies— son of holding a capital or profits interest in such tax exceeds the product of— ‘‘(A) section 6662(a) shall be applied with the domestic partnership, and ‘‘(A) the amount of the inversion gain for respect to such underpayment by sub- ‘‘(C) the expanded affiliated group which the taxable year, and stituting ‘30 percent’ for ‘20 percent’, and after the acquisition includes the entity does ‘‘(B) the highest rate of tax specified in ‘‘(B) if such underpayment is attributable not have substantial business activities in section 11(b)(1). to one or more gross valuation understate- the foreign country in which or under the For purposes of determining the credit al- ments, the increase in the rate of penalty law of which the entity is created or orga- lowed by section 901 inversion gain shall be under section 6662(h) shall be to 50 percent nized when compared to the total business treated as from sources within the United rather than 40 percent. activities of such expanded affiliated group. States. ‘‘(2) MODIFICATIONS OF LIMITATION ON INTER- Except as provided in regulations, an acqui- ‘‘(3) SPECIAL RULES FOR PARTNERSHIPS.—In EST DEDUCTION.—In the case of an acquired sition of properties of a domestic corporation the case of an acquired entity which is a entity to which subsection (b) applies, sec- shall not be treated as described in subpara- partnership— tion 163(j) shall be applied— graph (A) if none of the corporation’s stock ‘‘(A) the limitations of this subsection ‘‘(A) without regard to paragraph (2)(A)(ii) was readily tradeable on an established secu- shall apply at the partner rather than the thereof, and rities market at any time during the 4-year partnership level, ‘‘(B) by substituting ‘25 percent’ for ‘50 per- period ending on the date of the acquisition. ‘‘(B) the inversion gain of any partner for cent’ each place it appears in paragraph ‘‘(b) PRESERVATION OF DOMESTIC TAX BASE any taxable year shall be equal to the sum (2)(B) thereof. IN CERTAIN INVERSION TRANSACTIONS TO of— ‘‘(e) OTHER DEFINITIONS AND SPECIAL WHICH SUBSECTION (a) DOES NOT APPLY.— ‘‘(i) the partner’s distributive share of in- RULES.—For purposes of this section— ‘‘(1) IN GENERAL.—If a foreign incorporated version gain of the partnership for such tax- ‘‘(1) RULES FOR APPLICATION OF SUBSECTION entity would be treated as an inverted do- able year, plus (a)(2).—In applying subsection (a)(2) for pur- mestic corporation with respect to an ac- ‘‘(ii) income or gain required to be recog- poses of subsections (a) and (b), the following quired entity if either— nized for the taxable year by the partner rules shall apply: ‘‘(A) subsection (a)(2)(A) were applied by under section 367(a), 741, or 1001, or under ‘‘(A) CERTAIN STOCK DISREGARDED.—There substituting ‘after December 31, 1996, and on any other provision of chapter 1, by reason of shall not be taken into account in deter- or before March 20, 2002’ for ‘after March 20, the transfer during the applicable period of mining ownership for purposes of subsection 2002’ and subsection (a)(2)(B) were applied by any partnership interest of the partner in (a)(2)(B)— substituting ‘more than 50 percent’ for ‘at such partnership to the foreign incorporated ‘‘(i) stock held by members of the expanded least 80 percent’, or entity, and affiliated group which includes the foreign ‘‘(B) subsection (a)(2)(B) were applied by ‘‘(C) the highest rate of tax specified in the incorporated entity, or substituting ‘more than 50 percent’ for ‘at rate schedule applicable to the partner under ‘‘(ii) stock of such entity which is sold in least 80 percent’, chapter 1 shall be substituted for the rate of a public offering or private placement re- then the rules of subsection (c) shall apply to tax under paragraph (2)(B). lated to the acquisition described in sub- any inversion gain of the acquired entity ‘‘(4) INVERSION GAIN.—For purposes of this section (a)(2)(A). during the applicable period and the rules of section, the term ‘inversion gain’ means any ‘‘(B) PLAN DEEMED IN CERTAIN CASES.—If a subsection (d) shall apply to any related income or gain required to be recognized foreign incorporated entity acquires directly party transaction of the acquired entity dur- under section 304, 311(b), 367, 1001, or 1248, or or indirectly substantially all of the prop- ing the applicable period. This subsection under any other provision of chapter 1, by erties of a domestic corporation or partner- shall not apply for any taxable year if sub- reason of the transfer during the applicable ship during the 4-year period beginning on section (a) applies to such foreign incor- period of stock or other properties by an ac- the date which is 2 years before the owner- porated entity for such taxable year. quired entity— ship requirements of subsection (a)(2)(B) are

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00070 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3017 met with respect to such domestic corpora- vent the avoidance of the purposes of this ‘‘(I) such dollar amount, multiplied by tion or partnership, such actions shall be section, including the avoidance of such pur- ‘‘(II) the cost-of-living adjustment deter- treated as pursuant to a plan. poses through— mined under section 1(f)(3) for such calendar ‘‘(C) CERTAIN TRANSFERS DISREGARDED.— ‘‘(1) the use of related persons, pass-thru or year, determined by substituting ‘calendar The transfer of properties or liabilities (in- other noncorporate entities, or other inter- year 2003’ for ‘calendar year 1992’ in subpara- cluding by contribution or distribution) shall mediaries, or graph (B) thereof. be disregarded if such transfers are part of a ‘‘(2) transactions designed to have persons ‘‘(ii) ROUNDING RULES.—If any amount after plan a principal purpose of which is to avoid cease to be (or not become) members of ex- adjustment under clause (i) is not a multiple the purposes of this section. panded affiliated groups or related persons.’’. of $1,000, such amount shall be rounded to ‘‘(D) SPECIAL RULE FOR RELATED PARTNER- (b) INFORMATION REPORTING.—The Sec- the next lower multiple of $1,000. SHIPS.—For purposes of applying subsection retary of the Treasury shall exercise the Sec- ‘‘(4) ELECTION TO CONTINUE TO BE TAXED AS (a)(2) to the acquisition of a domestic part- retary’s authority under the Internal Rev- UNITED STATES CITIZEN.— nership, except as provided in regulations, enue Code of 1986 to require entities involved ‘‘(A) IN GENERAL.—If a covered expatriate all partnerships which are under common in transactions to which section 7874 of such elects the application of this paragraph— control (within the meaning of section 482) Code (as added by subsection (a)) applies to ‘‘(i) this section (other than this paragraph shall be treated as 1 partnership. report to the Secretary, shareholders, part- and subsection (i)) shall not apply to the ex- ‘‘(E) TREATMENT OF CERTAIN RIGHTS.—The ners, and such other persons as the Secretary patriate, but Secretary shall prescribe such regulations as may prescribe such information as is nec- ‘‘(ii) in the case of property to which this may be necessary— essary to ensure the proper tax treatment of section would apply but for such election, ‘‘(i) to treat warrants, options, contracts such transactions. the expatriate shall be subject to tax under (c) CONFORMING AMENDMENT.—The table of to acquire stock, convertible debt instru- this title in the same manner as if the indi- sections for subchapter C of chapter 80 is ments, and other similar interests as stock, vidual were a United States citizen. and amended by adding at the end the following new item: ‘‘(B) REQUIREMENTS.—Subparagraph (A) ‘‘(ii) to treat stock as not stock. shall not apply to an individual unless the ‘‘(2) EXPANDED AFFILIATED GROUP.—The ‘‘Sec. 7874. Rules relating to inverted cor- individual— term ‘expanded affiliated group’ means an porate entities.’’. ‘‘(i) provides security for payment of tax in affiliated group as defined in section 1504(a) (d) TRANSITION RULE FOR CERTAIN REGU- such form and manner, and in such amount, but without regard to section 1504(b)(3), ex- LATED INVESTMENT COMPANIES AND UNIT IN- as the Secretary may require, cept that section 1504(a) shall be applied by VESTMENT TRUSTS.—Notwithstanding section ‘‘(ii) consents to the waiver of any right of substituting ‘more than 50 percent’ for ‘at 7874 of the Internal Revenue Code of 1986 (as the individual under any treaty of the least 80 percent’ each place it appears. added by subsection (a)), a regulated invest- United States which would preclude assess- ‘‘(3) FOREIGN INCORPORATED ENTITY.—The ment company, or other pooled fund or trust ment or collection of any tax which may be term ‘foreign incorporated entity’ means any specified by the Secretary of the Treasury, imposed by reason of this paragraph, and entity which is, or but for subsection (a)(1) may elect to recognize gain by reason of sec- ‘‘(iii) complies with such other require- would be, treated as a foreign corporation for tion 367(a) of such Code with respect to a ments as the Secretary may prescribe. purposes of this title. transaction under which a foreign incor- ‘‘(C) ELECTION.—An election under sub- ‘‘(4) FOREIGN RELATED PERSON.—The term porated entity is treated as an inverted do- paragraph (A) shall apply to all property to ‘foreign related person’ means, with respect mestic corporation under section 7874(a) of which this section would apply but for the to any acquired entity, a foreign person such Code by reason of an acquisition com- election and, once made, shall be irrev- which— pleted after March 20, 2002, and before Janu- ocable. Such election shall also apply to ‘‘(A) bears a relationship to such entity de- ary 1, 2004. property the basis of which is determined in scribed in section 267(b) or 707(b), or SEC. 442. IMPOSITION OF MARK-TO-MARKET TAX whole or in part by reference to the property ‘‘(B) is under the same common control ON INDIVIDUALS WHO EXPATRIATE. with respect to which the election was made. (within the meaning of section 482) as such (a) IN GENERAL.—Subpart A of part II of entity. subchapter N of chapter 1 is amended by in- ‘‘(b) ELECTION TO DEFER TAX.— ‘‘(5) SUBSEQUENT ACQUISITIONS BY UNRE- serting after section 877 the following new ‘‘(1) IN GENERAL.—If the taxpayer elects the LATED DOMESTIC CORPORATIONS.— section: application of this subsection with respect to ‘‘(A) IN GENERAL.—Subject to such condi- ‘‘SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIA- any property treated as sold by reason of tions, limitations, and exceptions as the Sec- TION. subsection (a), the payment of the additional retary may prescribe, if, after an acquisition ‘‘(a) GENERAL RULES.—For purposes of this tax attributable to such property shall be described in subsection (a)(2)(A) to which subtitle— postponed until the due date of the return subsection (b) applies, a domestic corpora- ‘‘(1) MARK TO MARKET.—Except as provided for the taxable year in which such property tion stock of which is traded on an estab- in subsections (d) and (f), all property of a is disposed of (or, in the case of property dis- lished securities market acquires directly or covered expatriate to whom this section ap- posed of in a transaction in which gain is not indirectly any properties of one or more ac- plies shall be treated as sold on the day be- recognized in whole or in part, until such quired entities in a transaction with respect fore the expatriation date for its fair market other date as the Secretary may prescribe). to which the requirements of subparagraph value. ‘‘(2) DETERMINATION OF TAX WITH RESPECT (B) are met, this section shall cease to apply ‘‘(2) RECOGNITION OF GAIN OR LOSS.—In the TO PROPERTY.—For purposes of paragraph (1), to any such acquired entity with respect to case of any sale under paragraph (1)— the additional tax attributable to any prop- which such requirements are met. ‘‘(A) notwithstanding any other provision erty is an amount which bears the same ‘‘(B) REQUIREMENTS.—The requirements of of this title, any gain arising from such sale ratio to the additional tax imposed by this the subparagraph are met with respect to a shall be taken into account for the taxable chapter for the taxable year solely by reason transaction involving any acquisition de- year of the sale, and of subsection (a) as the gain taken into ac- scribed in subparagraph (A) if— ‘‘(B) any loss arising from such sale shall count under subsection (a) with respect to ‘‘(i) before such transaction the domestic be taken into account for the taxable year of such property bears to the total gain taken corporation did not have a relationship de- the sale to the extent otherwise provided by into account under subsection (a) with re- scribed in section 267(b) or 707(b), and was this title, except that section 1091 shall not spect to all property to which subsection (a) not under common control (within the mean- apply to any such loss. applies. ing of section 482), with the acquired entity, Proper adjustment shall be made in the ‘‘(3) TERMINATION OF POSTPONEMENT.—No or any member of an expanded affiliated amount of any gain or loss subsequently re- tax may be postponed under this subsection group including such entity, and alized for gain or loss taken into account later than the due date for the return of tax ‘‘(ii) after such transaction, such acquired under the preceding sentence. imposed by this chapter for the taxable year entity— ‘‘(3) EXCLUSION FOR CERTAIN GAIN.— which includes the date of death of the expa- ‘‘(I) is a member of the same expanded af- ‘‘(A) IN GENERAL.—The amount which, but triate (or, if earlier, the time that the secu- filiated group which includes the domestic for this paragraph, would be includible in the rity provided with respect to the property corporation or has such a relationship or is gross income of any individual by reason of fails to meet the requirements of paragraph under such common control with any mem- this section shall be reduced (but not below (4), unless the taxpayer corrects such failure ber of such group, and zero) by $600,000. For purposes of this para- within the time specified by the Secretary). ‘‘(II) is not a member of, and does not have graph, allocable expatriation gain taken into ‘‘(4) SECURITY.— such a relationship and is not under such account under subsection (f)(2) shall be ‘‘(A) IN GENERAL.—No election may be common control with any member of, the ex- treated in the same manner as an amount re- made under paragraph (1) with respect to panded affiliated group which before such ac- quired to be includible in gross income. any property unless adequate security is pro- quisition included such entity. ‘‘(B) COST-OF-LIVING ADJUSTMENT.— vided to the Secretary with respect to such ‘‘(f) REGULATIONS.—The Secretary shall ‘‘(i) IN GENERAL.—In the case of an expa- property. provide such regulations as are necessary to triation date occurring in any calendar year ‘‘(B) ADEQUATE SECURITY.—For purposes of carry out this section, including regulations after 2004, the $600,000 amount under sub- subparagraph (A), security with respect to providing for such adjustments to the appli- paragraph (A) shall be increased by an any property shall be treated as adequate se- cation of this section as are necessary to pre- amount equal to— curity if—

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00071 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3018 CONGRESSIONAL RECORD — SENATE March 23, 2004 ‘‘(i) it is a bond in an amount equal to the come by reason of the subsequent distribu- trust on the day before the expatriation deferred tax amount under paragraph (2) for tion shall be reduced by the excess of the date— the property, or amount includible in gross income under ‘‘(A) the individual shall not be treated as ‘‘(ii) the taxpayer otherwise establishes to subparagraph (A) over any portion of such having sold such interest, the satisfaction of the Secretary that the se- amount to which this subparagraph pre- ‘‘(B) such interest shall be treated as a sep- curity is adequate. viously applied. arate share in the trust, and ‘‘(5) WAIVER OF CERTAIN RIGHTS.—No elec- ‘‘(C) TREATMENT OF SUBSEQUENT DISTRIBU- ‘‘(C)(i) such separate share shall be treated tion may be made under paragraph (1) unless TIONS BY PLAN.—For purposes of this title, a as a separate trust consisting of the assets the taxpayer consents to the waiver of any retirement plan to which this paragraph ap- allocable to such share, right under any treaty of the United States plies, and any person acting on the plan’s be- ‘‘(ii) the separate trust shall be treated as which would preclude assessment or collec- half, shall treat any subsequent distribution having sold its assets on the day before the tion of any tax imposed by reason of this sec- described in subparagraph (B) in the same expatriation date for their fair market value tion. manner as such distribution would be treat- and as having distributed all of its assets to ‘‘(6) ELECTIONS.—An election under para- ed without regard to this paragraph. the individual as of such time, and graph (1) shall only apply to property de- ‘‘(D) APPLICABLE PLANS.—This paragraph ‘‘(iii) the individual shall be treated as scribed in the election and, once made, is ir- shall apply to— having recontributed the assets to the sepa- revocable. An election may be made under ‘‘(i) any qualified retirement plan (as de- rate trust. paragraph (1) with respect to an interest in a fined in section 4974(c)), Subsection (a)(2) shall apply to any income, trust with respect to which gain is required ‘‘(ii) an eligible deferred compensation gain, or loss of the individual arising from a to be recognized under subsection (f)(1). plan (as defined in section 457(b)) of an eligi- distribution described in subparagraph ‘‘(7) INTEREST.—For purposes of section ble employer described in section (C)(ii). In determining the amount of such 6601— 457(e)(1)(A), and distribution, proper adjustments shall be ‘‘(A) the last date for the payment of tax ‘‘(iii) to the extent provided in regulations, made for liabilities of the trust allocable to shall be determined without regard to the any foreign pension plan or similar retire- an individual’s share in the trust. election under this subsection, and ment arrangements or programs. PECIAL RULES FOR INTERESTS IN QUALI- ‘‘(B) section 6621(a)(2) shall be applied by ‘‘(2) S ‘‘(e) DEFINITIONS.—For purposes of this sec- substituting ‘5 percentage points’ for ‘3 per- FIED TRUSTS.— tion— centage points’ in subparagraph (B) thereof. ‘‘(A) IN GENERAL.—If the trust interest de- ‘‘(1) EXPATRIATE.—The term ‘expatriate’ ‘‘(c) COVERED EXPATRIATE.—For purposes scribed in paragraph (1) is an interest in a of this section— means— qualified trust— ‘‘(A) any United States citizen who relin- ‘‘(1) IN GENERAL.—Except as provided in ‘‘(i) paragraph (1) and subsection (a) shall paragraph (2), the term ‘covered expatriate’ quishes citizenship, and not apply, and means an expatriate. ‘‘(B) any long-term resident of the United ‘‘(ii) in addition to any other tax imposed ‘‘(2) EXCEPTIONS.—An individual shall not States who— by this title, there is hereby imposed on each be treated as a covered expatriate if— ‘‘(i) ceases to be a lawful permanent resi- distribution with respect to such interest a ‘‘(A) the individual— dent of the United States (within the mean- tax in the amount determined under sub- ‘‘(i) became at birth a citizen of the United ing of section 7701(b)(6)), or paragraph (B). States and a citizen of another country and, ‘‘(ii) commences to be treated as a resident ‘‘(B) AMOUNT OF TAX.—The amount of tax as of the expatriation date, continues to be a of a foreign country under the provisions of under subparagraph (A)(ii) shall be equal to citizen of, and is taxed as a resident of, such a tax treaty between the United States and the lesser of— other country, and the foreign country and who does not waive ‘‘(i) the highest rate of tax imposed by sec- ‘‘(ii) has not been a resident of the United the benefits of such treaty applicable to resi- tion 1(e) for the taxable year which includes States (as defined in section 7701(b)(1)(A)(ii)) dents of the foreign country. the day before the expatriation date, multi- during the 5 taxable years ending with the ‘‘(2) EXPATRIATION DATE.—The term ‘expa- plied by the amount of the distribution, or taxable year during which the expatriation triation date’ means— ‘‘(ii) the balance in the deferred tax ac- date occurs, or ‘‘(A) the date an individual relinquishes count immediately before the distribution ‘‘(B)(i) the individual’s relinquishment of United States citizenship, or determined without regard to any increases United States citizenship occurs before such ‘‘(B) in the case of a long-term resident of under subparagraph (C)(ii) after the 30th day individual attains age 181⁄2, and the United States, the date of the event de- preceding the distribution. ‘‘(ii) the individual has been a resident of scribed in clause (i) or (ii) of paragraph ‘‘(C) DEFERRED TAX ACCOUNT.—For purposes the United States (as so defined) for not (1)(B). of subparagraph (B)(ii)— more than 5 taxable years before the date of ‘‘(3) RELINQUISHMENT OF CITIZENSHIP.—A ‘‘(i) OPENING BALANCE.—The opening bal- relinquishment. citizen shall be treated as relinquishing ance in a deferred tax account with respect ‘‘(d) EXEMPT PROPERTY; SPECIAL RULES FOR United States citizenship on the earliest of— to any trust interest is an amount equal to PENSION PLANS.— ‘‘(A) the date the individual renounces the tax which would have been imposed on ‘‘(1) EXEMPT PROPERTY.—This section shall such individual’s United States nationality the allocable expatriation gain with respect not apply to the following: before a diplomatic or consular officer of the to the trust interest if such gain had been in- ‘‘(A) UNITED STATES REAL PROPERTY INTER- United States pursuant to paragraph (5) of cluded in gross income under subsection (a). ESTS.—Any United States real property in- section 349(a) of the Immigration and Na- ‘‘(ii) INCREASE FOR INTEREST.—The balance terest (as defined in section 897(c)(1)), other tionality Act (8 U.S.C. 1481(a)(5)), in the deferred tax account shall be in- than stock of a United States real property ‘‘(B) the date the individual furnishes to creased by the amount of interest deter- holding corporation which does not, on the the United States Department of State a mined (on the balance in the account at the day before the expatriation date, meet the signed statement of voluntary relinquish- time the interest accrues), for periods after requirements of section 897(c)(2). ment of United States nationality con- the 90th day after the expatriation date, by ‘‘(B) SPECIFIED PROPERTY.—Any property firming the performance of an act of expa- using the rates and method applicable under or interest in property not described in sub- triation specified in paragraph (1), (2), (3), or section 6621 for underpayments of tax for paragraph (A) which the Secretary specifies (4) of section 349(a) of the Immigration and such periods, except that section 6621(a)(2) in regulations. Nationality Act (8 U.S.C. 1481(a)(1)–(4)), shall be applied by substituting ‘5 percentage ‘‘(2) SPECIAL RULES FOR CERTAIN RETIRE- ‘‘(C) the date the United States Depart- points’ for ‘3 percentage points’ in subpara- MENT PLANS.— ment of State issues to the individual a cer- graph (B) thereof. ‘‘(A) IN GENERAL.—If a covered expatriate tificate of loss of nationality, or ‘‘(iii) DECREASE FOR TAXES PREVIOUSLY holds on the day before the expatriation date ‘‘(D) the date a court of the United States PAID.—The balance in the tax deferred ac- any interest in a retirement plan to which cancels a naturalized citizen’s certificate of count shall be reduced— this paragraph applies— naturalization. ‘‘(I) by the amount of taxes imposed by ‘‘(i) such interest shall not be treated as Subparagraph (A) or (B) shall not apply to subparagraph (A) on any distribution to the sold for purposes of subsection (a)(1), but any individual unless the renunciation or person holding the trust interest, and ‘‘(ii) an amount equal to the present value voluntary relinquishment is subsequently ‘‘(II) in the case of a person holding a non- of the expatriate’s nonforfeitable accrued approved by the issuance to the individual of vested interest, to the extent provided in benefit shall be treated as having been re- a certificate of loss of nationality by the regulations, by the amount of taxes imposed ceived by such individual on such date as a United States Department of State. by subparagraph (A) on distributions from distribution under the plan. ‘‘(4) LONG-TERM RESIDENT.—The term ‘long- the trust with respect to nonvested interests ‘‘(B) TREATMENT OF SUBSEQUENT DISTRIBU- term resident’ has the meaning given to such not held by such person. TIONS.—In the case of any distribution on or term by section 877(e)(2). ‘‘(D) ALLOCABLE EXPATRIATION GAIN.—For after the expatriation date to or on behalf of ‘‘(f) SPECIAL RULES APPLICABLE TO BENE- purposes of this paragraph, the allocable ex- the covered expatriate from a plan from FICIARIES’ INTERESTS IN TRUST.— patriation gain with respect to any bene- which the expatriate was treated as receiv- ‘‘(1) IN GENERAL.—Except as provided in ficiary’s interest in a trust is the amount of ing a distribution under subparagraph (A), paragraph (2), if an individual is determined gain which would be allocable to such bene- the amount otherwise includible in gross in- under paragraph (3) to hold an interest in a ficiary’s vested and nonvested interests in

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00072 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3019 the trust if the beneficiary held directly all the trust beneficiaries for purposes of this essary or appropriate to carry out the pur- assets allocable to such interests. section. poses of this section.’’. ‘‘(E) TAX DEDUCTED AND WITHHELD.— ‘‘(ii) TAXPAYER RETURN POSITION.—A tax- (b) INCLUSION IN INCOME OF GIFTS AND BE- ‘‘(i) IN GENERAL.—The tax imposed by sub- payer shall clearly indicate on its income QUESTS RECEIVED BY UNITED STATES CITIZENS paragraph (A)(ii) shall be deducted and with- tax return— AND RESIDENTS FROM EXPATRIATES.—Section held by the trustees from the distribution to ‘‘(I) the methodology used to determine 102 (relating to gifts, etc. not included in which it relates. that taxpayer’s trust interest under this sec- gross income) is amended by adding at the ‘‘(ii) EXCEPTION WHERE FAILURE TO WAIVE tion, and end the following new subsection: TREATY RIGHTS.—If an amount may not be ‘‘(II) if the taxpayer knows (or has reason ‘‘(d) GIFTS AND INHERITANCES FROM COV- deducted and withheld under clause (i) by to know) that any other beneficiary of such ERED EXPATRIATES.— reason of the distributee failing to waive any trust is using a different methodology to de- ‘‘(1) IN GENERAL.—Subsection (a) shall not treaty right with respect to such distribu- termine such beneficiary’s trust interest exclude from gross income the value of any tion— under this section. property acquired by gift, bequest, devise, or ‘‘(I) the tax imposed by subparagraph ‘‘(g) TERMINATION OF DEFERRALS, ETC.—In inheritance from a covered expatriate after (A)(ii) shall be imposed on the trust and each the case of any covered expatriate, notwith- the expatriation date. For purposes of this trustee shall be personally liable for the standing any other provision of this title— subsection, any term used in this subsection amount of such tax, and ‘‘(1) any period during which recognition of which is also used in section 877A shall have ‘‘(II) any other beneficiary of the trust income or gain is deferred shall terminate on the same meaning as when used in section shall be entitled to recover from the dis- the day before the expatriation date, and 877A. tributee the amount of such tax imposed on ‘‘(2) any extension of time for payment of ‘‘(2) EXCEPTIONS FOR TRANSFERS OTHERWISE the other beneficiary. tax shall cease to apply on the day before the SUBJECT TO ESTATE OR GIFT TAX.—Paragraph ‘‘(F) DISPOSITION.—If a trust ceases to be a expatriation date and the unpaid portion of (1) shall not apply to any property if either— qualified trust at any time, a covered expa- such tax shall be due and payable at the time ‘‘(A) the gift, bequest, devise, or inherit- triate disposes of an interest in a qualified and in the manner prescribed by the Sec- ance is— trust, or a covered expatriate holding an in- retary. ‘‘(i) shown on a timely filed return of tax terest in a qualified trust dies, then, in lieu ‘‘(h) IMPOSITION OF TENTATIVE TAX.— imposed by chapter 12 as a taxable gift by of the tax imposed by subparagraph (A)(ii), ‘‘(1) IN GENERAL.—If an individual is re- the covered expatriate, or there is hereby imposed a tax equal to the quired to include any amount in gross in- ‘‘(ii) included in the gross estate of the lesser of— come under subsection (a) for any taxable covered expatriate for purposes of chapter 11 ‘‘(i) the tax determined under paragraph (1) year, there is hereby imposed, immediately and shown on a timely filed return of tax im- as if the day before the expatriation date before the expatriation date, a tax in an posed by chapter 11 of the estate of the cov- were the date of such cessation, disposition, amount equal to the amount of tax which ered expatriate, or or death, whichever is applicable, or would be imposed if the taxable year were a ‘‘(B) no such return was timely filed but no ‘‘(ii) the balance in the tax deferred ac- short taxable year ending on the expatria- such return would have been required to be count immediately before such date. tion date. filed even if the covered expatriate were a Such tax shall be imposed on the trust and ‘‘(2) DUE DATE.—The due date for any tax citizen or long-term resident of the United each trustee shall be personally liable for the imposed by paragraph (1) shall be the 90th States.’’. amount of such tax and any other bene- day after the expatriation date. (c) DEFINITION OF TERMINATION OF UNITED ficiary of the trust shall be entitled to re- ‘‘(3) TREATMENT OF TAX.—Any tax paid STATES CITIZENSHIP.—Section 7701(a) is cover from the covered expatriate or the es- under paragraph (1) shall be treated as a pay- amended by adding at the end the following tate the amount of such tax imposed on the ment of the tax imposed by this chapter for new paragraph: other beneficiary. the taxable year to which subsection (a) ap- ‘‘(48) TERMINATION OF UNITED STATES CITI- ‘‘(G) DEFINITIONS AND SPECIAL RULES.—For plies. ZENSHIP.— purposes of this paragraph— ‘‘(4) DEFERRAL OF TAX.—The provisions of ‘‘(A) IN GENERAL.—An individual shall not ‘‘(i) QUALIFIED TRUST.—The term ‘qualified subsection (b) shall apply to the tax imposed cease to be treated as a United States citizen trust’ means a trust which is described in by this subsection to the extent attributable before the date on which the individual’s section 7701(a)(30)(E). to gain includible in gross income by reason citizenship is treated as relinquished under ‘‘(ii) VESTED INTEREST.—The term ‘vested of this section. section 877A(e)(3). interest’ means any interest which, as of the ‘‘(i) SPECIAL LIENS FOR DEFERRED TAX ‘‘(B) DUAL CITIZENS.—Under regulations day before the expatriation date, is vested in AMOUNTS.— prescribed by the Secretary, subparagraph the beneficiary. ‘‘(1) IMPOSITION OF LIEN.— (A) shall not apply to an individual who be- ‘‘(iii) NONVESTED INTEREST.—The term ‘‘(A) IN GENERAL.—If a covered expatriate came at birth a citizen of the United States ‘nonvested interest’ means, with respect to makes an election under subsection (a)(4) or and a citizen of another country.’’. any beneficiary, any interest in a trust (b) which results in the deferral of any tax (d) INELIGIBILITY FOR VISA OR ADMISSION TO which is not a vested interest. Such interest imposed by reason of subsection (a), the de- UNITED STATES.— shall be determined by assuming the max- ferred amount (including any interest, addi- (1) IN GENERAL.—Section 212(a)(10)(E) of the imum exercise of discretion in favor of the tional amount, addition to tax, assessable Immigration and Nationality Act (8 U.S.C. beneficiary and the occurrence of all contin- penalty, and costs attributable to the de- 1182(a)(10)(E)) is amended to read as follows: gencies in favor of the beneficiary. ferred amount) shall be a lien in favor of the ‘‘(E) FORMER CITIZENS NOT IN COMPLIANCE ‘‘(iv) ADJUSTMENTS.—The Secretary may United States on all property of the expa- WITH EXPATRIATION REVENUE PROVISIONS.— provide for such adjustments to the bases of triate located in the United States (without Any alien who is a former citizen of the assets in a trust or a deferred tax account, regard to whether this section applies to the United States who relinquishes United and the timing of such adjustments, in order property). States citizenship (within the meaning of to ensure that gain is taxed only once. ‘‘(B) DEFERRED AMOUNT.—For purposes of section 877A(e)(3) of the Internal Revenue ‘‘(v) COORDINATION WITH RETIREMENT PLAN this subsection, the deferred amount is the Code of 1986) and who is not in compliance RULES.—This subsection shall not apply to amount of the increase in the covered expa- with section 877A of such Code (relating to an interest in a trust which is part of a re- triate’s income tax which, but for the elec- expatriation).’’. tirement plan to which subsection (d)(2) ap- tion under subsection (a)(4) or (b), would (2) AVAILABILITY OF INFORMATION.— plies. have occurred by reason of this section for (A) IN GENERAL.—Section 6103(l) (relating ‘‘(3) DETERMINATION OF BENEFICIARIES’ IN- the taxable year including the expatriation to disclosure of returns and return informa- TEREST IN TRUST.— date. tion for purposes other than tax administra- ‘‘(A) DETERMINATIONS UNDER PARAGRAPH ‘‘(2) PERIOD OF LIEN.—The lien imposed by tion) is amended by adding at the end the (1).—For purposes of paragraph (1), a bene- this subsection shall arise on the expatria- following new paragraph: ficiary’s interest in a trust shall be based tion date and continue until— ‘‘(19) DISCLOSURE TO DENY VISA OR ADMIS- upon all relevant facts and circumstances, ‘‘(A) the liability for tax by reason of this SION TO CERTAIN EXPATRIATES.—Upon written including the terms of the trust instrument section is satisfied or has become unenforce- request of the Attorney General or the At- and any letter of wishes or similar docu- able by reason of lapse of time, or torney General’s delegate, the Secretary ment, historical patterns of trust distribu- ‘‘(B) it is established to the satisfaction of shall disclose whether an individual is in tions, and the existence of and functions per- the Secretary that no further tax liability compliance with section 877A (and if not in formed by a trust protector or any similar may arise by reason of this section. compliance, any items of noncompliance) to adviser. ‘‘(3) CERTAIN RULES APPLY.—The rules set officers and employees of the Federal agency ‘‘(B) OTHER DETERMINATIONS.—For purposes forth in paragraphs (1), (3), and (4) of section responsible for administering section of this section— 6324A(d) shall apply with respect to the lien 212(a)(10)(E) of the Immigration and Nation- ‘‘(i) CONSTRUCTIVE OWNERSHIP.—If a bene- imposed by this subsection as if it were a ality Act solely for the purpose of, and to the ficiary of a trust is a corporation, partner- lien imposed by section 6324A. extent necessary in, administering such sec- ship, trust, or estate, the shareholders, part- ‘‘(j) REGULATIONS.—The Secretary shall tion 212(a)(10)(E).’’. ners, or beneficiaries shall be deemed to be prescribe such regulations as may be nec- (B) SAFEGUARDS.—

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(i) TECHNICAL AMENDMENTS.—Paragraph (4) ‘‘CHAPTER 48—STOCK COMPENSATION OF ‘‘(ii) without regard to subsection (b)(1)(A). of section 6103(p) of the Internal Revenue INSIDERS IN INVERTED CORPORATIONS Such term includes any predecessor or suc- Code of 1986, as amended by section ‘‘Sec. 5000A. Stock compensation of insiders cessor of such a corporation. 202(b)(2)(B) of the Trade Act of 2002 (Public in inverted corporations enti- ‘‘(B) INVERSION DATE.—The term ‘inversion Law 107–210; 116 Stat. 961), is amended by ties. date’ means, with respect to a corporation, striking ‘‘or (17)’’ after ‘‘any other person de- ‘‘SEC. 5000A. STOCK COMPENSATION OF INSIDERS the date on which the corporation first be- scribed in subsection (l)(16)’’ each place it IN INVERTED CORPORATIONS. comes an inverted corporation. appears and inserting ‘‘or (18)’’. ‘‘(a) IMPOSITION OF TAX.—In the case of an ‘‘(3) SPECIFIED STOCK COMPENSATION.— (ii) CONFORMING AMENDMENTS.—Section individual who is a disqualified individual ‘‘(A) IN GENERAL.—The term ‘specified 6103(p)(4) (relating to safeguards), as amend- with respect to any inverted corporation, stock compensation’ means payment (or ed by clause (i), is amended by striking ‘‘or there is hereby imposed on such person a tax right to payment) granted by the inverted (18)’’ after ‘‘any other person described in equal to 20 percent of the value (determined corporation (or by any member of the ex- subsection (l)(16)’’ each place it appears and under subsection (b)) of the specified stock panded affiliated group which includes such inserting ‘‘(18), or (19)’’. compensation held (directly or indirectly) by corporation) to any person in connection (3) EFFECTIVE DATES.— or for the benefit of such individual or a with the performance of services by a dis- (A) IN GENERAL.—Except as provided in member of such individual’s family (as de- qualified individual for such corporation or subparagraph (B), the amendments made by fined in section 267) at any time during the member if the value of such payment or this subsection shall apply to individuals 12-month period beginning on the date which right is based on (or determined by reference who relinquish United States citizenship on is 6 months before the inversion date. to) the value (or change in value) of stock in or after the date of the enactment of this ‘‘(b) VALUE.—For purposes of subsection such corporation (or any such member). Act. (a)— ‘‘(B) EXCEPTIONS.—Such term shall not in- (B) TECHNICAL AMENDMENTS.—The amend- ‘‘(1) IN GENERAL.—The value of specified clude— ments made by paragraph (2)(B)(i) shall take stock compensation shall be— ‘‘(i) any option to which part II of sub- effect as if included in the amendments made ‘‘(A) in the case of a stock option (or other chapter D of chapter 1 applies, or by section 202(b)(2)(B) of the Trade Act of similar right) or any stock appreciation ‘‘(ii) any payment or right to payment 2002 (Public Law 107–210; 116 Stat. 961). right, the fair value of such option or right, from a plan referred to in section 280G(b)(6). and ‘‘(4) EXPANDED AFFILIATED GROUP.—The (e) CONFORMING AMENDMENTS.— ‘‘(B) in any other case, the fair market term ‘expanded affiliated group’ means an (1) Section 877 is amended by adding at the value of such compensation. affiliated group (as defined in section 1504(a) end the following new subsection: ‘‘(2) DATE FOR DETERMINING VALUE.—The without regard to section 1504(b)(3)); except ‘‘(g) APPLICATION.—This section shall not determination of value shall be made— that section 1504(a) shall be applied by sub- apply to an expatriate (as defined in section ‘‘(A) in the case of specified stock com- stituting ‘more than 50 percent’ for ‘at least 877A(e)) whose expatriation date (as so de- pensation held on the inversion date, on such 80 percent’ each place it appears. fined) occurs on or after January 1, 2004.’’. date, ‘‘(f) SPECIAL RULES.—For purposes of this (2) Section 2107 is amended by adding at ‘‘(B) in the case of such compensation section— the end the following new subsection: which is canceled during the 6 months before ‘‘(1) CANCELLATION OF RESTRICTION.—The ‘‘(f) APPLICATION.—This section shall not the inversion date, on the day before such cancellation of a restriction which by its apply to any expatriate subject to section cancellation, and terms will never lapse shall be treated as a 877A.’’. ‘‘(C) in the case of such compensation grant. (3) Section 2501(a)(3) is amended by adding which is granted after the inversion date, on ‘‘(2) PAYMENT OR REIMBURSEMENT OF TAX BY at the end the following new subparagraph: the date such compensation is granted. CORPORATION TREATED AS SPECIFIED STOCK ‘‘(F) APPLICATION.—This paragraph shall ‘‘(c) TAX TO APPLY ONLY IF SHAREHOLDER COMPENSATION.—Any payment of the tax im- not apply to any expatriate subject to sec- GAIN RECOGNIZED.—Subsection (a) shall posed by this section directly or indirectly tion 877A.’’. apply to any disqualified individual with re- by the inverted corporation or by any mem- (4)(A) Paragraph (1) of section 6039G(d) is spect to an inverted corporation only if gain ber of the expanded affiliated group which amended by inserting ‘‘or 877A’’ after ‘‘sec- (if any) on any stock in such corporation is includes such corporation— tion 877’’. recognized in whole or part by any share- ‘‘(A) shall be treated as specified stock (B) The second sentence of section 6039G(e) holder by reason of the acquisition referred compensation, and is amended by inserting ‘‘or who relinquishes to in section 7874(a)(2)(A) (determined by ‘‘(B) shall not be allowed as a deduction United States citizenship (within the mean- substituting ‘July 10, 2002’ for ‘March 20, under any provision of chapter 1. ing of section 877A(e)(3))’’ after ‘‘877(a))’’. 2002’) with respect to such corporation. ‘‘(3) CERTAIN RESTRICTIONS IGNORED.— (C) Section 6039G(f) is amended by insert- ‘‘(d) EXCEPTION WHERE GAIN RECOGNIZED ON Whether there is specified stock compensa- ing ‘‘or 877A(e)(2)(B)’’ after ‘‘877(e)(1)’’. COMPENSATION.—Subsection (a) shall not tion, and the value thereof, shall be deter- (f) CLERICAL AMENDMENT.—The table of apply to— mined without regard to any restriction sections for subpart A of part II of sub- ‘‘(1) any stock option which is exercised on other than a restriction which by its terms chapter N of chapter 1 is amended by insert- the inversion date or during the 6-month pe- will never lapse. ing after the item relating to section 877 the riod before such date and to the stock ac- ‘‘(4) PROPERTY TRANSFERS.—Any transfer of following new item: quired in such exercise, if income is recog- property shall be treated as a payment and nized under section 83 on or before the inver- any right to a transfer of property shall be ‘‘Sec. 877A. Tax responsibilities of expatria- sion date with respect to the stock acquired treated as a right to a payment. tion.’’. pursuant to such exercise, and ‘‘(5) OTHER ADMINISTRATIVE PROVISIONS.— ‘‘(2) any specified stock compensation For purposes of subtitle F, any tax imposed (g) EFFECTIVE DATE.— which is exercised, sold, exchanged, distrib- by this section shall be treated as a tax im- (1) IN GENERAL.—Except as provided in this uted, cashed out, or otherwise paid during subsection, the amendments made by this posed by subtitle A. such period in a transaction in which gain or ‘‘(g) REGULATIONS.—The Secretary shall section shall apply to expatriates (within the loss is recognized in full. prescribe such regulations as may be nec- meaning of section 877A(e) of the Internal ‘‘(e) DEFINITIONS.—For purposes of this sec- essary or appropriate to carry out the pur- Revenue Code of 1986, as added by this sec- tion— poses of this section.’’. tion) whose expatriation date (as so defined) ‘‘(1) DISQUALIFIED INDIVIDUAL.—The term (b) DENIAL OF DEDUCTION.— occurs on or after January 1, 2004. ‘disqualified individual’ means, with respect (1) IN GENERAL.—Paragraph (6) of section (2) GIFTS AND BEQUESTS.—Section 102(d) of to a corporation, any individual who, at any 275(a) is amended by inserting ‘‘48,’’ after the Internal Revenue Code of 1986 (as added time during the 12-month period beginning ‘‘46,’’. by subsection (b)) shall apply to gifts and be- on the date which is 6 months before the in- (2) $1,000,000 LIMIT ON DEDUCTIBLE COM- quests received on or after January 1, 2004, version date— PENSATION REDUCED BY PAYMENT OF EXCISE from an individual or the estate of an indi- ‘‘(A) is subject to the requirements of sec- TAX ON SPECIFIED STOCK COMPENSATION.— vidual whose expatriation date (as so de- tion 16(a) of the Securities Exchange Act of Paragraph (4) of section 162(m) is amended fined) occurs after such date. 1934 with respect to such corporation, or by adding at the end the following new sub- (3) DUE DATE FOR TENTATIVE TAX.—The due ‘‘(B) would be subject to such requirements paragraph: date under section 877A(h)(2) of the Internal if such corporation were an issuer of equity ‘‘(G) COORDINATION WITH EXCISE TAX ON Revenue Code of 1986, as added by this sec- securities referred to in such section. SPECIFIED STOCK COMPENSATION.—The dollar tion, shall in no event occur before the 90th ‘‘(2) INVERTED CORPORATION; INVERSION limitation contained in paragraph (1) with day after the date of the enactment of this DATE.— respect to any covered employee shall be re- Act. ‘‘(A) INVERTED CORPORATION.—The term duced (but not below zero) by the amount of SEC. 443. EXCISE TAX ON STOCK COMPENSATION ‘inverted corporation’ means any corpora- any payment (with respect to such em- OF INSIDERS IN INVERTED COR- tion to which subsection (a) or (b) of section ployee) of the tax imposed by section 5000A PORATIONS. 7874 applies determined— directly or indirectly by the inverted cor- (a) IN GENERAL.—Subtitle D is amended by ‘‘(i) by substituting ‘July 10, 2002’ for poration (as defined in such section) or by adding at the end the following new chapter: ‘March 20, 2002’ in section 7874(a)(2)(A), and any member of the expanded affiliated group

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00074 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3021 (as defined in such section) which includes The written statement required under the ‘‘(iv) which has not been in existence at all such corporation.’’. preceding sentence shall be furnished to the times during the 5 years immediately pre- (c) CONFORMING AMENDMENTS.— shareholder on or before January 31 of the ceding the date of the liquidation. (1) The last sentence of section 3121(v)(2)(A) year following the calendar year during ‘‘(B) AFFILIATED GROUP.—For purposes of is amended by inserting before the period ‘‘or which the taxable acquisition occurred.’’. this subsection, the term ‘affiliated group’ to any specified stock compensation (as de- (b) ASSESSABLE PENALTIES.— has the meaning given such term by section fined in section 5000A) on which tax is im- (1) Subparagraph (B) of section 6724(d)(1) 1504(a) (without regard to paragraphs (2) and posed by section 5000A’’. (relating to definitions) is amended by redes- (4) of section 1504(b)). (2) The table of chapters for subtitle D is ignating clauses (ii) through (xvii) as clauses ‘‘(3) COORDINATION WITH SUBPART F.—If the amended by adding at the end the following (iii) through (xviii), respectively, and by in- distributee of a distribution described in new item: serting after clause (i) the following new paragraph (1) is a controlled foreign corpora- clause: tion (as defined in section 957), then notwith- ‘‘Chapter 48. Stock compensation of insiders ‘‘(ii) section 6043A(a) (relating to returns standing paragraph (1) or subsection (a), in inverted corporations.’’. relating to taxable mergers and acquisi- such distribution shall be treated as a dis- (d) EFFECTIVE DATE.—The amendments tions),’’. tribution to which section 331 applies. made by this section shall take effect on (2) Paragraph (2) of section 6724(d) is ‘‘(4) REGULATIONS.—The Secretary shall July 11, 2002; except that periods before such amended by redesignating subparagraphs (F) provide such regulations as appropriate to date shall not be taken into account in ap- through (AA) as subparagraphs (G) through prevent the abuse of this subsection, includ- plying the periods in subsections (a) and (BB), respectively, and by inserting after ing regulations which provide, for the pur- (e)(1) of section 5000A of the Internal Rev- subparagraph (E) the following new subpara- poses of clause (iv) of paragraph (2)(A), that enue Code of 1986, as added by this section. graph: a corporation is not in existence for any pe- SEC. 444. REINSURANCE OF UNITED STATES ‘‘(F) subsections (b) and (d) of section 6043A riod unless it is engaged in the active con- RISKS IN FOREIGN JURISDICTIONS. (relating to returns relating to taxable merg- duct of a trade or business or owns a signifi- (a) IN GENERAL.—Section 845(a) (relating to ers and acquisitions).’’. cant ownership interest in another corpora- (c) CLERICAL AMENDMENT.—The table of allocation in case of reinsurance agreement tion so engaged.’’. sections for subpart B of part III of sub- involving tax avoidance or evasion) is (b) EFFECTIVE DATE.—The amendment chapter A of chapter 61 is amended by insert- amended by striking ‘‘source and character’’ made by this section shall apply to distribu- ing after the item relating to section 6043 the and inserting ‘‘amount, source, or char- tions in complete liquidation occurring on or following new item: acter’’. after the date of the enactment of this Act. (b) EFFECTIVE DATE.—The amendments ‘‘Sec. 6043A. Returns relating to taxable SEC. 453. PREVENTION OF MISMATCHING OF IN- made by this section shall apply to any risk mergers and acquisitions.’’. TEREST AND ORIGINAL ISSUE DIS- COUNT DEDUCTIONS AND INCOME reinsured after April 11, 2002. (d) EFFECTIVE DATE.—The amendments INCLUSIONS IN TRANSACTIONS SEC. 445. REPORTING OF TAXABLE MERGERS made by this section shall apply to acquisi- WITH RELATED FOREIGN PERSONS. AND ACQUISITIONS. tions after the date of the enactment of this (a) ORIGINAL ISSUE DISCOUNT.—Section (a) IN GENERAL.—Subpart B of part III of Act. 163(e)(3) (relating to special rule for original subchapter A of chapter 61 is amended by in- Subtitle E—International Tax issue discount on obligation held by related serting after section 6043 the following new SEC. 451. CLARIFICATION OF BANKING BUSINESS foreign person) is amended by redesignating section: FOR PURPOSES OF DETERMINING subparagraph (B) as subparagraph (C) and by ‘‘SEC. 6043A. TAXABLE MERGERS AND ACQUISI- INVESTMENT OF EARNINGS IN inserting after subparagraph (A) the fol- TIONS. UNITED STATES PROPERTY. lowing new subparagraph: (a) IN GENERAL.—Subparagraph (A) of sec- ‘‘(a) IN GENERAL.—The acquiring corpora- ‘‘(B) SPECIAL RULE FOR CERTAIN FOREIGN tion 956(c)(2) is amended to read as follows: tion in any taxable acquisition shall make a ENTITIES.— ‘‘(A) obligations of the United States, return (according to the forms or regulations ‘‘(i) IN GENERAL.—In the case of any debt money, or deposits with— prescribed by the Secretary) setting forth— instrument having original issue discount ‘‘(i) any bank (as defined by section 2(c) of ‘‘(1) a description of the acquisition, which is held by a related foreign person the Bank Holding Company Act of 1956 (12 ‘‘(2) the name and address of each share- which is a foreign personal holding company U.S.C. 1841(c)), without regard to subpara- holder of the acquired corporation who is re- (as defined in section 552), a controlled for- graphs (C) and (G) of paragraph (2) of such quired to recognize gain (if any) as a result eign corporation (as defined in section 957), of the acquisition, section), or ‘‘(ii) any corporation not described in or a passive foreign investment company (as ‘‘(3) the amount of money and the fair mar- defined in section 1297), a deduction shall be ket value of other property transferred to clause (i) with respect to which a bank hold- ing company (as defined by section 2(a) of allowable to the issuer with respect to such each such shareholder as part of such acqui- original issue discount for any taxable year sition, and such Act) or financial holding company (as defined by section 2(p) of such Act) owns di- before the taxable year in which paid only to ‘‘(4) such other information as the Sec- the extent such original issue discount is in- retary may prescribe. rectly or indirectly more than 80 percent by vote or value of the stock of such corpora- cluded during such prior taxable year in the To the extent provided by the Secretary, the tion;’’. gross income of a United States person who requirements of this section applicable to (b) EFFECTIVE DATE.—The amendment owns (within the meaning of section 958(a)) the acquiring corporation shall be applicable made by this section shall take effect on the stock in such corporation. to the acquired corporation and not to the date of the enactment of this Act. ‘‘(ii) SECRETARIAL AUTHORITY.—The Sec- acquiring corporation. SEC. 452. PROHIBITION ON NONRECOGNITION OF retary may by regulation exempt trans- ‘‘(b) NOMINEE REPORTING.—Any person who GAIN THROUGH COMPLETE LIQ- actions from the application of clause (i), in- holds stock as a nominee for another person UIDATION OF HOLDING COMPANY. cluding any transaction which is entered shall furnish in the manner prescribed by the (a) IN GENERAL.—Section 332 is amended by into by a payor in the ordinary course of a Secretary to such other person the informa- adding at the end the following new sub- trade or business in which the payor is pre- tion provided by the corporation under sub- section: dominantly engaged.’’. section (d). ‘‘(d) RECOGNITION OF GAIN ON LIQUIDATION (b) INTEREST AND OTHER DEDUCTIBLE ‘‘(c) TAXABLE ACQUISITION.—For purposes OF CERTAIN HOLDING COMPANIES.— AMOUNTS.—Section 267(a)(3) is amended— of this section, the term ‘taxable acquisition’ ‘‘(1) IN GENERAL.—In the case of any dis- (1) by striking ‘‘The Secretary’’ and insert- means any acquisition by a corporation of tribution to a foreign corporation in com- ing: stock in or property of another corporation plete liquidation of an applicable holding ‘‘(A) IN GENERAL.—The Secretary’’, and if any shareholder of the acquired corpora- company— (2) by adding at the end the following new tion is required to recognize gain (if any) as ‘‘(A) subsection (a) and section 331 shall subparagraph: a result of such acquisition. not apply to such distribution, and ‘‘(B) SPECIAL RULE FOR CERTAIN FOREIGN ‘‘(d) STATEMENTS TO BE FURNISHED TO ‘‘(B) such distribution shall be treated as a ENTITIES.— SHAREHOLDERS.—Every person required to distribution to which section 301 applies. ‘‘(i) IN GENERAL.—Notwithstanding sub- make a return under subsection (a) shall fur- ‘‘(2) APPLICABLE HOLDING COMPANY.—For paragraph (A), in the case of any amount nish to each shareholder whose name is re- purposes of this subsection— payable to a foreign personal holding com- quired to be set forth in such return a writ- ‘‘(A) IN GENERAL.—The term ‘applicable pany (as defined in section 552), a controlled ten statement showing— holding company’ means any domestic cor- foreign corporation (as defined in section ‘‘(1) the name, address, and phone number poration— 957), or a passive foreign investment com- of the information contact of the person re- ‘‘(i) which is a common parent of an affili- pany (as defined in section 1297), a deduction quired to make such return, ated group, shall be allowable to the payor with respect ‘‘(2) the information required to be shown ‘‘(ii) stock of which is directly owned by to such amount for any taxable year before on such return with respect to such share- the distributee foreign corporation, the taxable year in which paid only to the holder, and ‘‘(iii) substantially all of the assets of extent such amount is included during such ‘‘(3) such other information as the Sec- which consist of stock in other members of prior taxable year in the gross income of a retary may prescribe. such affiliated group, and United States person who owns (within the

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meaning of section 958(a)) stock in such cor- ‘‘(B) QUALIFIED TAX.—For purposes of sub- nating paragraph (8) as paragraph (9) and by poration. paragraph (A), the term ‘qualified tax’ means inserting after paragraph (7) the following ‘‘(ii) SECRETARIAL AUTHORITY.—The Sec- a tax paid to a foreign country (other than new paragraph: retary may by regulation exempt trans- the foreign country referred to in subpara- ‘‘(8) APPLICATION TO PARTNERSHIPS AND S actions from the application of clause (i), in- graph (A)) if— CORPORATIONS.— cluding any transaction which is entered ‘‘(i) the item to which such tax is attrib- ‘‘(A) IN GENERAL.—This subsection shall into by a payor in the ordinary course of a utable is subject to taxation on a net basis apply to partnerships and S corporations in trade or business in which the payor is pre- by the country referred to in subparagraph the same manner as it applies to C corpora- dominantly engaged and in which the pay- (A), and tions. ment of the accrued amounts occurs within ‘‘(ii) such country allows a credit against ‘‘(B) ALLOCATIONS TO CERTAIN CORPORATE 81⁄2 months after accrual or within such other its net basis tax for the full amount of the PARTNERS.—If a C corporation is a partner in period as the Secretary may prescribe.’’. tax paid to such other foreign country. a partnership— (c) EFFECTIVE DATE.—The amendments ‘‘(C) DEALER.—For purposes of subpara- ‘‘(i) the corporation’s allocable share of in- made by this section shall apply to payments graph (A), the term ‘dealer’ means— debtedness and interest income of the part- accrued on or after the date of the enact- ‘‘(i) with respect to a security, any person nership shall be taken into account in apply- ment of this Act. to whom paragraphs (1) and (2) of subsection ing this subsection to the corporation, and SEC. 454. EFFECTIVELY CONNECTED INCOME TO (k) would not apply by reason of paragraph ‘‘(ii) if a deduction is not disallowed under INCLUDE CERTAIN FOREIGN (4) thereof if such security were stock, and this subsection with respect to any interest SOURCE INCOME. ‘‘(ii) with respect to any other property, expense of the partnership, this subsection (a) IN GENERAL.—Section 864(c)(4)(B) (relat- any person with respect to whom such prop- shall be applied separately in determining ing to treatment of income from sources erty is described in section 1221(a)(1). whether a deduction is allowable to the cor- without the United States as effectively con- ‘‘(D) REGULATIONS.—The Secretary may poration with respect to the corporation’s al- nected income) is amended by adding at the prescribe such regulations as may be appro- locable share of such interest expense.’’. end the following new flush sentence: priate to carry out this paragraph, including (b) EFFECTIVE DATE.—The amendments ‘‘Any income or gain which is equivalent to regulations to prevent the abuse of the ex- made by this section shall apply to taxable any item of income or gain described in ception provided by this paragraph and to years beginning after the date of the enact- clause (i), (ii), or (iii) shall be treated in the treat other taxes as qualified taxes. ment of this Act. same manner as such item for purposes of ‘‘(3) EXCEPTIONS.—The Secretary may by SEC. 463. RECOGNITION OF CANCELLATION OF this subparagraph.’’. regulation provide that paragraph (1) shall INDEBTEDNESS INCOME REALIZED (b) EFFECTIVE DATE.—The amendment not apply to property where the Secretary ON SATISFACTION OF DEBT WITH PARTNERSHIP INTEREST. made by this section shall apply to taxable determines that the application of paragraph (a) IN GENERAL.—Paragraph (8) of section years beginning after the date of the enact- (1) to such property is not necessary to carry ment of this Act. 108(e) (relating to general rules for discharge out the purposes of this subsection. of indebtedness (including discharges not in SEC. 455. RECAPTURE OF OVERALL FOREIGN ‘‘(4) CERTAIN RULES TO APPLY.—Rules simi- LOSSES ON SALE OF CONTROLLED title 11 cases or insolvency)) is amended to lar to the rules of paragraphs (5), (6), and (7) read as follows: FOREIGN CORPORATION. of subsection (k) shall apply for purposes of (a) IN GENERAL.—Section 904(f)(3) (relating ‘‘(8) INDEBTEDNESS SATISFIED BY CORPORATE this subsection. to dispositions) is amending by adding at the STOCK OR PARTNERSHIP INTEREST.—For pur- ‘‘(5) DETERMINATION OF HOLDING PERIOD.— end the following new subparagraph: poses of determining income of a debtor from Holding periods shall be determined for pur- ‘‘(D) APPLICATION TO DISPOSITIONS OF STOCK discharge of indebtedness, if— poses of this subsection without regard to IN CONTROLLED FOREIGN CORPORATIONS.—In ‘‘(A) a debtor corporation transfers stock, section 1235 or any similar rule.’’. the case of any disposition by a taxpayer of or (b) CONFORMING AMENDMENT.—The heading ‘‘(B) a debtor partnership transfers a cap- any share of stock in a controlled foreign of subsection (k) of section 901 is amended by corporation (as defined in section 957), this ital or profits interest in such partnership, inserting ‘‘ON DIVIDENDS’’ after ‘‘TAXES’’. to a creditor in satisfaction of its recourse or paragraph shall apply to such disposition in (c) EFFECTIVE DATE.—The amendments nonrecourse indebtedness, such corporation the same manner as if it were a disposition made by this section shall apply to amounts or partnership shall be treated as having sat- of property described in subparagraph (A), paid or accrued more than 30 days after the isfied the indebtedness with an amount of except that the exception contained in sub- date of the enactment of this Act. paragraph (C)(i) shall not apply.’’. money equal to the fair market value of the (b) EFFECTIVE DATE.—The amendment Subtitle F—Other Revenue Provisions stock or interest. In the case of any partner- made by this section shall apply to disposi- PART I—FINANCIAL INSTRUMENTS ship, any discharge of indebtedness income tions after the date of the enactment of this SEC. 461. TREATMENT OF STRIPPED INTERESTS recognized under this paragraph shall be in- Act. IN BOND AND PREFERRED STOCK cluded in the distributive shares of taxpayers SEC. 456. MINIMUM HOLDING PERIOD FOR FOR- FUNDS, ETC. which were the partners in the partnership EIGN TAX CREDIT ON WITHHOLDING (a) IN GENERAL.—Section 1286 (relating to immediately before such discharge.’’. TAXES ON INCOME OTHER THAN tax treatment of stripped bonds) is amended (b) EFFECTIVE DATE.—The amendment DIVIDENDS. by redesignating subsection (f) as subsection made by this section shall apply with respect (a) IN GENERAL.—Section 901 is amended by (g) and by inserting after subsection (e) the to cancellations of indebtedness occurring on redesignating subsection (l) as subsection following new subsection: or after the date of the enactment of this (m) and by inserting after subsection (k) the ‘‘(f) TREATMENT OF STRIPPED INTERESTS IN Act. following new subsection: BOND AND PREFERRED STOCK FUNDS, ETC.—In SEC. 464. MODIFICATION OF STRADDLE RULES. ‘‘(l) MINIMUM HOLDING PERIOD FOR WITH- the case of an account or entity substan- (a) RULES RELATING TO IDENTIFIED STRAD- HOLDING TAXES ON GAIN AND INCOME OTHER tially all of the assets of which consist of DLES.— THAN DIVIDENDS ETC.— bonds, preferred stock, or a combination (1) IN GENERAL.—Subparagraph (A) of sec- ‘‘(1) IN GENERAL.—In no event shall a credit thereof, the Secretary may by regulations tion 1092(a)(2) (relating to special rule for be allowed under subsection (a) for any with- provide that rules similar to the rules of this identified straddles) is amended to read as holding tax (as defined in subsection (k)) on section and 305(e), as appropriate, shall apply follows: any item of income or gain with respect to to interests in such account or entity to ‘‘(A) IN GENERAL.—In the case of any strad- any property if— which (but for this subsection) this section dle which is an identified straddle— ‘‘(A) such property is held by the recipient or section 305(e), as the case may be, would ‘‘(i) paragraph (1) shall not apply with re- of the item for 15 days or less during the 30- not apply.’’. spect to identified positions comprising the day period beginning on the date which is 15 (b) CROSS REFERENCE.—Subsection (e) of identified straddle, days before the date on which the right to section 305 is amended by adding at the end ‘‘(ii) if there is any loss with respect to any receive payment of such item arises, or the following new paragraph: identified position of the identified straddle, ‘‘(B) to the extent that the recipient of the ‘‘(7) CROSS REFERENCE.— the basis of each of the identified offsetting item is under an obligation (whether pursu- ‘‘For treatment of stripped interests in cer- positions in the identified straddle shall be ant to a short sale or otherwise) to make re- tain accounts or entities holding preferred increased by an amount which bears the lated payments with respect to positions in stock, see section 1286(f).’’. same ratio to the loss as the unrecognized substantially similar or related property. (c) EFFECTIVE DATE.—The amendments gain with respect to such offsetting position This paragraph shall not apply to any divi- made by this section shall apply to pur- bears to the aggregate unrecognized gain dend to which subsection (k) applies. chases and dispositions after the date of the with respect to all such offsetting positions, ‘‘(2) EXCEPTION FOR TAXES PAID BY DEAL- enactment of this Act. and ERS.— SEC. 462. APPLICATION OF EARNINGS STRIPPING ‘‘(iii) any loss described in clause (ii) shall ‘‘(A) IN GENERAL.—Paragraph (1) shall not RULES TO PARTNERSHIPS AND S not otherwise be taken into account for pur- apply to any qualified tax with respect to CORPORATIONS. poses of this title.’’. any property held in the active conduct in a (a) IN GENERAL.—Section 168(j) (relating to (2) IDENTIFIED STRADDLE.—Section foreign country of a business as a dealer in limitation on deduction for interest on cer- 1092(a)(2)(B) (defining identified straddle) is such property. tain indebtedness) is amended by redesig- amended—

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(A) by striking clause (ii) and inserting the ‘‘(I) TERMINATION.—This paragraph shall sons who are individuals, estates, or trusts following: not apply to any position established on or own (within the meaning of subsection (d)(2) ‘‘(ii) to the extent provided by regulations, after the date of the enactment of this sub- stock possessing— the value of each position of which (in the paragraph.’’. ‘(A) at least 80 percent of the total com- hands of the taxpayer immediately before (e) EFFECTIVE DATE.—The amendments bined voting power of all classes of stock en- the creation of the straddle) is not less than made by this section shall apply to positions titled to vote, or at least 80 percent of the the basis of such position in the hands of the established on or after the date of the enact- total value of shares of all classes of stock, taxpayer at the time the straddle is created, ment of this Act. of each corporation, and and’’, and SEC. 465. DENIAL OF INSTALLMENT SALE TREAT- ‘(B) more than 50 percent of the total com- (B) by adding at the end the following new MENT FOR ALL READILY bined voting power of all classes of stock en- flush sentence: TRADEABLE DEBT. titled to vote or more than 50 percent of the ‘‘The Secretary shall prescribe regulations (a) IN GENERAL.—Section 453(f)(4)(B) (relat- total value of shares of all classes of stock of which specify the proper methods for clearly ing to purchaser evidences of indebtedness each corporation, taking into account the identifying a straddle as an identified strad- payable on demand or readily tradeable) is stock ownership of each such person only to dle (and the positions comprising such strad- amended by striking ‘‘is issued by a corpora- the extent such stock ownership is identical dle), which specify the rules for the applica- tion or a government or political subdivision with respect to each such corporation.’ tion of this section for a taxpayer which fails thereof and’’. ‘‘(B) APPLICABLE PROVISION.—For purposes to properly identify the positions of an iden- (b) EFFECTIVE DATE.—The amendment of this paragraph, an applicable provision is tified straddle, and which specify the order- made by this section shall apply to sales oc- any provision of law (other than this part) ing rules in cases where a taxpayer disposes curring on or after the date of the enactment which incorporates the definition of con- of less than an entire position which is part of this Act. trolled group of corporations under sub- of an identified straddle.’’. PART II—CORPORATIONS AND section (a).’’. (3) UNRECOGNIZED GAIN.—Section 1092(a)(3) PARTNERSHIPS (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable (defining unrecognized gain) is amended by SEC. 466. MODIFICATION OF TREATMENT OF redesignating subparagraph (B) as subpara- TRANSFERS TO CREDITORS IN DIVI- years beginning after the date of the enact- graph (C) and by inserting after subpara- SIVE REORGANIZATIONS. ment of this Act. graph (A) the following new subparagraph: (a) IN GENERAL.—Section 361(b)(3) (relating SEC. 469. MANDATORY BASIS ADJUSTMENTS IN CONNECTION WITH PARTNERSHIP ‘‘(B) SPECIAL RULE FOR IDENTIFIED STRAD- to treatment of transfers to creditors) is amended by adding at the end the following DISTRIBUTIONS AND TRANSFERS OF DLES.—For purposes of paragraph (2)(A)(ii), PARTNERSHIP INTERESTS. new sentence: ‘‘In the case of a reorganiza- the unrecognized gain with respect to any (a) IN GENERAL.—Section 754 is repealed. identified offsetting position shall be the ex- tion described in section 368(a)(1)(D) with re- (b) ADJUSTMENT TO BASIS OF UNDISTRIB- cess of the fair market value of the position spect to which stock or securities of the cor- UTED PARTNERSHIP PROPERTY.—Section 734 is at the time of the determination over the poration to which the assets are transferred amended— fair market value of the position at the time are distributed in a transaction which quali- (1) by striking ‘‘, with respect to which the the taxpayer identified the position as a po- fies under section 355, this paragraph shall election provided in section 754 is in effect,’’ sition in an identified straddle.’’. apply only to the extent that the sum of the in the matter preceding paragraph (1) of sub- (4) CONFORMING AMENDMENT.—Section money and the fair market value of other section (b), 1092(c)(2) is amended by striking subpara- property transferred to such creditors does (2) by striking ‘‘(as adjusted by section graph (B) and by redesignating subparagraph not exceed the adjusted bases of such assets 732(d))’’ both places it appears in subsection (C) as subparagraph (B). transferred.’’. (b), (b) PHYSICALLY SETTLED POSITIONS.—Sec- (b) LIABILITIES IN EXCESS OF BASIS.—Sec- (3) by striking the last sentence of sub- tion 1092(d) (relating to definitions and spe- tion 357(c)(1)(B) is amended by inserting section (b), cial rules) is amended by adding at the end ‘‘with respect to which stock or securities of (4) by striking subsection (a) and by redes- the following new paragraph: the corporation to which the assets are ignating subsections (b) and (c) as sub- ‘‘(8) SPECIAL RULES FOR PHYSICALLY SET- transferred are distributed in a transaction sections (a) and (b), respectively, and TLED POSITIONS.—For purposes of subsection which qualifies under section 355’’ after ‘‘sec- (5) by striking ‘‘optional’’ in the heading. (a), if a taxpayer settles a position which is tion 368(a)(1)(D)’’. (c) ADJUSTMENT TO BASIS OF PARTNERSHIP part of a straddle by delivering property to (c) EFFECTIVE DATE.—The amendments PROPERTY.—Section 743 is amended— which the position relates (and such posi- made by this section shall apply to transfers (1) by striking ‘‘with respect to which the tion, if terminated, would result in a realiza- of money or other property, or liabilities as- election provided in section 754 is in effect’’ tion of a loss), then such taxpayer shall be sumed, in connection with a reorganization in the matter preceding paragraph (1) of sub- treated as if such taxpayer— occurring on or after the date of the enact- section (b), ‘‘(A) terminated the position for its fair ment of this Act. (2) by striking subsection (a) and by redes- market value immediately before the settle- SEC. 467. CLARIFICATION OF DEFINITION OF ignating subsections (b) and (c) as sub- ment, and NONQUALIFIED PREFERRED STOCK. sections (a) and (b), respectively, ‘‘(B) sold the property so delivered by the (a) IN GENERAL.—Section 351(g)(3)(A) is (3) by adding at the end the following new taxpayer at its fair market value.’’. amended by adding at the end the following: subsection: (c) REPEAL OF STOCK EXCEPTION.— ‘‘Stock shall not be treated as participating ‘‘(c) ELECTION TO ADJUST BASIS FOR TRANS- (1) IN GENERAL.—Paragraph (3) of section in corporate growth to any significant ex- FERS UPON DEATH OF PARTNER.—Subsection 1092(d) (relating to definitions and special tent unless there is a real and meaningful (a) shall not apply and no adjustments shall rules) is amended to read as follows: likelihood of the shareholder actually par- be made in the case of any transfer of an in- ‘‘(3) SPECIAL RULES FOR STOCK.—For pur- ticipating in the earnings and growth of the terest in a partnership upon the death of a poses of paragraph (1)— corporation.’’. partner unless an election to do so is made ‘‘(A) IN GENERAL.—The term ‘personal (b) EFFECTIVE DATE.—The amendment by the partnership. Such an election shall property’ includes— made by this section shall apply to trans- apply with respect to all such transfers of in- ‘‘(i) any stock which is a part of a straddle actions after May 14, 2003. terests in the partnership. Any election at least 1 of the offsetting positions of which SEC. 468. MODIFICATION OF DEFINITION OF CON- under section 754 in effect on the date of the is a position with respect to such stock or TROLLED GROUP OF CORPORA- enactment of this subsection shall constitute substantially similar or related property, or TIONS. an election made under this subsection. Such ‘‘(ii) any stock of a corporation formed or (a) IN GENERAL.—Section 1563(a)(2) (relat- election may be revoked by the partnership, availed of to take positions in personal prop- ing to brother-sister controlled group) is subject to such limitations as may be pro- erty which offset positions taken by any amended by striking ‘‘possessing—’’ and all vided by regulations prescribed by the Sec- shareholder. that follows through ‘‘(B)’’ and inserting retary.’’, and ‘‘(B) RULE FOR APPLICATION.—For purposes ‘‘possessing’’. (4) by striking ‘‘optional’’ in the heading. of determining whether subsection (e) ap- (b) APPLICATION OF EXISTING RULES TO (d) CONFORMING AMENDMENTS.— plies to any transaction with respect to OTHER CODE PROVISIONS.—Section 1563(f) (re- (1) Subsection (d) of section 732 is repealed. stock described in subparagraph (A)(ii), all lating to other definitions and rules) is (2) Section 755(a) is amended— includible corporations of an affiliated group amended by adding at the end the following (A) by striking ‘‘section 734(b) (relating to (within the meaning of section 1504(a)) shall new paragraph: the optional adjustment’’ and inserting ‘‘sec- be treated as 1 taxpayer.’’. ‘‘(5) BROTHER-SISTER CONTROLLED GROUP tion 734(a) (relating to the adjustment’’, and (2) CONFORMING AMENDMENT.—Section DEFINITION FOR PROVISIONS OTHER THAN THIS (B) by striking ‘‘section 743(b) (relating to 1258(d)(1) is amended by striking ‘‘; except PART.— the optional adjustment’’ and inserting ‘‘sec- that the term ‘personal property’ shall in- ‘‘(A) IN GENERAL.—Except as specifically tion 743(a) (relating to the adjustment’’. clude stock’’. provided in an applicable provision, sub- (3) Section 755(c), as added by this Act, is (d) REPEAL OF QUALIFIED COVERED CALL section (a)(2) shall be applied to an applica- amended by striking ‘‘section 734(b)’’ and in- EXCEPTION.—Section 1092(c)(4) is amended by ble provision as if it read as follows: serting ‘‘section 734(a)’’. adding at the end the following new subpara- ‘(2) BROTHER-SISTER CONTROLLED GROUP.— (4) Section 761(e)(2) is amended by striking graph: Two or more corporations if 5 or fewer per- ‘‘optional’’.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00077 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3024 CONGRESSIONAL RECORD — SENATE March 23, 2004 (5) Section 774(a) is amended by striking placed in service after the date of the enact- ‘‘(A) the amount of organizational expendi- ‘‘743(b)’’ both places it appears and inserting ment of this Act. tures with respect to the taxpayer, or ‘‘743(a)’’. SEC. 473. EXPANSION OF LIMITATION ON DEPRE- ‘‘(B) $5,000, reduced (but not below zero) by (6) The item relating to section 734 in the CIATION OF CERTAIN PASSENGER the amount by which such organizational ex- table of sections for subpart B of part II of AUTOMOBILES. penditures exceed $50,000, and subchapter K of chapter 1 is amended by (a) IN GENERAL.—Section 179(b) (relating to ‘‘(2) the remainder of such organizational striking ‘‘Optional’’. limitations) is amended by adding at the end expenditures shall be allowed as a deduction (7) The item relating to section 743 in the the following new paragraph: ratably over the 180-month period beginning table of sections for subpart C of part II of ‘‘(6) LIMITATION ON COST TAKEN INTO AC- with the month in which the corporation be- subchapter K of chapter 1 is amended by COUNT FOR CERTAIN PASSENGER VEHICLES.— gins business.’’. ‘‘(A) IN GENERAL.—The cost of any sport striking ‘‘Optional’’. (c) TREATMENT OF ORGANIZATIONAL AND (e) EFFECTIVE DATES.— utility vehicle for any taxable year which SYNDICATION FEES OR PARTNERSHIPS.— (1) IN GENERAL.—Except as provided in may be taken into account under this sec- (1) IN GENERAL.—Section 709(b) (relating to paragraph (2), the amendments made by this tion shall not exceed $25,000. amortization of organization fees) is amend- section shall apply to transfers and distribu- ‘‘(B) SPORT UTILITY VEHICLE.—For purposes ed by redesignating paragraph (2) as para- tions made after the date of the enactment of subparagraph (A)— graph (3) and by amending paragraph (1) to of this Act. ‘‘(i) IN GENERAL.—The term ‘sport utility read as follows: (2) REPEAL OF SECTION 732(d).—The amend- vehicle’ means any 4-wheeled vehicle ‘‘(1) ALLOWANCE OF DEDUCTION.—If a tax- ments made by subsections (b)(2) and (d)(1) which— payer elects the application of this sub- shall apply to— ‘‘(I) is manufactured primarily for use on section (in accordance with regulations pre- (A) except as provided in subparagraph (B), public streets, roads, and highways, scribed by the Secretary) with respect to any transfers made after the date of the enact- ‘‘(II) is not subject to section 280F, and organizational expenses— ment of this Act, and ‘‘(III) is rated at not more than 14,000 ‘‘(A) the taxpayer shall be allowed a deduc- (B) in the case of any transfer made on or pounds gross vehicle weight. tion for the taxable year in which the part- before such date to which section 732(d) ap- ‘‘(ii) CERTAIN VEHICLES EXCLUDED.—Such nership begins business in an amount equal plies, distributions made after the date term does not include any vehicle which— to the lesser of— which is 2 years after such date of enact- ‘‘(I) does not have the primary load car- ‘‘(i) the amount of organizational expenses ment. rying device or container attached, ‘‘(II) has a seating capacity of more than 12 with respect to the partnership, or PART III—DEPRECIATION AND ‘‘(ii) $5,000, reduced (but not below zero) by AMORTIZATION individuals, ‘‘(III) is designed for more than 9 individ- the amount by which such organizational ex- SEC. 471. EXTENSION OF AMORTIZATION OF IN- penses exceed $50,000, and TANGIBLES TO SPORTS FRAN- uals in seating rearward of the driver’s seat, ‘‘(B) the remainder of such organizational CHISES. ‘‘(IV) is equipped with an open cargo area, (a) IN GENERAL.—Section 197(e) (relating to or a covered box not readily accessible from expenses shall be allowed as a deduction rat- exceptions to definition of section 197 intan- the passenger compartment, of at least 72.0 ably over the 180-month period beginning gible) is amended by striking paragraph (6) inches in interior length, or with the month in which the partnership be- and by redesignating paragraphs (7) and (8) ‘‘(V) has an integral enclosure, fully en- gins business. ISPOSITIONS BEFORE CLOSE OF AMORTI- as paragraphs (6) and (7), respectively. closing the driver compartment and load ‘‘(2) D (b) CONFORMING AMENDMENTS.— ZATION PERIOD.—In any case in which a part- carrying device, does not have seating rear- (1)(A) Section 1056 (relating to basis limi- nership is liquidated before the end of the pe- ward of the driver’s seat, and has no body tation for player contracts transferred in riod to which paragraph (1)(B) applies, any section protruding more than 30 inches connection with the sale of a franchise) is re- deferred expenses attributable to the part- ahead of the leading edge of the wind- pealed. nership which were not allowed as a deduc- shield.’’. (B) The table of sections for part IV of sub- (c) EFFECTIVE DATE.—The amendments tion by reason of this section may be de- chapter O of chapter 1 is amended by strik- made by this section shall apply to property ducted to the extent allowable under section ing the item relating to section 1056. placed in service after the date of the enact- 165.’’. (2) Section 1245(a) (relating to gain from ment of this Act. (2) CONFORMING AMENDMENT.—Subsection disposition of certain depreciable property) SEC. 474. CONSISTENT AMORTIZATION OF PERI- (b) of section 709 is amended by striking is amended by striking paragraph (4). ODS FOR INTANGIBLES. ‘‘AMORTIZATION’’ and inserting ‘‘DEDUCTION’’ (3) Section 1253 (relating to transfers of (a) START-UP EXPENDITURES.— in the heading. franchises, trademarks, and trade names) is (1) ALLOWANCE OF DEDUCTION.—Paragraph (d) EFFECTIVE DATE.—The amendments amended by striking subsection (e). (1) of section 195(b) (relating to start-up ex- made by this section shall apply to amounts (c) EFFECTIVE DATES.— penditures) is amended to read as follows: paid or incurred after the date of the enact- (1) IN GENERAL.—Except as provided in ‘‘(1) ALLOWANCE OF DEDUCTION.—If a tax- paragraph (2), the amendments made by this ment of this Act. payer elects the application of this sub- section shall apply to property acquired section with respect to any start-up expendi- SEC. 475. REFORM OF TAX TREATMENT OF LEAS- after the date of the enactment of this Act. ING OPERATIONS. tures— (2) SECTION 1245.—The amendment made by ‘‘(A) the taxpayer shall be allowed a deduc- (a) CLARIFICATION OF RECOVERY PERIOD FOR subsection (b)(2) shall apply to franchises ac- tion for the taxable year in which the active TAX-EXEMPT USE PROPERTY SUBJECT TO quired after the date of the enactment of trade or business begins in an amount equal LEASE.—Subparagraph (A) of section 168(g)(3) this Act. to the lesser of— (relating to special rules for determining SEC. 472. CLASS LIVES FOR UTILITY GRADING COSTS. ‘‘(i) the amount of start-up expenditures class life) is amended by inserting ‘‘(notwith- (a) GAS UTILITY PROPERTY.—Section with respect to the active trade or business, standing any other subparagraph of this 168(e)(3)(E) (defining 15-year property) is or paragraph)’’ after ‘‘shall’’. amended by striking ‘‘and’’ at the end of ‘‘(ii) $5,000, reduced (but not below zero) by (b) LIMITATION ON DEPRECIATION PERIOD clause (ii), by striking the period at the end the amount by which such start-up expendi- FOR SOFTWARE LEASED TO TAX-EXEMPT ENTI- of clause (iii) and inserting ‘‘, and’’, and by tures exceed $50,000, and TY.—Paragraph (1) of section 167(f) is amend- adding at the end the following new clause: ‘‘(B) the remainder of such start-up ex- ed by adding at the end the following new ‘‘(iv) initial clearing and grading land im- penditures shall be allowed as a deduction subparagraph: provements with respect to gas utility prop- ratably over the 180-month period beginning ‘‘(C) TAX-EXEMPT USE PROPERTY SUBJECT TO erty.’’. with the month in which the active trade or LEASE.—In the case of computer software (b) ELECTRIC UTILITY PROPERTY.—Section business begins.’’. which would be tax-exempt use property as 168(e)(3) is amended by adding at the end the (2) CONFORMING AMENDMENT.—Subsection defined in subsection (h) of section 168 if following new subparagraph: (b) of section 195 is amended by striking such section applied to computer software, ‘‘(F) 20-YEAR PROPERTY.—The term ‘20-year ‘‘AMORTIZE’’ and inserting ‘‘DEDUCT’’ in the the useful life under subparagraph (A) shall property’ means initial clearing and grading heading. not be less than 125 percent of the lease term land improvements with respect to any elec- (b) ORGANIZATIONAL EXPENDITURES.—Sub- (within the meaning of section 168(i)(3)).’’ tric utility transmission and distribution section (a) of section 248 (relating to organi- plant.’’. zational expenditures) is amended to read as (c) LEASE TERM TO INCLUDE RELATED SERV- (c) CONFORMING AMENDMENTS.—The table follows: ICE CONTRACTS.—Subparagraph (A) of section contained in section 168(g)(3)(B) is amend- ‘‘(a) ELECTION TO DEDUCT.—If a corporation 168(i)(3) (relating to lease term) is amended ed— elects the application of this subsection (in by striking ‘‘and’’ at the end of clause (i), by (1) by inserting ‘‘or (E)(iv)’’ after ‘‘(E)(iii)’’, accordance with regulations prescribed by redesignating clause (ii) as clause (iii), and and the Secretary) with respect to any organiza- by inserting after clause (i) the following (2) by adding at the end the following new tional expenditures— new clause: item: ‘‘(1) the corporation shall be allowed a de- ‘‘(ii) the term of a lease shall include the ‘‘(F) ...... 25’’. duction for the taxable year in which the term of any service contract or similar ar- (d) EFFECTIVE DATE.—The amendments corporation begins business in an amount rangement (whether or not treated as a lease made by this section shall apply to property equal to the lesser of— under section 7701(e))—

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00078 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3025 ‘‘(I) which is part of the same transaction such arrangement provides credit support), ‘‘(i) is not tax-exempt use property for the (or series of related transactions) which in- and taxable year, but cludes the lease, and ‘‘(ii) any other arrangement identified by ‘‘(ii) was tax-exempt use property for any ‘‘(II) which is with respect to the property the Secretary in regulations. prior taxable year. subject to the lease or substantially similar ‘‘(C) ALLOWABLE AMOUNT.— ‘‘(2) DISPOSITION OF ENTIRE INTEREST IN property, and’’. ‘‘(i) IN GENERAL.—Except as otherwise pro- PROPERTY.—If during the taxable year a tax- (d) EFFECTIVE DATE.—The amendments vided in this subparagraph, the term ‘allow- payer disposes of the taxpayer’s entire inter- made by this section shall apply to leases en- able amount’ means an amount equal to 20 est in tax-exempt use property (or former tered into after December 31, 2003. percent of the lessor’s adjusted basis in the tax-exempt use property), rules similar to SEC. 476. LIMITATION ON DEDUCTIONS ALLO- property at the time the lease is entered the rules of section 469(g) shall apply for pur- CABLE TO PROPERTY USED BY GOV- into. poses of this section. ERNMENTS OR OTHER TAX-EXEMPT ‘‘(ii) HIGHER AMOUNT PERMITTED IN CERTAIN ‘‘(3) COORDINATION WITH SECTION 469.—This ENTITIES. CASES.—To the extent provided in regula- section shall be applied before the applica- (a) IN GENERAL.—Subpart C of part II of tions, a higher percentage shall be permitted tion of section 469. subchapter E of chapter 1 (relating to tax- under clause (i) where necessary because of ‘‘(f) OTHER DEFINITIONS.—For purposes of able year for which deductions taken) is the credit-worthiness of the lessee. In no this section— amended by adding at the end the following event may such regulations permit a per- ‘‘(1) RELATED PARTIES.—The terms ‘lessor’, new section: centage of more than 50 percent. ‘lessee’, and ‘lender’ include any related ‘‘SEC. 470. LIMITATIONS ON LOSSES FROM TAX- ‘‘(iii) OPTION TO PURCHASE.—If under the party (within the meaning of section EXEMPT USE PROPERTY. lease the lessee has the option to purchase 197(f)(9)(C)(i)). ‘‘(a) LIMITATION ON LOSSES.—Except as oth- the property for other than the fair market ‘‘(2) LEASE TERM.—The term ‘lease term’ erwise provided in this section, a tax-exempt value of the property (determined at the has the meaning given to such term by sec- use loss for any taxable year shall not be al- time of exercise), the allowable amount at tion 168(i)(3). lowed. the time such option may be exercised may ‘‘(3) LENDER.—The term ‘lender’ means, ‘‘(b) DISALLOWED LOSS CARRIED TO NEXT not exceed 50 percent of the price at which with respect to any lease, a person that YEAR.—Any tax-exempt use loss with respect such option may be exercised. makes a loan to the lessor which is secured to any tax-exempt use property which is dis- ‘‘(3) LESSOR MUST MAKE SUBSTANTIAL EQ- (or economically similar to being secured) by allowed under subsection (a) for any taxable UITY INVESTMENT.—A lease of property meets the lease or the leased property. year shall be treated as a deduction with re- the requirements of this paragraph if— ‘‘(4) LOAN.—The term ‘loan’ includes any spect to such property in the next taxable ‘‘(A) the lessor— similar arrangement. year. ‘‘(i) has at the time the lease is entered ‘‘(g) REGULATIONS.—The Secretary shall into an unconditional at-risk equity invest- ‘‘(c) DEFINITIONS.—For purposes of this sec- prescribe such regulations as may be nec- tion— ment (as determined by the Secretary) in the essary or appropriate to carry out the provi- property of at least 20 percent of the lessor’s ‘‘(1) TAX-EXEMPT USE LOSS.—The term ‘tax- sions of this section, including regulation exempt use loss’ means, with respect to any adjusted basis in the property as of that which— taxable year, the amount (if any) by which— time, and ‘‘(1) allow in appropriate cases the aggrega- ‘‘(ii) maintains such investment through- ‘‘(A) the sum of— tion of property subject to the same lease, out the term of the lease, and ‘‘(i) the aggregate deductions (other than and ‘‘(B) the fair market value of the property interest) directly allocable to a tax-exempt ‘‘(2) provide for the determination of the at the end of the lease term is reasonably ex- use property, plus allocation of interest expense for purposes of pected to be equal to at least 20 percent of ‘‘(ii) the aggregate deductions for interest this section.’’ such basis. properly allocable to such property, exceed (b) CONFORMING AMENDMENT.—The table of ‘‘(4) LESSEE MAY NOT BEAR MORE THAN MINI- ‘‘(B) the aggregate income from such prop- sections for subpart C of part II of sub- MAL RISK OF LOSS.— erty. chapter E of chapter 1 is amended by adding ‘‘(A) IN GENERAL.—A lease of property AX-EXEMPT USE PROPERTY.—The term at the end the following new item: ‘‘(2) T meets the requirements of this paragraph if ‘tax-exempt use property’ has the meaning there is no arrangement under which more ‘‘Sec. 470. Limitations on losses from tax-ex- given to such term by section 168(h) (without than a minimal risk of loss (as determined empt use property.’’ regard to paragraph (1)(C) or (3)(C) thereof under regulations) in the value of the prop- (c) EFFECTIVE DATE.—The amendments and determined as if property described in erty is borne by the lessee. made by this section shall apply to leases en- section 167(f)(1)(B) were tangible property). ‘‘(B) CERTAIN ARRANGEMENTS FAIL REQUIRE- tered into after December 31, 2003. XCEPTION FOR ERTAIN EASES ‘‘(d) E C L .—This MENT.—In no event will the requirements of PART IV—ADMINISTRATIVE PROVISIONS section shall not apply to any lease of prop- this paragraph be met if there is any ar- erty which meets the requirements of all of SEC. 481. CLARIFICATION OF RULES FOR PAY- rangement under which the lessee bears— MENT OF ESTIMATED TAX FOR CER- the following paragraphs: ‘‘(i) any portion of the loss that would TAIN DEEMED ASSET SALES. ‘‘(1) PROPERTY NOT FINANCED WITH TAX-EX- occur if the fair market value of the leased (a) IN GENERAL.—Paragraph (13) of section EMPT BONDS.—A lease of property meets the property at the time the lease is terminated 338(h) (relating to tax on deemed sale not requirements of this paragraph if no part of were 25 percent less than its projected fair taken into account for estimated tax pur- the property was financed (directly or indi- market value at the end of the lease term, or poses) is amended by adding at the end the rectly) from the proceeds of an obligation ‘‘(ii) more than 50 percent of the loss that following: ‘‘The preceding sentence shall not the interest on which is exempt from tax would occur if the fair market value of the apply with respect to a qualified stock pur- under section 103(a) and which (or any re- leased property at the time the lease is ter- chase for which an election is made under funding bond of which) is outstanding when minated were zero. paragraph (10).’’. the lease is entered into. The Secretary may ‘‘(5) REGULATORY REQUIREMENTS.—A lease (b) EFFECTIVE DATE.—The amendment by regulations provide for a de minimis ex- of property meets the requirements of this made by subsection (a) shall apply to trans- ception from this paragraph. paragraph if such lease of property meets actions occurring after the date of the enact- ‘‘(2) AVAILABILITY OF FUNDS.— such requirements as the Secretary may pre- ment of this Act. ‘‘(A) IN GENERAL.—A lease of property scribe by regulations. SEC. 482. EXTENSION OF IRS USER FEES. meets the requirements of this paragraph if ‘‘(e) SPECIAL RULES.— (a) IN GENERAL.—Section 7528(c) (relating (at any time during the lease term) not more ‘‘(1) TREATMENT OF FORMER TAX-EXEMPT than an allowable amount of funds are— to termination) is amended by striking ‘‘De- USE PROPERTY.— cember 31, 2004’’ and inserting ‘‘September ‘‘(i) subject to any arrangement referred to ‘‘(A) IN GENERAL.—In the case of any in subparagraph (B), or 30, 2013’’. former tax-exempt use property— (b) EFFECTIVE DATE.—The amendment ‘‘(ii) otherwise reasonably expected to re- ‘‘(i) any deduction allowable under sub- made by this section shall apply to requests main available, section (b) with respect to such property for after the date of the enactment of this Act. to or for the benefit of the lessor or any lend- any taxable year shall be allowed only to the SEC. 483. DOUBLING OF CERTAIN PENALTIES, er, or to or for the benefit of the lessee to extent of any net income (without regard to FINES, AND INTEREST ON UNDER- satisfy the lessee’s obligations or options such deduction) from such property for such PAYMENTS RELATED TO CERTAIN under the lease. taxable year, and OFFSHORE FINANCIAL ARRANGE- ‘‘(B) ARRANGEMENTS.—The arrangements ‘‘(ii) any portion of such unused deduction MENT. referred to in this subparagraph are— remaining after application of clause (i) (a) GENERAL RULE.—If— ‘‘(i) a defeasance arrangement, a loan by shall be treated as allowable under sub- (1) a taxpayer eligible to participate in— the lessee to the lessor or any lender, a de- section (b) with respect to such property in (A) the Department of the Treasury’s Off- posit arrangement, a letter of credit the next taxable year. shore Voluntary Compliance Initiative, or collateralized with cash or cash equivalents, ‘‘(B) FORMER TAX-EXEMPT USE PROPERTY.— (B) the Department of the Treasury’s vol- a payment undertaking agreement, a lease For purposes of this subsection, the term untary disclosure initiative which applies to prepayment, a sinking fund arrangement, or ‘former tax-exempt use property’ means any the taxpayer by reason of the taxpayer’s any similar arrangement (whether or not property which— underreporting of United States income tax

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liability through financial arrangements SEC. 486. DEPOSITS MADE TO SUSPEND RUNNING (c) EFFECTIVE DATE.— which rely on the use of offshore arrange- OF INTEREST ON POTENTIAL UN- (1) IN GENERAL.—The amendments made by ments which were the subject of the initia- DERPAYMENTS. this section shall apply to deposits made tive described in subparagraph (A), and (a) IN GENERAL.—Subchapter A of chapter after the date of the enactment of this Act. 67 (relating to interest on underpayments) is (2) any interest or applicable penalty is im- (2) COORDINATION WITH DEPOSITS MADE amended by adding at the end the following posed with respect to any arrangement to UNDER REVENUE PROCEDURE 84–58.—In the case new section: which any initiative described in paragraph of an amount held by the Secretary of the (1) applied or to any underpayment of Fed- ‘‘SEC. 6603. DEPOSITS MADE TO SUSPEND RUN- Treasury or his delegate on the date of the NING OF INTEREST ON POTENTIAL eral income tax attributable to items arising UNDERPAYMENTS, ETC. enactment of this Act as a deposit in the na- in connection with any arrangement de- ‘‘(a) AUTHORITY TO MAKE DEPOSITS OTHER ture of a cash bond deposit pursuant to Rev- scribed in paragraph (1), THAN AS PAYMENT OF TAX.—A taxpayer may enue Procedure 84–58, the date that the tax- then, notwithstanding any other provision of make a cash deposit with the Secretary payer identifies such amount as a deposit law, the amount of such interest or penalty which may be used by the Secretary to pay made pursuant to section 6603 of the Internal shall be equal to twice that determined with- any tax imposed under subtitle A or B or Revenue Code (as added by this Act) shall be out regard to this section. chapter 41, 42, 43, or 44 which has not been treated as the date such amount is deposited for purposes of such section 6603. (b) DEFINITIONS AND RULES.—For purposes assessed at the time of the deposit. Such a of this section— deposit shall be made in such manner as the SEC. 487. QUALIFIED TAX COLLECTION CON- (1) APPLICABLE PENALTY.—The term ‘‘appli- Secretary shall prescribe. TRACTS. cable penalty’’ means any penalty, addition ‘‘(b) NO INTEREST IMPOSED.—To the extent (a) CONTRACT REQUIREMENTS.— to tax, or fine imposed under chapter 68 of that such deposit is used by the Secretary to (1) IN GENERAL.—Subchapter A of chapter the Internal Revenue Code of 1986. pay tax, for purposes of section 6601 (relating 64 (relating to collection) is amended by add- to interest on underpayments), the tax shall (2) VOLUNTARY OFFSHORE COMPLIANCE INI- ing at the end the following new section: be treated as paid when the deposit is made. TIATIVE.—The term ‘‘Voluntary Offshore ‘‘SEC. 6306. QUALIFIED TAX COLLECTION CON- ‘‘(c) RETURN OF DEPOSIT.—Except in a case TRACTS. Compliance Initiative’’ means the program where the Secretary determines that collec- ‘‘(a) IN GENERAL.—Nothing in any provi- established by the Department of the Treas- tion of tax is in jeopardy, the Secretary shall sion of law shall be construed to prevent the ury in January of 2003 under which any tax- return to the taxpayer any amount of the de- Secretary from entering into a qualified tax payer was eligible to voluntarily disclose posit (to the extent not used for a payment collection contract. previously undisclosed income on assets of tax) which the taxpayer requests in writ- placed in offshore accounts and accessed ing. ‘‘(b) QUALIFIED TAX COLLECTION CON- through credit card and other financial ar- ‘‘(d) PAYMENT OF INTEREST.— TRACT.—For purposes of this section, the rangements. ‘‘(1) IN GENERAL.—For purposes of section term ‘qualified tax collection contract’ (3) PARTICIPATION.—A taxpayer shall be 6611 (relating to interest on overpayments), a means any contract which— treated as having participated in the Vol- deposit which is returned to a taxpayer shall ‘‘(1) is for the services of any person (other untary Offshore Compliance Initiative if the be treated as a payment of tax for any period than an officer or employee of the Treasury taxpayer submitted the request in a timely to the extent (and only to the extent) attrib- Department)— manner and all information requested by the utable to a disputable tax for such period. ‘‘(A) to locate and contact any taxpayer Secretary of the Treasury or his delegate Under regulations prescribed by the Sec- specified by the Secretary, within a reasonable period of time following retary, rules similar to the rules of section ‘‘(B) to request full payment from such the request. 6611(b)(2) shall apply. taxpayer of an amount of Federal tax speci- (c) EFFECTIVE DATE.—The provisions of ‘‘(2) DISPUTABLE TAX.— fied by the Secretary and, if such request this section shall apply to interest, pen- ‘‘(A) IN GENERAL.—For purposes of this sec- cannot be met by the taxpayer, to offer the alties, additions to tax, and fines with re- tion, the term ‘disputable tax’ means the taxpayer an installment agreement pro- spect to any taxable year if as of the date of amount of tax specified at the time of the de- viding for full payment of such amount dur- the enactment of this Act, the assessment of posit as the taxpayer’s reasonable estimate ing a period not to exceed 3 years, and any tax, penalty, or interest with respect to of the maximum amount of any tax attrib- ‘‘(C) to obtain financial information speci- such taxable year is not prevented by the op- utable to disputable items. fied by the Secretary with respect to such eration of any law or rule of law. ‘‘(B) SAFE HARBOR BASED ON 30-DAY LET- taxpayer, ‘‘(2) prohibits each person providing such SEC. 484. PARTIAL PAYMENT OF TAX LIABILITY TER.—In the case of a taxpayer who has been IN INSTALLMENT AGREEMENTS. issued a 30-day letter, the maximum amount services under such contract from commit- ting any act or omission which employees of (a) IN GENERAL.— of tax under subparagraph (A) shall not be (1) Section 6159(a) (relating to authoriza- less than the amount of the proposed defi- the Internal Revenue Service are prohibited tion of agreements) is amended— ciency specified in such letter. from committing in the performance of simi- (A) by striking ‘‘satisfy liability for pay- ‘‘(3) OTHER DEFINITIONS.—For purposes of lar services, ment of’’ and inserting ‘‘make payment on’’, paragraph (2)— ‘‘(3) prohibits subcontractors from— and ‘‘(A) DISPUTABLE ITEM.—The term ‘disput- ‘‘(A) having contacts with taxpayers, able item’ means any item of income, gain, (B) by inserting ‘‘full or partial’’ after ‘‘fa- ‘‘(B) providing quality assurance services, loss, deduction, or credit if the taxpayer— cilitate’’. and ‘‘(i) has a reasonable basis for its treat- (2) Section 6159(c) (relating to Secretary ‘‘(C) composing debt collection notices, ment of such item, and required to enter into installment agree- and ‘‘(ii) reasonably believes that the Sec- ments in certain cases) is amended in the ‘‘(4) permits subcontractors to perform retary also has a reasonable basis for dis- matter preceding paragraph (1) by inserting other services only with the approval of the allowing the taxpayer’s treatment of such ‘‘full’’ before ‘‘payment’’. Secretary. item. ‘‘(c) FEES.—The Secretary may retain and (b) REQUIREMENT TO REVIEW PARTIAL PAY- ‘‘(B) 30-DAY LETTER.—The term ‘30-day let- use an amount not in excess of 25 percent of MENT AGREEMENTS EVERY TWO YEARS.—Sec- ter’ means the first letter of proposed defi- the amount collected under any qualified tax tion 6159, as amended by this Act, is amend- ciency which allows the taxpayer an oppor- collection contract for the costs of services ed by redesignating subsections (d), (e), and tunity for administrative review in the In- performed under such contract. The Sec- (f) as subsections (e), (f), and (g), respec- ternal Revenue Service Office of Appeals. retary shall keep adequate records regarding tively, and inserting after subsection (c) the ‘‘(4) RATE OF INTEREST.—The rate of inter- amounts so retained and used. The amount following new subsection: est allowable under this subsection shall be credited as paid by any taxpayer shall be de- ‘‘(d) SECRETARY REQUIRED TO REVIEW IN- the Federal short-term rate determined termined without regard to this subsection. STALLMENT AGREEMENTS FOR PARTIAL COL- under section 6621(b), compounded daily. ‘‘(d) NO FEDERAL LIABILITY.—The United LECTION EVERY TWO YEARS.—In the case of ‘‘(e) USE OF DEPOSITS.— States shall not be liable for any act or an agreement entered into by the Secretary ‘‘(1) PAYMENT OF TAX.—Except as otherwise omission of any person performing services under subsection (a) for partial collection of provided by the taxpayer, deposits shall be under a qualified tax collection contract. a tax liability, the Secretary shall review treated as used for the payment of tax in the ‘‘(e) APPLICATION OF FAIR DEBT COLLECTION the agreement at least once every 2 years.’’. order deposited. PRACTICES ACT.—The provisions of the Fair (c) EFFECTIVE DATE.—The amendments ‘‘(2) RETURNS OF DEPOSITS.—Deposits shall Debt Collection Practices Act (15 U.S.C. 1692 made by this section shall apply to agree- be treated as returned to the taxpayer on a et seq.) shall apply to any qualified tax col- ments entered into on or after the date of last-in, first-out basis.’’. lection contract, except to the extent super- the enactment of this Act. (b) CLERICAL AMENDMENT.—The table of seded by section 6304, section 7602(c), or by SEC. 485. EXTENSION OF CUSTOMS USER FEES. sections for subchapter A of chapter 67 is any other provision of this title. amended by adding at the end the following Section 13031(j)(3) of the Consolidated Om- ‘‘(f) CROSS REFERENCES.— nibus Budget Reconciliation Act of 1985 (19 new item: ‘‘(1) For damages for certain unauthorized U.S.C. 58c(j)(3)) is amended by striking ‘‘Sec. 6603. Deposits made to suspend running collection actions by persons performing ‘‘March 31, 2004’’ and inserting ‘‘September of interest on potential under- services under a qualified tax collection con- 30, 2013’’. payments, etc.’’. tract, see section 7433A.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00080 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3027 ‘‘(2) For application of Taxpayer Assist- by the Secretary of the Treasury under such company’ has the meaning given to such ance Orders to persons performing services contract that such individual committed any term by section 816(a)).’’. under a qualified tax collection contract, see act or omission described under subsection (b) EFFECTIVE DATE.—The amendment section 7811(a)(4).’’. (b) in connection with the performance of made by this section shall apply to taxable (2) CONFORMING AMENDMENTS.— such services.’’. years beginning after December 31, 2003. (A) Section 7809(a) is amended by inserting (e) EFFECTIVE DATE.—The amendments SEC. 495. LIMITATIONS ON DEDUCTION FOR ‘‘6306,’’ before ‘‘7651’’. made to this section shall take effect on the CHARITABLE CONTRIBUTIONS OF (B) The table of sections for subchapter A date of the enactment of this Act. PATENTS AND SIMILAR PROPERTY. of chapter 64 is amended by adding at the PART V—MISCELLANEOUS PROVISIONS (a) DEDUCTION ALLOWED ONLY TO THE EX- end the following new item: SEC. 491. ADDITION OF VACCINES AGAINST HEPA- TENT OF BASIS.—Section 170(e)(1)(B) (relating ‘‘Sec. 6306. Qualified Tax Collection Con- TITIS A TO LIST OF TAXABLE VAC- to certain contributions of ordinary income tracts.’’. CINES. and capital gain property) is amended by (b) CIVIL DAMAGES FOR CERTAIN UNAUTHOR- (a) IN GENERAL.—Section 4132(a)(1) (defin- striking ‘‘or’’ at the end of clause (i), by add- IZED COLLECTION ACTIONS BY PERSONS PER- ing taxable vaccine) is amended by redesig- ing ‘‘or’’ at the end of clause (ii), and by in- FORMING SERVICES UNDER QUALIFIED TAX nating subparagraphs (I), (J), (K), and (L) as serting after clause (ii) the following new COLLECTION CONTRACTS.— subparagraphs (J), (K), (L), and (M), respec- clause: (1) IN GENERAL.—Subchapter B of chapter tively, and by inserting after subparagraph ‘‘(iii) of any patent, copyright, trademark, 76 (relating to proceedings by taxpayers and (H) the following new subparagraph: trade name, trade secret, know-how, soft- third parties) is amended by inserting after ‘‘(I) Any vaccine against hepatitis A.’’. ware, or similar property, or applications or section 7433 the following new section: (b) CONFORMING AMENDMENT.—Section registrations of such property,’’. ‘‘SEC. 7433A. CIVIL DAMAGES FOR CERTAIN UN- 9510(c)(1)(A) is amended by striking ‘‘October (b) TREATMENT OF CONTRIBUTIONS WHERE AUTHORIZED COLLECTION ACTIONS 18, 2000’’ and inserting ‘‘May 8, 2003’’. DONOR RECEIVES INTEREST.—Section 170(e) is BY PERSONS PERFORMING SERV- (c) EFFECTIVE DATE.— amended by adding at the end the following ICES UNDER QUALIFIED TAX COL- (1) SALES, ETC.—The amendments made by new paragraph: LECTION CONTRACTS. this section shall apply to sales and uses on ‘‘(7) SPECIAL RULES FOR CONTRIBUTIONS OF ‘‘(a) IN GENERAL.—Subject to the modifica- or after the first day of the first month PATENTS AND SIMILAR PROPERTY WHERE DONOR tions provided by subsection (b), section 7433 which begins more than 4 weeks after the RECEIVES INTEREST.— shall apply to the acts and omissions of any date of the enactment of this Act. ‘‘(A) DISALLOWANCE OF DEDUCTION.—No de- person performing services under a qualified (2) DELIVERIES.—For purposes of paragraph duction shall be allowed under this section tax collection contract (as defined in section (1) and section 4131 of the Internal Revenue with respect to a contribution of property 6306(b)) to the same extent and in the same Code of 1986, in the case of sales on or before described in paragraph (1)(B)(iii) if the tax- manner as if such person were an employee the effective date described in such para- payer after the contribution has any interest of the Internal Revenue Service. graph for which delivery is made after such in the property other than a qualified inter- ‘‘(b) MODIFICATIONS.—For purposes of sub- date, the delivery date shall be considered est. section (a)— the sale date. ‘‘(B) CONTRIBUTIONS WITH QUALIFIED INTER- ‘‘(1) Any civil action brought under section SEC. 492. RECOGNITION OF GAIN FROM THE SALE EST.—If a taxpayer after a contribution of 7433 by reason of this section shall be OF A PRINCIPAL RESIDENCE AC- property described in paragraph (1)(B)(iii) brought against the person who entered into QUIRED IN A LIKE-KIND EXCHANGE has a qualified interest in the property— the qualified tax collection contract with WITHIN 5 YEARS OF SALE. ‘‘(i) any payment pursuant to the qualified the Secretary and shall not be brought (a) IN GENERAL.—Section 121(d) (relating to interest shall be treated as ordinary income against the United States. special rules for exclusion of gain from sale and shall be includible in gross income of the ‘‘(2) Such person and not the United States of principal residence) is amended by adding taxpayer for the taxable year in which the shall be liable for any damages and costs de- at the end the following new paragraph: payment is received by the taxpayer, and termined in such civil action. ‘‘(10) PROPERTY ACQUIRED IN LIKE-KIND EX- ‘‘(ii) subsection (f)(3) and section 1011(b) ‘‘(3) Such civil action shall not be an exclu- CHANGE.—If a taxpayer acquired property in shall not apply to the transfer of the prop- sive remedy with respect to such person. an exchange to which section 1031 applied, erty from the taxpayer to the donee. ‘‘(4) Subsections (c), (d)(1), and (e) of sec- subsection (a) shall not apply to the sale or ‘‘(C) QUALIFIED INTEREST.—For purposes of tion 7433 shall not apply.’’. exchange of such property if it occurs during this paragraph— (2) CLERICAL AMENDMENT.—The table of the 5-year period beginning with the date of ‘‘(i) IN GENERAL.—The term ‘qualified in- sections for subchapter B of chapter 76 is the acquisition of such property.’’. terest’ means, with respect to any taxpayer, amended by inserting after the item relating (b) EFFECTIVE DATE.—The amendment a right to receive from the donee a percent- to section 7433 the following new item: made by this section shall apply to sales or age (not greater than 50 percent) of any roy- ‘‘Sec. 7433A. Civil damages for certain unau- exchanges after the date of the enactment of alty payment received by the donee with re- thorized collection actions by this Act. spect to property described in paragraph persons performing services SEC. 493. CLARIFICATION OF EXEMPTION FROM (1)(B)(iii) (other than copyrights which are under a qualified tax collection TAX FOR SMALL PROPERTY AND described in section 1221(a)(3) or 1231(b)(1)(C)) contract.’’. CASUALTY INSURANCE COMPANIES. contributed by the taxpayer to the donee. (c) APPLICATION OF TAXPAYER ASSISTANCE (a) IN GENERAL.—Section 501(c)(15)(A) is ‘‘(ii) SECRETARIAL AUTHORITY.— ORDERS TO PERSONS PERFORMING SERVICES amended to read as follows: ‘‘(I) IN GENERAL.—Except as provided in UNDER A QUALIFIED TAX COLLECTION CON- ‘‘(A) Insurance companies (as defined in subclause (II), the Secretary may by regula- TRACT.—Section 7811 (relating to taxpayer section 816(a)) other than life (including tion or other administrative guidance treat assistance orders) is amended by adding at interinsurers and reciprocal underwriters) as a qualified interest the right to receive the end the following new subsection: if— other payments from the donee, but only if ‘‘(g) APPLICATION TO PERSONS PERFORMING ‘‘(i) the gross receipts for the taxable year the donee does not possess a right to receive SERVICES UNDER A QUALIFIED TAX COLLEC- do not exceed $600,000, and any payment (whether royalties or other- TION CONTRACT.—Any order issued or action ‘‘(ii) more than 50 percent of such gross re- wise) from a third party with respect to the taken by the National Taxpayer Advocate ceipts consist of premiums.’’. contributed property. pursuant to this section shall apply to per- (b) CONTROLLED GROUP RULE.—Section ‘‘(II) EXCEPTIONS.—The Secretary may not sons performing services under a qualified 501(c)(15)(C) is amended by inserting ‘‘, ex- treat as a qualified interest the right to re- tax collection contract (as defined in section cept that in applying section 1563 for pur- ceive any payment which provides a benefit 6306(b)) to the same extent and in the same poses of section 831(b)(2)(B)(ii), subpara- to the donor which is greater than the ben- manner as such order or action applies to the graphs (B) and (C) of section 1563(b)(2) shall efit retained by the donee or the right to re- Secretary.’’. be disregarded’’ before the period at the end. ceive any portion of the proceeds from the (d) INELIGIBILITY OF INDIVIDUALS WHO COM- (c) CONFORMING AMENDMENT.—Clause (i) of sale of the property contributed. MIT MISCONDUCT TO PERFORM UNDER CON- section 831(b)(2)(A) is amended by striking ‘‘(iii) LIMITATION.—An interest shall be TRACT.—Section 1203 of the Internal Revenue ‘‘exceed $350,000 but’’. treated as a qualified interest under this sub- Service Restructuring Act of 1998 (relating (d) EFFECTIVE DATE.—The amendments paragraph only if the taxpayer has no right to termination of employment for mis- made by this section shall apply to taxable to receive any payment described in clause conduct) is amended by adding at the end the years beginning after December 31, 2003. (i) or (ii)(I) after the earlier of the date on following new subsection: SEC. 494. DEFINITION OF INSURANCE COMPANY which the legal life of the contributed prop- ‘‘(e) INDIVIDUALS PERFORMING SERVICES FOR SECTION 831. erty expires or the date which is 20 years UNDER A QUALIFIED TAX COLLECTION CON- (a) IN GENERAL.—Section 831 is amended by after the date of the contribution.’’. TRACT.—An individual shall cease to be per- redesignating subsection (c) as subsection (d) (c) REPORTING REQUIREMENTS.— mitted to perform any services under any and by inserting after subsection (b) the fol- (1) IN GENERAL.—Section 6050L(a) (relating qualified tax collection contract (as defined lowing new subsection: to returns regarding certain dispositions of in section 6306(b) of the Internal Revenue ‘‘(c) INSURANCE COMPANY DEFINED.—For donated property) is amended— Code of 1986) if there is a final determination purposes of this section, the term ‘insurance (A) by striking ‘‘If’’ and inserting:

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00081 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3028 CONGRESSIONAL RECORD — SENATE March 23, 2004 ‘‘(1) DISPOSITIONS OF DONATED PROPERTY.— ner that preserves jobs and production ‘‘(3) CREDIT ALLOWANCE DATE.—For pur- If’’, activities in the United States, to re- poses of paragraph (1), the term ‘credit al- (B) by redesignating paragraphs (1) form and simplify the international lowance date’ means, with respect to any through (5) as subparagraphs (A) through (E), taxation rules of the United States, qualified equity investment— respectively, and ‘‘(A) the date on which such investment is (C) by adding at the end the following new and for other purposes; which was or- initially made, and paragraph: dered to lie on the table; as follows: ‘‘(B) each of the 6 anniversary dates of ‘‘(2) PAYMENTS OF QUALIFIED INTERESTS.— On page 179, after line 25, add the fol- such date thereafter. Each donee of property described in section lowing: ‘‘(b) QUALIFIED EQUITY INVESTMENT.—For 170(e)(1)(B)(iii) which makes a payment to a SEC. ll. INCREASE IN HISTORIC REHABILITA- purposes of this section— donor pursuant to a qualified interest (as de- TION CREDIT FOR CERTAIN LOW-IN- ‘‘(1) IN GENERAL.—The term ‘qualified eq- fined in section 170(e)(7)) during any calendar COME HOUSING FOR THE ELDERLY. uity investment’ means any equity invest- year shall make a return (in accordance with (a) IN GENERAL.—Section 47 (relating to re- ment in a reservation development entity forms and regulations prescribed by the Sec- habilitation credit) is amended by adding at if— retary) showing— the end the following new subsection: ‘‘(A) such investment is acquired by the ‘‘(A) the name, address, and TIN of the ‘‘(e) SPECIAL RULE REGARDING CERTAIN HIS- taxpayer at its original issue (directly or payor and the payee with respect to such a TORIC STRUCTURES.—In the case of any quali- through an underwriter) solely in exchange payment, fied rehabilitation expenditure with respect for cash, ‘‘(B) a description, and date of contribu- to any certified historic structure— ‘‘(B) substantially all of such cash is used tion, of the property to which the qualified ‘‘(1) which is placed in service after the by the reservation development entity to interest relates, date of the enactment of this subsection, make qualified low-income reservation in- ‘‘(C) the dates and amounts of any royalty ‘‘(2) which is part of a qualified low-income vestments, and payments received by the donee with respect building with respect to which a credit under ‘‘(C) such investment is designated for pur- to such property, section 42 is allowed, and poses of this section by the reservation de- ‘‘(D) the date and the amount of the pay- ‘‘(3) substantially all of the residential velopment entity. rental units of which are used for tenants ment pursuant to the qualified interest, and Such term shall not include any equity in- who have attained the age of 65, ‘‘(E) a description of the terms of the vestment issued by a reservation develop- subsection (a)(2) shall be applied by sub- qualified interest.’’. ment entity more than 5 years after the date stituting ‘25 percent’ for ‘20 percent’.’’. (2) CONFORMING AMENDMENTS.— that such entity receives an allocation under (b) APPLICATION OF MACRS.—The Internal (A) The heading for section 6050L is amend- subsection (f ). Any allocation not used with- Revenue Code of 1986 shall be applied and ad- ed by striking ‘‘certain dispositions of’’. in such 5-year period may be reallocated by ministered as if paragraph (4)(X) of section (B) The item relating to section 6050L in the Secretary under subsection (f ). 251(d) of the Tax Reform Act of 1986 as ap- the table of sections for subpart B of part III ‘‘(2) LIMITATION.—The maximum amount of plied to the amendments made by section 201 of subchapter A of chapter 61 is amended by equity investments issued by a reservation of such Act had not been enacted with re- striking ‘‘certain dispositions of’’. development entity which may be designated spect to any property described in such para- (d) ANTI-ABUSE RULES.—The Secretary of under paragraph (1)(C) by such entity shall graph and placed in service after the date of the Treasury may prescribe such regulations not exceed the portion of the limitation the enactment of this Act. or other administrative guidance as may be amount allocated under subsection (f ) to necessary or appropriate to prevent the (c) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to prop- such entity. avoidance of the purposes of section ‘‘(3) SAFE HARBOR FOR DETERMINING USE OF 170(e)(1)(B)(iii) of the Internal Revenue Code erty placed in service after the date of the enactment of this Act. CASH.—The requirement of paragraph (1)(B) of 1986 (as added by subsection (a)), including shall be treated as met if at least 85 percent preventing— of the aggregate gross assets of the reserva- (1) the circumvention of the reduction of SA 2896. Mr. DASCHLE submitted an amendment intended to be proposed by tion development entity are invested in the charitable deduction by embedding or qualified low-income reservation invest- bundling the patent or similar property as him to the bill S. 1637, to amend the In- ments. part of a charitable contribution of property ternal Revenue Code of 1986 to comply ‘‘(4) TREATMENT OF SUBSEQUENT PUR- that includes the patent or similar property, with the World Trade Organization rul- CHASERS.—The term ‘qualified equity invest- (2) the manipulation of the basis of the ings on the FSC/ETI benefit in a man- ment’ includes any equity investment which property to increase the amount of the char- ner that preserves jobs and production would (but for paragraph (1)(A)) be a quali- itable deduction through the use of related activities in the United States, to re- fied equity investment in the hands of the persons, pass-thru entities, or other inter- taxpayer if such investment was a qualified mediaries, or through the use of any provi- form and simplify the international taxation rules of the United States, equity investment in the hands of a prior sion of law or regulation (including the con- holder. and for other purposes; which was or- solidated return regulations), and ‘‘(5) REDEMPTIONS.—A rule similar to the (3) a donor from changing the form of the dered to lie on the table; as follows: rule of section 1202(c)(3) shall apply for pur- patent or similar property to property of a On page 179, after line 25, insert the fol- poses of this subsection. form for which different deduction rules lowing: ‘‘(6) EQUITY INVESTMENT.—The term ‘equity would apply. SEC. . NEW MARKETS TAX CREDIT FOR NATIVE investment’ means— (e) EFFECTIVE DATE.—The amendments AMERICAN RESERVATIONS. ‘‘(A) any stock (other than nonqualified made by this section shall apply to contribu- (a) IN GENERAL.—Subpart D of part IV of preferred stock as defined in section tions made after October 1, 2003. subchapter A of chapter 1 (relating to busi- 351(g)(2)) in an entity which is a corporation, SEC. 496. REPEAL OF 10-PERCENT REHABILITA- ness related credits) is amended by redesig- and TION TAX CREDIT. nating sections 45E and 45F as sections 45F ‘‘(B) any capital interest in an entity Section 47 is amended by adding at the end and 45G, respectively, and by inserting after which is a partnership. the following new subsection: section 45E the following new section: ‘‘(c) RESERVATION DEVELOPMENT ENTITY.— ‘‘(e) TERMINATION.—This section shall not ‘‘SEC. 45D. NEW MARKETS TAX CREDIT FOR NA- For purposes of this section— apply to expenditures described in sub- TIVE AMERICAN RESERVATIONS. ‘‘(1) IN GENERAL.—The term ‘reservation section (a)(1) incurred in taxable years be- ‘‘(a) ALLOWANCE OF CREDIT.— development entity’ means any domestic ginning after December 31, 2003.’’. ‘‘(1) IN GENERAL.—For purposes of section corporation or partnership if— SEC. 497. INCREASE IN AGE OF MINOR CHILDREN 38, in the case of a taxpayer who holds a ‘‘(A) the primary mission of the entity is WHOSE UNEARNED INCOME IS qualified equity investment on a credit al- serving, or providing investment capital for, TAXED AS IF PARENT’S INCOME. lowance date of such investment which oc- low-income reservations, (a) IN GENERAL.—Section 1(g)(2)(A) (relat- curs during the taxable year, the Native ‘‘(B) the entity maintains accountability ing to child to whom subsection applies) is American new markets tax credit deter- to residents of low-income reservations amended by striking ‘‘age 14’’ and inserting mined under this section for such taxable through their representation on any gov- ‘‘age 18’’. year is an amount equal to the applicable erning board of the entity or on any advisory (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable percentage of the amount paid to the res- board to the entity, and years beginning after December 31, 2003. ervation development entity for such invest- ‘‘(C) the entity is certified by the Sec- ment at its original issue. retary for purposes of this section as being a SA 2895. Mr. DASCHLE submitted an ‘‘(2) APPLICABLE PERCENTAGE.—For pur- reservation development entity. amendment intended to be proposed by poses of paragraph (1), the applicable per- ‘‘(2) EXCEPTION.—For purposes of subpara- centage is— graph (C) of paragraph (1), the Secretary him to the bill S. 1637, to amend the In- ‘‘(A) 5 percent with respect to the first 3 shall not certify an entity as a reservation ternal Revenue Code of 1986 to comply credit allowance dates, and development entity if such entity is also cer- with the World Trade Organization rul- ‘‘(B) 6 percent with respect to the remain- tified as a qualified community development ings on the FSC/ETI benefit in a man- der of the credit allowance dates. entity under section 45D(c).

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‘‘(d) QUALIFIED LOW-INCOME RESERVATION ‘‘(B) which intends to satisfy the require- ‘‘(3) which provide rules for determining INVESTMENTS.—For purposes of this section— ment under subsection (b)(1)(B) by making whether the requirement of subsection ‘‘(1) IN GENERAL.—The term ‘qualified low- qualified low-income reservation invest- (b)(1)(B) is treated as met, income reservation investment’ means— ments in 1 or more businesses in which per- ‘‘(4) which impose appropriate reporting re- ‘‘(A) any capital or equity investment in, sons unrelated to such entity (within the quirements, and or loan to, any qualified active low-income meaning of section 267(b) or 707(b)(1)) hold ‘‘(5) which apply the provisions of this sec- reservation business, the majority equity interest. tion to newly formed entities.’’. ‘‘(B) the purchase from another reservation ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If (b) CREDIT MADE PART OF GENERAL BUSI- development entity of any loan made by the Native American new markets tax credit NESS CREDIT.— such entity which is a qualified low-income limitation for any calendar year exceeds the (1) IN GENERAL.—Subsection (b) of section reservation investment, aggregate amount allocated under paragraph 38 is amended by redesignating paragraphs ‘‘(C) financial counseling and other serv- (2) for such year, such limitation for the suc- (14) and (15) as paragraphs (15) and (16), re- ices specified in regulations prescribed by ceeding calendar year shall be increased by spectively, and by inserting after paragraph the Secretary to businesses located in, and the amount of such excess. No amount may (13) the following new paragraph: residents of, low-income reservations, and be carried under the preceding sentence to ‘‘(14) the Native American new markets ‘‘(D) any equity investment in, or loan to, any calendar year after 2014. tax credit determined under section 45E(a),’’. any reservation development entity. ‘‘(g) RECAPTURE OF CREDIT IN CERTAIN (2) LIMITATION ON CARRYBACK.—Subsection ‘‘(2) QUALIFIED ACTIVE LOW-INCOME RES- CASES.— (d) of section 39 is amended by redesignating ERVATION BUSINESS.— ‘‘(1) IN GENERAL.—If, at any time during paragraph (10) as paragraph (11) and by in- ‘‘(A) IN GENERAL.—For purposes of para- the 7-year period beginning on the date of serting after paragraph (9) the following new graph (1), the term ‘qualified active low-in- the original issue of a qualified equity in- paragraph: come reservation business’ means, with re- vestment in a reservation development enti- ‘‘(10) NO CARRYBACK OF NATIVE AMERICAN spect to any taxable year, any corporation ty, there is a recapture event with respect to NEW MARKETS TAX CREDIT BEFORE JANUARY 1, (including a nonprofit corporation) or part- such investment, then the tax imposed by 2004.—No portion of the unused business cred- nership if for such year— this chapter for the taxable year in which it for any taxable year which is attributable ‘‘(i) at least 50 percent of the total gross such event occurs shall be increased by the to the credit under section 45E may be car- income of such entity is derived from the ac- credit recapture amount. ried back to a taxable year ending before January 1, 2004.’’. tive conduct of a qualified business within ‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur- poses of paragraph (1), the credit recapture (c) DEDUCTION FOR UNUSED CREDIT.—Sub- any low-income reservation, section (c) of section 196 is amended by re- ‘‘(ii) a substantial portion of the use of the amount is an amount equal to the sum of— ‘‘(A) the aggregate decrease in the credits designating paragraph (10) as paragraph (11), tangible property of such entity (whether by striking ‘‘and’’ at the end of paragraph owned or leased) is within any low-income allowed to the taxpayer under section 38 for all prior taxable years which would have re- (9), and by inserting after paragraph (9) the reservation, following new paragraph: ‘‘(iii) a substantial portion of the services sulted if no credit had been determined under this section with respect to such in- ‘‘(10) the Native American new markets performed for such entity by its employees tax credit determined under section 45E(a), are performed in any low-income reserva- vestment, plus ‘‘(B) interest at the underpayment rate es- and’’. tion, (d) CONFORMING AMENDMENTS.— tablished under section 6621 on the amount ‘‘(iv) less than 5 percent of the average of (1) Section 38(b)(15), as redesignated by determined under subparagraph (A) for each the aggregate unadjusted bases of the prop- subsection (b)(1), is amended— prior taxable year for the period beginning erty of such entity is attributable to collect- (A) by striking ‘‘45E(c)’’ and inserting on the due date for filing the return for the ibles (as defined in section 408(m)(2)) other ‘‘45F(c)’’, and prior taxable year involved. than collectibles that are held primarily for (B) by striking ‘‘45E(a)’’ and inserting No deduction shall be allowed under this sale to customers in the ordinary course of ‘‘45F(a)’’. chapter for interest described in subpara- such business, and (2) Section 38(b)(16), as redesignated by graph (B). ‘‘(v) less than 5 percent of the average of subsection (b)(1), is amended by striking ECAPTURE EVENT.—For purposes of the aggregate unadjusted bases of the prop- ‘‘(3) R ‘‘45F(a)’’ and inserting ‘‘45G(a)’’. erty of such entity is attributable to non- paragraph (1), there is a recapture event with (3) Section 39(d)(11), as redesignated by qualified financial property (as defined in respect to an equity investment in a reserva- subsection (b)(2), is amended by striking section 1397C(e)). tion development entity if— ‘‘section 45E’’ and inserting ‘‘section 45F’’. ‘‘(B) PROPRIETORSHIP.—Such term shall in- ‘‘(A) such entity ceases to be a reservation (4) Section 196(c)(11), as redesignated by clude any business carried on by an indi- development entity, subsection (c), is amended by striking vidual as a proprietor if such business would ‘‘(B) the proceeds of the investment cease ‘‘45E(a)’’ and inserting ‘‘45F(a)’’. meet the requirements of subparagraph (A) to be used as required of subsection (b)(1)(B), (5) Section 1016(a)(28) is amended— were it incorporated. or (A) by striking ‘‘under section 45F’’ and in- ‘‘(C) PORTIONS OF BUSINESS MAY BE QUALI- ‘‘(C) such investment is redeemed by such serting ‘‘under section 45G’’, and FIED ACTIVE LOW-INCOME RESERVATION BUSI- entity. (B) by striking ‘‘section 45F(f)(1)’’ and in- NESS.—The term ‘qualified active low-income ‘‘(4) SPECIAL RULES.— serting ‘‘section 45G(f)(1)’’. reservation business’ includes any trades or ‘‘(A) TAX BENEFIT RULE.—The tax for the (e) CLERICAL AMENDMENT.—The table of businesses which would qualify as a qualified taxable year shall be increased under para- sections for subpart D of part IV of sub- active low-income reservation business if graph (1) only with respect to credits allowed chapter A of chapter 1 is amended by strik- such trades or businesses were separately in- by reason of this section which were used to ing the items relating to sections 45E and corporated. reduce tax liability. In the case of credits 45F and inserting the following: not so used to reduce tax liability, the ‘‘(3) QUALIFIED BUSINESS.—For purposes of ‘‘Sec. 45E. Native American new markets carryforwards and carrybacks under section this subsection, the term ‘qualified business’ tax credit. 39 shall be appropriately adjusted. has the meaning given to such term by sec- ‘‘Sec. 45F. Small employer pension plan tion 45D(d)(3). ‘‘(B) NO CREDITS AGAINST TAX.—Any in- crease in tax under this subsection shall not startup costs. ‘‘(e) LOW-INCOME RESERVATION.—For pur- be treated as a tax imposed by this chapter ‘‘Sec. 45G. Employer-provided child care poses of this section, the term ‘low-income for purposes of determining the amount of credit.’’. reservation’ means any Indian reservation any credit under this chapter or for purposes (e) EFFECTIVE DATE.—The amendments (as defined in section 168(j)(6)) which has a of section 55. made by this section shall apply to invest- poverty rate of at least 40 percent. ‘‘(h) BASIS REDUCTION.—The basis of any ments made after December 31, 2003. ‘‘(f ) NATIONAL LIMITATION ON AMOUNT OF qualified equity investment shall be reduced (f ) GUIDANCE ON ALLOCATION OF NATIONAL INVESTMENTS DESIGNATED.— by the amount of any credit determined LIMITATION.—Not later than 120 days after ‘‘(1) IN GENERAL.—There is a Native Amer- under this section with respect to such in- the date of the enactment of this Act, the ican new markets tax credit limitation of vestment. This subsection shall not apply for Secretary of the Treasury or the Secretary’s $50,000,000 for each of calendar years 2004 purposes of sections 1202, 1400B, and 1400F. delegate shall issue guidance which speci- through 2007. ‘‘(i) REGULATIONS.—The Secretary shall fies— ‘‘(2) ALLOCATION OF LIMITATION.—The limi- prescribe such regulations as may be appro- (1) how entities shall apply for an alloca- tation under paragraph (1) shall be allocated priate to carry out this section, including tion under section 45E(f )(2) of the Internal by the Secretary among reservation develop- regulations— Revenue Code of 1986, as added by this sec- ment entities selected by the Secretary. In ‘‘(1) which limit the credit for investments tion; making allocations under the preceding sen- which are directly or indirectly subsidized by (2) the competitive procedure through tence, the Secretary shall give priority to other Federal tax benefits (including the which such allocations are made; and any entity— credit under section 42 and the exclusion (3) the actions that such Secretary or dele- ‘‘(A) with a record of having successfully from gross income under section 103), gate shall take to ensure that such alloca- provided capital or technical assistance to ‘‘(2) which prevent the abuse of the pur- tions are properly made to appropriate enti- disadvantaged businesses or communities, or poses of this section, ties.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00083 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3030 CONGRESSIONAL RECORD — SENATE March 23, 2004 (g) AUDIT AND REPORT.—Not later than (C) social security number; posed by Mr. GRASSLEY to the amend- January 31 of 2007 and 2010, the Comptroller (D) address; ment SA 2886 submitted by Mr. MCCON- General of the United States shall, pursuant (E) telephone number; NELL (for Mr. FRIST) to the bill S. 1637, to an audit of the Native American new mar- (F) passwords; to amend the Internal Revenue Code of kets tax credit program established under (G) mother’s maiden name; and 1986 to comply with the World Trade section 45E of the Internal Revenue Code of (H) age. 1986 (as added by subsection (a)), report to (b) TRANSMISSION OF INFORMATION.— Organization rulings on the FSC/ETI Congress on such program, including all res- (1) IN GENERAL.—A business enterprise may benefit in a manner that preserves jobs ervation development entities that receive transmit personally identifiable information and production activities in the United an allocation under the Native American regarding a citizen of the United States to States, to reform and simplify the new markets credit under such section. any foreign affiliate or subcontractor lo- international taxation rules of the (f) GRANTS IN COORDINATION WITH CREDIT.— cated in a country that is a country with United States, and for other purposes; (1) IN GENERAL.—The Secretary of the adequate privacy protection. as follows: Treasury is authorized to award a grant of (2) CONSENT REQUIRED.—A business enter- in the pending amendment strike ‘‘one’’ not more than $1,000,000 to the First Nations prise may not transmit personally identifi- and insert ‘‘two’’. Oweesta Corporation. able information regarding a citizen of the (2) USE OF FUNDS.—The grant awarded United States to any foreign affiliate or sub- SA 2900. Mr. THOMAS (for himself under paragraph (1) may be used— contractor located in a country that is not a and Mr. DASCHLE) submitted an amend- (A) to enhance the capacity of people liv- country with adequate privacy protection, ing on low-income reservations (within the unless— ment intended to be proposed by him meaning of section 45E(e) of the Internal (A) the business enterprise obtains consent to the bill S. 1637, to amend the Inter- Revenue Code of 1986, as added by this sec- from the citizen, before a consumer relation- nal Revenue Code of 1986 to comply tion) to access, apply, control, create, lever- ship is established or before the effective with the World Trade Organization rul- age, utilize, and retain the financial benefits date of this section, to transmit such infor- ings on the FSC/ETI benefit in a man- to such low-income reservations which are mation to such foreign affiliate or subcon- ner that preserves jobs and production attributable to qualified low-income reserva- tractor; and activities in the United States, to re- tion investments (within the meaning of sec- (B) the consent referred to in subparagraph form and simplify the international tion 45E(d) of such Code), and (A) is renewed by the citizen within 1 year taxation rules of the United States, (B) to provide access to appropriate finan- before such information is transmitted. and for other purposes; which was or- cial capital for the development of such low- (3) LIABILITY.—A business enterprise shall income reservations. be liable for any damages arising from the dered to lie on the table; as follows: (3) AUTHORIZATION OF APPROPRIATIONS.— improper storage, duplication, sharing, or On page 179, after line 25, add the fol- There are authorized to be appropriated other misuse of personally identifiable infor- lowing: $1,000,000 for fiscal years 2004 through 2014 to mation by the business enterprise or by any SEC. ll. SPECIAL RULES FOR LIVESTOCK SOLD carry out the provisions of this subsection. of its foreign affiliates or subcontractors ON ACCOUNT OF WEATHER-RE- that received such information from the LATED CONDITIONS. SA 2897. Mrs. CLINTON submitted an business enterprise. (a) REPLACEMENT OF LIVESTOCK WITH OTHER FARM PROPERTY.—Subsection (f) of amendment intended to be proposed by (4) RULEMAKING.—The Chairman of the section 1033 (relating to involuntary conver- her to the bill S. 1637, to amend the In- Federal Trade Commission shall promulgate regulations through which the Chairman sions) is amended— ternal Revenue Code of 1986 to comply (1) by inserting ‘‘drought, flood, or other with the World Trade Organization rul- may enforce the provisions of this subsection and impose a fine for a violation of this sub- weather-related conditions, or’’ after ‘‘be- ings on the FSC/ETI benefit in a man- section. cause of’’, ner that preserves jobs and production (c) HEALTH CARE INFORMATION.— (2) by inserting ‘‘in the case of soil con- activities in the United States, to re- (1) IN GENERAL.—A health care business tamination or other environmental contami- form and simplify the international shall be liable for any damages arising from nation’’ after ‘‘including real property’’, and taxation rules of the United States, the improper storage, duplication, sharing, (3) by striking ‘‘WHERE THERE HAS BEEN ENVIRONMENTAL CONTAMINATION’’ in the and for other purposes; which was or- or other misuse of personally identifiable in- heading and inserting ‘‘IN CERTAIN CASES’’. dered to lie on the table; as follows: formation by the business enterprise or by any of its foreign affiliates or subcontractors (b) EXTENSION OF REPLACEMENT PERIOD OF At the appropriate place, insert the fol- that received such information from the INVOLUNTARILY CONVERTED LIVESTOCK.—Sub- lowing: business enterprise. section (e) of section 1033 (relating to invol- untary conversions) is amended— SEC. ll. TRANSMISSION OF PERSONALLY IDEN- (2) NO OPT OUT PROVISION.—A health care ONDITIONS.—For pur- TIFIABLE INFORMATION TO FOR- business may not terminate an existing rela- (1) by striking ‘‘C EIGN AFFILIATES OR SUBCONTRAC- poses’’ and inserting ‘‘CONDITIONS.— tionship with a consumer of health care serv- TORS. ‘‘(1) IN GENERAL.—For purposes’’, and ices to avoid the consent requirement under (a) DEFINITIONS.—As used in this section, (2) by adding at the end the following new subsection (b)(2). the following definitions shall apply: paragraph: (3) RULEMAKING.—The Secretary of Health (1) BUSINESS ENTERPRISE.—The term ‘‘busi- XTENSION OF REPLACEMENT PERIOD.— and Human Services shall promulgate regu- ‘‘(2) E ness enterprise’’ means any organization, as- ‘‘(A) IN GENERAL.—In the case of drought, lations through which the Secretary may en- sociation, or venture established to make a flood, or other weather-related conditions force the provisions of this subsection and profit. described in paragraph (1) which result in the impose a fine for the violation of this sub- (2) COUNTRY WITH ADEQUATE PRIVACY PRO- area being designated as eligible for assist- section. TECTION.—The term ‘‘country with adequate (d) EFFECTIVE DATE.—This section shall ance by the Federal Government, subsection privacy protection’’ means a country that take effect on the date which is 90 days after (a)(2)(B) shall be applied with respect to any has been certified by the Federal Trade Com- the date of enactment of this Act. converted property by substituting ‘4 years’ mission as having a legal system that pro- for ‘2 years’. vides adequate privacy protection for such SA 2898. Mr. GRASSLEY proposed an ‘‘(B) FURTHER EXTENSION BY SECRETARY.— information. amendment to amendment SA 2886 sub- The Secretary may extend on a regional (3) HEALTH CARE BUSINESS.—The term basis the period for replacement under this mitted by Mr. MCCONNELL (for Mr. ‘‘health care business’’ means any business section (after the application of subpara- enterprise that collects or retains personally FRIST) to the bill S. 1637, to amend the graph (A)) for such additional time as the identifiable information about consumers in Internal Revenue Code of 1986 to com- Secretary determines appropriate if the relation to medical care, including— ply with the World Trade Organization weather-related conditions which resulted in (A) hospitals; rulings on the FSC/ETI benefit in a such application continue for more than 3 (B) health maintenance organizations; manner that preserves jobs and produc- years.’’. (C) medical partnerships; tion activities in the United States, to (c) INCOME INCLUSION RULES.—Section (D) emergency medical transportation reform and simplify the international 451(e) (relating to special rule for proceeds companies; from livestock sold on account of drought, (E) medical transcription companies; and taxation rules of the United States, flood, or other weather-related conditions) is (F) subcontractors, or potential sub- and for other purposes; as follows: amended by adding at the end the following contractors, of the entities described in sub- At the end of the instructions (Amdt. No. new paragraph: paragraphs (A) through (E). 2886) insert the following: ‘‘(3) SPECIAL ELECTION RULES.—If section (4) PERSONALLY IDENTIFIABLE INFORMA- Sec. . This act shall become effective one 1033(e)(2) applies to a sale or exchange of TION.—The term ‘‘personally identifiable in- day following enactment of the legislation. livestock described in paragraph (1), the formation’’ includes— election under paragraph (1) shall be deemed (A) name; SA 2899. Mr. GRASSLEY proposed an valid if made during the replacement period (B) bank account information; amendment to amendment SA 2898 pro- described in such section.’’.

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(d) EFFECTIVE DATE.—The amendments ‘‘(3) LIMITED DESIGNATIONS.—A project may ‘‘(iii) the amount of the gross installed ca- made by this section shall apply to taxable not be designated under this subsection un- pacity of the project’s solar photovoltaic ca- years beginning after December 31, 2003. less— pacity measured in megawatts, and ‘‘(A) the project is nominated by a State or ‘‘(iv) the amount, in megawatts, of the SA 2901. Mr. MILLER (for himself, local government within 180 days of the en- project’s fuel cell energy generation. Mr. ALLARD, Mrs. CLINTON, Mr. SCHU- actment of this subsection, and ‘‘(5) CERTIFICATION OF USE OF TAX BEN- MER, and Mr. CHAMBLISS) submitted an ‘‘(B) such State or local government pro- EFIT.—No later than 30 days after the com- amendment intended to be proposed by vides written assurances that the project pletion of the project, each project must cer- him to the bill S. 1637, to amend the In- will satisfy the eligibility criteria described tify to the Secretary that the net benefit of ternal Revenue Code of 1986 to comply in paragraph (4). the tax-exempt financing was used for the with the World Trade Organization rul- ‘‘(4) APPLICATION.— purposes described in paragraph (4). ‘‘(A) IN GENERAL.—A project may not be ings on the FSC/ETI benefit in a man- ‘‘(6) DEFINITIONS.—For purposes of this sub- designated under this subsection unless the section— ner that preserves jobs and production application for such designation includes a ‘‘(A) RURAL STATE.—The term ‘rural State’ activities in the United States, to re- project proposal which describes the energy means any State which has— form and simplify the international efficiency, renewable energy, and sustainable ‘‘(i) a population of less than 4,500,000 ac- taxation rules of the United States, design features of the project and dem- cording to the 2000 census, and for other purposes; which was or- onstrates that the project satisfies the fol- ‘‘(ii) a population density of less than 150 dered to lie on the table; as follows: lowing eligibility criteria: people per square mile according to the 2000 ‘‘(i) GREEN BUILDING AND SUSTAINABLE DE- Beginning on page 179, after line 25, add census, and SIGN.—At least 75 percent of the square foot- the following: ‘‘(iii) increased in population by less than age of commercial buildings which are part half the rate of the national increase be- SEC. ll. BROWNFIELDS DEMONSTRATION PRO- of the project is registered for United States GRAM FOR QUALIFIED GREEN tween the 1990 and 2000 censuses. BUILDING AND SUSTAINABLE DE- Green Building Council’s LEED certification ‘‘(B) LOCAL GOVERNMENT.—The term ‘local SIGN PROJECTS. and is reasonably expected (at the time of government’ has the meaning given such (a) TREATMENT AS EXEMPT FACILITY the designation) to receive such certifi- term by section 1393(a)(5). BOND.—Subsection (a) of section 142 (relating cation. ‘‘(C) NET BENEFIT OF TAX-EXEMPT FINANC- to the definition of exempt facility bond) is ‘‘(ii) BROWNFIELD REDEVELOPMENT.—The ING.—The term ‘net benefit of tax-exempt fi- amended by striking ‘‘or’’ at the end of para- project includes a brownfield site as defined nancing’ means the present value of the in- graph (12), by striking the period at the end by section 101(39) of the Comprehensive Envi- terest savings (determined by a calculation of paragraph (13) and inserting ‘‘, or’’, and by ronmental Response, Compensation, and Li- established by the Secretary) which result inserting at the end the following new para- ability Act of 1980 (42 U.S.C. 9601), including from the tax-exempt status of the bonds. a site described in subparagraph graph: ‘‘(7) AGGREGATE FACE AMOUNT OF TAX-EX- (D)(ii)(II)(aa) thereof. ‘‘(14) qualified green building and sustain- EMPT FINANCING.— ‘‘(iii) STATE AND LOCAL SUPPORT.—The able design projects.’’. ‘‘(A) IN GENERAL.—An issue shall not be UALIFIED GREEN BUILDING AND SUS- project receives specific State or local gov- (b) Q treated as an issue described in subsection TAINABLE DESIGN PROJECTS.—Section 142 (re- ernment resources which will support the (a)(14) if the aggregate face amount of bonds lating to exempt facility bonds) is amended project in an amount equal to at least issued by the State or local government pur- by adding at the end thereof the following $5,000,000. For purposes of the preceding sen- suant thereto for a project (when added to new subsection: tence, the term ‘resources’ includes tax the aggregate face amount of bonds pre- ‘‘(l) QUALIFIED GREEN BUILDING AND SUS- abatement benefits and contributions in viously so issued for such project) exceeds an TAINABLE DESIGN PROJECTS.— kind. amount designated by the Secretary as part ‘‘(1) IN GENERAL.—For purposes of sub- ‘‘(iv) SIZE.—The project includes at least of the designation. section (a)(14), the term ‘qualified green one of the following: ‘‘(B) LIMITATION ON AMOUNT OF BONDS.—The building and sustainable design project’ ‘‘(I) At least 1,000,000 square feet of build- Secretary may not allocate authority to means any project which is designated by ing. the Secretary, after consultation with the ‘‘(II) At least 20 acres. issue qualified green building and sustain- able design project bonds in an aggregate Administrator of the Environmental Protec- ‘‘(v) USE OF TAX BENEFIT.—The project pro- tion Agency, as a qualified green building posal includes a description of the net ben- face amount exceeding $2,000,000,000. and sustainable design project and which efit of the tax-exempt financing provided ‘‘(8) TERMINATION.—Subsection (a)(14) shall meets the requirements of clauses (i), (ii), under this subsection which will be allocated not apply with respect to any bond issued (iii), and (iv) of paragraph (4)(A). for financing of one or more of the following: after September 30, 2009. ‘‘(2) DESIGNATIONS.— ‘‘(I) The purchase, construction, integra- ‘‘(9) TREATMENT OF CURRENT REFUNDING ‘‘(A) IN GENERAL.—Within 60 days after the tion, or other use of energy efficiency, re- BONDS.—Paragraphs (7)(B) and (8) shall not end of the application period described in newable energy, and sustainable design fea- apply to any bond (or series of bonds) issued paragraph (3)(A), the Secretary, after con- tures of the project. to refund a bond issued under subsection sultation with the Administrator of the En- ‘‘(II) Compliance with LEED certification (a)(14) before October 1, 2009, if— vironmental Protection Agency, shall des- standards. ‘‘(A) the average maturity date of the issue ignate qualified green building and sustain- ‘‘(III) The purchase, remediation, and foun- of which the refunding bond is a part is not able design projects. At least one of the dation construction and preparation of the later than the average maturity date of the projects designated shall be located in, or brownfields site. bonds to be refunded by such issue, within a 10-mile radius of, an empowerment ‘‘(vi) PROHIBITED FACILITIES.—An issue ‘‘(B) the amount of the refunding bond does zone as designated pursuant to section 1391, shall not be treated as an issue described in not exceed the outstanding amount of the re- and at least one of the projects designated subsection (a)(14) if any proceeds of such funded bond, and shall be located in a rural State. No more issue are used to provide any facility the ‘‘(C) the net proceeds of the refunding bond than one project shall be designated in a principal business of which is the sale of food are used to redeem the refunded bond not State. A project shall not be designated if or alcoholic beverages for consumption on later than 90 days after the date of the such project includes a stadium or arena for the premises. issuance of the refunding bond. ‘‘(vii) EMPLOYMENT.—The project is pro- professional sports exhibitions or games. For purposes of subparagraph (A), average ‘‘(B) MINIMUM CONSERVATION AND TECH- jected to provide permanent employment of maturity shall be determined in accordance NOLOGY INNOVATION OBJECTIVES.—The Sec- at least 1,500 full time equivalents (150 full retary, after consultation with the Adminis- time equivalents in rural States) when com- with section 147(b)(2)(A).’’. trator of the Environmental Protection pleted and construction employment of at (c) EXEMPTION FROM GENERAL STATE VOL- Agency, shall ensure that, in the aggregate, least 1,000 full time equivalents (100 full time UME CAPS.—Paragraph (3) of section 146(g) the projects designated shall— equivalents in rural States). (relating to exception for certain bonds) is ‘‘(i) reduce electric consumption by more The application shall include an independent amended— than 150 megawatts annually as compared to analysis which describes the project’s eco- (1) by striking ‘‘or (13)’’ and inserting ‘‘(13), conventional generation, nomic impact, including the amount of pro- or (14)’’, and ‘‘(ii) reduce daily sulfur dioxide emissions jected employment. (2) by striking ‘‘and qualified public edu- by at least 10 tons compared to coal genera- ‘‘(B) PROJECT DESCRIPTION.—Each applica- cational facilities’’ and inserting ‘‘qualified tion power, tion described in subparagraph (A) shall con- public educational facilities, and qualified ‘‘(iii) expand by 75 percent the domestic tain for each project a description of— green building and sustainable design solar photovoltaic market in the United ‘‘(i) the amount of electric consumption re- projects’’. States (measured in megawatts) as compared duced as compared to conventional construc- to the expansion of that market from 2001 to tion, (d) ACCOUNTABILITY.—Each issuer shall 2002, and ‘‘(ii) the amount of sulfur dioxide daily maintain, on behalf of each project, an inter- ‘‘(iv) use at least 25 megawatts of fuel cell emissions reduced compared to coal genera- est bearing reserve account equal to 1 per- energy generation. tion, cent of the net proceeds of any bond issued

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00085 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3032 CONGRESSIONAL RECORD — SENATE March 23, 2004 under this section for such project. Not later cluded in the enactment of the Emergency with the World Trade Organization rul- than 5 years after the date of issuance, the Wartime Supplemental Appropriations Act, ings on the FSC/ETI benefit in a man- Secretary of the Treasury, after consultation 2003 (Public Law 108–11; 26 U.S.C. 3304 note). ner that preserves jobs and production with the Administrator of the Environ- activities in the United States, to re- mental Protection Agency, shall determine SA 2904. Mr. BOND submitted an whether the project financed with such amendment intended to be proposed by form and simplify the international bonds has substantially complied with the him to the bill S. 1637, to amend the In- taxation rules of the United States, terms and conditions described in section ternal Revenue Code of 1986 to comply and for other purposes; which was or- 142(l)(4) of the Internal Revenue Code of 1986 dered to lie on the table; as follows: (as added by this section). If the Secretary, with the World Trade Organization rul- ings on the FSC/ETI benefit in a man- At the appropriate place, insert the fol- after such consultation, certifies that the lowing: ner that preserves jobs and production project has substantially complied with such SEC. terms and conditions and meets the commit- activities in the United States, to re- (a) IN GENERAL.—Paragraph (1) of section ments set forth in the application for such form and simplify the international 648 Public Law 98–369 (the Deficit Reduction project described in section 142(l)(4) of such taxation rules of the United States, Act of 1984) is amended to read as follows: Code, amounts in the reserve account, in- and for other purposes; which was or- ‘‘(1) such securities obligations are held in cluding all interest, shall be released to the dered to lie on the table; as follows: a fund— project. If the Secretary determines that the ‘‘(A) which, except to the extent of the in- On page 64, of Senate amendment no. 2645, project has not substantially complied with vestment earnings on such securities or obli- as agreed to, strike lines 23 through 25, and such terms and conditions, amounts in the gations, cannot be used, under State con- insert the following: reserve account, including all interest, shall stitutional or statutory restrictions continu- (c) EFFECTIVE DATES.— be paid to the United States Treasury. ously in effect since October 9, 1969, through (1) IN GENERAL.—The amendment made by (e) EFFECTIVE DATE.—The amendments the date of issue of the bond issue, to pay made by this section shall apply to bonds subsection (a) shall apply to transactions after December 31, 2003. debt service on the bond issue or to finance issued after the date of the enactment of this the facilities that are to be financed with the Act. (2) LIQUIDATIONS.—The amendment made by subsection (b)(1)(B) shall apply to liquida- proceeds of the bonds, or ‘‘(B) the annual distributions from which tions after December 31, 2003. SA 2902. Mr. BOND submitted an cannot exceed 7 percent of the average fair amendment intended to be proposed to SA 2905. Mr. NICKLES (for himself market value of the assets held in such fund amendment SA 2886 submitted by Mr. except to the extent distributions are nec- and Mrs. LINCOLN) submitted an MCCONNELL (for Mr. FRIST) to the bill essary to pay debt service on the bond S. 1637, to amend the Internal Revenue amendment intended to be proposed by issue,’’. Code 1986 to comply with the World him to the bill S. 1637, to amend the In- (b) CONFORMING AMENDMENT.—Paragraph Trade Organization rulings on the FSC/ ternal Revenue Code of 1986 to comply (3) of such section is amended by striking with the World Trade Organization rul- ‘‘the investment earnings of’’ and inserting ETI benefit in a manner that preserves ‘‘distributions from.’’ jobs and production activities in the ings on the FSC/ETI benefit in a man- ner that preserves jobs and production (c) EFFECTIVE DATE.—The amendments United States, to reform and simplify made by this section shall take effect on the international taxation rules of the activities in the United States, to re- January 1, 2000. United States, and for other purposes; form and simplify the international Mr. MCCONNELL submitted which was ordered to lie on the table; taxation rules of the United States, SA 2907. an amendment intended to be proposed as follows: and for other purposes; which was or- dered to lie on the table; as follows: by him to the bill S. 1637, to amend the On page 218, of Senate amendment no. 2886, strike lines 13 through 19, and insert the fol- On page 179, after line 25, add the fol- Internal Revenue Code of 1986 to com- lowing: lowing: ply with the World Trade Organization (c) EFFECTIVE DATES.— SEC. ll. RECOVERY PERIOD FOR CERTAIN rulings on the FSC/ETI benefit in a (1) IN GENERAL.—The amendment made by WIRELESS TELECOMMUNICATIONS manner that preserves jobs and produc- subsection (a) shall apply to transactions EQUIPMENT. tion activities in the United States, to (a) IN GENERAL.—Subparagraph (A) of sec- after December 31, 2003. reform and simplify the international (2) LIQUIDATIONS.—The amendment made tion 168(i)(2) (defining qualified techno- by subsection (b)(1)(B) shall apply to liquida- logical equipment) is amended by striking taxation rules of the United States, tions after December 31, 2003. ‘‘and’’ at the end of clause (ii), by striking and for other purposes; which was or- the period at the end of clause (iii) and in- dered to lie on the table; as follows: SA 2903. Mr. BOND (for himself and serting ‘‘, and’’, and by inserting after clause At the end of the amendment, add the fol- Mr. TALENT) submitted an amendment (iii) the following new clause: lowing: intended to be proposed to amendment ‘‘(iv) any wireless telecommunications TITLE V—EXTENSION OF NORMAL TRADE SA 2886 submitted by Mr. MCCONNELL equipment.’’. RELATIONS TO ARMENIA (b) WIRELESS TELECOMMUNICATIONS EQUIP- (for Mr. FRIST) to the bill S. 1637, to SEC. 501. FINDINGS. MENT.—Section 168(i)(2) is amended by in- Congress makes the following findings: amend the Internal Revenue Code of serting after subparagraph (C) the following (1) Armenia has been found to be in full 1986 to comply with the World Trade new subparagraph: compliance with the freedom of emigration Organization rulings on the FSC/ETI ‘‘(D) WIRELESS TELECOMMUNICATIONS EQUIP- requirements under title IV of the Trade Act benefit in a manner that preserves jobs MENT.—For purposes of this paragraph— of 1974. ‘‘(i) IN GENERAL.—The term ‘wireless tele- and production activities in the United (2) Armenia acceded to the World Trade Or- communications equipment’ means equip- States, to reform and simplify the ganization on February 5, 2003. ment which is used in the transmission, re- international taxation rules of the (3) Since declaring its independence from ception, coordination, or switching of wire- United States, and for other purposes; the Soviet Union in 1991, Armenia has made less telecommunications service. which was ordered to lie on the table; considerable progress in enacting free-mar- ‘‘(ii) EXCEPTION.—Such term does not in- ket reforms within a stable democratic as follows: clude towers, buildings, T–1 lines, or other framework. At the end of the instructions, add the fol- cabling which connects cell sites to mobile (4) Armenia has demonstrated a strong de- lowing: switching centers. sire to build a friendly and cooperative rela- SEC. ll. EXTENSION OF THE ADDITIONAL TEM- ‘‘(iii) WIRELESS TELECOMMUNICATIONS SERV- tionship with the United States and has con- PORARY EXTENDED UNEMPLOY- ICE.—For purposes of clause (i), the term cluded many bilateral treaties and agree- MENT COMPENSATION FOR DIS- ‘wireless telecommunications service’ in- ments with the United States. PLACED AIRLINE RELATED WORK- cludes any commercial mobile radio service ERS. (5) United States-Armenia bilateral trade as defined in title 47 of the Code of Federal (a) IN GENERAL.—Section 4002(c)(2) of the for 2002 totaled more than $134,200,000. Regulations.’’. Emergency Wartime Supplemental Appro- SEC. 502. TERMINATION OF APPLICATION OF (c) EFFECTIVE DATE.—The amendments priations Act, 2003 (Public Law 108–11; 26 TITLE IV OF THE TRADE ACT OF 1974 made by this section shall apply to property U.S.C. 3304 note), in the deemed matter, is TO ARMENIA. placed in service after December 31, 2004, and amended— (a) PRESIDENTIAL DETERMINATIONS AND EX- before January 1, 2008. (1) by striking ‘‘December 29, 2003’’ and in- TENSIONS OF NONDISCRIMINATORY TREAT- MENT.—Notwithstanding any provision of serting ‘‘May 17, 2004’’; and Mr. CORNYN submitted an (2) by striking ‘‘December 28, 2003’’ and in- SA 2906. title IV of the Trade Act of 1974 (19 U.S.C. serting ‘‘May 16, 2004’’. amendment intended to be proposed by 2431 et seq.), the President may— EFFECTIVE DATE.—The amendments made him to the bill S. 1637, to amend the In- (1) determine that such title should no by this section shall take effect as if in- ternal Revenue Code of 1986 to comply longer apply to Armenia; and

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00086 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3033 (2) after making a determination under At the end of the bill, add the following: ‘‘(F) The Secretary of Homeland Security paragraph (1) with respect to Armenia, pro- TITLE V—MISCELLANEOUS PROVISIONS. shall impose a fee on any employer that files claim the extension of nondiscriminatory SEC. 501. TEMPORARY WORKER PROVISIONS. a blanket petition to import aliens as non- treatment (normal trade relations treat- (a) ATTESTATION REQUIREMENTS FOR H–1B immigrants described in section 101(a)(15)(L) ment) to the products of that country. WORKERS.—Section 212(n)(1)(E)(ii) of the Im- in an amount equal to $1,500 for each blanket (b) TERMINATION OF APPLICATION OF TITLE migration and Nationality Act (8 U.S.C. petition filed by such employer. The fee shall IV.—On and after the effective date of the 1182(n)(1)(E)(ii)) is amended by striking ‘‘Oc- be deposited in the H–1B Nonimmigrant Peti- extension under subsection (a)(2) of non- tober 1, 2003,’’ and inserting ‘‘October 1, tioner Account in accordance with paragraph discriminatory treatment to the products of 2005,’’. (6) of section 286(s).’’. Armenia, title IV of the Trade Act of 1974 (b) H–1B EMPLOYER PETITIONS.—Section (e) TECHNICAL AND CONFORMING AMEND- shall cease to apply to that country. 214(c)(9) of the Immigration and Nationality MENTS.—Section 286(s) of the Immigration Act (8 U.S.C. 1184(c)(9)) is amended— and Nationality Act (8 U.S.C. 1356(s)) is SA 2908. Mr. SMITH submitted an (1) in subparagraph (A), by striking ‘‘Octo- amendment intended to be proposed by amended in paragraphs (2) through (5) by in- ber 1, 2003’’ and inserting ‘‘October 1, 2005,’’; serting ‘‘in accordance with section him to the bill S. 1637, to amend the In- and 214(c)(9)(B)(i)’’ after ‘‘H–1B Nonimmigrant ternal Revenue Code of 1986 to comply (2) by striking subparagraphs (B) and (C) Petitioner Account’’ each place that term with the World Trade Organization rul- and inserting the following: appears. ings on the FSC/ETI benefit in a man- ‘‘(B) The amount of the fee shall be $2,000 for each such petition, of which— ner that preserves jobs and production ‘‘(i) $1,000 shall be deposited in the H–1B SA 2910. Mr. SPECTER submitted an activities in the United States, to re- Nonimmigrant Petitioner Account in accord- amendment intended to be proposed to form and simplify the international ance with paragraphs (1) through (5) of sec- amendment SA 2886 submitted by Mr. taxation rules of the United States, tion 286(s); and MCCONNELL (for Mr. FRIST) to the bill and for other purposes; which was or- ‘‘(ii) $1,000 shall be deposited in the H–1B S. 1637, to amend the Internal Revenue dered to lie on the table; as follows: Nonimmigrant Petitioner Account in accord- Code of 1986 to comply with the World On page 68, strike lines 17 through 20, and ance with paragraph (6) of section 286(s).’’. (c) H–1B NONIMMIGRANT PETITIONER AC- Trade Organization rulings on the FSC/ insert: COUNT.—Section 286(s) of the Immigration (4) BASE PERIOD AMOUNT.—For purposes of ETI benefit in a manner that preserves and Nationality Act (8 U.S.C. 1356(s)) is jobs and production activities in the this subsection, the base period amount is amended by adding at the end the following: the average FSC/ETI benefit for the tax- United States, to reform and simplify ‘‘(6) TRADE ADJUSTMENT ASSISTANCE.—One payer’s taxable years beginning in calendar hundred percent of amounts deposited into the international taxation rules of the years 2000, 2001, and 2002. the H–1B Nonimmigrant Petitioner Account United States, and for other purposes; which was ordered to lie on the table; SA 2909. Mr. GRASSLEY submitted in accordance with sections 214(c)(9)(B)(ii) and 214(c)(2)(F) shall remain available to the as follows: an amendment intended to be proposed Secretary of Labor until expended for trade At the end of the instructions, add the fol- by him to the bill S. 1637, to amend the adjustment assistance programs under chap- lowing: Internal Revenue Code of 1986 to com- ter 2 of title II of the Trade Act of 1974 (19 ply with the World Trade Organization U.S.C. 2271 et seq.). Such amounts shall be TITLE V—MISCELLANEOUS PROVISIONS rulings on the FSC/ETI benefit in a used to supplement and not supplant other manner that preserves jobs and produc- Federal, State, and local public funds ex- SEC. 501. TEMPORARY DUTY REDUCTIONS FOR pended to provide trade adjustment assist- CERTAIN COTTON SHIRTING FAB- tion activities in the United States, to RIC. reform and simplify the international ance for workers.’’. (d) L VISA BLANKET PETITIONS.—Section (a) CERTAIN COTTON SHIRTING FABRICS.— taxation rules of the United States, 214(c)(2) of the Immigration and Nationality (1) IN GENERAL.—Subchapter II of chapter and for other purposes; which was or- Act (8 U.S.C. 1184(c)(2)) is amended by adding 99 is amended by inserting in numerical se- dered to lie on the table; as follows: at the end the following: quence the following new headings:

‘‘ 9902.52.08 Woven fabrics of cotton, all the foregoing cer- tified by the importer as suitable for use in making men’s and boys’ shirts and as im- ported by or for the benefit of a manufacturer of men’s and boys’ shirts, subject to the quan- tity limitations contained in general note 18 of this subchapter (provided for in section 204(b)(3)(B)(i)(III) of the Andean Trade Pref- erence Act (19 U.S.C. 3203)) ...... Free No change No change On or before 12/31/2005 9902.52.09 Woven fabrics of cotton, all the foregoing cer- tified by the importer as containing 100 per- cent pima cotton grown in the United States, as suitable for use in making men’s and boys’ shirts, and as imported by or for the benefit of a manufacturer of men’s and boys’ shirts (pro- vided for in section 204(b)(3)(B)(i)(III) of the Andean Trade Preference Act (19 U.S.C. 3203)) Free No change No change On or before 12/31/2005 ’’.

(2) DEFINITIONS AND LIMITATION ON QUAN- (b) DETERMINATION OF TARIFF-RATE (a)(2), a license shall be issued within 60 days TITY OF IMPORTS.—The U.S. Notes to chapter QUOTAS.— of an application containing a notarized affi- 99 are amended by adding at the end the fol- (1) AUTHORITY TO ISSUE LICENSES AND LI- davit from an officer of the manufacturer lowing: CENSE USE.—To implement the limitation on that the manufacturer is eligible to receive a ‘‘17. For purposes of subheadings 9902.52.08 the quantity of imports of cotton woven fab- license and stating the quantity of imported and 9902.52.09, the term ‘making’ means cut- rics under subheading 9902.52.08 of the Har- cotton woven fabric purchased during cal- ting and sewing in the United States, and the monized Tariff Schedule of the United endar year 2000 for use in the cutting and term ‘manufacturer’ means a person or enti- States, as required by U.S. Note 18 to sub- sewing men’s and boys’ shirts in the United ty that cuts and sews in the United States. chapter II of chapter 99 of such Schedule, for States. (3) AFFIDAVITS.—For purposes of an affi- ‘‘18. The aggregate quantity of cotton fab- the entry, or withdrawal from warehouse for davit described in this subsection, the date rics entered under subheading 9902.52.08 from consumption, the Secretary of Commerce of purchase shall be— January 1 to December 31 of each year, in- shall issue licenses designating eligible man- (A) the invoice date if the manufacturer is clusive, by or on behalf of each manufacturer ufacturers and the annual quantity restric- tions under each such license. A licensee not the importer of record; and of men’s and boys’ shirts shall be limited to (B) the date of entry if the manufacturer is may assign the authority (in whole or in 85 percent of the total square meter equiva- the importer of record. lents of all imported cotton woven fabric part) to import fabric under subheading used by such manufacturer in cutting and 9902.52.08 of such Schedule. SEC. 502. COTTON TRUST FUND. sewing men’s and boys’ cotton shirts in the (2) LICENSES UNDER U.S. NOTE 18.—For pur- (a) IN GENERAL.—There is established in United States and purchased by such manu- poses of U.S. Note 18 to subchapter II of the Treasury of the United States a trust facturer during calendar year 2000.’’. chapter 99 of the Harmonized Tariff Schedule fund to be known as the ‘‘Pima Cotton Trust of the United States, as added by subsection Fund’’, consisting of $32,000,000 transferred to

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00087 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3034 CONGRESSIONAL RECORD — SENATE March 23, 2004 the Pima Cotton Trust Fund from funds in and shall be allocated to each manufacturer (B) the quantity, measured in pounds, of the general fund of the Treasury. on the bases of the dollar value (excluding ring spun cotton yarns, measuring less than (b) GRANTS.— duty, shipping, and related costs) of im- 83.33 decitex (exceeding 120 metric number), (1) GENERAL PURPOSE.—From amounts in ported woven cotton shirting fabric of 80s or in single and plied form during calendar year the Pima Cotton Trust Fund, the Secretary higher count and 2-ply in warp purchased by 2002; and of Commerce is authorized to provide grants the manufacturer during calendar year 2002 (C) that the manufacturer maintains sup- to spinners of United States grown pima cot- (as evidenced by an affidavit from the manu- porting documentation showing the quantity ton, manufacturers of men’s and boys’ cot- facturer) used in the manufacturing of men’s of such yarns produced, and evidencing the ton shirting, and a nationally recognized as- and boys’ cotton shirts, compared to the dol- yarns as ring spun cotton yarns, measuring sociation that promotes the use of pima cot- lar value (excluding duty, shipping, and re- less than 83.33 decitex (exceeding 120 metric ton grown in the United States, to assist lated costs) of such fabric for all manufac- number), in single and plied form during cal- such spinners and manufacturers in maxi- turers who qualify under this subparagraph. endar year 2002. mizing United States employment in the (4) AFFIDAVIT OF SHIRTING MANUFACTUR- (7) NO APPEAL.—Any grant awarded by the production of textile or apparel products and ERS.—For purposes of paragraph (3)(D), an of- Secretary under this section shall be final to increase the promotion of the use of ficer of the manufacturer of men’s and boys’ and not subject to appeal or protest. United States grown pima cotton respec- shirts shall provide a notarized affidavit af- (c) AUTHORIZATION.—There are authorized tively. firming— to be appropriated, and are appropriated out (2) TIMING FOR GRANT AWARDS.—The Sec- (A) that the manufacturer used imported of the amounts in the general fund of the retary of the Treasury shall, not later than cotton fabric during the period January 1, Treasury not otherwise appropriated, such 90 days after the date of enactment of this 1998, through July 1, 2003, to cut and sew sums as are necessary to carry out the provi- section, establish guidelines for the applica- men’s and boys’ woven cotton shirts in the sions of this section, including funds nec- tion and awarding of the grants described in United States; paragraph (1), and shall award such grants to (B) the dollar value of imported woven cot- essary for the administration and oversight qualified applicants not later than 180 days ton shirting fabric of 80s or higher count and of the grants provided for in this section. after the date of enactment of this section. 2-ply in warp purchased during calendar year Each grant awarded under this section shall 2002; SA 2911. Mr. SPECTER submitted an be distributed to the qualified applicant in 2 (C) that the manufacturer maintains in- amendment intended to be proposed to equal annual installments. voices along with other supporting docu- amendment SA 2886 submitted by Mr. (3) DISTRIBUTION OF FUNDS.—Of the mentation (such as price lists and other amounts in the Pima Cotton Trust Fund— technical descriptions of the fabric qualities) MCCONNELL (for Mr. FRIST) to the bill (A) $8,000,000 shall be made available to a showing the dollar value of such fabric pur- S. 1637, to amend the Internal Revenue nationally recognized association estab- chased, the date of purchase, and evidencing Code of 1986 to comply with the World lished for the promotion of pima cotton the fabric as woven cotton fabric of 80s or Trade Organization rulings on the FSC/ grown in the United States for the use in higher count and 2-ply in warp; and ETI benefit in a manner that preserves textile and apparel goods; (D) that the fabric was suitable for use in jobs and production activities in the (B) $8,000,000 shall be made available to the manufacturing of men’s and boys’ cotton United States, to reform and simplify yarn spinners of pima cotton grown in the shirts. United States, and shall be allocated to each (5) DATE OF PURCHASE.—For purposes of the the international taxation rules of the spinner based on the percentage of the spin- affidavit required by paragraph (4), the date United States, and for other purposes; ner’s production of ring spun cotton yarns, of purchase shall be the invoice date, and the which was ordered to lie on the table; measuring less than 83.33 decitex (exceeding dollar value shall be determined excluding as follows: 120 metric number), from pima cotton grown duty, shipping, and related costs. in the United States in single and plied form (6) AFFIDAVIT OF YARN SPINNERS.—For pur- At the end of the instructions, add the fol- during calendar year 2002 (as evidenced by an poses of paragraph (3)(B), an officer of a com- lowing: affidavit provided by the spinner), compared pany that produces ringspun yarns shall pro- TITLE V—MISCELLANEOUS PROVISIONS to the production of such yarns for all spin- vide a notarized affidavit affirming— ners who qualify under this subparagraph; (A) that the manufacturer used pima cot- SEC. 501. TEMPORARY DUTY REDUCTIONS FOR and ton grown in the United States during the CERTAIN COTTON SHIRTING FAB- (C) $16,000,000 shall be made available to period January 1, 2002, through December 31, RIC. manufacturers who cut and sew cotton shirts 2002, to produce ring spun cotton yarns, (a) CERTAIN COTTON SHIRTING FABRICS.— in the United States and that certify that measuring less than 83.33 decitex (exceeding (1) IN GENERAL.—Subchapter II of chapter they used imported cotton fabric during the 120 metric number), in single and plied form 99 is amended by inserting in numerical se- period January 1, 1998, through July 1, 2003, during 2002; quence the following new headings:

‘‘ 9902.52.08 Woven fabrics of cotton, all the foregoing certified by the importer as suit- able for use in making men’s and boys’ shirts and as imported by or for the benefit of a manufacturer of men’s and boys’ shirts, subject to the quantity limitations contained in general note 18 of this subchapter (pro- vided for in section 204(b)(3)(B)(i)(III) of the Andean Trade Preference Act (19 U.S.C. 3203)) ...... Free No change No change On or before 12/31/2005

9902.52.09 Woven fabrics of cotton, all the foregoing certified by the importer as con- taining 100 percent pima cotton grown in the United States, as suitable for use in making men’s and boys’ shirts, and as imported by or for the benefit of a manufacturer of men’s and boys’ shirts (provided for in sec- tion 204(b)(3)(B)(i)(III) of the Andean Trade Preference Act (19 U.S.C. 3203)) ...... Free No change No change On or before 12/31/2005 ’’.

(2) DEFINITIONS AND LIMITATION ON QUAN- (b) DETERMINATION OF TARIFF-RATE of the United States, as added by subsection TITY OF IMPORTS.—The U.S. Notes to chapter QUOTAS.— (a)(2), a license shall be issued within 60 days 99 are amended by adding at the end the fol- (1) AUTHORITY TO ISSUE LICENSES AND LI- of an application containing a notarized affi- lowing: CENSE USE.—To implement the limitation on davit from an officer of the manufacturer ‘‘17. For purposes of subheadings 9902.52.08 the quantity of imports of cotton woven fab- that the manufacturer is eligible to receive a and 9902.52.09, the term ‘making’ means cut- rics under subheading 9902.52.08 of the Har- license and stating the quantity of imported ting and sewing in the United States, and the monized Tariff Schedule of the United cotton woven fabric purchased during cal- term ‘manufacturer’ means a person or enti- States, as required by U.S. Note 18 to sub- endar year 2000 for use in the cutting and ty that cuts and sews in the United States. chapter II of chapter 99 of such Schedule, for sewing men’s and boys’ shirts in the United ‘‘18. The aggregate quantity of cotton fab- the entry, or withdrawal from warehouse for States. rics entered under subheading 9902.52.08 from consumption, the Secretary of Commerce (3) AFFIDAVITS.—For purposes of an affi- January 1 to December 31 of each year, in- shall issue licenses designating eligible man- davit described in this subsection, the date clusive, by or on behalf of each manufacturer ufacturers and the annual quantity restric- of purchase shall be— of men’s and boys’ shirts shall be limited to tions under each such license. A licensee (A) the invoice date if the manufacturer is 85 percent of the total square meter equiva- may assign the authority (in whole or in not the importer of record; and lents of all imported cotton woven fabric part) to import fabric under subheading (B) the date of entry if the manufacturer is used by such manufacturer in cutting and 9902.52.08 of such Schedule. the importer of record. sewing men’s and boys’ cotton shirts in the (2) LICENSES UNDER U.S. NOTE 18.—For pur- SEC. 502. COTTON TRUST FUND. United States and purchased by such manu- poses of U.S. Note 18 to subchapter II of (a) IN GENERAL.—There is established in facturer during calendar year 2000.’’. chapter 99 of the Harmonized Tariff Schedule the Treasury of the United States a trust

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00088 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3035 fund to be known as the ‘‘Pima Cotton Trust the fabric as woven cotton fabric of 80s or amendment SA 2886 submitted by Mr. Fund’’, consisting of $32,000,000 transferred to higher count and 2-ply in warp; and MCCONNELL (for Mr. FRIST) to the bill the Pima Cotton Trust Fund from funds in (D) that the fabric was suitable for use in S. 1637, to amend the Internal Revenue the general fund of the Treasury. the manufacturing of men’s and boys’ cotton Code of 1986 to comply with the World (b) GRANTS.— shirts. (5) DATE OF PURCHASE.—For purposes of the Trade Organization rulings on the FSC/ (1) GENERAL PURPOSE.—From amounts in ETI benefit in a manner that preserves the Pima Cotton Trust Fund, the Secretary affidavit required by paragraph (4), the date of Commerce is authorized to provide grants of purchase shall be the invoice date, and the jobs and production activities in the to spinners of United States grown pima cot- dollar value shall be determined excluding United States, to reform and simplify ton, manufacturers of men’s and boys’ cot- duty, shipping, and related costs. the international taxation rules of the ton shirting, and a nationally recognized as- (6) AFFIDAVIT OF YARN SPINNERS.—For pur- United States, and for other purposes; sociation that promotes the use of pima cot- poses of paragraph (3)(B), an officer of a com- which was ordered to lie on the table; ton grown in the United States, to assist pany that produces ringspun yarns shall pro- as follows: such spinners and manufacturers in maxi- vide a notarized affidavit affirming— At the end of subtitle A of title III of the mizing United States employment in the (A) that the manufacturer used pima cot- instructions, add the following: production of textile or apparel products and ton grown in the United States during the to increase the promotion of the use of period January 1, 2002, through December 31, SEC. ll. RECOVERY PERIOD FOR CERTAIN 2002, to produce ring spun cotton yarns, WIRELESS TELECOMMUNICATIONS United States grown pima cotton respec- EQUIPMENT. tively. measuring less than 83.33 decitex (exceeding (a) IN GENERAL.—Subparagraph (A) of sec- (2) TIMING FOR GRANT AWARDS.—The Sec- 120 metric number), in single and plied form tion 168(i)(2) (defining qualified techno- retary of the Treasury shall, not later than during 2002; logical equipment) is amended by striking 90 days after the date of enactment of this (B) the quantity, measured in pounds, of ‘‘and’’ at the end of clause (ii), by striking section, establish guidelines for the applica- ring spun cotton yarns, measuring less than the period at the end of clause (iii) and in- tion and awarding of the grants described in 83.33 decitex (exceeding 120 metric number), serting ‘‘, and’’, and by inserting after clause paragraph (1), and shall award such grants to in single and plied form during calendar year (iii) the following new clause: qualified applicants not later than 180 days 2002; and ‘‘(iv) any wireless telecommunications after the date of enactment of this section. (C) that the manufacturer maintains sup- equipment.’’. Each grant awarded under this section shall porting documentation showing the quantity (b) WIRELESS TELECOMMUNICATIONS EQUIP- be distributed to the qualified applicant in 2 of such yarns produced, and evidencing the MENT.—Section 168(i)(2) is amended by in- equal annual installments. yarns as ring spun cotton yarns, measuring serting after subparagraph (C) the following (3) DISTRIBUTION OF FUNDS.—Of the less than 83.33 decitex (exceeding 120 metric new subparagraph: amounts in the Pima Cotton Trust Fund— number), in single and plied form during cal- ‘‘(D) WIRELESS TELECOMMUNICATIONS EQUIP- (A) $8,000,000 shall be made available to a endar year 2002. MENT.—For purposes of this paragraph— nationally recognized association estab- (7) NO APPEAL.—Any grant awarded by the ‘‘(i) IN GENERAL.—The term ‘wireless tele- lished for the promotion of pima cotton Secretary under this section shall be final communications equipment’ means equip- grown in the United States for the use in and not subject to appeal or protest. ment which is used in the transmission, re- textile and apparel goods; (c) AUTHORIZATION.—There are authorized ception, coordination, or switching of wire- (B) $8,000,000 shall be made available to to be appropriated, and are appropriated out less telecommunications service. yarn spinners of pima cotton grown in the of the amounts in the general fund of the ‘‘(ii) EXCEPTION.—Such term does not in- United States, and shall be allocated to each Treasury not otherwise appropriated, such clude towers, buildings, T–1 lines, or other spinner based on the percentage of the spin- sums as are necessary to carry out the provi- cabling which connects cell sites to mobile ner’s production of ring spun cotton yarns, sions of this section, including funds nec- switching centers. measuring less than 83.33 decitex (exceeding essary for the administration and oversight ‘‘(iii) WIRELESS TELECOMMUNICATIONS SERV- 120 metric number), from pima cotton grown of the grants provided for in this section. ICE.—For purposes of clause (i), the term in the United States in single and plied form ‘wireless telecommunications service’ in- during calendar year 2002 (as evidenced by an SA 2912. Mrs. HUTCHISON submitted cludes any commercial mobile radio service affidavit provided by the spinner), compared an amendment intended to be proposed as defined in title 47 of the Code of Federal to the production of such yarns for all spin- to amendment SA 2886 submitted by Regulations.’’. ners who qualify under this subparagraph; C ONNELL RIST Mr. M C (for Mr. F ) to the (c) EFFECTIVE DATE.—The amendments and bill S. 1637, to amend the Internal Rev- made by this section shall apply to property (C) $16,000,000 shall be made available to enue Code of 1986 to comply with the placed in service after December 31, 2004, and manufacturers who cut and sew cotton shirts World Trade Organization rulings on before January 1, 2008. in the United States and that certify that the FSC/ETI benefit in a manner that they used imported cotton fabric during the Mr. COLEMAN submitted an period January 1, 1998, through July 1, 2003, preserves jobs and production activi- SA 2914. and shall be allocated to each manufacturer ties in the United States, to reform and amendment intended to be proposed to on the bases of the dollar value (excluding simplify the international taxation amendment SA 2886 submitted by Mr. duty, shipping, and related costs) of im- rules of the United States, and for MCCONNELL (for Mr. FRIST) to the bill ported woven cotton shirting fabric of 80s or other purposes; which was ordered to S. 1637, to amend the Internal Revenue higher count and 2-ply in warp purchased by lie on the table; as follows: Code of 1968 to comply with the World the manufacturer during calendar year 2002 On page 22, strike lines 3 through 14 and in- Trade Organization rulings on the FSC/ (as evidenced by an affidavit from the manu- sert the following: ETI benefit in a manner that preserves facturer) used in the manufacturing of men’s ‘‘(e) DOMESTIC PRODUCTION GROSS RE- jobs and production activities in the and boys’ cotton shirts, compared to the dol- CEIPTS.—For purposes of this section— lar value (excluding duty, shipping, and re- United States, to reform and simplify ‘‘(1) IN GENERAL.— lated costs) of such fabric for all manufac- the international taxation rules of the ‘‘(A) RECEIPTS FROM QUALIFYING PRODUC- turers who qualify under this subparagraph. United States, and for other purposes; TION PROPERTY.—The term ‘domestic produc- (4) AFFIDAVIT OF SHIRTING MANUFACTUR- which was ordered to lie on the table; tion gross receipts’ means the gross receipts ERS.—For purposes of paragraph (3)(D), an of- of the taxpayer which are derived from— as follows: ficer of the manufacturer of men’s and boys’ ‘‘(i) any sale, exchange, or other disposi- At the end of the instructions, add the fol- shirts shall provide a notarized affidavit af- tion of, or lowing: firming— ‘‘(ii) any lease, rental, or license of, (A) that the manufacturer used imported TITLE V—NON-REVENUE PROVISIONS cotton fabric during the period January 1, qualifying production property which was SEC. 501. CUSTOMS SERVICES. 1998, through July 1, 2003, to cut and sew manufactured, produced, grown, or extracted Section 13031(e)(1) of the Consolidated Om- men’s and boys’ woven cotton shirts in the in whole or in significant part by the tax- nibus Budget Reconciliation Act of 1985 (19 United States; payer within the United States. U.S.C. 58c(e)(1)) is amended— (B) the dollar value of imported woven cot- ‘‘(B) RECEIPTS FROM CERTAIN SERVICES.— (1) by striking ‘‘(1) Notwithstanding sec- ton shirting fabric of 80s or higher count and Such term also includes the gross receipts of tion 451 of the Tariff Act of 1930 (19 U.S.C. 2-ply in warp purchased during calendar year the taxpayer which are derived from any 1451) or any other provision of law (other 2002; construction, engineering, or architectural than paragraph (2)),’’ and inserting: (C) that the manufacturer maintains in- services performed in the United States for ‘‘(1) IN GENERAL.— voices along with other supporting docu- construction projects in the United States. ‘‘(A) SCHEDULED FLIGHTS.—Notwith- mentation (such as price lists and other standing section 451 of the Tariff Act of 1930 technical descriptions of the fabric qualities) SA 2913. Mr. NICKLES (for himself (19 U.S.C. 1451) or any other provision of law showing the dollar value of such fabric pur- and Mrs. LINCOLN) submitted an (other than subparagraph (B) and paragraph chased, the date of purchase, and evidencing amendment intended to be proposed to (2)),’’; and

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00089 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3036 CONGRESSIONAL RECORD — SENATE March 23, 2004 (2) by adding at the end the following: TITLE V—TRADE ADJUSTMENT sion accounting for not less than 20 percent ‘‘(B) CHARTER FLIGHTS.—If an air carrier ASSISTANCE of the sales of the workers’ firm or subdivi- (as defined in section 40102(2) of title 49, Subtitle A—Service Workers sion certify to the Secretary that they are obtaining such articles or services from a United States Code) specifically requests SEC. 511. SHORT TITLE. foreign country. that customs border patrol services for pas- This subtitle may be cited as the ‘‘Trade ‘‘(2) OBTAINING SERVICES ABROAD.—For pur- sengers and their baggage be provided for a Adjustment Assistance Equity For Service poses of subsection (a)(2)(B)(ii), the Sec- charter flight arriving after normal oper- Workers Act of 2004’’. ating hours at a customs border patrol serv- retary may determine that the workers’ SEC. 512. EXTENSION OF TRADE ADJUSTMENT AS- firm, subdivision, or public agency has ob- iced airport and overtime funds for those SISTANCE TO SERVICES SECTOR. services are not available, the appropriate tained or is likely to obtain like or directly (a) ADJUSTMENT ASSISTANCE FOR WORK- customs border patrol officer may assign suf- competitive services from a firm in a foreign ERS.—Section 221(a)(1)(A) of the Trade Act of country based on a certification thereof from ficient customs employees (if available) to 1974 (19 U.S.C. 2271(a)(1)(A)) is amended by the workers’ firm, subdivision, or public perform any such services, which could law- striking ‘‘firm)’’ and inserting ‘‘firm, and agency. fully be performed during regular hours of workers in a service sector firm or subdivi- ‘‘(3) AUTHORITY OF THE SECRETARY.—The operation, and any overtime fees incurred in sion of a service sector firm or public agen- Secretary may obtain the certifications connection with such service shall be paid by cy)’’. under paragraphs (1) and (2) through ques- the air carrier.’’. (b) GROUP ELIGIBILITY REQUIREMENTS.— Section 222 of the Trade Act of 1974 (19 U.S.C. tionnaires or in such other manner as the 2272) is amended— Secretary determines is appropriate.’’. Mr. COLEMAN submitted an (c) TRAINING.—Section 236(a)(2)(A) of the SA 2915. (1) in subsection (a)— Trade Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is amendment intended to be proposed by (A) in the matter preceding paragraph (1), him to the bill S. 1637, to amend the In- amended by striking ‘‘$220,000,000’’ and in- by striking ‘‘agricultural firm)’’ and insert- serting ‘‘$440,000,000’’. ternal Revenue Code of 1968 to comply ing ‘‘agricultural firm, and workers in a (d) DEFINITIONS.—Section 247 of the Trade with the World Trade Organization rul- service sector firm or subdivision of a service Act of 1974 (19 U.S.C. 2319) is amended— ings on the FSC/ETI benefit in a man- sector firm or public agency)’’; (1) in paragraph (1)— (B) in paragraph (1), by inserting ‘‘or pub- (A) by inserting ‘‘or public agency’’ after ner that preserves jobs and production lic agency’’ after ‘‘of the firm’’; and activities in the United States, to re- ‘‘of a firm’’; and (C) in paragraph (2)— (B) by inserting ‘‘or public agency’’ after form and simplify the international (i) in subparagraph (A)(ii), by striking ‘‘or subdivision’’; taxation rules of the United States, ‘‘like or directly competitive with articles (2) in paragraph (2)(B), by inserting ‘‘or and for other purposes; which was or- produced’’ and inserting ‘‘or services like or public agency’’ after ‘‘the firm’’; directly competitive with articles produced dered to lie on the table; as follows: (3) by redesignating paragraphs (8) through or services provided’’; and (17) as paragraphs (9) through (18), respec- At the end of the bill, add the following: (ii) by striking subparagraph (B) and in- tively; and serting the following: (4) by inserting after paragraph (6) the fol- TITLE V—NON-REVENUE PROVISIONS ‘‘(B)(i) there has been a shift, by such lowing: workers’ firm, subdivision, or public agency SEC. 501. CUSTOMS SERVICES. ‘‘(7) The term ‘public agency’ means a de- to a foreign country, of production of arti- partment or agency of a State or local gov- Section 13031(e)(1) of the Consolidated Om- cles, or in provision of services, like or di- ernment or of the Federal Government. nibus Budget Reconciliation Act of 1985 (19 rectly competitive with articles which are ‘‘(8) The term ‘service sector firm’ means U.S.C. 58c(e)(1)) is amended— produced, or services which are provided, by an entity engaged in the business of pro- (1) by striking ‘‘(1) Notwithstanding sec- such firm, subdivision, or public agency; or viding services.’’. tion 451 of the Tariff Act of 1930 (19 U.S.C. ‘‘(ii) such workers’ firm, subdivision, or (e) TECHNICAL AMENDMENT.—Section 245(a) 1451) or any other provision of law (other public agency has obtained or is likely to ob- of the Trade Act of 1974 (19 U.S.C. 2317(a)) is than paragraph (2)),’’ and inserting: tain such services from a foreign country.’’; amended by striking ‘‘, other than sub- ‘‘(1) IN GENERAL.— (2) in subsection (b)— chapter D’’. ‘‘(A) SCHEDULED FLIGHTS.—Notwith- (A) in the matter preceding paragraph (1), SEC. 513. TRADE ADJUSTMENT ASSISTANCE FOR standing section 451 of the Tariff Act of 1930 by striking ‘‘agricultural firm)’’ and insert- FIRMS AND INDUSTRIES. (19 U.S.C. 1451) or any other provision of law ing ‘‘agricultural firm, and workers in a (a) FIRMS.— (other than subparagraph (B) and paragraph service sector firm or subdivision of a service (1) ASSISTANCE.—Section 251 of the Trade (2)),’’; and sector firm or public agency)’’; Act of 1974 (19 U.S.C. 2341) is amended— (2) by adding at the end the following: (B) in paragraph (2), by inserting ‘‘or serv- (A) in subsection (a), by inserting ‘‘or serv- ‘‘(B) CHARTER FLIGHTS.—If an air carrier ice’’ after ‘‘related to the article’’; and ice sector firm’’ after ‘‘(including any agri- (as defined in section 40102(2) of title 49, (C) in paragraph (3)(A), by inserting ‘‘or cultural firm’’; United States Code) specifically requests services’’ after ‘‘component parts’’; (B) in subsection (c)(1)— that customs border patrol services for pas- (3) in subsection (c)— (i) in the matter preceding subparagraph sengers and their baggage be provided for a (A) in paragraph (2), by adding at the end (A), by inserting ‘‘or service sector firm’’ charter flight arriving after normal oper- the following: after ‘‘any agricultural firm’’; ating hours at a customs border patrol serv- ‘‘(C) Taconite pellets produced in the (ii) in subparagraph (B)(ii), by inserting iced airport and overtime funds for those United States shall be considered to be an ‘‘or service’’ after ‘‘of an article’’; and services are not available, the appropriate article that is like or directly competitive (iii) in subparagraph (C), by striking ‘‘arti- customs border patrol officer may assign suf- with imports of semifinished steel slab.’’. cles like or directly competitive with arti- ficient customs employees (if available) to (B) in paragraph (3)— cles which are produced’’ and inserting ‘‘arti- perform any such services, which could law- (i) by inserting ‘‘or services’’ after ‘‘value- cles or services like or directly competitive fully be performed during regular hours of added production processes’’; with articles or services which are produced operation, and any overtime fees incurred in (ii) by striking ‘‘or finishing’’ and inserting or provided’’; and connection with such service shall be paid by ‘‘, finishing, or testing’’; (C) by adding at the end the following: the air carrier.’’. (iii) by inserting ‘‘or services’’ after ‘‘for ‘‘(e) BASIS FOR SECRETARY DETERMINA- articles’’; and TION.— (iv) by inserting ‘‘(or subdivision)’’ after ‘‘(1) INCREASED IMPORTS.—For purposes of SA 2916. Mr. WYDEN (for himself and ‘‘such other firm’’; and subsection (c)(1)(C), the Secretary may de- Mr. COLEMAN) submitted an amend- (C) in paragraph (4)— termine that increases of imports of like or ment intended to be proposed by him (i) by striking ‘‘for articles’’ and inserting directly competitive articles or services ‘‘, or services, used in the production of arti- exist if customers accounting for not less to the bill S. 1637, to amend the Inter- cles or in the provision of services’’; and than 20 percent of the sales of the workers’ nal Revenue Code of 1986 to comply (ii) by inserting ‘‘(or subdivision)’’ after firm certify to the Secretary that they are with the World Trade Organization rul- ‘‘such other firm’’; and obtaining such articles or services from a ings on the FSC/ETI benefit in a man- (4) by adding at the end the following new foreign country. ner that preserves jobs and production subsection: ‘‘(2) AUTHORITY OF THE SECRETARY.—The ‘‘(d) BASIS FOR SECRETARY’S DETERMINA- Secretary may obtain the certifications activities in the United States, to re- TIONS.— under paragraph (1) through questionnaires form and simplify the international ‘‘(1) INCREASED IMPORTS.—For purposes of or in such other manner as the Secretary de- taxation rules of the United States, subsection (a)(2)(A)(ii), the Secretary may termines is appropriate. The Secretary may and for other purposes; which was or- determine that increased imports of like or exercise the authority under section 249 in dered to lie on the table; as follows: directly competitive articles or services carrying out this subsection.’’. exist if the workers’ firm or subdivision or (2) AUTHORIZATION OF APPROPRIATIONS.— At the end of the bill, add the following: customers of the workers’ firm or subdivi- Section 256(b) of the Trade Act of 1974 (19

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00090 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3037 U.S.C. 2346(b)) is amended by striking SEC. 516. CLARIFICATION OF MARKETING YEAR. ‘‘(E) the effectiveness of individual train- ‘‘$16,000,000’’ and inserting ‘‘$32,000,000’’. Section 291(5) of the Trade Act of 1974 (19 ing providers in providing appropriate infor- (3) DEFINITION.—Section 261 of the Trade U.S.C. 2401(5)) is amended by inserting before mation and training; Act of 1974 (19 U.S.C. 2351) is amended— the end period the following: ‘‘, or in the case ‘‘(F) the extent to which States have de- (A) by striking ‘‘For purposes of’’ and in- of an agricultural commodity that has no signed and implemented health care cov- serting ‘‘(a) FIRM.—For purposes of’’; and marketing year, in a 12-month period for erage options under title II of the Trade Act (B) by adding at the end the following: which the petitioner provides written jus- of 2002, including any difficulties States have ‘‘(b) SERVICE SECTOR FIRM.—For purposes tification’’. encountered in carrying out the provisions of of this chapter, the term ‘service sector firm’ SEC. 517. EFFECTIVE DATE. title II; means a firm engaged in the business of pro- (a) IN GENERAL.—Except as provided in ‘‘(G) how Federal, State, and local officials viding services.’’. subsections (b) and (c), the amendments are implementing the trade adjustment as- (b) INDUSTRIES.—Section 265(a) of the made by this subtitle shall take effect on Oc- sistance program to ensure that all eligible Trade Act of 1974 (19 U.S.C. 2355(a)) is amend- tober 1, 2004. individuals receive benefits, including pro- ed by inserting ‘‘or service’’ after ‘‘new prod- (b) SPECIAL RULE FOR CERTAIN SERVICE viding outreach, rapid response, and other uct’’. WORKERS.—A group of workers in a service activities; and SEC. 514. MONITORING AND REPORTING. sector firm, or subdivision of a service sector ‘‘(H) any other data necessary to evaluate Section 282 of the Trade Act of 1974 (19 firm, or public agency (as defined in section how individual States are implementing the U.S.C. 2393) is amended— 247 (7) and (8) of the Trade Act of 1974, as requirements of this chapter. (1) in the first sentence— added by section 512(d) of this Act) who— ‘‘(2) PROGRAM PARTICIPATION .—The effec- (A) by striking ‘‘The Secretary’’ and in- (1) would have been certified eligible to tiveness of the program relating to— ‘‘(A) the number of workers receiving bene- serting ‘‘(a) MONITORING PROGRAMS.—The apply for adjustment assistance under chap- fits and the type of benefits being received Secretary’’; ter 2 of title II of the Trade Act of 1974 if the both before and after the effective date of (B) by inserting ‘‘and services’’ after ‘‘im- amendments made by this Act had been in the Trade Adjustment Assistance Reform ports of articles’’; effect on November 4, 2002, and Act of 2002; (C) by inserting ‘‘and domestic provision of (2) file a petition pursuant to section 221 of ‘‘(B) the number of workers enrolled in, services’’ after ‘‘domestic production’’; such Act within 6 months after the date of and the duration of, training by major types (D) by inserting ‘‘or providing services’’ enactment of this Act, of training both before and after the effec- after ‘‘producing articles’’; and shall be eligible for certification under sec- tive date of the Trade Adjustment Assist- (E) by inserting ‘‘, or provision of serv- tion 223 of the Trade Act of 1974 if the work- ance Reform Act of 2002; ices,’’ after ‘‘changes in production’’; and ers’ last total or partial separation from the ‘‘(C) earnings history of workers that re- firm or subdivision of the firm or public (2) by adding at the end the following: flects wages before separation and wages in agency occurred on or after November 4, 2002 ‘‘(b) COLLECTION OF DATA AND REPORTS ON any job obtained after receiving benefits and before October 1, 2004. SERVICES SECTOR.— under this Act; (c) SPECIAL RULE FOR TACONITE.—A group ‘‘(1) SECRETARY OF LABOR.—Not later than ‘‘(D) reemployment rates and sectors in of workers in a firm, or subdivision of a firm, 3 months after the date of the enactment of which dislocated workers have been em- engaged in the production of taconite pellets the Trade Adjustment Assistance Equity For ployed; who— Service Workers Act of 2004, the Secretary of ‘‘(E) the cause of dislocation identified in (1) would have been certified eligible to Labor shall implement a system to collect each petition that resulted in a certification apply for adjustment assistance under chap- data on adversely affected service workers under this chapter; and ter 2 of title II of the Trade Act of 1974 if the that includes the number of workers by ‘‘(F) the number of petitions filed and amendments made by this Act had been in State, industry, and cause of dislocation of workers certified in each congressional dis- effect on November 4, 2002, and each worker. trict of the United States. (2) file a petition pursuant to section 221 of ‘‘(2) SECRETARY OF COMMERCE.—Not later ‘‘(c) STATE PARTICIPATION.—The Secretary than 6 months after such date of enactment, such Act within 6 months after the date of shall ensure, to the extent practicable, the Secretary of Commerce shall, in con- enactment of this Act, through oversight and effective internal con- sultation with the Secretary of Labor, con- shall be eligible for certification under sec- trol measures the following: tion 223 of the Trade Act of 1974 if the work- duct a study and report to the Congress on ‘‘(1) STATE PARTICIPATION.—Participation ways to improve the timeliness and coverage ers’ last total or partial separation from the by each State in the performance measure- of data on trade in services, including meth- firm or subdivision of the firm occurred on ment system established under subsection ods to identify increased imports due to the or after November 4, 2002 and before October (b). 1, 2004. relocation of United States firms to foreign ‘‘(2) MONITORING.—Monitoring by each countries, and increased imports due to Subtitle B—Data Collection State of internal control measures with re- United States firms obtaining services from SEC. 521. SHORT TITLE. spect to performance measurement data col- firms in foreign countries.’’. This subtitle may be cited as the ‘‘Trade lected by each State. SEC. 515. ALTERNATIVE TRADE ADJUSTMENT AS- Adjustment Assistance Accountability Act’’. ‘‘(3) RESPONSE.—The quality and speed of SISTANCE. SEC. 522. DATA COLLECTION; STUDY; INFORMA- the rapid response provided by each State IN GENERAL.—Section 246(a)(3) of the Trade TION TO WORKERS. under section 134(a)(2)(A) of the Workforce Act of 1974 (19 U.S.C. 2318(a)(3)) is amended to (a) DATA COLLECTION; EVALUATIONS.—Sub- Investment Act of 1998 (29 U.S.C. read as follows: chapter C of chapter 2 of title II of the Trade 2864(a)(2)(A)). ‘‘(3) ELIGIBILITY.—A worker in the group Act of 1974 is amended by inserting after sec- ‘‘(d) REPORTS.— that the Secretary has certified as eligible tion 249, the following new section: ‘‘(1) REPORTS BY THE SECRETARY.— for the alternative trade adjustment assist- ‘‘SEC. 250. DATA COLLECTION; EVALUATIONS; RE- ‘‘(A) INITIAL REPORT.—Not later than 6 ance program may elect to receive benefits PORTS. months after the date of enactment of the under the alternative trade adjustment as- ‘‘(a) DATA COLLECTION.—The Secretary Trade Adjustment Assistance Accountability sistance program if the worker— shall, pursuant to regulations prescribed by Act, the Secretary shall submit to the Com- ‘‘(A) is covered by a certification under the Secretary, collect any data necessary to mittee on Finance of the Senate and the subchapter A of this chapter; meet the requirements of this chapter. Committee on Ways and Means of the House ‘‘(B) obtains reemployment not more than ‘‘(b) PERFORMANCE EVALUATIONS.—The Sec- of Representatives a report that— 26 weeks after the date of separation from retary shall establish an effective perform- ‘‘(i) describes the performance measure- the adversely affected employment; ance measuring system to evaluate the fol- ment system established under subsection ‘‘(C) is at least 40 years of age; lowing: (b); ‘‘(D) earns not more than $50,000 a year in ‘‘(1) PROGRAM PERFORMANCE.—A compari- ‘‘(ii) includes analysis of data collected wages from reemployment; son of the trade adjustment assistance pro- through the system established under sub- ‘‘(E) is employed on a full-time basis as de- gram before and after the effective date of section (b); and fined by State law in the State in which the the Trade Adjustment Assistance Reform ‘‘(iii) provides recommendations for pro- worker is employed; and Act of 2002 with respect to— gram improvements. ‘‘(F) does not return to the employment ‘‘(A) the number of workers certified and ‘‘(B) ANNUAL REPORT.—Not later than 1 from which the worker was separated.’’. the number of workers actually partici- year after the date the report is submitted (b) CONFORMING AMENDMENTS.—(1) Sub- pating in the trade adjustment assistance under subparagraph (A), and annually there- paragraphs (A) and (B) of section 246(a)(2) of program; after, the Secretary shall submit to the Com- the Trade Act of 1974 (19 U.S.C. 2318(a)(2) (A) ‘‘(B) the time for processing petitions; mittee on Finance of the Senate and the and (B)) are amended by striking ‘‘paragraph ‘‘(C) the number of training waivers grant- Committee on Ways and Means of the House (3)(B)’’ and inserting ‘‘paragraph (3)’’ each ed; of Representatives a report that includes the place it appears. ‘‘(D) the coordination of programs under information collected under clause (ii) of (2) Section 246(b)(2) of such Act is amended this chapter with programs under the Work- subparagraph (A). by striking ‘‘subsection (a)(3)(B)’’ and insert- force Investment Act of 1998 (29 U.S.C. 2801 et ‘‘(2) STATE REPORTS.—Pursuant to regula- ing ‘‘subsection (a)(3)’’. seq.); tions prescribed by the Secretary, each State

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00091 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3038 CONGRESSIONAL RECORD — SENATE March 23, 2004 shall submit to the Secretary a report that tified under section 273 for assistance under ‘‘(7) establish an interagency Trade Adjust- details its participation in the programs es- this chapter. ment Assistance for Communities Working tablished under this chapter, and that con- ‘‘(6) FISHERMAN.— Group, consisting of the representatives of tains the data necessary to allow the Sec- ‘‘(A) IN GENERAL.—The term ‘fisherman’ any Federal department or agency with re- retary to submit the report required under means any person who— sponsibility for economic adjustment assist- paragraph (1). ‘‘(i) is engaged in commercial fishing; or ance, including the Department of Agri- ‘‘(3) PUBLICATION.—The Secretary shall ‘‘(ii) is a United States fish processor. culture, the Department of Education, the make available to each State, and other pub- ‘‘(B) COMMERCIAL FISHING, FISH, FISHERY, Department of Labor, the Department of lic and private organizations as determined FISHING, FISHING VESSEL, PERSON, AND UNITED Housing and Urban Development, the De- by the Secretary, the data gathered and STATES FISH PROCESSOR.—The terms ‘com- partment of Health and Human Services, the evaluated through the performance measure- mercial fishing’, ‘fish’, ‘fishery’, ‘fishing’, Small Business Administration, the Depart- ment system established under subsection ‘fishing vessel’, ‘person’, and ‘United States ment of the Treasury, the Department of (b).’’. fish processor’ have the same meanings as Commerce, and any other Federal, State, or (b) CONFORMING AMENDMENTS.— such terms have in the Magnuson-Stevens regional department or agency the Secretary (1) COORDINATION.—Section 281 of the Trade Fishery Conservation and Management Act determines necessary or appropriate. Act of 1974 (19 U.S.C. 2392) is amended by (16 U.S.C. 1802). ‘‘SEC. 273. CERTIFICATION AND NOTIFICATION. striking ‘‘Departments of Labor and Com- ‘‘(7) JOB LOSS.—The term ‘job loss’ means ‘‘(a) CERTIFICATION.—Not later than 45 days merce’’ and inserting ‘‘Departments of the total or partial separation of an indi- after an event described in subsection (c)(1), Labor, Commerce, and Agriculture’’. vidual, as those terms are defined in section the Secretary of Commerce shall determine (2) TRADE MONITORING SYSTEM.—Section 282 247. if a community described in subsection (b)(1) of the Trade Act of 1974 (19 U.S.C. 2393) is ‘‘(8) SECRETARY.—The term ‘Secretary’ is negatively impacted by trade, and if a amended by striking ‘‘The Secretary of Com- means the Secretary of Commerce. positive determination is made, shall certify merce and the Secretary of Labor’’ and in- ‘‘SEC. 272. COMMUNITY TRADE ADJUSTMENT AS- the community for assistance under this serting ‘‘The Secretaries of Commerce, SISTANCE PROGRAM. chapter. Labor, and Agriculture’’. ‘‘(a) ESTABLISHMENT.—Within 6 months ‘‘(b) DETERMINATION THAT COMMUNITY IS (3) TABLE OF CONTENTS.—The table of con- after the date of enactment of the Trade Ad- ELIGIBLE.— tents for title II of the Trade Act of 1974 is justment Assistance for Communities Act of ‘‘(1) COMMUNITY DESCRIBED.—A community amended by inserting after the item relating 2004, the Secretary shall establish a Trade described in this paragraph means a commu- to section 249, the following new item: Adjustment Assistance for Communities nity with respect to which on or after Octo- ‘‘Sec. 250. Data collection; evaluations; re- Program at the Department of Commerce. ber 1, 2004— ports.’’. ‘‘(b) PERSONNEL.—The Secretary shall des- ‘‘(A) the Secretary of Labor certifies a (c) EFFECTIVE DATE.—The amendments ignate such staff as may be necessary to group of workers (or their authorized rep- made by this section shall take effect on Oc- carry out the responsibilities described in resentative) in the community as eligible for tober 1, 2004. this chapter. assistance pursuant to section 223; ‘‘(c) COORDINATION OF FEDERAL RE- ‘‘(B) the Secretary of Commerce certifies a Subtitle C—Trade Adjustment Assistance for SPONSE.—The Secretary shall— firm located in the community as eligible for Communities ‘‘(1) provide leadership, support, and co- adjustment assistance under section 251; SEC. 531. SHORT TITLE. ordination for a comprehensive management ‘‘(C) the Secretary of Agriculture certifies This subtitle may be cited as the ‘‘Trade program to address economic dislocation in a group of agricultural commodity producers Adjustment Assistance for Communities Act eligible communities; (or their authorized representative) in the of 2004’’. ‘‘(2) coordinate the Federal response to an community as eligible for adjustment assist- SEC. 532. PURPOSE. eligible community— ance under section 293; The purpose of this subtitle is to assist ‘‘(A) by identifying all Federal, State, and ‘‘(D) an affected domestic producer is lo- communities negatively impacted by trade local resources that are available to assist cated in the community; or with economic adjustment through the inte- the eligible community in recovering from ‘‘(E) the Secretary determines that a sig- gration of political and economic organiza- economic distress; nificant number of fishermen in the commu- tions, the coordination of Federal, State, and ‘‘(B) by ensuring that all Federal agencies nity is negatively impacted by trade. local resources, the creation of community- offering assistance to an eligible community ‘‘(2) NEGATIVELY IMPACTED BY TRADE.—The based development strategies, and the provi- do so in a targeted, integrated manner that Secretary shall determine that a community sion of economic transition assistance. ensures that an eligible community has ac- is negatively impacted by trade, after taking SEC. 533. TRADE ADJUSTMENT ASSISTANCE FOR cess to all available Federal assistance; into consideration— COMMUNITIES. ‘‘(C) by assuring timely consultation and ‘‘(A) the number of jobs affected compared Chapter 4 of title II of the Trade Act of 1974 cooperation between Federal, State, and re- to the size of workforce in the community; (19 U.S.C. 2371 et seq.) is amended to read as gional officials concerning economic adjust- ‘‘(B) the severity of the rates of unemploy- follows: ment for an eligible community; and ment in the community and the duration of ‘‘CHAPTER 4—TRADE ADJUSTMENT ‘‘(D) by identifying and strengthening ex- the unemployment in the community; ASSISTANCE FOR COMMUNITIES isting agency mechanisms designed to assist ‘‘(C) the income levels and the extent of ‘‘SEC. 271. DEFINITIONS. eligible communities in their efforts to underemployment in the community; ‘‘In this chapter: achieve economic adjustment and workforce ‘‘(D) the outmigration of population from ‘‘(1) AFFECTED DOMESTIC PRODUCER.—The reemployment; the community and the extent to which the term ‘affected domestic producer’ means any ‘‘(3) provide comprehensive technical as- outmigration is causing economic injury in manufacturer, producer, service provider, sistance to any eligible community in the ef- the community; and farmer, rancher, fisherman or worker rep- forts of that community to— ‘‘(E) the unique problems and needs of the resentative (including associations of such ‘‘(A) identify serious economic problems in community. persons) that was affected by a finding under the community that are the result of nega- ‘‘(c) DEFINITION AND SPECIAL RULES.— the Antidumping Act of 1921, or by an anti- tive impacts from trade; ‘‘(1) EVENT DESCRIBED.—An event described dumping or countervailing duty order issued ‘‘(B) integrate the major groups and orga- in this paragraph means one of the following: under title VII of the Tariff Act of 1930. nizations significantly affected by the eco- ‘‘(A) A notification described in paragraph ‘‘(2) AGRICULTURAL COMMODITY PRODUCER.— nomic adjustment; (2). The term ‘agricultural commodity producer’ ‘‘(C) access Federal, State, and local re- ‘‘(B) A certification of a firm under section has the same meaning as the term ‘person’ sources designed to assist in economic devel- 251. as prescribed by regulations promulgated opment and trade adjustment assistance; ‘‘(C) A finding under the Antidumping Act under section 1001(5) of the Food Security ‘‘(D) diversify and strengthen the commu- of 1921, or an antidumping or countervailing Act of 1985 (7 U.S.C. 1308(5)). nity economy; and duty order issued under title VII of the Tar- ‘‘(3) COMMUNITY.—The term ‘community’ ‘‘(E) develop a community-based strategic iff Act of 1930. means a city, county, or other political sub- plan to address economic development and ‘‘(D) A determination by the Secretary division of a State or a consortium of polit- workforce dislocation, including unemploy- that a significant number of fishermen in a ical subdivisions of a State that the Sec- ment among agricultural commodity pro- community have been negatively impacted retary certifies as being negatively impacted ducers, and fishermen; by trade. by trade. ‘‘(4) establish specific criteria for submis- ‘‘(2) NOTIFICATION.—The Secretary of ‘‘(4) COMMUNITY NEGATIVELY IMPACTED BY sion and evaluation of a strategic plan sub- Labor, immediately upon making a deter- TRADE.—A community negatively impacted mitted under section 274(d); mination that a group of workers is eligible by trade means a community with respect to ‘‘(5) establish specific criteria for submit- for trade adjustment assistance under sec- which a determination has been made under ting and evaluating applications for grants tion 223, (or the Secretary of Agriculture, section 273. under section 275; immediately upon making a determination ‘‘(5) ELIGIBLE COMMUNITY.—The term ‘eligi- ‘‘(6) administer the grant programs estab- that a group of agricultural commodity pro- ble community’ means a community cer- lished under sections 274 and 275; and ducers is eligible for adjustment assistance

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under section 293, as the case may be) shall ‘‘(b) ADDITIONAL GRANTS.— Subtitle D—Office of Trade Adjustment notify the Secretary of Commerce of the de- ‘‘(1) IN GENERAL.—Subject to paragraph (2), Assistance termination. in order to assist eligible communities to ob- SEC. 541. SHORT TITLE. ‘‘(d) NOTIFICATION TO ELIGIBLE COMMU- tain funds under Federal grant programs, This subtitle may be cited as the ‘‘Trade NITIES.—Immediately upon certification by other than the grants provided for in section Adjustment Assistance for Firms Reorga- the Secretary of Commerce that a commu- 274(c) or subsection (a), the Secretary may, nization Act’’. nity is eligible for assistance under sub- on the application of an eligible community, SEC. 542. OFFICE OF TRADE ADJUSTMENT AS- section (b), the Secretary shall notify the make a supplemental grant to the commu- SISTANCE. community— nity if— (a) IN GENERAL.—Chapter 3 of title II of the ‘‘(1) of the determination under subsection ‘‘(A) the purpose of the grant program Trade Act of 1974 (19 U.S.C. 2341 et seq.) is (b); from which the grant is made is to provide amended by inserting after section 255 the ‘‘(2) of the provisions of this chapter; technical or other assistance for planning, following new section: ‘‘(3) how to access the clearinghouse estab- constructing, or equipping public works fa- ‘‘SEC. 255A. OFFICE OF TRADE ADJUSTMENT AS- lished by the Department of Commerce re- cilities or to provide assistance for public SISTANCE. garding available economic assistance; service projects; and ‘‘(a) ESTABLISHMENT.—Not later than 90 ‘‘(4) how to obtain technical assistance ‘‘(B) the grant is 1 for which the commu- days after the date of enactment of the provided under section 272(c)(3); and nity is eligible except for the community’s Trade Adjustment Assistance for Firms Re- ‘‘(5) how to obtain grants, tax credits, low inability to meet the non-Federal share re- organization Act, there shall be established income loans, and other appropriate eco- quirements of the grant program. in the International Trade Administration of nomic assistance. ‘‘(2) USE AS NON-FEDERAL SHARE.—A supple- the Department of Commerce an Office of Trade Adjustment Assistance. ‘‘SEC. 274. STRATEGIC PLANS. mental grant made under this subsection ‘‘(b) PERSONNEL.—The Office shall be head- ‘‘(a) IN GENERAL.—An eligible community may be used to provide the non-Federal share of a project, unless the total Federal ed by a Director, and shall have such staff as may develop a strategic plan for community may be necessary to carry out the respon- contribution to the project for which the economic adjustment and diversification. sibilities of the Secretary of Commerce de- grant is being made exceeds 80 percent and ‘‘(b) REQUIREMENTS FOR STRATEGIC PLAN.— scribed in this chapter. that excess is not permitted by law. A strategic plan shall contain, at a min- ‘‘(c) FUNCTIONS.—The Office shall assist the imum, the following: ‘‘(c) RURAL COMMUNITY PREFERENCE.—The Secretary of Commerce in carrying out the ‘‘(1) A description and justification of the Secretary shall develop guidelines to ensure Secretary’s responsibilities under this chap- capacity for economic adjustment, including that rural communities receive preference in ter.’’. the method of financing to be used. the allocation of resources. (b) CONFORMING AMENDMENT.—The table of ‘‘(2) A description of the commitment of ‘‘SEC. 276. GENERAL PROVISIONS. contents for the Trade Act of 1974 is amended the community to the strategic plan over ‘‘(a) REGULATIONS.—The Secretary shall by inserting after the item relating to sec- the long term and the participation and prescribe such regulations as are necessary tion 255, the following new item: input of groups affected by economic disloca- to carry out the provisions of this chapter. ‘‘Sec. 255A. Office of Trade Adjustment As- tion. Before implementing any regulation or sistance.’’. ‘‘(3) A description of the projects to be un- guideline proposed by the Secretary with re- SEC. 543. EFFECTIVE DATE. dertaken by the eligible community. spect to this chapter, the Secretary shall The amendments made by this subtitle ‘‘(4) A description of how the plan and the submit the regulation or guideline to the shall take effect on the earlier of— projects to be undertaken by the eligible Committee on Finance of the Senate and the (1) the date of the enactment of this Act; community will lead to job creation and job Committee on Ways and Means of the House or retention in the community. of Representatives for approval. (2) October 1, 2004. ‘‘(5) A description of how the plan will ‘‘(b) SUPPLEMENT NOT SUPPLANT.—Funds TITLE VI—IMPROVEMENT OF CREDIT FOR achieve economic adjustment and diver- appropriated under this chapter shall be used HEALTH INSURANCE COSTS OF ELIGI- sification. to supplement and not supplant other Fed- BLE INDIVIDUALS ‘‘(6) A description of how the plan and the eral, State, and local public funds expended SEC. 601. CLARIFICATION OF 3-MONTH REQUIRE- projects will contribute to establishing or to provide economic development assistance MENT OF EXISTING COVERAGE. maintaining a level of public services nec- for communities. (a) IN GENERAL.—Clause (i) of section essary to attract and retain economic invest- ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— 35(e)(2)(B) of the Internal Revenue Code of ment. There are authorized to be appropriated to 1986 (defining qualifying individual) is ‘‘(7) A description and justification for the the Secretary $100,000,000 for each of fiscal amended by inserting ‘‘(prior to the employ- cost and timing of proposed basic and ad- years 2005 through 2008, to carry out this ment separation necessary to attain the sta- vanced infrastructure improvements in the chapter. Amounts appropriated pursuant to tus of an eligible individual)’’ after ‘‘9801(c)’’. eligible community. this subsection shall remain available until (b) CONFORMING AMENDMENT.—Section ‘‘(8) A description of how the plan will ad- expended.’’. 173(f)(2)(B)(ii)(I) of the Workforce Investment dress the occupational and workforce condi- SEC. 534. CONFORMING AMENDMENTS. Act of 1998 (29 U.S.C. 2918(f)(2)(B)(ii)(I)) is tions in the eligible community. (a) TERMINATION.—Section 285(b) of the amended by inserting ‘‘(prior to the employ- ‘‘(9) A description of the educational pro- Trade Act of 1974 (19 U.S.C. 2271 note) is ment separation necessary to attain the sta- grams available for workforce training and amended by adding at the end the following tus of an eligible individual)’’ after ‘‘1986’’. future employment needs. new paragraph: (c) EFFECTIVE DATE.—The amendments ‘‘(10) A description of how the plan will ‘‘(3) ASSISTANCE FOR COMMUNITIES.—Tech- made by this section take effect on the date adapt to changing markets and business cy- nical assistance and other payments may not of enactment of this Act. cles. be provided under chapter 4 after September SEC. 602. DISREGARD OF TAA PRE-CERTIFI- ‘‘(11) A description and justification for the 30, 2008.’’. CATION PERIOD FOR PURPOSES OF cost and timing of the total funds required DETERMINING WHETHER THERE IS (b) TABLE OF CONTENTS.—The table of con- A 63-DAY LAPSE IN CREDITABLE by the community for economic assistance. tents for title II of the Trade Act of 1974 is COVERAGE. ‘‘(12) A graduation strategy through which amended by striking the items relating to (a) ERISA AMENDMENT.—Section 701(c)(2) the eligible community demonstrates that chapter 4 of title II and inserting after the of the Employee Retirement Income Secu- the community will terminate the need for items relating to chapter 3 the following new rity Act of 1974 (29 U.S.C. 1181(c)(2)) is Federal assistance. items: amended by adding at the end the following: ‘‘(c) GRANTS TO DEVELOP STRATEGIC ‘‘CHAPTER 4—TRADE ADJUSTMENT ASSISTANCE ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— PLANS.—The Secretary, upon receipt of an ISREGARD OF PRE CERTIFICATION PE FOR COMMUNITIES ‘‘(i) D - - application from an eligible community, RIOD.—In the case of a TAA-eligible indi- may award a grant to that community to be ‘‘Sec. 271. Definitions. vidual, the period beginning on the date the used to develop the strategic plan. ‘‘Sec. 272. Community Trade Adjustment individual has a TAA-related loss of cov- ‘‘(d) SUBMISSION OF PLAN.—A strategic plan Assistance Program. erage and ending on the date the individual developed under subsection (a) shall be sub- ‘‘Sec. 273. Certification and notification. is certified by the Secretary (or by any per- mitted to the Secretary for evaluation and ‘‘Sec. 274. Strategic plans. son or entity designated by the Secretary) as approval. ‘‘Sec. 275. Grants for economic develop- being eligible for a qualified health insur- ment. ‘‘SEC. 275. GRANTS FOR ECONOMIC DEVELOP- ance costs credit eligibility certificate for ‘‘Sec. 276. General provisions.’’. MENT. purposes of section 7527 of the Internal Rev- ‘‘(a) IN GENERAL.—The Secretary, upon ap- (c) JUDICIAL REVIEW.—Section 284(a) of the enue Code of 1986 shall not be taken into ac- proval of a strategic plan from an eligible Trade Act of 1974 (19 U.S.C. 2395(a)) is amend- count in determining the continuous period community, may award a grant to that com- ed by striking ‘‘section 271’’ and inserting under subparagraph (A). munity to carry out any project or program ‘‘section 273’’. ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- that is certified by the Secretary to be in- SEC. 535. EFFECTIVE DATE. ble individual’, and ‘TAA-related loss of cov- cluded in the strategic plan approved under The amendments made by this subtitle erage’ have the meanings given such terms section 274(d), or consistent with that plan. shall take effect on October 1, 2004. in section 605(b)(4)(C).’’.

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00093 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3040 CONGRESSIONAL RECORD — SENATE March 23, 2004 (b) PHSA AMENDMENT.—Section 2701(c)(2) by him to the bill S. 1637, to amend the ‘‘(c) REPORTS.— of the Public Health Service Act (42 U.S.C. Internal Revenue Code of 1986 to com- ‘‘(1) IN GENERAL.—Not later than 60 days 300gg(c)(2)) is amended by adding at the end ply with the World Trade Organization after the end of each fiscal year, the head of the following: rulings on the FSC/ETI benefit in a each Federal agency shall submit to Con- ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— manner that preserves jobs and produc- gress a report on the acquisitions that were ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- made of articles, materials, or supplies by RIOD.—In the case of a TAA-eligible indi- tion activities in the United States, to the agency in that fiscal year from entities vidual, the period beginning on the date the reform and simplify the international that manufacture the articles, materials, or individual has a TAA-related loss of cov- taxation rules of the United States, supplies outside the United States. erage and ending on the date the individual and for other purposes; which was or- ‘‘(2) CONTENT OF REPORT.—The report for a is certified by the Secretary (or by any per- dered to lie on the table; as follows: fiscal year under paragraph (1) shall sepa- son or entity designated by the Secretary) as At the end of the bill, add the following: rately indicate the following information: being eligible for a qualified health insur- TITLE V—BUY AMERICAN ACT ‘‘(A) The dollar value of any articles, mate- ance costs credit eligibility certificate for IMPROVEMENTS rials, or supplies that were manufactured purposes of section 7527 of the Internal Rev- outside the United States. SEC. 501. SHORT TITLE. enue Code of 1986 shall not be taken into ac- ‘‘(B) An itemized list of all waivers granted This title may be cited as the ‘‘Buy Amer- count in determining the continuous period with respect to such articles, materials, or ican Improvement Act of 2004’’. under subparagraph (A). supplies under this Act. SEC. 502. REQUIREMENTS FOR WAIVERS. ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- ‘‘(C) A summary of— (a) IN GENERAL.—Section 2 of the Buy ble individual’, and ‘TAA-related loss of cov- ‘‘(i) the total procurement funds expended American Act (41 U.S.C. 10a) is amended— erage’ have the meanings given such terms on articles, materials, and supplies manufac- (1) by striking ‘‘Notwithstanding’’ and in- in section 2205(b)(4)(C).’’. tured inside the United States; and serting the following: (c) IRC AMENDMENT.—Section 9801(c)(2) of ‘‘(ii) the total procurement funds expended ‘‘(a) IN GENERAL.—Notwithstanding’’; and the Internal Revenue Code of 1986 (relating (2) by adding at the end the following: on articles, materials, and supplies manufac- to not counting periods before significant ‘‘(b) SPECIAL RULES.—The following rules tured outside the United States. breaks in creditable coverage) is amended by shall apply in carrying out the provisions of ‘‘(3) PUBLIC AVAILABILITY.—The head of adding at the end the following: subsection (a): each Federal agency submitting a report ‘‘(D) TAA-ELIGIBLE INDIVIDUALS.— ‘‘(1) PUBLIC INTEREST WAIVER.—A deter- under paragraph (1) shall make the report ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- mination that it is not in the public interest publicly available by posting on an Internet RIOD.—In the case of a TAA-eligible indi- to enter into a contract in accordance with website.’’. vidual, the period beginning on the date the this Act may not be made after a notice of (b) DEFINITIONS.—Section 1 of the Buy individual has a TAA-related loss of cov- solicitation of offers for the contract is pub- American Act (41 U.S.C. 10c) is amended by erage and ending on the date the individual lished in accordance with section 18 of the striking subsection (c) and inserting the fol- is certified by the Secretary of Labor (or by Office of Federal Procurement Policy Act (41 lowing: ‘‘(c) FEDERAL AGENCY.—The term ‘Federal any person or entity designated by the Sec- U.S.C. 416) and section 8(e) of the Small Busi- retary of Labor) as being eligible for a quali- agency’ means any executive agency (as de- ness Act (15 U.S.C. 637(e)). fined in section 4(1) of the Federal Procure- fied health insurance costs credit eligibility ‘‘(2) DOMESTIC BIDDER.—A Federal agency certificate for purposes of section 7527 shall ment Policy Act (41 U.S.C. 403(1))) or any es- entering into a contract shall give pref- tablishment in the legislative or judicial not be taken into account in determining the erence to a company submitting an offer on continuous period under subparagraph (A). branch of the Government.’’. the contract that manufactures in the (c) CONFORMING AMENDMENTS.— ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- United States the article, material, or sup- (1) Section 2 of the Buy American Act (41 ble individual’, and ‘TAA-related loss of cov- ply for which the offer is solicited, if— erage’ have the meanings given such terms U.S.C. 10a) is amended by striking ‘‘depart- ‘‘(A) that company’s offer is substantially ment or independent establishment’’ and in- in section 4980B(f)(5)(C)(iv).’’. the same as an offer made by a company that (d) EFFECTIVE DATE.—The amendments serting ‘‘Federal agency’’. does not manufacture the article, material, (2) Section 3 of such Act (41 U.S.C. 10b) is made by this section take effect on the date or supply in the United States; or of enactment of this Act. amended— ‘‘(B) that company is the only company (A) by striking ‘‘department or inde- SEC. 603. IMPROVEMENT OF THE AFFORDABILITY that manufactures in the United States the pendent establishment’’ in subsection (a), OF THE CREDIT. article, material, or supply for which the (a) IN GENERAL.—Section 35(a) of the Inter- and inserting ‘‘Federal agency’’; and offer is solicited. nal Revenue Code of 1986 (relating to credit (B) by striking ‘‘department, bureau, agen- ‘‘(3) USE OUTSIDE THE UNITED STATES.— for health insurance costs of eligible individ- cy, or independent establishment’’ in sub- ‘‘(A) IN GENERAL.—Subsection (a) shall uals) is amended by striking ‘‘65’’ and insert- section (b) and inserting ‘‘Federal agency’’. apply without regard to whether the articles, ing ‘‘75’’. (3) Section 633 of the National Military Es- materials, or supplies to be acquired are for (b) CONFORMING AMENDMENT.—Section tablishment Appropriations Act, 1950 (41 7527(b) of such Code (relating to advance pay- use outside the United States if the articles, U.S.C. 10d) is amended by striking ‘‘depart- ment of credit for health insurance costs of materials, or supplies are not needed on an ment or independent establishment’’ and in- eligible individuals) is amended by striking urgent basis or if they are acquired on a reg- serting ‘‘Federal agency’’. ‘‘65’’ and inserting ‘‘75’’. ular basis. SEC. 503. GAO REPORT AND RECOMMENDATIONS. (c) EFFECTIVE DATE.—The amendments ‘‘(B) COST ANALYSIS.—In any case where (a) REQUIREMENT FOR REPORT.— made by this section apply to taxable years the articles, materials, or supplies are to be (1) IN GENERAL.—Not later than 6 months beginning after December 31, 2004. acquired for use outside the United States after the date of enactment of this Act, the and are not needed on an urgent basis, before SEC. 604. EXPEDITED REFUND OF CREDIT FOR Comptroller General of the United States PRORATED FIRST MONTHLY PRE- entering into a contract an analysis shall be shall report to Congress recommendations MIUM. made of the difference in the cost for acquir- for determining, for purposes of applying the (a) IN GENERAL.—Section 7527 of the Inter- ing the articles, materials, or supplies from waiver provision of section 2(a) of the Buy nal Revenue Code of 1986 (relating to advance a company manufacturing the articles, ma- American Act— payment of credit for health insurance costs terials, or supplies in the United States (in- (A) unreasonable cost; and of eligible individuals) is amended by adding cluding the cost of shipping) and the cost for (B) inconsistent with the public interest. at the end the following: acquiring the articles, materials, or supplies (2) REPORT TO INCLUDE RECOMMENDED DEFI- ‘‘(e) EXPEDITED PAYMENT OF PRORATED from a company manufacturing the articles, NITIONS.—The report shall include rec- FIRST MONTHLY PREMIUM.—The program es- materials, or supplies outside the United ommendations for a statutory definition of tablished under subsection (a) shall provide States (including the cost of shipping). unreasonable cost and standards for deter- for payment to a certified individual of an ‘‘(4) DOMESTIC AVAILABILITY.—The head of a mining inconsistency with the public inter- amount equal to the applicable percentage Federal agency may not make a determina- est. (as defined in section 35(a)(2)) of the prorated tion under subsection (a) that an article, ma- (b) WAIVER PROCEDURES.—The report de- first monthly premium for coverage of the terial, or supply is not mined, produced, or scribed in subsection (a) shall also include taxpayer and qualifying family members manufactured, as the case may be, in the recommendations for establishing proce- under qualified health insurance for eligible United States in sufficient and reasonably dures for applying the waiver provisions of coverage months upon receipt by the Sec- available commercial quantities and of satis- the Buy American Act that can be consist- retary of evidence of payment of such pre- factory quality, unless the head of the agen- ently applied. mium by the certified individual.’’. cy has conducted a study and, on the basis of SEC. 504. DUAL-USE TECHNOLOGIES. (b) EFFECTIVE DATE.—The amendment such study, determined that— The head of a Federal agency (as defined in made by this section takes effect on the date ‘‘(A) domestic production cannot be initi- section 1(c) of the Buy American Act (as of enactment of this Act. ated to meet the procurement needs; and amended by section 502)) may not enter into ‘‘(B) a comparable article, material, or a contract, nor permit a subcontract under a SA 2917. Mr. FEINGOLD submitted supply is not available from a company in contract of the Federal agency, with a for- an amendment intended to be proposed the United States. eign entity that involves giving the foreign

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00094 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3041 entity plans, manuals, or other information ship is established or before the effective wage differential of the qualified active duty that would facilitate the manufacture of a date of this section, to transmit such infor- reservist multiplied by the number of days dual-use item on the Commerce Control List mation to such foreign affiliate or subcon- such qualified reservist participates in quali- unless approval for providing such plans, tractor; and fied reserve component duty during the tax- manuals, or information has been obtained (C) the consent referred to in subparagraph able year, including time spent in a travel in accordance with the provisions of the Ex- (B) is renewed by the citizen within 1 year status. port Administration Act of 1979 (50 U.S.C. before such information is transmitted. ‘‘(2) DAILY WAGE DIFFERENTIAL.—The daily App. 2401 et seq.) and the Export Administra- (3) LIABILITY.—A business enterprise shall wage differential is an amount equal to the tion Regulations (15 C.F.R. part 730 et seq.). be liable for any damages arising from the lesser of— improper storage, duplication, sharing, or ‘‘(A) the excess of— SA 2918. Mrs. CLINTON submitted an other misuse of personally identifiable infor- ‘‘(i) the qualified reservist’s average daily amendment intended to be proposed by mation by the business enterprise or by any qualified compensation, over her to the bill S. 1637, to amend the In- of its foreign affiliates or subcontractors ‘‘(ii) the qualified reservist’s average daily ternal Revenue Code of 1986 to comply that received such information from the military pay while participating in qualified with the World Trade Organization rul- business enterprise. reserve component duty to the exclusion of (4) RULEMAKING.—The Chairman of the the qualified reservist’s normal employment ings on the FSC/ETI benefit in a man- Federal Trade Commission shall promulgate ner that preserves jobs and production duties, or regulations through which the Chairman ‘‘(B) $54.80. activities in the United States, to re- may enforce the provisions of this subsection ‘‘(3) AVERAGE DAILY QUALIFIED COMPENSA- form and simplify the international and impose a fine for a violation of this sub- TION.— taxation rules of the United States, section. ‘‘(A) IN GENERAL.—The term ‘average daily and for other purposes; which was or- (c) HEALTH CARE INFORMATION.— qualified compensation’ means— dered to lie on the table; as follows: (1) IN GENERAL.—A health care business ‘‘(i) the qualified compensation of the shall be liable for any damages arising from At the appropriate place, insert the fol- qualified reservist for the one-year period the improper storage, duplication, sharing, ending on the day before the date the quali- lowing: or other misuse of personally identifiable in- SEC. ll. TRANSMISSION OF PERSONALLY IDEN- fied reservist begins qualified reserve compo- formation by the business enterprise or by nent duty, divided by TIFIABLE INFORMATION TO FOR- any of its foreign affiliates or subcontractors EIGN AFFILIATES OR SUBCONTRAC- ‘‘(ii) 365. that received such information from the TORS. ‘‘(B) QUALIFIED COMPENSATION.—The term business enterprise. (a) DEFINITIONS.—As used in this section, ‘qualified compensation’ means— (2) NO OPT OUT PROVISION.—A health care the following definitions shall apply: ‘‘(i) compensation which is normally con- business may not terminate an existing rela- (1) BUSINESS ENTERPRISE.—The term ‘‘busi- tingent on the qualified reservist’s presence tionship with a consumer of health care serv- ness enterprise’’ means any organization, as- for work and which would be includible in ices to avoid the consent requirement under sociation, or venture established to make a gross income, and subsection (b)(2). profit. ‘‘(ii) compensation which is not character- (3) RULEMAKING.—The Secretary of Health (2) COUNTRY WITH ADEQUATE PRIVACY PRO- ized by the qualified reservist’s employer as and Human Services shall promulgate regu- TECTION.—The term ‘‘country with adequate vacation or holiday pay, or as sick leave or lations through which the Secretary may en- privacy protection’’ means a country that pay, or as any other form of pay for a non- has been certified by the Federal Trade Com- force the provisions of this subsection and impose a fine for the violation of this sub- specific leave of absence. mission as having a legal system that pro- ‘‘(4) AVERAGE DAILY MILITARY PAY AND AL- vides adequate privacy protection for person- section. (d) CERTIFICATION.—Not later than 6 LOWANCES.— ally identifiable information. months after the date of enactment of this ‘‘(A) IN GENERAL.—The term ‘average daily (3) HEALTH CARE BUSINESS.—The term Act, the Federal Trade Commission shall— military pay and allowances’ means— ‘‘health care business’’ means any business (1) certify those countries that have legal ‘‘(i) the amount paid to the qualified re- enterprise or private, nonprofit organization systems that provide adequate privacy pro- servist during the taxable year as military that collects or retains personally identifi- tection for personally identifiable informa- pay and allowances on account of the quali- able information about consumers in rela- tion; and fied reservist’s participation in qualified re- tion to medical care, including— (2) make the list of countries certified serve component duty, determined as of the (A) hospitals; under paragraph (1) available to the general date the qualified reservists begins qualified (B) health maintenance organizations; public. reserve component duty, divided by (C) medical partnerships; (e) EFFECTIVE DATE.—This section shall ‘‘(ii) the total number of days the qualified (D) emergency medical transportation take effect on the date which is 90 days after reservist participates in qualified reserve companies; the date of enactment of this Act. component duty during the taxable year, in- (E) medical transcription companies; and cluding time spent in travel status. (F) subcontractors, or potential sub- SA 2919. Mr. DORGAN submitted an ‘‘(B) MILITARY PAY AND ALLOWANCES.—The contractors, of the entities described in sub- amendment intended to be proposed by term ‘military pay’ means pay as that term paragraphs (A) through (E). him to the bill S. 1637, to amend the In- is defined in section 101(21) of title 37, United (4) PERSONALLY IDENTIFIABLE INFORMA- ternal Revenue Code of 1986 to comply States Code, and the term ‘allowances’ TION.—The term ‘‘personally identifiable in- with the World Trade Organization rul- means the allowances payable to a member formation’’ includes— of the Armed Forces of the United States (A) name; ings on the FSC/ETI benefit in a man- under chapter 7 of that title. (B) bank account information; ner that preserves jobs and production ‘‘(5) QUALIFIED RESERVE COMPONENT DUTY.— (C) social security number; activities in the United States, to re- The term ‘qualified reserve component duty’ (D) address; form and simplify the international means— (E) telephone number; taxation rules of the United States, ‘‘(A) active duty performed, as designated (F) passwords; and for other purposes; which was or- in the reservist’s military orders, in support (G) mother’s maiden name; and dered to lie on the table; as follows: of a contingency operation as defined in sec- (H) age. At the end add the following: tion 101(a)(13) of title 10, United States Code, (b) TRANSMISSION OF INFORMATION.— SEC. ll. REFUNDABLE CREDIT FOR ACTIVATED or (1) IN GENERAL.—A business enterprise may MILITARY RESERVISTS. ‘‘(B) full-time National Guard duty (as de- transmit personally identifiable information (a) IN GENERAL.—Subpart C of part IV of fined in section 101(19) of title 32, United regarding a citizen of the United States to subchapter A of chapter 1 is amended by re- States Code) which is ordered pursuant to a any foreign affiliate or subcontractor lo- designating section 36 as section 37 and by request by the President, cated in a country that is a country with inserting after section 35 the following new for a period under 1 or more orders described adequate privacy protection. section: in subparagraph (A) or (B) of more than 90 (2) CONSENT REQUIRED.—A business enter- ‘‘SEC. 36. WAGE DIFFERENTIAL FOR ACTIVATED consecutive days. prise may not transmit personally identifi- RESERVISTS. able information regarding a citizen of the ‘‘(a) IN GENERAL.—In the case of a qualified ‘‘(c) QUALIFIED RESERVIST.—For purposes United States to any foreign affiliate or sub- reservist, there shall be allowed as a credit of this section— contractor located outside of the United against the tax imposed by this subtitle an ‘‘(1) IN GENERAL.—The term ‘qualified re- States unless— amount equal to the qualified active duty servist’ means an individual who is engaged (A) the business enterprise discloses to the wage differential of such qualified reservist in normal employment and is a member of— citizen whether the country to which the in- for the taxable year. ‘‘(A) the National Guard (as defined by sec- formation will be transmitted has been cer- ‘‘(b) QUALIFIED ACTIVE DUTY WAGE DIF- tion 101(c)(1) of title 10, United States Code), tified under subsection (d); FERENTIAL.—For purposes of this section— or (B) the business enterprise obtains consent ‘‘(1) IN GENERAL.—The term ‘qualified ac- ‘‘(B) the Ready Reserve (as defined by sec- from the citizen, before a consumer relation- tive duty wage differential’ means the daily tion 10142 of title 10, United States Code).

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‘‘(2) NORMAL EMPLOYMENT.—The term ‘nor- ‘‘(4) MODIFICATION OF INCOME REQUIREMENT when such property was sold to the unrelated mal employment duties’ includes self-em- FOR CENSUS TRACTS WITHIN HIGH MIGRATION person by the controlled foreign corporation ployment. RURAL COUNTIES.— (or a related person), it was reasonable to ex- ‘‘(d) DISALLOWANCE WITH RESPECT TO PER- ‘‘(A) IN GENERAL.—In the case of a popu- pect that— SONS ORDERED TO ACTIVE DUTY FOR TRAIN- lation census tract located within a high mi- ‘‘(i) such property would be imported into ING.—No credit shall be allowed under sub- gration rural county, paragraph (1)(B)(i) the United States, or section (a) to a qualified reservist who is shall be applied by substituting ‘85 percent’ ‘‘(ii) such property would be used as a com- called or ordered to active duty for any of for ‘80 percent’. ponent in other property which would be im- the following types of duty: ‘‘(B) HIGH MIGRATION RURAL COUNTY.—For ported into the United States. ‘‘(1) Active duty for training under any purposes of this paragraph, the term ‘high ‘‘(C) EXCEPTION FOR PROPERTY SUBSE- provision of title 10, United States Code. migration rural county’ means any county QUENTLY EXPORTED.—The term ‘imported ‘‘(2) Training at encampments, maneuvers, which, during the 20-year period ending on property’ does not include any property outdoor target practice, or other exercises December 31, 2000, has a net out-migration of which is imported into the United States and under chapter 5 of title 32, United States inhabitants from the county of at least 10- which— Code. percent of the population of the county at ‘‘(i) before substantial use in the United ‘‘(3) Full-time National Guard duty, as de- the beginning of such period.’’. States, is sold, leased, or rented by the con- fined in section 101(d)(5) of title 10, United (b) EFFECTIVE DATE.—The amendment trolled foreign corporation or a related per- States Code. made by this section shall take effect as if son for direct use, consumption, or disposi- ‘‘(e) CREDIT INCLUDED IN GROSS INCOME.— included in the amendment made by section tion outside the United States, or Gross income includes the amount of the 121(a) of the Community Renewal Tax Relief ‘‘(ii) is used by the controlled foreign cor- credit allowed the taxpayer under this sec- Act of 2000. poration or a related person as a component tion.’’. in other property which is so sold, leased, or (b) CONFORMING AMENDMENTS.— SA 2922. Mr. DORGAN (for himself, rented. (1) Paragraph (2) of section 1324(b) of title Ms. MIKULSKI, Mr. KOHL, Mr. KENNEDY, ‘‘(3) DEFINITIONS AND SPECIAL RULES.— 31, United States Code, is amended by insert- Mr. EDWARDS, Mr. FEINGOLD, and Mr. ‘‘(A) IMPORT.—For purposes of this sub- ing before the period ‘‘, or from section 36 of HARKIN) submitted an amendment in- section, the term ‘import’ means entering, or such Code’’. tended to be proposed by him to the withdrawal from warehouse, for consumption or use. Such term includes any grant of the (2) The table of sections for subpart C of bill S. 1637, to amend the Internal Rev- part IV of chapter 1 is amended by striking right to use intangible property (as defined the last item and inserting the following new enue Code of 1986 to comply with the in section 936(h)(3)(B)) in the United States. items: World Trade Organization rulings on ‘‘(B) UNRELATED PERSON.—For purposes of the FSC/ETI benefit in a manner that this subsection, the term ‘unrelated person’ ‘‘Sec. 36. Wage differential for activated re- means any person who is not a related per- servists. preserves jobs and production activi- ties in the United States, to reform and son with respect to the controlled foreign ‘‘Sec. 37. Overpayments of tax.’’. simplify the international taxation corporation. (c) EFFECTIVE DATE.—The amendments rules of the United States, and for ‘‘(C) COORDINATION WITH FOREIGN BASE COM- made by this section shall apply to taxable PANY SALES INCOME.—For purposes of this years beginning after December 31, 2003. other purposes; which was ordered to section, the term ‘foreign base company lie on the table; as follows: sales income’ shall not include any imported SA 2920. Mr. DORGAN submitted an On page 330, between lines 6 and 7, insert property income.’’ amendment intended to be proposed by the following: (c) SEPARATE APPLICATION OF LIMITATIONS him to the bill S. 1637, to amend the In- SEC. ll. TAXATION OF INCOME OF CON- ON FOREIGN TAX CREDIT FOR IMPORTED PROP- ternal Revenue Code of 1986 to comply TROLLED FOREIGN CORPORATIONS ERTY INCOME.— ATTRIBUTABLE TO IMPORTED PROP- (1) IN GENERAL.—Paragraph (1) of section with the World Trade Organization rul- ERTY. 904(d) (relating to separate application of ings on the FSC/ETI benefit in a man- (a) GENERAL RULE.—Subsection (a) of sec- section with respect to certain categories of ner that preserves jobs and production tion 954 (defining foreign base company in- income) is amended by striking ‘‘and’’ at the activities in the United States, to re- come) is amended by striking ‘‘and’’ at the end of subparagraph (H), by redesignating form and simplify the international end of paragraph (4), by striking the period subparagraph (I) as subparagraph (J), and by taxation rules of the United States, at the end of paragraph (5) and inserting ‘‘, inserting after subparagraph (H) the fol- and’’, and by adding at the end the following lowing new subparagraph: and for other purposes; which was or- new paragraph: dered to lie on the table; as follows: ‘‘(I) imported property income, and’’. ‘‘(6) imported property income for the tax- (2) IMPORTED PROPERTY INCOME DEFINED.— At the end add the following: able year (determined under subsection (j) Paragraph (2) of section 904(d) is amended by SEC. ll. ADDITIONAL 2-YEAR EXTENSION OF and reduced as provided in subsection redesignating subparagraphs (H) and (I) as WIND ENERGY PRODUCITON CRED- (b)(5)).’’ subparagraphs (I) and (J), respectively, and IT. (b) DEFINITION OF IMPORTED PROPERTY IN- by inserting after subparagraph (G) the fol- (a) IN GENERAL.—Section 45(c)(3)(a) (relat- COME.—Section 954 is amended by adding at lowing new subparagraph: ing to wind facility), as amended by this Act, the end the following new subsection: ‘‘(H) IMPORTED PROPERTY INCOME.—The is amended by striking ‘‘January 1, 2005’’ and ‘‘(j) IMPORTED PROPERTY INCOME.— term ‘imported property income’ means any inserting ‘‘January 1, 2007’’. ‘‘(1) IN GENERAL.—For purposes of sub- income received or accrued by any person (b) EFFECTIVE DATE.—The amendments section (a)(6), the term ‘imported property which is of a kind which would be imported made by this section shall apply to elec- income’ means income (whether in the form property income (as defined in section tricity sold after December 31, 2003, in tax- of profits, commissions, fees, or otherwise) 954(j)).’’ able years ending after such date. derived in connection with— (3) LOOK-THRU RULES TO APPLY.—Subpara- ‘‘(A) manufacturing, producing, growing, graph (F) of section 904(d)(3) is amended by SA 2921. Mr. DORGAN submitted an or extracting imported property, amendment intended to be proposed by striking ‘‘or (E)’’ and inserting ‘‘(E), or (I)’’. ‘‘(B) the sale, exchange, or other disposi- (d) TECHNICAL AMENDMENTS.— him to the bill S. 1637, to amend the In- tion of imported property, or (1) Clause (iii) of section 952(c)(1)(B) (relat- ternal Revenue Code of 1986 to comply ‘‘(C) the lease, rental, or licensing of im- ing to certain prior year deficits may be with the World Trade Organization rul- ported property. taken into account) is amended— ings on the FSC/ETI benefit in a man- Such term shall not include any foreign oil (A) by redesignating subclauses (III), (IV), ner that preserves jobs and production and gas extraction income (within the mean- (V), and (VI) as subclauses (IV), (V), (VI), and activities in the United States, to re- ing of section 907(c)) or any foreign oil re- (VII), and lated income (within the meaning of section form and simplify the international (B) by inserting after subclause (II) the fol- 907(c)). lowing new subclause: taxation rules of the United States, ‘‘(2) IMPORTED PROPERTY.—For purposes of ‘‘(III) imported property income,’’. and for other purposes; which was or- this subsection— (2) Paragraph (5) of section 954(b) (relating dered to lie on the table; as follows: ‘‘(A) IN GENERAL.—Except as otherwise pro- to deductions to be taken into account) is On page 179, after line 25, add the fol- vided in this paragraph, the term ‘imported amended by striking ‘‘and the foreign base lowing: property’ means property which is imported company oil related income’’ and inserting SEC. ll. MODIFICATION OF INCOME REQUIRE- into the United States by the controlled for- ‘‘the foreign base company oil related in- MENT FOR CENSUS TRACTS WITHIN eign corporation or a related person. come, and the imported property income’’. HIGH MIGRATION RURAL COUNTIES. ‘‘(B) IMPORTED PROPERTY INCLUDES CERTAIN (e) EFFECTIVE DATE.— (a) IN GENERAL.—Section 45D(e) (relating PROPERTY IMPORTED BY UNRELATED PER- (1) IN GENERAL.—Except as provided in to low-income community) is amended by SONS.—The term ‘imported property’ in- paragraph (2), the amendments made by this adding at the end the following new para- cludes any property imported into the section shall apply to taxable years of for- graph: United States by an unrelated person if, eign corporations beginning after the date of

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00096 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3043 the enactment of this Act, and to taxable in the distribution for the use of an organiza- ‘‘(A) the amount of the deduction taken years of United States shareholders within tion described in section 170(c) would be al- under section 642(c) within such year, which or with which such taxable years of lowable under section 170 (determined with- ‘‘(B) the amount paid out within such year such foreign corporations end. out regard to subsection (b) thereof and this which represents amounts for which deduc- (2) SUBSECTION (c).—The amendments made paragraph). tions under section 642(c) have been taken in by subsection (c) shall apply to taxable years ‘‘(D) APPLICATION OF SECTION 72.—Notwith- prior years, beginning after such date of enactment. standing section 72, in determining the ex- ‘‘(C) the amount for which such deductions (f) SENSE OF THE SENATE.—It is the sense of tent to which a distribution is a qualified have been taken in prior years but which has the Senate that any increase in revenues in charitable distribution, the entire amount of not been paid out at the beginning of such the Treasury resulting from the amendments the distribution shall be treated as includ- year, made by this section should be applied to re- ible in gross income without regard to sub- ‘‘(D) the amount paid out of principal in duce the phasein of the deduction relating to paragraph (A) to the extent that such the current and prior years for the purposes income attributable to domestic production amount does not exceed the aggregate described in section 642(c), activities under section 199 of the Internal amount which would have been so includible ‘‘(E) the total income of the trust within Revenue Code of 1986 (as added by section 102 if all amounts were distributed from all indi- such year and the expenses attributable of this Act). vidual retirement accounts treated as 1 con- thereto, and tract under paragraph (2)(A) for purposes of ‘‘(F) a balance sheet showing the assets, li- SA 2923. Mr. DORGAN submitted an determining the inclusion on such distribu- abilities, and net worth of the trust as of the amendment intended to be proposed by tion under section 72. Proper adjustments beginning of such year. him to the bill S. 1637, to amend the In- shall be made in applying section 72 to other ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not ternal Revenue Code of 1986 to comply distributions in such taxable year and subse- apply to a trust for any taxable year if— with the World Trade Organization rul- quent taxable years. ‘‘(A) all the net income for such year, de- ings on the FSC/ETI benefit in a man- ‘‘(E) SPECIAL RULES FOR SPLIT-INTEREST EN- termined under the applicable principles of the law of trusts, is required to be distrib- ner that preserves jobs and production TITIES.— ‘‘(i) CHARITABLE REMAINDER TRUSTS.—Not- uted currently to the beneficiaries, or activities in the United States, to re- withstanding section 664(b), distributions ‘‘(B) the trust is described in section form and simplify the international made from a trust described in subparagraph 4947(a)(1).’’. taxation rules of the United States, (G)(i) shall be treated as ordinary income in (2) INCREASE IN PENALTY RELATING TO FIL- and for other purposes; which was or- the hands of the beneficiary to whom is paid ING OF INFORMATION RETURN BY SPLIT-INTER- dered to lie on the table; as follows: the annuity described in section 664(d)(1)(A) EST TRUSTS.—Paragraph (2) of section 6652(c) On page 179, after line 25, add the fol- or the payment described in section (relating to returns by exempt organizations lowing: 664(d)(2)(A). and by certain trusts) is amended by adding at the end the following new subparagraph: SEC. ll. TAX-FREE DISTRIBUTIONS FROM INDI- ‘‘(ii) POOLED INCOME FUNDS.—No amount VIDUAL RETIREMENT ACCOUNTS shall be includible in the gross income of a ‘‘(C) SPLIT-INTEREST TRUSTS.—In the case FOR CHARITABLE PURPOSES. pooled income fund (as defined in subpara- of a trust which is required to file a return (a) IN GENERAL.—Subsection (d) of section graph (G)(ii)) by reason of a qualified chari- under section 6034(a), subparagraphs (A) and 408 (relating to individual retirement ac- table distribution to such fund, and all dis- (B) of this paragraph shall not apply and counts) is amended by adding at the end the tributions from the fund which are attrib- paragraph (1) shall apply in the same manner following new paragraph: utable to qualified charitable distributions as if such return were required under section ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR- shall be treated as ordinary income to the 6033, except that— POSES.— beneficiary. ‘‘(i) the 5 percent limitation in the second ‘‘(A) IN GENERAL.—No amount shall be in- ‘‘(iii) CHARITABLE GIFT ANNUITIES.—Quali- sentence of paragraph (1)(A) shall not apply, cludible in gross income by reason of a quali- fied charitable distributions made for a char- ‘‘(ii) in the case of any trust with gross in- fied charitable distribution. itable gift annuity shall not be treated as an come in excess of $250,000, the first sentence ‘‘(B) QUALIFIED CHARITABLE DISTRIBUTION.— investment in the contract. of paragraph (1)(A) shall be applied by sub- For purposes of this paragraph, the term ‘‘(F) DENIAL OF DEDUCTION.—Qualified char- stituting ‘$100’ for ‘$20’, and the second sen- ‘qualified charitable distribution’ means any itable distributions shall not be taken into tence thereof shall be applied by substituting distribution from an individual retirement account in determining the deduction under ‘$50,000’ for ‘$10,000’, and account— section 170. ‘‘(iii) the third sentence of paragraph (1)(A) ‘‘(i) which is made directly by the trustee— ‘‘(G) SPLIT-INTEREST ENTITY DEFINED.—For shall be disregarded. ‘‘(I) to an organization described in section purposes of this paragraph, the term ‘split- In addition to any penalty imposed on the 170(c), or interest entity’ means— trust pursuant to this subparagraph, if the ‘‘(II) to a split-interest entity, and ‘‘(i) a charitable remainder annuity trust person required to file such return know- ‘‘(ii) which is made on or after— or a charitable remainder unitrust (as such ingly fails to file the return, such penalty ‘‘(I) in the case of any distribution de- terms are defined in section 664(d)) which shall also be imposed on such person who scribed in clause (i)(I), the date that the in- must be funded exclusively by qualified char- shall be personally liable for such penalty.’’. dividual for whose benefit the account is itable distributions, (3) CONFIDENTIALITY OF NONCHARITABLE maintained has attained age 701⁄2, and ‘‘(ii) a pooled income fund (as defined in BENEFICIARIES.—Subsection (b) of section ‘‘(II) in the case of any distribution de- section 642(c)(5)), but only if the fund ac- 6104 (relating to inspection of annual infor- scribed in clause (i)(II), the the date that counts separately for amounts attributable mation returns) is amended by adding at the such individual has attained age 591⁄2. to qualified charitable distributions, and end the following new sentence: ‘‘In the case A distribution shall be treated as a qualified ‘‘(iii) a charitable gift annuity (as defined of a trust which is required to file a return charitable distribution only to the extent in section 501(m)(5)).’’. under section 6034(a), this subsection shall that the distribution would be includible in (b) MODIFICATIONS RELATING TO INFORMA- not apply to information regarding bene- gross income without regard to subpara- TION RETURNS BY CERTAIN TRUSTS.— ficiaries which are not organizations de- graph (A) and, in the case of a distribution to (1) RETURNS.—Section 6034 (relating to re- scribed in section 170(c).’’. a split-interest entity, only if no person turns by trusts described in section 4947(a)(2) (c) EFFECTIVE DATES.— holds an income interest in the amounts in or claiming charitable deductions under sec- (1) SUBSECTION (a).—The amendment made the split-interest entity attributable to such tion 642(c)) is amended to read as follows: by subsection (a) shall apply to distribu- distribution other than one or more of the ‘‘SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN tions— following: the individual for whose benefit SECTION 4947(a)(2) OR CLAIMING (A) described in section 408(d)(8)(B)(i)(I) of such account is maintained, the spouse of CHARITABLE DEDUCTIONS UNDER the Internal Revenue Code of 1986, as added such individual, or any organization de- SECTION 642(c). by this section, made after the date of the scribed in section 170(c). ‘‘(a) TRUSTS DESCRIBED IN SECTION enactment of this Act, and ‘‘(C) CONTRIBUTIONS MUST BE OTHERWISE DE- 4947(a)(2).—Every trust described in section (B) described in section 408(d)(8)(B)(i)(II) of DUCTIBLE.—For purposes of this paragraph— 4947(a)(2) shall furnish such information with such Code, as so added, made after December ‘‘(i) DIRECT CONTRIBUTIONS.—A distribution respect to the taxable year as the Secretary 31, 2003. to an organization described in section 170(c) may by forms or regulations require. (2) SUBSECTION (b).—The amendments made shall be treated as a qualified charitable dis- ‘‘(b) TRUSTS CLAIMING A CHARITABLE DE- by subsection (b) shall apply to returns for tribution only if a deduction for the entire DUCTION UNDER SECTION 642(c).— taxable years beginning after December 31, distribution would be allowable under sec- ‘‘(1) IN GENERAL.—Every trust not required 2003. tion 170 (determined without regard to sub- to file a return under subsection (a) but section (b) thereof and this paragraph). claiming a deduction under section 642(c) for SA 2924. Mr. DORGAN (for himself, ‘‘(ii) SPLIT-INTEREST GIFTS.—A distribution the taxable year shall furnish such informa- Mr. COLEMAN, Ms. CANTWELL, Mrs. to a split-interest entity shall be treated as tion with respect to such taxable year as the MURRAY, Mr. BINGAMAN, and Mr. NEL- a qualified charitable distribution only if a Secretary may by forms or regulations pre- SON of Nebraska) submitted an amend- deduction for the entire value of the interest scribe, including— ment intended to be proposed by him

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00097 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3044 CONGRESSIONAL RECORD — SENATE March 23, 2004 to the bill S. 1637, to amend the Inter- ‘‘(6) MUNICIPAL SOLID WASTE.—The term ‘‘(5) SMALL IRRIGATION POWER FACILITY.—In nal Revenue Code of 1986 to comply ‘municipal solid waste’ has the meaning the case of a facility using small irrigation with the World Trade Organization rul- given the term ‘solid waste’ under section power to produce electricity, the term 2(27) of the Solid Waste Disposal Act (42 ‘qualified facility’ means any facility owned ings on the FSC/ETI benefit in a man- U.S.C. 6903).’’. by the taxpayer which is originally placed in ner that preserves jobs and production (b) EXTENSION AND EXPANSION OF QUALIFIED service after December 31, 2003, and before activities in the United States, to re- FACILITIES.— January 1, 2007. form and simplify the international (1) IN GENERAL.—Section 45 is amended by ‘‘(6) LANDFILL GAS FACILITIES.—In the case taxation rules of the United States, redesignating subsection (d) as subsection (e) of a facility producing electricity from gas and for other purposes; which was or- and by inserting after subsection (c) the fol- derived from the biodegradation of munic- dered to lie on the table; as follows: lowing new subsection: ipal solid waste, the term ‘qualified facility’ ‘‘(d) QUALIFIED FACILITIES.—For purposes means any facility owned by the taxpayer At the end add the following: of this section— which is originally placed in service after SEC. ll. EXTENSION AND EXPANSION OF CRED- ‘‘(1) WIND FACILITY.—In the case of a facil- December 31, 2003, and before January 1, 2007. IT FOR ELECTRICITY PRODUCED ity using wind to produce electricity, the ‘‘(7) TRASH COMBUSTION FACILITIES.—In the FROM CERTAIN RENEWABLE RE- term ‘qualified facility’ means any facility SOURCES. case of a facility which burns municipal owned by the taxpayer which is originally (a) EXPANSION OF QUALIFIED ENERGY RE- solid waste to produce electricity, the term placed in service after December 31, 1993, and SOURCES.—Subsection (c) of section 45 (relat- ‘qualified facility’ means any facility or unit before January 1, 2007. ing to electricity produced from certain re- owned by the taxpayer which is originally ‘‘(2) CLOSED-LOOP BIOMASS FACILITY.— newable resources) is amended to read as fol- placed in service after December 31, 2003, and ‘‘(A) IN GENERAL.—In the case of a facility lows: before January 1, 2007.’’. using closed-loop biomass to produce elec- ‘‘(c) QUALIFIED ENERGY RESOURCES.—For (2) CONFORMING AMENDMENT.—Section 45(e) tricity, the term ‘qualified facility’ means purposes of this section— of such Code, as so redesignated, is amended any facility— ‘‘(1) IN GENERAL.—The term ‘qualified en- by striking ‘‘subsection (c)(3)(A)’’ in para- ‘‘(i) owned by the taxpayer which is origi- ergy resources’ means— graph (7)(A)(i) and inserting ‘‘subsection nally placed in service after December 31, ‘‘(A) wind, (d)(1)’’. 1992, and before January 1, 2007, or ‘‘(B) closed-loop biomass, (c) SPECIAL CREDIT RATE AND PERIOD FOR ‘‘(ii) owned by the taxpayer which before ‘‘(C) open-loop biomass, ELECTRICITY PRODUCED AND SOLD AFTER EN- January 1, 2007, is originally placed in serv- ‘‘(D) geothermal energy, ACTMENT DATE.—Section 45(b) is amended by ice and modified to use closed-loop biomass ‘‘(E) solar energy, adding at the end the following new para- to co-fire with coal, with other biomass, or graph: ‘‘(F) small irrigation power, and with both, but only if the modification is ap- ‘‘(G) municipal solid waste. ‘‘(4) CREDIT RATE AND PERIOD FOR ELEC- proved under the Biomass Power for Rural TRICITY PRODUCED AND SOLD FROM CERTAIN ‘‘(2) CLOSED-LOOP BIOMASS.—The term Development Programs or is part of a pilot ‘closed-loop biomass’ means any organic ma- FACILITIES.— project of the Commodity Credit Corporation ‘‘(A) CREDIT RATE.—In the case of elec- terial from a plant which is planted exclu- as described in 65 Fed. Reg. 63052. sively for purposes of being used at a quali- tricity produced and sold after the date of ‘‘(B) SPECIAL RULES.—In the case of a the enactment of this paragraph at any fied facility to produce electricity. qualified facility described in subparagraph ‘‘(3) OPEN-LOOP BIOMASS.— qualified facility described in paragraph (3), (A)(ii)— (5), (6), or (7) of subsection (d), the amount in ‘‘(A) IN GENERAL.—The term ‘open-loop bio- ‘‘(i) the 10-year period referred to in sub- mass’ means— effect under subsection (a)(1) for any cal- section (a) shall be treated as beginning no endar year beginning with the calendar year ‘‘(i) any agricultural livestock waste nutri- earlier than January 1, 2004, ents, or in which such date occurs (determined before ‘‘(ii) the amount of the credit determined the application of the last sentence of para- ‘‘(ii) any solid, nonhazardous, cellulosic under subsection (a) with respect to the fa- waste material which is segregated from graph (2) of this subsection) shall be reduced cility shall be an amount equal to the by one-third. other waste materials and which is derived amount determined without regard to this ‘‘(B) CREDIT PERIOD.— from— clause multiplied by the ratio of the thermal ‘‘(i) IN GENERAL.—Except as provided in ‘‘(I) any of the following forest-related re- content of the closed-loop biomass used in sources: mill and harvesting residues, clause (ii), in the case of any facility de- such facility to the thermal content of all scribed in paragraph (3), (4), (5), (6), or (7) of precommercial thinnings, slash, and brush, fuels used in such facility, and ‘‘(II) solid wood waste materials, including subsection (d), the 5-year period beginning ‘‘(iii) if the owner of such facility is not on the date the facility was originally placed waste pallets, crates, dunnage, manufac- the producer of the electricity, the person el- turing and construction wood wastes (other in service shall be substituted for the 10-year igible for the credit allowable under sub- period in subsection (a)(2)(A)(ii). than pressure-treated, chemically-treated, or section (a) shall be the lessee or the operator ‘‘(ii) CERTAIN OPEN-LOOP BIOMASS FACILI- painted wood wastes), and landscape or of such facility. TIES.—In the case of any facility described in right-of-way tree trimmings, but not includ- ‘‘(3) OPEN-LOOP BIOMASS FACILITIES.— ing municipal solid waste, gas derived from subsection (d)(3)(A)(ii) placed in service be- ‘‘(A) IN GENERAL.—In the case of a facility fore January 1, 2004, the 5-year period begin- the biodegradation of solid waste, or paper using open-loop biomass to produce elec- which is commonly recycled, or ning on January 1, 2004, shall be substituted tricity, the term ‘qualified facility’ means for the 10-year period in subsection ‘‘(III) agriculture sources, including or- any facility owned by the taxpayer which— chard tree crops, vineyard, grain, legumes, (a)(2)(A)(ii).’’. ‘‘(i) in the case of a facility using agricul- (d) COORDINATION WITH SECTION 48.—Sec- sugar, and other crop by-products or resi- tural livestock waste nutrients— tion 48(a)(3) (relating to defining energy dues. ‘‘(I) is originally placed in service after De- property) is amended by adding at the end Such term shall not include closed-loop bio- cember 31, 2003, and before January 1, 2007, the following new sentence: ‘‘Such term mass. and shall not include any property which is part ‘‘(B) AGRICULTURAL LIVESTOCK WASTE NU- ‘‘(II) the nameplate capacity rating of of a facility the production from which is al- TRIENTS.— which is not less than 150 kilowatts, and lowed as a credit under section 45 for the ‘‘(i) IN GENERAL.—The term ‘agricultural ‘‘(ii) in the case of any other facility, is taxable year or any prior taxable year.’’. livestock waste nutrients’ means agricul- originally placed in service before January 1, (e) CREDIT ALLOWED AGAINST REGULAR AND tural livestock manure and litter, including 2007. MINIMUM TAX.— wood shavings, straw, rice hulls, and other ‘‘(B) CREDIT ELIGIBILITY.—In the case of (1) IN GENERAL.—Subsection (c) of section bedding material for the disposition of ma- any facility described in subparagraph (A), if 38 (relating to limitation based on amount of nure. the owner of such facility is not the producer tax) is amended by redesignating paragraph ‘‘(ii) AGRICULTURAL LIVESTOCK.—The term of the electricity, the person eligible for the (4) as paragraph (5) and by inserting after ‘agricultural livestock’ includes bovine, credit allowable under subsection (a) shall be paragraph (3) the following new paragraph: swine, poultry, and sheep. the lessee or the operator of such facility. ‘‘(4) SPECIAL RULES FOR SECTION 45 CREDIT.— ‘‘(4) GEOTHERMAL ENERGY.—The term ‘geo- ‘‘(4) GEOTHERMAL OR SOLAR ENERGY FACIL- ‘‘(A) IN GENERAL.—In the case of any sec- thermal energy’ means energy derived from ITY.—In the case of a facility using geo- tion 45 credit— a geothermal deposit (within the meaning of thermal or solar energy to produce elec- ‘‘(i) this section and section 39 shall be ap- section 613(e)(2)). tricity, the term ‘qualified facility’ means plied separately with respect to such credit, ‘‘(5) SMALL IRRIGATION POWER.—The term any facility owned by the taxpayer which is and ‘small irrigation power’ means power— originally placed in service after December ‘‘(ii) in applying paragraph (1) to such cred- ‘‘(A) generated without any dam or im- 31, 2003, and before January 1, 2007. Such it— poundment of water through an irrigation term shall not include any property de- ‘‘(I) the tentative minimum tax shall be system canal or ditch, and scribed in section 48(a)(3) the basis of which treated as being zero, and ‘‘(B) the nameplate capacity rating of is taken into account by the taxpayer for ‘‘(II) the limitation under paragraph (1) (as which is not less than 150 kilowatts but is purposes of determining the energy credit modified by subclause (I)) shall be reduced less than 5 megawatts. under section 48. by the credit allowed under subsection (a) for

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00098 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3045 the taxable year (other than the section 45 an assignment to any other person not de- electricity from fossil fuels using the latest credit). scribed in subparagraph (A)(ii). Such transfer generation of technology. Not later than ‘‘(B) SECTION 45 CREDIT.—For purposes of may be revoked only with the consent of the June 30, 2006, the Comptroller shall report on this subsection, the term ‘section 45 credit’ Secretary. such study to the Committee on Ways and means the credit determined under section 45 ‘‘(ii) REGULATIONS.—The Secretary shall Means of the House of Representatives and to the extent that such credit is attributable prescribe such regulations as necessary to the Committee on Finance of the Senate. to electricity produced— ensure that any credit described in clause (i) f ‘‘(i) at a facility which is originally placed is assigned once and not reassigned by such in service after the date of the enactment of other person. AUTHORITY FOR COMMITTEES TO this paragraph, and ‘‘(iii) TRANSFER PROCEEDS TREATED AS ARIS- MEET ‘‘(ii) during the 4-year period beginning on ING FROM ESSENTIAL GOVERNMENT FUNCTION.— COMMITTEE ON ARMED SERVICES the date that such facility was originally Any proceeds derived by a person described placed in service.’’. in subclause (III), (IV), or (V) of subpara- Mr. GRASSLEY. Mr. President, I ask (2) CONFORMING AMENDMENTS.— graph (A)(ii) from the transfer of any credit unanimous consent that the Com- (A) Paragraph (2)(A)(ii)(II) of section 38(c) under clause (i) shall be treated as arising mittee on Armed Services be author- of such Code is amended by striking ‘‘or’’ from the exercise of an essential government ized to meet during the session of the and inserting a comma and by inserting ‘‘, function. Senate on March 23, 2004, at 9:30 a.m., and the section 45 credit’’ after ‘‘employee ‘‘(C) USE OF CREDIT AS AN OFFSET.—Not- in open session to receive testimony on credit’’. withstanding any other provision of law, in the Atomic Energy Defense activities (B) Paragraph (3)(A)(ii)(II) of section 38(c) the case of a person described in subclause of the Department of Energy, in review of such Code is amended by inserting ‘‘and (I), (II), or (V) of subparagraph (A)(ii), any of the Defense authorization request the section 45 credit’’ after ‘‘employee cred- credit to which subparagraph (A)(i) applies for fiscal year 2005. it’’. may be applied by such person, to the extent (f) ELIMINATION OF CERTAIN CREDIT REDUC- provided by the Secretary of Agriculture, as The PRESIDING OFFICER. Without TIONS.—Section 45(b)(3)(A) (relating to credit a prepayment of any loan, debt, or other ob- objection, it is so ordered. reduced for grants, tax-exempt bonds, sub- ligation the entity has incurred under sub- COMMITTEE ON BANKING, HOUSING, AND URBAN sidized energy financing, and other credits) chapter I of chapter 31 of title 7 of the Rural AFFAIRS is amended— Electrification Act of 1936 (7 U.S.C. 901 et Mr. GRASSLEY. Mr. President, I ask (1) by striking clause (ii), seq.), as in effect on the date of the enact- unanimous consent that the Com- (2) by redesignating clauses (iii) and (iv) as ment of the Energy Tax Incentives Act. mittee on Banking, Housing, and clauses (ii) and (iii), ‘‘(D) CREDIT NOT INCOME.—Any transfer Urban Affairs be authorized to meet (3) by inserting ‘‘(other than proceeds of an under subparagraph (B) or use under sub- issue of State or local government obliga- during the session of the Senate on paragraph (C) of any credit to which sub- Tuesday, March 23, 2004, at 10:00 a.m. to tions the interest on which is exempt from paragraph (A)(i) applies shall not be treated tax under section 103, or any loan, debt, or as income for purposes of section 501(c)(12). conduct a hearing on ‘‘Review of Cur- other obligation incurred under subchapter I ‘‘(E) TREATMENT OF UNRELATED PERSONS.— rent Investigations and Regulatory Ac- of chapter 31 of title 7 of the Rural Elec- For purposes of subsection (a)(2)(B), sales of tions Regarding the Mutual Fund In- trification Act of 1936 (7 U.S.C. 901 et seq.), as electricity among and between persons de- dustry.’’ in effect on the date of the enactment of the scribed in subparagraph (A)(ii) shall be treat- The PRESIDING OFFICER. Without Energy Tax Incentives Act of 2003)’’ after ed as sales between unrelated parties.’’. objection, it is so ordered. ‘‘project’’ in clause (ii) (as so redesignated), (h) EFFECTIVE DATES.— COMMITTEE ON COMMERCE, SCIENCE, AND (4) by adding at the end the following new (1) IN GENERAL.—Except as otherwise pro- TRANSPORTATION sentence: ‘‘This paragraph shall not apply vided in this subsection, the amendments with respect to any facility described in sub- Mr. GRASSLEY. Mr. President, I ask made by this section shall apply to elec- unanimous consent that the Com- section (d)(2)(A)(ii).’’, and tricity produced and sold after December 31, (5) by striking ‘‘TAX-EXEMPT BONDS,’’ in the 2003, in taxable years ending after such date. mittee on Commerce, Science, and heading and inserting ‘‘CERTAIN’’. (2) CERTAIN BIOMASS FACILITIES.—With re- Transportation be authorized to meet (g) TREATMENT OF PERSONS NOT ABLE TO spect to any facility described in section on Tuesday, March 23, 2004, at 10 a.m., USE ENTIRE CREDIT.—Section 45(e) (relating 45(d)(3)(A)(ii) of the Internal Revenue Code of on Passenger and Freight Rail Safety. to definitions and special rules), as redesig- 1986, as added by subsection (b)(1), which is The PRESIDING OFFICER. Without nated by subsection (b)(1), is amended by placed in service before January 1, 2004, the objection, it is so ordered. adding at the end the following new para- amendments made by this section shall graph: COMMITTEE ON ENVIRONMENT AND PUBLIC apply to electricity produced and sold after WORKS ‘‘(8) TREATMENT OF PERSONS NOT ABLE TO December 31, 2003, in taxable years ending Mr. GRASSLEY. Mr. President, I ask USE ENTIRE CREDIT.— after such date. ‘‘(A) ALLOWANCE OF CREDIT.— unanimous consent that the Com- (3) CREDIT RATE AND PERIOD FOR NEW FA- ‘‘(i) IN GENERAL.—Except as otherwise pro- mittee on Environment and Public CILITIES.—The amendments made by sub- vided in this subsection— section (c) shall apply to electricity pro- Works be authorized to meet on Tues- ‘‘(I) any credit allowable under subsection duced and sold after the date of the enact- day, March 23rd at 2:00 p.m. to conduct (a) with respect to a qualified facility owned ment of this Act, in taxable years ending an oversight hearing to examine the by a person described in clause (ii) may be after such date. ‘‘United Nations Convention on the transferred or used as provided in this para- (4) NONAPPLICATION OF AMENDMENTS TO Law of the Sea’’. graph, and PREEFFECTIVE DATE POULTRY WASTE FACILI- ‘‘(II) the determination as to whether the The meeting will be held in SD 406. TIES.—The amendments made by this section credit is allowable shall be made without re- The PRESIDING OFFICER. Without shall not apply with respect to any poultry objection, it is so ordered. gard to the tax-exempt status of the person. waste facility (within the meaning of section COMMITTEE ON FOREIGN RELATIONS ‘‘(ii) PERSONS DESCRIBED.—A person is de- 45(c)(3)(C), as in effect on the day before the scribed in this clause if the person is— date of the enactment of this Act) placed in Mr. GRASSLEY. Mr. President, I ask ‘‘(I) an organization described in section service before January 1, 2004. unanimous consent that the Com- 501(c)(12)(C) and exempt from tax under sec- (5) CREDIT ALLOWED AGAINST REGULAR AND mittee on Foreign Relations be author- tion 501(a), MINIMUM TAX.—The amendments made by ized to meet during the session of the ‘‘(II) an organization described in section subsection (e) shall apply to taxable years Senate on Tuesday, March 23, 2004 at 1381(a)(2)(C), ending after the date of the enactment of ‘‘(III) a public utility (as defined in section 9:30 a.m. to hold a hearing on U.S. & this Act. Mexico: Immigration Policy and the 136(c)(2)(B)), which is exempt from income (i) GAO STUDY.—The Comptroller General tax under this subtitle, Bilateral Relationship. of the United States shall conduct a study on The PRESIDING OFFICER. Without ‘‘(IV) any State or political subdivision the market viability of producing electricity thereof, the District of Columbia, any pos- from resources with respect to which credit objection, it is so ordered. session of the United States, or any agency is allowed under section 45 of the Internal COMMITTEE ON GOVERNMENTAL AFFAIRS or instrumentality of any of the foregoing, Revenue Code of 1986 but without such cred- Mr. GRASSLEY. Mr. President, I ask or it. In the case of open-loop biomass and mu- unanimous consent that the Com- ‘‘(V) any Indian tribal government (within nicipal solid waste resources, the study mittee on Governmental Affairs be au- the meaning of section 7871) or any agency or should take into account savings associated thorized to meet on Tuesday, March 23, instrumentality thereof. with not having to dispose of such resources. ‘‘(B) TRANSFER OF CREDIT.— In conducting such study, the Comptroller 2004, at 2:30 p.m. for a joint hearing ‘‘(i) IN GENERAL.—A person described in shall estimate the dollar value of the envi- with the House Committee on Govern- subparagraph (A)(ii) may transfer any credit ronmental impact of producing electricity ment Reform, titled ‘‘The Postal Serv- to which subparagraph (A)(i) applies through from such resources relative to producing ice in Crisis: A Joint Senate-House

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00099 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3046 CONGRESSIONAL RECORD — SENATE March 23, 2004 Hearing on Principles for Meaningful of America, Washington, DC, Ms. AUTHORIZING SENATE LEGAL Reform.’’ Vanessa Price, Intellectual Property REPRESENTATION The PRESIDING OFFICER. Without Specialist, Burton Snowboards, Bur- Mr. FRIST. Mr. President, I ask objection, it is so ordered. lington, VT. unanimous consent that the Senate COMMITTEE ON THE JUDICIARY The PRESIDING OFFICER. Without proceed to the immediate consider- Mr. GRASSLEY. Mr. President, I ask objection, it is so ordered. ation of S. Res. 323, which was sub- unanimous consent that the Com- SELECT COMMITTEE ON INTELLIGENCE mitted earlier today. mittee on the Judiciary be authorized Mr. GRASSLEY. Mr. President, I ask The PRESIDING OFFICER. The to meet to conduct a hearing on Tues- unanimous consent that the Select clerk will report the resolution by day, March 23, 2004, at 10 a.m. on ‘‘A Committee on Intelligence be author- title. Proposed Constitutional Amendment ized to meet during the session of the The legislative clerk read as follows: to Preserve Traditional Marriage’’ in Senate on March 23, 2004 at 2:30 p.m. to A resolution (S. Res. 323) to authorize legal the Russell Senate Office Building hold a closed hearing on intelligence representation in United States of America Room 325. matters. v. Elena Ruth Sassower. Panel I: The Honorable WAYNE The PRESIDING OFFICER. Without There being no objection, the Senate ALLARD, U.S. Senator, R–CO, The Hon- objection, it is so ordered. proceeded to consider the resolution. orable BARNEY FRANK, U.S. Represent- SPECIAL COMMITTEE ON AGING Mr. FRIST. Mr. President, this reso- ative, D–MA, The Honorable JOHN Mr. GRASSLEY. Mr. President, I ask lution concerns representation by the LEWIS, U.S. Representative, D–GA. unanimous consent that the Special Senate legal counsel of five Members Panel II: Ms. Phyllis G. Bossin, Phyl- Committee on Aging be authorized to and four of their employees who have lis G. Bossin Co., L.P.A., Chair, Amer- meet Tuesday, March 23, 2004 from 10:30 been subpoenaed to provide testimony ican Bar Association, Family Law Sec- a.m.–12:00 p.m. in Dirksen 628 for the and documents in a criminal trial by a tion, Cincinnati, OH, Professor Teresa purpose of conducting a hearing. defendant charged with disrupting pro- Stanton Collett, Professor of Law, St. The PRESIDING OFFICER. Without ceedings at a hearing of the Senate Thomas University School of Law, objection, it is so ordered. Committee on the Judiciary in May Minneapolis, MN, Reverent Richard SUBCOMMITTEE ON COMMUNICATIONS 2003. These subpoenas are not well Richardson, Assistant Pastor, St. Paul Mr. GRASSLEY. Mr. President, I ask taken. As the testimony and docu- African Methodist Episcopal (AME) unanimous consent that the Sub- ments sought by these subpoenas are Church, Director of Political Affairs, committee on Communications be au- either irrelevant or cumulative of the The Black Ministerial Alliance of thorized to Meet Tuesday, March 23, testimony and evidence that will be of- Greater Boston, President/CEO, Chil- 2004, at 2:30 p.m., on Spyware. fered at trial from other sources, evi- dren’s Services of Roxbury, Boston, The PRESIDING OFFICER. Without dence from these Senators and Senate MA, Professor Katherine S. Spaht, objection, it is so ordered. employees is unnecessary. Moreover, Jules F. and Frances L. Landry Pro- SUBCOMMITTEE ON READINESS AND under controlling precedent, the testi- fessor, Paul M. Hebert Law Center, MANAGEMENT SUPPORT mony and documents sought by the Louisiana State University, Baton Mr. GRASSLEY. Mr. President, I ask subpoenas are privileged under the Rouge, LA, Professor Cass R. Sunstein, unanimous consent that the Sub- Speech or Debate Clause of the Con- Karl N. Llewellyn Distinguished Serv- committee on Readiness and Manage- stitution. ice Professor of Jurisprudence, Univer- ment Support of the Committee on This resolution would authorize the sity of Chicago Law School, Chicago, Armed Services be authorized to meet Senate legal counsel to represent the IL. during the session of the Senate on Senators and staff who have been sub- The PRESIDING OFFICER. Without March 23, 2004, at 2:30 p.m., in open ses- poenaed by the defendant, as well as objection, it is so ordered. sion to receive testimony on Depart- any other Members, officers, or em- COMMITTEE ON THE JUDICIARY ment of Defense financial management ployees who may be subpoenaed, in Mr. GRASSLEY. Mr. President, I ask in review of the defense authorization order to quash the subpoenas and pro- unanimous consent that the Com- request for fiscal year 2005. tect the privileges of the Senate. mittee on the Judiciary be authorized The PRESIDING OFFICER. Without Mr. President, I ask unanimous con- to meet to conduct a hearing on Tues- objection, it is so ordered. sent that the resolution be agreed to, day, March 23, 2004, at 2:30 p.m. on f the preamble be agreed to, the motion ‘‘Counterfeiting and Theft of Tangible to reconsider be laid upon the table, Intellectual Property: Challenges and PRIVILEGE OF THE FLOOR and that any statements relating to Solutions’’ in the Dirksen Senate Of- Mr. HARKIN. Mr. President, I ask this matter be printed in the RECORD. fice Building Room 226. unanimous consent Emily Deimel of The PRESIDING OFFICER. Without Panel I: The Honorable Jon W. my staff be granted the privilege of the objection, it is so ordered. Dudas, Acting Under Secretary of Com- floor for the duration of today’s ses- The resolution (S. Res. 323) was merce for Intellectual Property and Di- sion. agreed to. rector of the Patent and Trademark Of- The PRESIDING OFFICER. Without The preamble was agreed to. fice, Washington, DC, The Honorable objection, it is so ordered. The resolution, with its preamble, Christopher Wray, Assistant Attorney f reads as follows: General, Criminal Division, United S. RES. 323 States Department of Justice, Wash- APPOINTMENTS Whereas, in the case of United States of ington, DC, Mr. James Mendenhall, As- The PRESIDING OFFICER. The America v. Elena Ruth Sassower, Crim. No. sistant United States Trade Represent- Chair, on behalf of the Vice President, M–4113–3, pending in the Superior Court of ative for Intellectual Property, Office pursuant to the provisions of S. Con. the District of Columbia, the defendant has of the United States Trade Representa- Res. 94, 108th Congress, appoints the served subpoenas for testimony and docu- tive, Washington, DC, The Honorable following Senators to the Joint Con- ments upon Senators ORRIN HATCH, PATRICK LEAHY, SAXBY CHAMBLISS, HILLARY RODHAM Earl Anthony Wayne, Assistant Sec- gressional Committee on Inaugural CLINTON, and CHARLES SCHUMER, and on Sen- retary of State for Economic and Busi- Ceremonies: the Senator from Ten- ate employees Tamera Luzzatto, Chief of ness Affairs, United States Department nessee, Mr. FRIST; the Senator from Staff to Senator Clinton, Leecia Eve, Coun- of State, Washington, DC. Mississippi, Mr. LOTT; and the Senator sel to Senator Clinton, Joshua Albert, Legis- Panel II: Mr. Thomas J. Donohue, from Connecticut, Mr. DODD. lative Correspondent to Senator Clinton, and President and CEO, United States The Chair, on behalf of the majority Michael Tobman, Director of Intergovern- Chamber of Commerce, Mr. Richard K. leader, pursuant to Public Law 108–136, mental Affairs for Senator Schumer; and, Willard, Senior Vice President, Legal Title XV, Section 1501(b)(1)(C), ap- Whereas, pursuant to sections 703(a) and 288c(a)(2) of the Ethias in Government Act of and General Counsel, The Gillette points the following individual to serve 1978, 2 U.S.C. §§ 288b(a) and 288c(a)(2), the Company, Boston, MA, Mr. Brad Buck- on the Veteran’s Disability Benefits Senate may direct its counsel to represent les, Executive Vice President for Anti- Commission: Mr. Charles Joeckel of Members, officers, and employees of the Sen- Piracy, Recording Industry Association Washington, DC. ate with respect to any subpoena, order, or

VerDate Mar 15 2010 22:23 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00100 Fmt 4624 Sfmt 0634 E:\2004SENATE\S23MR4.REC S23MR4 mmaher on DSKCGSP4G1 with SOCIALSECURITY March 23, 2004 CONGRESSIONAL RECORD — SENATE S3047 request for testimony or documents relating will resume consideration of the JOBS SION FOR A TERM OF SEVEN YEARS FROM OCTOBER 27, 2003. (REAPPOINTMENT) to their official responsibilities: Now, there- bill. That is S. 1637. At 11:30 in the fore, be it morning, the Senate will vote on the DEPARTMENT OF STATE Resolved, That the Senate Legal Counsel is authorized to represent the above-listed Sen- motion to invoke cloture on the mo- JAMES FRANCIS MORIARTY, OF VIRGINIA, A CAREER tion to recommit. This is the second MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF ators and Senate employees who are the sub- MINISTER-COUNSELOR, TO BE AMBASSADOR EXTRAOR- ject of subpoenas and any other Member, of- week of floor consideration of the DINARY AND PLENIPOTENTIARY OF THE UNITED STATES ficer, or employee who may be subpoenaed in JOBS bill. It is my hope that cloture OF AMERICA TO THE KINGDOM OF NEPAL. this case. would be invoked and we could finish IN THE NAVY f the bill this week. We have been pre- pared to consider amendments relating THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT ORDERS FOR WEDNESDAY, MARCH IN THE UNITED STATES NAVY TO THE GRADE INDICATED to the underlying bill, but, unfortu- UNDER TITLE 10, U.S.C., SECTION 624: 24, 2004 nately, extraneous amendments have To be rear admiral (lower half) Mr. FRIST. Mr. President, I ask been offered. Chairman GRASSLEY has unanimous consent that when the Sen- been prepared to work through the CAPTAIN GERALD R. BEAMAN, 0000 CAPTAIN MARK S. BOENSEL, 0000 ate completes its business today, it ad- amendments that Members have men- CAPTAIN JOHN H. BOWLING III, 0000 journ until 9:30 a.m., on Wednesday, tioned and that are relevant to the CAPTAIN MARK H. BUZBY, 0000 March 24. I further ask that following CAPTAIN DAN W. DAVENPORT, 0000 issue. CAPTAIN WILLIAM E. GORTNEY, 0000 the prayer and pledge, the morning Rollcall votes will occur during to- CAPTAIN MICHAEL R. GROOTHOUSEN, 0000 hour be deemed expired, the Journal of morrow’s session. The first rollcall CAPTAIN VICTOR GUILLORY, 0000 CAPTAIN CECIL E. HANEY, 0000 proceedings be approved to date, the vote will occur at 11:30 a.m., and that CAPTAIN HARRY B. HARRIS JR., 0000 time for the two leaders be reserved for vote will be on the motion to invoke CAPTAIN JAMES M. HART, 0000 their use later in the day, and the Sen- CAPTAIN RONALD H. HENDERSON JR., 0000 cloture on the motion to recommit the CAPTAIN JOSEPH D. KERNAN, 0000 ate then begin a period of morning bill. CAPTAIN RAYMOND M. KLEIN, 0000 business until 10:30 a.m., with the f CAPTAIN CHARLES J. LEIDIG JR., 0000 Democratic leader or his designee in CAPTAIN ARCHER M. MACY JR., 0000 CAPTAIN MICHAEL K. MAHON, 0000 control of the first half of the time and ADJOURNMENT UNTIL 9:30 A.M. CAPTAIN CHARLES W. MARTOGLIO, 0000 the majority leader or his designee in TOMORROW CAPTAIN WALTER M. SKINNER, 0000 CAPTAIN SCOTT R. VANBUSKIRK, 0000 control of the remaining time; pro- Mr. FRIST. Mr. President, if there is CAPTAIN MICHAEL C. VITALE, 0000 vided that at 10:30 a.m., the Senate re- no further business to come before the CAPTAIN RICHARD B. WREN, 0000 sume consideration of S. 1637, the Senate, I ask unanimous consent that JOBS bill, and the time until 11:30 a.m. the Senate stand in adjournment under f be equally divided between the two the previous order. leaders or their designees; provided fur- There being no objection, the Senate, WITHDRAWAL ther that at 11:30 a.m. the Senate pro- at 7:33 p.m., adjourned until Wednes- ceed to the cloture vote on the motion day, March 24, 2004, at 9:30 a.m. Executive message transmitted by to recommit the bill. f the President to the Senate on March The PRESIDING OFFICER. Without 23, 2004, withdrawing from further Sen- objection, it is so ordered. NOMINATIONS ate consideration the following nomi- f Executive nominations received by the Senate March 23, 2004: nation: PROGRAM CONSUMER PRODUCT SAFETY COMMISSION THOMAS HILL MOORE, OF FLORIDA, TO BE A COMMIS- SIONER OF THE CONSUMER PRODUCT SAFETY COMMIS- Mr. FRIST. Mr. President, tomorrow, THOMAS HILL MOORE, OF FLORIDA, TO BE A COMMIS- SION FOR A TERM OF SEVEN YEARS FROM OCTOBER 27, following morning business, the Senate SIONER OF THE CONSUMER PRODUCT SAFETY COMMIS- 2002, WHICH WAS SENT TO THE SENATE ON MARCH 11, 2004.

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