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, APRIL 6, 2004 No. 47 House of Representatives The House was not in session today. Its next meeting will be held on Tuesday, April 20, 2004, at 2 p.m. Senate TUESDAY, APRIL 6, 2004

The Senate met at 10 a.m. and was to the Senate from the President pro on the motion to proceed to the preg- called to order by the Honorable JOHN tempore (Mr. STEVENS). nancy and trauma care bill. Under the CORNYN, a Senator from the State of The legislative clerk read the fol- order, that vote will occur at 2:15 to- Texas. lowing letter: morrow afternoon. Members will de- U.S. SENATE, bate that motion and the merits of this PRAYER PRESIDENT PRO TEMPORE, underlying medical liability legislation The Chaplain, Dr. Barry C. Black, of- Washington, DC, April 6, 2004. throughout the day today. I do hope we fered the following prayer: To the Senate: are able to invoke cloture Wednesday Let us pray. Under the provisions of rule I, paragraph 3, afternoon so we may proceed to this O God, who remains the same though of the Standing Rules of the Senate, I hereby very important measure. all else fades, in this season that is appoint the Honorable JOHN CORNYN, a Sen- I also remind Senators yesterday it holy for so many we pause to thank ator from the State of Texas, to perform the became necessary for me to file a sec- duties of the Chair. You for loving us, even when we wan- ond cloture motion with respect to the der from Your purposes. Incline our TED STEVENS, President pro tempore. JOBS bill, the bill known as the FSC/ hearts to respond to Your amazing ETI, or the Jumpstart JOBS bill. Con- Mr. CORNYN thereupon assumed the grace and to cling to You, who alone sideration of this timely measure— Chair as Acting President pro tempore. can give us rest and joy. timely because sanctions right now are We pray for our Senators. May they f in effect and the sanctions are affect- follow in the footsteps of their noble ing U.S. companies every day—consid- forebears who risked all for freedom. RECOGNITION OF THE MAJORITY LEADER eration of this timely measure has Help them through the decisions they been slowed because of unrelated make to build monuments of moral ex- The ACTING PRESIDENT pro tem- amendments, amendments that have cellence and courage for generations to pore. The distinguished majority leader nothing to do with these manufac- behold. Open their eyes to Your wis- is recognized. turing jobs and trade issues. dom and may they hear the distant tri- f I have had a number of discussions umph songs of Your throne. Lord, up- with the two managers of the bill in an SCHEDULE hold this great Nation with Your effort to finish the bill in a reasonable strong right hand. We pray this in Your Mr. FRIST. Mr. President, this morn- amount of time with a reasonable num- holy Name. Amen. ing there will be a period of morning ber of amendments, but we have been f business until 11 a.m. Following morn- unable to reach an agreement today. PLEDGE OF ALLEGIANCE ing business, the Senate will then re- Due to the desire to offer these unre- sume consideration of the motion to lated amendments not relevant to the The Honorable JOHN CORNYN led the proceed to S. 2207, the Pregnancy and Pledge of Allegiance, as follows: bill, and with no end to the number of Trauma Care Access Protection Act of amendments in sight, it became nec- I pledge allegiance to the Flag of the 2004. United States of America, and to the Repub- essary for this second cloture vote. lic for which it stands, one nation under God, I remind my colleagues, on Friday of I now ask consent that the vote on indivisible, with liberty and justice for all. this past week I asked for consent to cloture on the motion to recommit proceed to S. 2207 to allow us to begin f occur tomorrow afternoon following debate on this important medical li- the 2:15 vote, regardless of the provi- APPOINTMENT OF ACTING ability issue, an issue which addresses sions of rule XXII. PRESIDENT PRO TEMPORE a crisis which affects us all. There was The ACTING PRESIDENT pro tem- The PRESIDING OFFICER. The an objection from the other side and it pore. Without objection, it is so or- clerk will please read a communication was necessary to file a cloture motion dered.

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

S3735

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VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00001 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3736 CONGRESSIONAL RECORD — SENATE April 6, 2004 Mr. FRIST. Yesterday, I also men- dent. I would hope other members of refer to him personally, but I think tioned the need to act on the pension his party would follow his lead. this speech, in fact, is a distillation of equity conference report. We would We have seen the former Vice Presi- the position the Democratic Party will like to lock in agreement for a short dent of the United States attack the take in the upcoming election. So I period of debate and a vote on the con- President of the United States in lan- think we should step back from the ference report prior to the end of this guage reminiscent of that which Joe point-by-point situation and look at week. An important piece of legisla- McCarthy used to use to attack Harry the overall message of what they are tion, the pension bill had gone to con- Truman. We should back away from trying to tell us. That is what I would ference; it has come out of conference; that kind of personal hatred, even like to address today. it is ready for floor action. I know though historically it has been part of Basically, as I say, it is rooted in fear there are objections to this on the our election tradition. and its derivative, pessimism. That is Democratic side at this time. However, There has probably not been a Presi- what they are offering the American I hope we will be able to reach a time dent more personally hated than people: fear and pessimism. This is the agreement this week on this timely Franklin Roosevelt in my lifetime. I fundamental position Senator KEN- conference report as well. remember the things that were said NEDY’s speech takes: If it is bad, and it Mr. President, as we look at the med- about him. I remember the things that happened on President Bush’s watch, ical malpractice and medical liability were said about Harry Truman. I re- he is responsible for it. If it is good, bill, as we look at FSC/ETI or the member some of the things that were and it happened on President Bush’s JOBS bill, as we look at the pension said about Richard Nixon, about Bill watch, it was coincidence or anybody equity conference report, we have a lot Clinton. We should back away from could have done it, and he does not de- to do over the next 4 days. We have a those kinds of personal attacks. Unfor- serve any of the credit. short amount of time to do it. It is im- tunately, this election year has seen Let’s go down the history of what has portant we stay focused on these im- them come back to the point where one happened on President Bush’s watch portant bills for the American people. could almost say the basis of the cam- and see if, in fact, that pattern I have I yield the floor. paign against the President is, in fact, just described did play itself out. personal hatred. Turn to today’s headline where we f Former Governor Dean certainly have a Commission examining what RESERVATION OF LEADER TIME went into that direction in his attacks happened prior to 9/11 in the year 2001. Well, we are being told repeatedly it The ACTING PRESIDENT pro tem- against the President. We have seen was Bush’s fault. He is responsible for pore. Under the previous order, the Senator KERRY, in an unguarded mo- 9/11 because he did not do enough to leadership time is reserved. ment, refer to his opponents as a bunch of lying crooks. I would hope we could prevent it. 9/11 was his fault. Then the f back down from hatred as the primary Commission goes on to detail what he MORNING BUSINESS theme of this campaign. did. Basically what he did was what the But there is another theme in this Clinton administration did. They kept The ACTING PRESIDENT pro tem- campaign which did come out in Sen- track of al-Qaida. They monitored pore. Under the previous order, there ator KENNEDY’s speech I would like to what was happening. They did their will be a period for the transaction of respond to and comment on. It is the best to find out what was happening, morning business until 11 a.m., with theme of fear. There is an underlying but they did not do enough. In other the first half of the time under the con- sense of fear that pervades the rhetoric words, they did not invade Afghani- trol of the majority leader or his des- of the President’s opponents here. It is stan. ignee and the second half of the time interesting to me, because the founder It is interesting to me that the peo- under the control of the Democratic of the modern Democratic Party, ple who are now saying President Bush leader or his designee. Franklin D. Roosevelt, is perhaps best did not do enough prior to 9/11 are the The Senator from Utah. remembered for his statement in his same people who are saying he did too f first inaugural when he said: We have much in Iraq. He acted before Iraq be- nothing to fear but fear itself. came a threat. That is in Senator KEN- FEAR AND PESSIMISM IN It would seem in this campaign there NEDY’s speech—he should have waited CAMPAIGN POLITICS are those who have nothing to offer but until Iraq became a threat. But, of Mr. BENNETT. Mr. President, on the fear itself—fear and its handmaiden, course, the same critics are saying he 5th of April, the senior Senator from indeed, its standard derivative, which should have acted before al-Qaida be- Massachusetts, Senator KENNEDY, ap- is pessimism. We have great fear, and came a threat. You cannot have it both pearing before the Brookings Institute, we are convinced nothing is going to ways. Either he was prudent in doing delivered what Larry King described as work. That, if I may, Mr. President, is what the Clinton administration did a blistering attack on the Bush admin- what pervaded Senator KENNEDY’s prior to 9/11, and watched the situation istration. Last night, Larry King and speech before the Brookings Institute, carefully to see how it would play out, Senator KENNEDY had a conversation a conviction that nothing is going to or he was too timid. And if he was too about the speech and Senator KEN- work, that nothing is going to save this timid and should have taken more NEDY’s comments that is worthy of country except the personal replace- forceful action prior to 9/11, he learned comment and reaction in the Senate. ment of the President. But none of the that lesson and took more forceful ac- First, let me make this observation. policies the President has put in place tion with respect to Iraq. You cannot Senator KENNEDY earlier in this cam- can possibly work, and we are in such attack him for doing the one in the one paign made personal attacks on the a terrible morass and difficulty that we situation and then the other in the President which I felt compelled to re- live in fear. other; you must be consistent. But the spond to in the Senate. I was tempted to go through Senator President’s critics are not. I am happy to report in his conversa- KENNEDY’s speech point by point and As I say, he is responsible for 9/11, ac- tions with Larry King, Senator KEN- rebut it one at a time. I believe I could cording to his critics, because he did NEDY backed away from that degree of do that. It would take a great deal of basically what the Clinton administra- personal attack on the President, and I time, and it would probably bore every- tion did, but he should have seen it salute him for that. I think it impor- body. It is the kind of thing lawyers do coming and done more. Then when he tant for us to recognize how much we in courtrooms where it is essential to did do more—that is, when the Presi- can get carried away with election- build a record. But, as you know, Mr. dent led us into Afghanistan—the year rhetoric and how personal we can President, I am unburdened with a President’s critics were outraged. What get in our attacks sometimes. I salute legal education. I would like to step did we hear over and over again? Senator KENNEDY, in spite of the vigor- back from the point-by-point kind of Maybe the media has short memories, ousness of his attack on the adminis- refutation that would be called for in a but I do not. We heard lessons from his- tration, for his decision to back away courtroom and have an overall view of tory: The British went into Afghani- from personal attacks on the Presi- what Senator KENNEDY was saying. I stan, they got bogged down, and they

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00002 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3737 could not accomplish anything. The issues, but I have a clear memory. Sit- Then when the action started, these Soviets went into Afghanistan; they ting in this body, I remember who it same voices said: Bogged down on the got bogged down and ultimately hu- was who first convinced me al-Qaida road; held down by the resistance of miliated. We are going to get bogged had weapons of mass destruction. That the Iraqis. We are in a quagmire; we down, and we are going to get humili- was Madeleine Albright, President will never succeed. ated. And going into Afghanistan is a Clinton’s Secretary of State. Then when Baghdad fell within a terrible mistake. We all went to 407, the room in the matter of weeks from those prophesies Then suddenly the battlefield situa- Capitol where we receive briefings on and predictions, now we are being told: tion changed, and now we hear the confidential and top secret informa- Anybody could have done it. No big President’s actions in Afghanistan tion, classified information. Madeleine deal. We can’t give Bush any credit for were brilliantly planned and brilliantly Albright laid out in chilling fashion all having gone into Iraq and winning the executed. We see Afghanistan on the of the evidence to tell us there were war. It was a piece of cake. verge of a new constitution. We see weapons of mass destruction in Iraq. In Before the fact, fear and pessimism; women back in the Afghanistan econ- response to that evidence, President after the fact, blame, no credit for suc- omy, women going to school, women Clinton went to war against Iraq. We cess, determination that it is not going now being allowed rights they did not forget that. We pretend that never hap- to work in the long term. have under the Taliban. But we do not pened. President Clinton, using his I could go on about Iraq in that re- give President Bush any credit for powers as Commander in Chief and act- gard, but there will be many more de- that. No. As I say, the mantra is: If it ing under the authority of the U.N. res- bates. Let me go into the other sub- is bad, and it happened on Bush’s olutions that had condemned Iraq fol- stance of Senator KENNEDY’s speech watch, he is responsible. But if some- lowing the first gulf war, launched a and demonstrate the same pattern: fear thing good comes out of what happened heavy bombing attack upon Iraq for and pessimism. The Senator talks about education, on President Bush’s watch, that was the sole purpose of destroying their talks about No Child Left Behind. He coincidence, and he has no right to weapons of mass destruction. And to takes credit for having helped write No claim any credit for it. his credit, during the current political Child Left Behind, appropriately. One I am interested in a comment Sen- debate, President Clinton has made it of the reasons I voted against No Child ator KENNEDY did make in his speech, clear we did not know whether or not Left Behind is because I thought the and I will go to the speech for this one. that bombing attack destroyed all of things the Senator from Massachusetts He said, referring to our decision to go Iraq’s weapons of mass destruction. succeeded in getting into that bill to war in Iraq: President Clinton has made it clear we would be too heavy handed in terms of . . . President Bush gave al Qaeda two had no way of knowing how successful the Federal pressure on State boards of years—two whole years—to regroup and re- that bombing attack was. education. In that, I feel vindicated be- cover in the border regions of Afghanistan. Yes, the difference between President cause State board after State board has I find that an incredible statement— Bush and President Clinton is Presi- complained that this represents en- incredible in the true meaning of that dent Clinton bombed. He carried on the tirely too much Federal control on word: incredible, not credible, not to be war from the air. President Bush de- education. accepted. cided to carry on the war at ground Now Senator KENNEDY says: No Afghanistan, prior to the time we level. I do not suggest that is a trivial money for education; lots of promises went in—Afghanistan, during the pe- difference. It is a very significant dif- out of the administration but no riod of the Clinton administration— ference. But if we are going to talk money. was a haven for al-Qaida. It was a about who went to war in Iraq over the The facts are that under President training ground for al-Qaida. President issue of weapons of mass destruction, Bush’s leadership, this Congress has in- Clinton ordered the lobbing of cruise we have to say the answer is President creased Federal spending on education missiles into some of those training Clinton. If we are going to talk about to higher actual levels and at a higher grounds but did nothing more. Secretaries of State who informed the percentage increase than any other ad- Now, in response to 9/11, President Congress about Iraq’s program of weap- ministration in history. This adminis- Bush led the world into cleaning out ons of mass destruction, we have to say tration has spent more on education the al-Qaida training camps in Afghan- the first one who did it was Madeleine than the Clinton administration did istan. The al-Qaida leadership has been Albright. and has accelerated that spending at a disrupted. A large percentage of their I am one who believed Madeleine higher rate than the Clinton adminis- leadership has been either killed or ar- Albright. I am one who believed and tration did. rested. Assets, totaling in the tens if supported President Clinton. I find it a Yet we are being told: No, they are not hundreds of millions of dollars, of little disheartening to have those who holding back on education spending. al-Qaida have been discovered and fro- agreed with us then now suggesting it They are being too stingy on education zen, and yet the Senator says: ‘‘Presi- was President Bush who first brought spending—as they spend more than any dent Bush gave al Qaeda two years . . . up the issue of weapons of mass de- other administration and Congress in to regroup and recover in the border re- struction, and it was President Bush history. gions of Afghanistan.’’ who first said we had to deal with In advance, can’t work; after the Al-Qaida has been on the run. Al- those weapons by acts of war. Memo- fact, pessimism that we can’t get Qaida has been disrupted. Al-Qaida has ries should be longer than that. there—fear and pessimism. seen its assets destroyed in the 2 years When President Bush decided to go The Senator talks about cost esti- we have been at war with al-Qaida and ahead in Iraq, what did his critics have mates with respect to the Medicare Afghanistan has been freed. Those are to say? It will never work—fear, pes- bill. Here we have to get into a little solid accomplishments for which the simism; we can’t succeed. On the floor inside baseball so people can under- President’s enemies give him no credit of this Senate, we heard over and over stand exactly what happened. Senator whatsoever. again: There will be thousands and KENNEDY quotes the fact that we used Let’s talk about Iraq. That is the thousands of body bags coming back as the figure in the Senate of $400 billion core of most of the criticism of the Saddam Hussein uses chemical weap- as the cost of this bill and that an offi- President. There are those who suggest ons against our troops. We cannot send cial in the Department of Health and Iraq was created by George W. Bush; our troops there to be exposed to these Human Services said it is going to be that is, the crisis was created by weapons. closer to 500, that it is going to be over George W. Bush. There are those who These are the same voices now who 500. And he was told not to make that suggest—and Senator KENNEDY comes are saying: There were no weapons. But estimate public. Senator KENNEDY be- very close to it—that George W. Bush certainly they believed there were, as rates the administration for selling the was the first one to indicate there they warned us that our troops would $400 billion number when it knew $500 might have been weapons of mass de- be gassed, that they would be killed billion was the correct one. struction in Iraq. Again, the media with chemical weapons, and we could Now let’s get into the facts. A num- may not have any memory on these not run that risk. ber of us on this side of the aisle were

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00003 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3738 CONGRESSIONAL RECORD — SENATE April 6, 2004 equally disturbed by this gap between mistically that we are never going to in Libya saying: Maybe it is not a good numbers. We assaulted the chairman of get any jobs. idea to have weapons of mass destruc- the Budget Committee, Senator NICK- Once again, before this last Friday, tion and I will voluntarily surrender LES, to ask him: How did this happen? we were told, well, the unemployment them and dismantle them in this new How did we get trapped with a low esti- rate might be coming down, but that situation that George W. Bush has cre- mate when there was a higher estimate isn’t the rate we should look at; we ated. out there? should look at the number of jobs cre- I believe the American people will re- He pointed out this fact that doesn’t ated. On Friday, it was announced that spond more actively to hope and opti- get into the public consciousness and 308,000 jobs were created in March. Now mism than they will to fear and pes- that the media does not take the time we are told, no, don’t look at that, look simism. For that reason, I look forward to understand and explain: By law, we at the unemployment figure; it is not to this election season with some relish in the Congress, as we are adopting a coming down fast enough. Don’t pay about debating the details of the issues budget, can use only one source for our attention to the number of jobs cre- raised by the Senator from Massachu- estimate of costs. By law we have to ated. setts and, at the same time, some con- take the estimate or score—to use the We are told this is the worst econ- fidence in the wisdom of the American word we all understand around here—of omy in 50 years. I have heard that rhet- people and their willingness to em- the Congressional Budget Office. oric on the floor. According to the brace hope and optimism and put aside As Senator NICKLES pointed out to blue-chip economists who are looking the fears and pessimism that are being us, during the debate, the Congres- at this recovery, they are projecting peddled by the President’s opponents. sional Budget Office said: This will cost for 2004—another guess, I make that The ACTING PRESIDENT pro tem- $400 billion. clear—the highest growth rates in 40 pore. The Senator from New Hampshire That is where it was scored. After the years. If that is the example of the is recognized. estimate came out of the administra- kind of economy we are getting from Mr. GREGG. I ask unanimous con- tion that it was going to be higher, the George W. Bush, I say give us more. sent that I be allowed to proceed for 10 Congressional Budget Office said: The The highest growth rate in 40 years is minutes as in morning business. number is still $400 billion, according what the experts on Wall Street are The ACTING PRESIDENT pro tem- to our estimates. projecting. pore. Without objection, it is so or- By law, we could not have used the And the pessimists are complaining dered. higher estimate in writing the budget about that. The pessimists are telling f because it came from a source outside us we cannot get there. Look at Iraq. of the Congressional Budget Office. Of course, things are bad in the Sunni MEDICAL MALPRACTICE Now, the one thing I know about the Triangle in Iraq. The deaths of Ameri- Mr. GREGG. Mr. President, later on, $400 billion number offered by the CBO cans and the deaths of Iraqis are trag- we are going to move to the medical and the $500 billion-plus number offered ic, and we should mourn them and do malpractice bill, which is an important by OMB is that both of them are everything we can to try to prevent piece of legislation. It will allow wrong. I cannot tell you whether either them, but let us not focus solely on women, especially, to have access to one of them are too high or too low. I those deaths. OB/GYN doctors, some of whom are can only make my own estimate. Let us look at the fact that Iraq is on giving up their practices of delivering But stop and think about it for a mo- its way—however haltingly or however babies because of the cost of medical li- ment. We are talking about a program, slowly, and with whatever difficulty— ability insurance. It will also address spread over 5 years, that is not working toward establishing a constitution and, the issue of doctors in emergency yet, and we are making guesses as to one hopes, a democracy. The pessimists rooms and make sure those doctors are what it would cost. You feed into your say we can never get there. The pes- able to practice in emergency rooms so computer certain assumptions and you simists are filled with fear and are say- people, when they are seriously injured get a number; you change the assump- ing we will fail and when we fail al- and they go to an emergency room, tions in the computer and it will give Qaida will destroy our cities. But will have doctors. We will be on that you another number. The question is George W. Bush is not a pessimist. He bill at 11 o’clock. not, Is the number correct? The ques- is an optimist and he does not peddle f tion is, Are the assumptions correct? fear. JOBS The answer is, all of the assumptions The ACTING PRESIDENT pro tem- are guesses—whether CBO is making pore. The time of the Senator has ex- Mr. GREGG. Mr. President, I want to the guess or whether HHS is making pired. talk about the approach being taken by the guess or whether it is OMB. Every- Mr. BENNETT. I ask unanimous con- the other side of the aisle toward a lot body is making the guess. sent that I be allowed to continue for of issues in the Senate but specifically But in terms of the debate on the an additional 4 minutes. two dealing with jobs; that is, this atti- floor of the Senate, we had no choice The ACTING PRESIDENT pro tem- tude of obstruction for the purpose of but to accept the CBO number as the pore. Without objection, it is so or- basically stopping legislation and not controlling number. That is the law. So dered. allowing this body to move forward and Senator KENNEDY is attacking the Re- Mr. BENNETT. That is the core of do the business of the people. publicans and the decisions in this Sen- this election. Do we face the future There are two bills pending in this ate with respect to the budget for fol- with fear and pessimism and a convic- body. One is the JOBS bill, which deals lowing the law. He is attacking us for tion that we cannot do it or do we face with correcting the tax structure of not accepting estimates which, by law, the future with a clear, realistic under- the United States so we are no longer we cannot use. I think it is important standing of how difficult it will be, but out of compliance with a ruling made to understand that as we go through with a confidence and an optimism by the WTO, which ruling, if it is al- this debate, and talk about what is that we can do it, that we can succeed lowed to stand, will have the practical going to happen in the election. in implanting a democracy in Iraq, in effect of raising duties on American In summary, as we look ahead to the bringing freedom into that part of the products sold overseas rather signifi- election, I think we should pay atten- world in a way that it has never known cantly. In fact, they could raise as high tion to the details, but we should also before? as 18 percent, as I understand it. understand the overall thrust of the We see signs that we are succeeding The effect of those duties, of course, two campaigns. I do believe that the already. We see India and Pakistan, which have now been ruled legal under campaign mounted on the Democratic two nuclear powers that have been on this international tribunal that we side of the aisle has begun out of per- the verge of war, now looking out over subscribe to as a member state, will be sonal hatred of President Bush, and the world of George W. Bush and Amer- that those American goods are not as now more into a litany of fear and pes- ican resolve and saying maybe we competitive as they should be, and simism. They are afraid the economy is should talk and try to resolve our dif- therefore those American goods will not coming back. They tell us pessi- ferences short of war. We see Qadhafi not be able to be effectively sold into

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00004 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3739 those markets overseas. The practical that companies fund what is known as and equipment and the resulting jobs effect of that will be that jobs will be a defined benefits plan under rules that occur from that. lost here in the U.S. which they say, in order to determine So, once again, we see from the other The other side of the aisle continues how much they are going to pay to the side of the aisle an attitude that says: to filibuster that bill. The effect of the plan each year, they have to look at We are going to obstruct you; we are filibuster will be that these duties will the rate of return on the 30-year Treas- going to stop business in the Senate. go into place and jobs will be lost. This ury bond. We don’t care that in the process of bill which is called the JOBS bill is The 30-year Treasury bond is a vehi- doing that we are going to create an just that, a jobs bill. Yet we hear from cle which does not exist anymore. We atmosphere where jobs are lost, as in the other side of the aisle what appears do not sell it, basically, as a country. the case of the JOBS bill where the du- to be and must be crocodile tears on Therefore, the price of a 30-year Treas- ties are increased against American the issue of creating more jobs, because ury bond has been moved to an artifi- manufacturers and maybe as a result they have the opportunity to pass a cially low number, and the practical ef- jobs have to be outsourced. In any piece of legislation that will clearly fect of that is that companies, busi- event, we will certainly have our prod- impact the creation and maintenance nesses, and unions which must see ucts being less competitive, which of jobs in the United States, and they their pension funds funded for these de- means probably fewer jobs will be cre- are obstructing it and filibustering it. fined benefits plans are going to see ated in those businesses and maybe We hear from the other side a great those payments to those defined bene- jobs will be lost in those businesses in deal about outsourcing, American jobs fits plans increased at an arbitrary the area of the pensions bill. They do being moved overseas. The practical ef- rate based on a nonexistent bond vehi- not care. They are going to obstruct, fect of objecting to this bill, obstruct- cle, the 30-year bond. It is technical, and they are going to stop this bill be- ing this bill and of filibustering this but it is an important point. cause they are tweaked about the issue bill, is that those jobs will probably This pensions bill corrects that situa- of how far it went and, as a result, move overseas because those manufac- tion. It sets up a new structure for de- what is going to be the impact. Jobs turers, in order to avoid the duty, are fining how much must be contributed will be lost because the dollars for in- going to have to move overseas in to a defined benefits plan for a period vesting in plant and equipment will not order to be competitive with the prod- of 2 years based on a bond rate which be available. It is a rather cynical ucts in those nations where they are does actually exist, which is a market strategy from the other side of the selling them. So the effect of the fili- basket of corporate bonds. The prac- aisle. First, they go out to the public buster and obstruction we are seeing tical effect of that will be an appro- in the Presidential campaign and say: on the other side on the issue of the priate allocation of money into these Why don’t we have more jobs? Then, on JOBS bill is to basically energize the defined benefits plans, leaving dollars the floor of the Senate, they are ag- loss of jobs in the U.S. and the out- available to invest in new plant, new gressively pursuing strategies which sourcing of jobs overseas. equipment, and expansion of business stop us from creating more jobs. It is a Therefore, when we hear all this dis- in the United States, which leads di- lot like the kids who killed their par- cussion and concern about the creation rectly to jobs. ents and then go to the court and claim of jobs in this country today from the Thus, if this pensions bill is not en- they should receive special treatment other side of the aisle in the context of acted in the next week, we will have because they are orphans. the Presidential election, one wonders these arbitrary reallocations of funds These folks on the other side of the how serious they are, because clearly if occurring by April 15. This pensions aisle are shooting the programs which they are serious they would pass this bill will have a direct and proximate would create jobs, and then they are bill which, by the way, is supported by effect on the ability of business in the going out in the Presidential politics a majority of the Senate. The objection United States to be competitive, to arena and saying: Why aren’t we cre- to this bill is not the underlying law. It create investment, and, in return, to ating more jobs? is not the correction to the tax law create jobs. The cynicism of it is rather extreme. which will allow these jobs to be re- Yet, once again, we were told by the From my standpoint, I certainly hope tained in the United States. It is, rath- leadership on the other side of the they are not going to continue this er, they wish to bring forward extra- aisle—at least the leadership in the practice because, in the end, it means neous legislation and put it on this committees, Senator KENNEDY and people in America will not have jobs bill, legislation which we voted on a Senator BAUCUS—that they oppose this and will have fewer opportunities to couple of times before in committee bill and they are going to use all their work. For me, that is not right. and which we voted on at least once on means available to them to stop it. I hope we can pass this pensions bill the floor of the Senate. They can stop this bill. There is no this week, and I hope we can pass this Therefore, it is a tangential idea and question about it. They can stop it for JOBS bill this week, but it certainly a desire to make a political point, and at least 2 or 3 weeks, and the practical doesn’t look like that is going to occur. their willingness to pursue that tan- effect of that will be that we will go be- I yield back the remainder of my gential idea and desire at the expense yond the April 15 funding date, and this time. I yield the floor. of these jobs, I find, is cynical and rather horrific misallocation of re- The ACTING PRESIDENT pro tem- clearly inappropriate. That is the first sources will kick in, the practical ef- pore. The Senator’s time has expired. bill being stopped. fect of which will be instead of invest- The Senator from North Dakota. The second bill is a bill I managed ing to create jobs, they will be invest- Mr. DORGAN. Mr. President, I lis- and which just came out of conference, ing arbitrarily in these defined benefits tened with great interest to comments and it is the pension reform bill. It did funds at a rate which is not reflective of some of my colleagues, especially on not have everything in it that I want- of what the actual return rate on those this issue of obstructionism as it re- ed. It did not have everything in it the funds would be if they had an appro- lates to jobs. It is true there is a JOBS House wanted. But it has key pieces of priate market basket of corporate bill, as it is called, on the floor of the legislation in it which will have a di- bonds on which they were basing their Senate that has been delayed. This rect impact on jobs. I called this pen- yield rates. JOBS bill is a bill that gives tax breaks sions bill the ultimate jobs bill be- Yes, they can hold this bill up. And, to U.S. manufacturers, and it has, in cause, quite honestly, that is exactly yes, I guess they intend to hold this fact, been delayed. Let me explain why what it is. bill up. What is the effect of that? It is it has been delayed and why the ob- If this pensions bill is not passed and going to cost Americans jobs. It is structionism on the part of the major- passed promptly, the practical effect is going to mean jobs will not be created. ity party in Congress exists. there will be a misallocation of up to It is going to mean investment will not When that bill came to the floor of $80 billion of resources within the in- be made. It will mean dollars will be the Senate, someone on this side of the vestment community and in the small arbitrarily allocated rather than flow- aisle offered a very important amend- and large business communities of this ing where they can most effectively be ment. It also had to do with jobs, so it country. What has happened today is used through investment in new plant had to do with the subject of the bill.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00005 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3740 CONGRESSIONAL RECORD — SENATE April 6, 2004 Because the majority party did not Bring the bills to the floor and let us people, just for the big interests who do want to vote on the amendment, they try to deal with them in a thoughtful a lot of business, make a lot of money took all their marbles, walked off the way. When someone offers an amend- and pay no taxes. Shame on them. floor, and went home and accused our ment, like Senator HARKIN, give us an This report also found that 61 percent side of being obstructionist. Let me de- opportunity to have a vote on it. Let’s of domestic companies during this pe- scribe the circumstances. move ahead. That is not the case these riod of economic growth paid no in- Senator HARKIN offered an amend- days. It is just a little bizarre to hear come taxes in this country. ment on overtime pay. Why did he do these charges of obstructionism. We know the stories about companies that? Because the Department of Labor I would also say to those who came that have decided they want to run is about to produce new regulations to the floor this morning to say what their company out of a mailbox in Ber- that, for the first time in 60 years, will they really want to see is a positive muda or the Bahamas. Why? Because obliterate the 40-hour workweek and campaign for the Presidency, I say they do not want to pay taxes to the tell workers, Oh, by the way, if your amen to that. But there is a large, United States. I say this to companies employer decides to work you more well-oiled attack machine in this town. that want to do that: If they want to than 40 hours, anywhere from 6 to 8 In fact, I watched the television com- run their company out of a mailbox in million Americans who now receive mercials last evening by the adminis- the Bahamas, the next time they get in overtime will not be able to receive tration, which represent Senator trouble, call the Bahamian Navy. I un- overtime pay. The employer will be KERRY’s position on taxation. It is a derstand they have 21 sailors. Call able to say: You work overtime, you wholly negative television commercial. them to get their company out of trou- work 50 hours; if you don’t like it, I agree with my colleague who said, ble. tough luck, and I am not going to pay let’s be positive. How about maybe we These foreign corporations that do you overtime. For the first time in 60 see the other side, maybe see the White business and make profits in this coun- years, the 40-hour workweek will be House take some of those commercials try have an obligation to pay taxes in gone for about 6 to 8 million people. off the air and then let us talk about this country. Domestic companies that These new rules are touted as work- being positive. make profits in this country have an obligation as well. That obligation is er-friendly rules, but, of course, we f know that is not the case at all be- to participate with ordinary Americans cause there are consulting companies— FOREIGN COMPANIES MUST PAY who understand that part of the cost of and the Department of Labor itself— TAXES citizenship in this country is to help putting out information to businesses Mr. DORGAN. Mr. President, I came fund schools, pay for defense and pay to say: Here is the way you structure to the floor not to talk about the ob- for the social services that make this a great country. That is part of the obli- your company to avoid paying your struction by the majority party; I gation. workers overtime under these new came instead to talk about a new re- port that is just out. It is a report by We have some of the biggest eco- rules. nomic interests who have decided they Senator HARKIN offered an amend- the GAO, and it says something impor- want to participate in every way of ment on this important JOBS bill. Why tant about fiscal policy in this coun- being an American except paying is it germane to this JOBS bill? Be- try. taxes. That has to stop. I hope this cause if employers are able to say to The GAO report, which Senator CARL Congress will begin to take this seri- workers, You work overtime for no LEVIN and I asked for, compares the re- ported tax liabilities of some of the ously. extra pay, instead of creating new jobs This is the second GAO report we biggest companies that do business in which ought to be created, they will have done in the last 6 years on this this country, both domestic companies say to existing workers: You work subject. The tax avoidance problem is overtime; we are not going to pay you and foreign companies. not getting better, it is getting worse. This report studied a period of time extra. Tax loopholes are not getting nar- when we had robust economic growth This new rule from the Department rower, they are getting wider. of Labor is an approach that will di- in our economy, 1996–2000. On the sum- Again, as we near April 15, when minish jobs, that will retard the cre- mary page, it says that an average of 71 Americans think about the obligation ation of new jobs. Yet, when Senator percent of all foreign corporations to pay taxes into this Government, I HARKIN offered that amendment, the doing business in the United States of think it is shameful to get a report like majority party had some kind of an ap- America pay no income tax at all. this that says so many big economic oplectic seizure. These are names almost all Americans interests that make so much money According to the majority party, would easily recognize. Obviously, this have decided they want all of the ad- Senator HARKIN is apparently obstruct- report does not provide these names. vantages America has to offer, but ing things because he offers an amend- But when one talks about the major they do not want to pay taxes to the ment dealing directly with jobs. No, it foreign corporations selling products in United States of America. That is a is not Senator HARKIN who is obstruct- this country, earning billions of dollars shameful situation and one we ought to ing. What is obstructing the business of from those sales and paying zero to the fix. this Chamber is the majority party. Federal Government in tax liability, it f Senator HARKIN offered an amendment raises very serious questions about that deals directly with jobs and they gaping holes in this country’s tax sys- THE JOBS BILL refused to have a vote on it, and they tem. Mr. DORGAN. Mr. President, when are going to take their marbles and We are nearing April 15, when Ameri- we return to the JOBS Act, the bill just go home. They are going to go cans will march off to the post office that the majority party pulled from home and accuse someone else of ob- and pay their taxes. They will pay the Senate floor because Senator HAR- structing. their taxes because they do not have KIN offered an amendment on overtime, The obstruction in this Chamber is any alternative or any flexibility. They Senator MIKULSKI and I are going to by the majority party that refuses to understand the obligation in this coun- offer an amendment. The amendment allow votes on issues that are impor- try to pay taxes. is very simple. It says this: We are tant and that are relevant to the mat- Now, 71 percent of the foreign cor- going to end that provision in our Tax ters at hand. That is the obstruction. It porations that do business and make Code that says to American companies, is a curious strategy to know the ma- money in this country have decided if they will just pack up all of their be- jority party would obstruct its own they want to participate in our coun- longings, fire all of their workers and agenda, but obstruct they do. Then try and market system, but they do move somewhere else offshore, make they rush out to the microphones to not want to participate in paying taxes the same product and ship it back into accuse others of obstructing. on those profits. There is something our country, we will give them a tax There is a very simple way to remove fundamentally wrong with that. Once break. Talk about perversity, that is all of these issues. We do not have to again, it demonstrates the gaping holes perverse, offering a tax break to some- have any obstruction by anybody. in our tax system. No, not for ordinary one who moves their American jobs

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00006 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3741 overseas. Yet, that is exactly what ex- Zocor, Celebrex—it is the same drug the issue, which is a safety issue that ists in the Tax Code. We have voted on put in the same bottle made by the they have described, simply does not, this before because I offered a similar same company sold in two countries, cannot, and will not exist with respect amendment a number of years ago. but the charges are much higher to the to this matter. Let me describe exactly how this tax U.S. consumer. It is not just true with The question is, Who is going to break works. Let’s say there are two Canada; it is true for every country in stand up for the American consumer? companies in this country with manu- the world because the U.S. consumer is Will somebody stand up and say, on be- facturing plants. Each company pro- charged the highest prices in the world half of the American consumers, that duces garage door openers and these for FDA-approved prescription drugs, what is happening here is not fair? I companies do a good job. They employ and that is not fair. hope so. American workers, they produce ga- Let me ask consent to show two pill This proposal is called Prairie Pre- rage door openers for sale in the U.S. bottles on the floor of the Senate. scriptions. It is a 2-year pilot project I marketplace and they earn some profit. The PRESIDING OFFICER (Mr. put together. My hope is my State can But one company decides what it really ENZI). Without objection, it is so or- be a pilot project that will demonstrate wants to do is move overseas because it dered. for everyone that the issue of safety in does not have to pay $11 an hour for a Mr. DORGAN. These are bottles of a the reimportation of drugs with Can- manufacturing worker. The company drug called Lipitor. This, I believe, is ada, which has a nearly identical chain can go to Sri Lanka, Bangladesh, Indo- one of the fastest selling, most popular of custody, will always be a bogus nesia or China and hire a 16 year-old- drugs in the United States. It is used issue. The issue is whether the Amer- kid or a 12-year-old kid and pay them for the lowering of cholesterol. By all ican people will continue to pay the 12 cents an hour, working them 12 accounts, it is a very successful drug highest prices in the world for prescrip- hours a day 7 days a week. and it sells rapidly and is prescribed tion drugs. So one of the companies that makes often. Miracle drugs offer no miracle for garage door openers leaves, makes ex- As you can see, these two bottles of those who cannot afford them. Our sen- actly the same garage door opener now Lipitor are identical. These are both ior citizens of this country are 12 per- in Sri Lanka and ships it back into this bottles that have 10 milligram tablets cent of America’s population and they country. of Lipitor in them. They are made in take one-third of the prescription The other company that makes ga- the same plant. These are FDA-ap- drugs. They are often the people least rage door openers stays in America. proved drugs made in an FDA-approved able to afford these prices. Yet day The difference is that the company plant. The same pill is put in the same after day, month after month in this that left this country does not have to bottle made by the same company. country we have senior citizens going pay income taxes on their profits any There is one difference. This one is sold down to their grocery store, and find- longer because we have something to Canadians at $1.01 per tablet. This ing out how much their prescription called tax deferral. Until and unless one is sold to Americans at $1.81 per drugs are going to cost so they know they repatriate those earnings, those tablet. It is the same pill, the same how much they have left to buy their earnings are tax free in this country. bottle, same company, FDA approved, groceries. Our amendment is very simple. It but nearly twice as much money is I notice my colleague Senator HAR- says this: If a company leaves this charged to the American consumer KIN is waiting to speak. I am sure in country and moves its jobs overseas to than the Canadian consumer. Iowa, as we have in North Dakota, produce a product to ship back into I could have used Germany as an ex- when you go to a meeting someplace this marketplace, the company loses ample, Italy, England, France, Spain— you often have somebody 80 years old tax deferral that now perversely almost anyone. I could have used al- touch you on the elbow and say: Can incentivizes companies to leave this most any country and come up with country. It is one thing to have compa- you help me? You say: What is it? And nearly the same result. the tears well up in their eyes and nies leave because of bad trade agree- In Europe, they have something ments, because they can avoid the their chin begins to quiver and they called parallel trading. If you are in say: I have heart disease and diabetes things we have fought for for years in Spain and want to buy a drug from this country—safe workplaces, fair and I am supposed to take this medi- Germany, there is no problem, you go labor standards, and decent wages. It is cine and I can’t afford it. Can you help through the parallel trading system. If quite another thing for them to leave me? you are in Italy and want to buy a drug because in part we say we will give The fact is, we pay too much for pre- from France, no problem, parallel trad- them a tax break if they leave our scription drugs. We pay the highest ing. In this country we are told by FDA country. What a nutty idea and one prices in the world, and it is just not and others that there would be a huge that we ought to change. fair. safety problem if we purchased drugs Obviously, my interest is at some f from Canada—total nonsense. The Ca- point to force a repricing in this coun- REIMPORTATION OF nadians have virtually the same chain try, but in the absence of that, I be- PRESCRIPTION DRUGS of custody as we do. The Canadian drug lieve reimportation is the way to let Mr. DORGAN. Mr. President, I will supply is safe. Even our health authori- the market system even out these make one additional point on another ties will admit that. So having licensed prices. I believe that can, should, and subject. Last week, I went to see the U.S. pharmacists acquire from licensed will be done without any safety issues Secretary of Health and Human Serv- pharmacists or licensed distributors in whatsoever. ices, Tommy Thompson, and made a Canada the identical drug and passing I await anxiously the decision by the presentation in support of a pilot the savings along to the American con- Secretary of Health and Human Serv- project I want him to approve which sumer makes good sense and poses no— ices and the administration. The Prai- would allow the reimportation of pre- I repeat no—safety issues for citizens rie Prescriptions Pilot Project is a scription drugs from Canada. My pilot of this country. solid project, one that will benefit, in project is very simple. It sets up a 2- I have asked the Secretary of Health my judgment, the entire country by year pilot project for North Dakota and Human Services for a waiver to demonstrating once and for all this that would allow North Dakota phar- allow this pilot program to go forward. phony issue that has been raised by the macists to access FDA-approved drugs We will continue on the floor of the former head of FDA, Dr. McClellan, from pharmacists in Canada. Senate to pass legislation. I believe we and so many others. The issue of safety As you know, the administration has will soon pass legislation that deals is just not an issue at all. The issue been fighting this notion of re- with this issue, but, in the meantime, I really is will the American people fi- importing prescription drugs. The am asking the Secretary of Health and nally be treated fairly with respect to pharmaceutical industry is fighting it. Human Services to make a decision on prescription drug pricing. The administration is fighting it. this waiver request. He is now studying I yield the floor. This is why it is important: In every that. I assume it will be some weeks. Mr. HARKIN. Mr. President, how case—the drug Lipitor, Prevacid, But my hope is he will understand that much time is left?

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00007 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3742 CONGRESSIONAL RECORD — SENATE April 6, 2004 The PRESIDING OFFICER. Five that there is a trend that different stand I was under a time limit. I had minutes fifty seconds. countries go through at various stages asked to continue to proceed after Mr. HARKIN. I understand that the of their growth. One of those stages is morning business on the motion to pro- Senate will then resume consideration where more and more of the output of ceed, but I didn’t recognize there was a of the motion to proceed. a country accumulates to capital and time limit there. I did not ask consent The PRESIDING OFFICER. The Sen- less and less accumulates to labor, to for 10 minutes. ator is correct. the working people. The PRESIDING OFFICER. The Sen- Mr. HARKIN. Mr. President, I am It is with great interest I note that, ator has been granted 10 minutes to going to ask unanimous consent, since after I had read Kevin Phillips’ book, speak on any subject he wishes. But I had 15 minutes—I am going to ask yesterday in the New York Times an the total is 15 minutes under the re- unanimous consent that I be allowed to article by Bob Herbert brought it quest. speak for 5 minutes as in morning busi- home. The title of the piece was ‘‘We’re Mr. HARKIN. I think the record will ness and then the Senate would then More Productive. Who Gets the show that I asked for consent to con- interrupt my presentation to return to Money?’’ As Mr. Herbert wrote yester- tinue to speak in morning business, to the motion to proceed and that I be day in the New York Times: yield the floor, to then return to the recognized to finish my statement It’s like running on a treadmill that keeps motion to proceed, and that I be recog- then. increasing its speed. You have to go faster nized to continue to speak on the mo- The PRESIDING OFFICER. Is there and faster just to stay in place. Or, as a fac- tion to proceed. That does not have a objection? tory worker said many years ago, ‘‘You can time limit. Mr. DORGAN. Mr. President, might I work ’til you drop dead, but you won’t get The PRESIDING OFFICER. The Sen- ask—reserving the right to object, may ahead.’’ ator is recognized to speak on the mo- I ask unanimous consent that the Sen- American workers have been remarkably tion to proceed or on whatever subject productive in recent years, but they are get- ator from Iowa be given 15 minutes in ting fewer and fewer of the benefits of this he wishes to speak for 10 minutes and morning business? increased productivity. While the economy, thereafter on the bill. Mr. HARKIN. We will just go to the as measured by the gross domestic product, Mr. HARKIN. I understand that. I motion to proceed. That is fine. has been strong for some time now, ordinary thank the Chair. The PRESIDING OFFICER. Is there workers have gotten little more than the Mr. GREGG. Mr. President, will the objection to the original request? back of the hand from employers who have Senator yield for a parliamentary in- Without objection, it is so ordered. pocketed an unprecedented share of the case quiry? Mr. HARKIN. Which one? from this burst of economic growth. Mr. HARKIN. Sure. The PRESIDING OFFICER. Your re- What is happening is nothing short of his- Mr. GREGG. At the end of the Sen- toric. The American workers’ share of the in- ator’s 10 minutes, does the Senator quest that you be allowed 5 minutes crease in national income since November now, then we go to the bill, and then 2001, the end of the last recession, is the low- come back and retain the floor? you be recognized to speak for an addi- est on record. Employers took the money The PRESIDING OFFICER. It was tional 10 minutes. and ran. This is extraordinary, but very few my understanding that the time under Mr. HARKIN. I thank the Chair and I people are talking about it, which tells you the request was that he was going to thank my colleague from North Da- something about the hold that corporate in- have a total of 15 minutes. Otherwise, kota. We might as well go on with the terests have on the national conversation. there would have been an objection. motion to proceed. I can make my The situation is summed up in the long, Mr. GREGG. Mr. President, I will be unwieldy but very revealing title of a new presentation then, too. seeking the floor at the conclusion of study from the Center of Labor Market Stud- the 10 minutes as the manager of the f ies at Northeastern University: ‘‘The Un- bill, for everybody’s knowledge. THE ECONOMY precedented Rising Tide of Corporate Profits and the Simultaneous Ebbing of Labor Com- The PRESIDING OFFICER. Under Mr. HARKIN. Mr. President, there is pensation—Gainers and Losers from the Na- the normal procedure, the manager of no secret that there is a great frustra- tional Economic Recovery in 2002 and 2003.’’ the bill may speak as soon as a bill is tion in the American workplace today. The PRESIDING OFFICER. The Sen- brought up, with the exception of the There is a great anxiety among Amer- ator’s time has expired. 10 minutes as a continuation of the ican working families. You can sense total of 15 minutes. f it, you can feel it, you can hear it no The Senator from Iowa may proceed. matter where you go in America, CONCLUSION OF MORNING Mr. HARKIN. I do not mean to take whether it is in Iowa or Wyoming or BUSINESS more than 15 minutes. I might go into New York or wherever it is. Something The PRESIDING OFFICER. Under 18 or 20 minutes. I wasn’t going to take is happening out there. You get it all the previous order, morning business is a long time. I wanted to finish my the time from people who have been closed. statement without being constrained working, maybe have lost their jobs, with the 15 minutes I had under morn- f maybe they took another job, they are ing business. That is why I went on the not making ends meet. They see the PREGNANCY AND TRAUMA CARE motion to proceed. I will speak on that economy doing much better. They read ACCESS PROTECTION ACT OF for an additional few minutes. But I this in the paper all the time—the 2004—MOTION TO PROCEED will take whatever time I can now. If I economy is getting better, tax cuts are The PRESIDING OFFICER. Under am cut off, I will be back. The PRESIDING OFFICER. The Sen- going into effect, foreign car sales, the the previous order, the hour of 11 a.m. ator from Iowa. big cars, the Mercedes and all those, having arrived, the Senate will resume Mr. HARKIN. Mr. President, Mr. Her- are up. We see all the higher end items consideration of the motion to proceed bert further said: being purchased and sold. to the consideration of S. 2207, which Andrew Sum, the center’s director and lead For example, over the recent Christ- the clerk will report. mas holidays, the Sharper Image, I be- author of the study, said: ‘‘This is the first The legislative clerk read as follows: time we’ve ever had a case where two years lieve, which sells high end electronics A bill (S. 2207) to improve women’s access into a recovery, corporate profits got a larg- stuff, and Neiman Marcus had great to health care services, and the access of all er share of the growth of national income sales. But Wal-Mart was down. individuals to emergency and trauma care than labor did. Normally labor gets about 65 There is a great sense among Amer- services, by reducing the excessive burden percent and corporate profits about 15 to 18 ican working people that something is the liability system places on the delivery of percent. This time profits got 41 percent and not quite right with what is going on in such service. labor [meaning all forms of employee com- this country. Maybe most Americans The PRESIDING OFFICER. Under pensation, including wages, benefits, salaries don’t have degrees in economics; they the previous order, the Senator from and the percentage of payroll taxes paid by employers] got 38 percent.’’ haven’t studied it, but they sense Iowa is recognized for an additional 10 The study said: ‘‘In no other recovery from something is going wrong. minutes. a post-World War II recession did corporate In his recent book, ‘‘Wealth and De- Mr. HARKIN. Mr. President, par- profits ever account for as much as 20 per- mocracy,’’ Kevin Phillips pointed out liamentary inquiry. I did not under- cent of the growth in national income. And

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00008 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3743 at no time did corporate profits ever increase going to say to workers we will take had altered time records to shortchange em- by a greater amount than labor compensa- away your right to overtime. ployees. The Department of Labor recently tion.’’ That issue was brought up on the bill reached two back-pay settlements with In other words, an awful lot American that was before us earlier. That was Kinko’s photocopy centers, totaling $56,600, workers have been had. Fleeced. Taken to after finding that managers in Ithaca, NY, the cleaners. my amendment, to say these proposed and Hyannis, MA, had erased time for 13 em- The recent productivity gains have been rules by the Department of Labor that ployees. widely acknowledged. But workers are not would deny up to 8 million Americans ‘‘There are a lot of incentives for store being compensated for this. During the past their right to time-and-a-half overtime managers to cut costs in illegal ways,’’ said two years, increases in wages and benefits could not go into effect. Now we find David Lewin, a professor of management who have been very weak, or nonexistent. And de- that not only is the administration teaches a course on compensation at the spite the growth of jobs in March that had trying to push through new rules to University of California, Los Angeles. ‘‘You the Bush crowd dancing in the White House eliminate overtime pay; at the same hope that would be contrary to company halls last Friday, there has been no net in- practices, but sometimes these practices be- crease in formal payroll employment since time, many employers are illegally come so ingrained that they become the the end of the recession. We have lost jobs. pushing the same thing. They are doc- dominant practice.’’ There are fewer payroll jobs now than there toring their employee time records in Officials at Toys ‘‘R’’ Us, Family Dollar, were when the recession ended in November order to avoid paying overtime. This Pep Boys, Wal-Mart and Taco Bell say they 2001. practice is shaving time. It is easy to prohibit manipulation of time records, but So if employers were not hiring workers, do, it is hard to detect, and is done in many acknowledge that it sometimes hap- and if they were miserly when it came to in- a matter of a few keystrokes. pens. creases in wages and benefits for existing ‘‘Our policy is to pay hourly associates for employees, what happened to all the money According to the New York Times ar- every minute they work,’’ said Mona Wil- from the strong economic growth? ticle on Sunday by Steven Greenhouse: liams, vice president for communications at The study is very clear on this point. The Workers have sued Family Dollar and Pep Wal-Mart. ‘‘With a company this large, there bulk of the gains did not go to workers, ‘‘but Boys, the auto parts and repair chain, accus- will inevitably be instances of managers instead were used to boost profits, lower ing managers of deleting hours. A jury found doing the wrong thing. Our policy is if a prices, or increase C.E.O. compensation.’’ the Taco Bell managers in Oregon had rou- manager deliberately deletes time, they’re This is a radical transformation of the way tinely erased workers’ time. More than a dismissed.’’ the bounty of this country has been distrib- dozen former Wal-Mart employees said in Compensation experts say that many man- uted since World War II. Workers are being interviews and depositions that managers agers, whether at discount stores or fast-food treated more and more like patrons in a had altered time records and shortchanged restaurants, fear losing their jobs if they fail rigged casino. They can’t win. employees. to keep costs down. Corporate profits go up. The stock market I ask unanimous consent a copy of ‘‘A lot of this is that district managers goes up. Executive compensation sky- the New York Times article be printed might fire you as soon as look at you,’’ said rockets. But workers, for the most part, re- William Rutzick, a lawyer who reached a $1.5 main on the treadmill. in the RECORD. million settlement with Taco Bell last year The study found that the amount of in- There being no objection, the mate- after a jury found the chain’s managers come growth devoured by corporate profits rial was ordered to be printed in the guilty of erasing time and requiring off-the- in this recovery is ‘‘historically unprece- RECORD, as follows: clock work. ‘‘The store managers have a toe- dented,’’ as is the ‘‘low share . . . accruing [From the New York Times, Apr. 4, 2004] hold in the lower middle class. They’re being to the nation’s workers in the form of labor paid $20,000, $30,000. They’re in management. compensation.’’ ALTERING OF WORKER TIME CARDS SPURS GROWING NUMBER OF SUITS They get medical. They have no job security I thought Mr. Herbert wound up his at all, and they want to keep their toehold in (By Steven Greenhouse) statement quite adequately when he the lower middle class, and they’ll often do As a former member of the Air Force mili- said: whatever is necessary to do it.’’ tary police, as a play-by-the-rules guy, Drew Another reason managers shave time, ex- I have to laugh when I hear conservatives Pooters said he was stunned by what he perts say, is that an increasing part of their complaining about class warfare. They know found his manager doing in the Toys ‘‘R’’ Us compensation comes in bonuses based on this terrain better than anyone. They store in Albuquerque. minimizing costs or maximizing profits. launched the war. They’re waging it. And Inside a cramped office, he said, his man- ‘‘The pressures are just unbelievable to they’re winning it. ager was sitting at a computer and altering control costs and improve productivity,’’ One of the reasons they are winning workers’ time records, secretly deleting said George Milkovich, a long time Cornell it is because workers no longer have hours to cut their paychecks and fatten his University professor of industrial relations organized labor. Organized labor has store’s bottom line. and co-author of the leading textbook on been weakened to the point where ‘‘I told him, ‘That’s not exactly legal,’ ’’ compensation. ‘‘All this manipulation of said Mr. Pooters, who ran the store’s elec- workers are told: Take what you got or payroll may be the unintended consequence tronics department. ‘‘Then he out-and-out of increasing the emphasis on bonuses.’’ go get something else or we will take threatened me not to talk about what I Beth Terrell, a Seattle lawyer who has your job and we will take it to China or saw.’’ sued Wal-Mart, accusing its managers of doc- we will take your job and move it to Mr. Pooters quit, landing a job in 2002 toring time records, said: ‘‘Many of these India or South Africa or some other managing a Family Dollar store, one of 5,100 employees are making $8 an hour. These em- place. You have no recourse as a work- in that discount chain. Top managers there ployees can scarcely afford to have time de- er. ordered him not to let employees’ total leted. They’re barely paying their bills al- I have tried for years in this Senate hours exceed a certain amount each week, ready.’’ and one day, he said, his district manager and in this Congress to try to get a bill In the punch-card era, managers would told him to use a trick to cut payroll: delete have had to conspire with payroll clerks or passed called the striker replacement some employee hours electronically. accountants to manipulate records. But now bill which says if you are on strike you ‘‘I told her, ‘I’m not going to get involved it is far easier for individual managers to ac- can’t be replaced with a replacement in this,’ ’’ Mr. Pooters recalled, saying that complish this secretly with computers, pay- worker. That one thing alone has bro- when he refused, the district manager erased roll experts say. ken the back of organized labor to the the hours herself. Mr. Pooters, a father of five who left the point where workers no longer have the Experts on compensation say that the ille- Air Force in 1997 for a career in retailing, power to withhold their labor, the only gal doctoring of hourly employees’ time talks with disgust about photocopied Toys records is far more prevalent than most ‘‘R’’ Us records that he said showed how his tool with which they have to bargain. Americans believe. The practice, commonly manager made it appear that he had clocked So here we have more and more of called shaving time, is easily done and hard out much earlier than he had. the earnings from increased produc- to detect—a simple matter of computer key- ‘‘Unless you keep track of your time and tivity going to capital and less going to strokes—and has spurred a growing number keep records of when you punch in and punch workers. What do we do about it? We of lawsuits and settlements against a wide out, there’s no way to stop this,’’ he said. say now we are going to take away range of businesses. After leaving Toys ‘‘R’’ Us and Family your time-and-a-half overtime. That is Workers have sued Family Dollar and Pep Dollar, Mr. Potters moved to Indiana and the next assault on the time-and-a-half Boys, the auto parts and repair chain, accus- took a job as an account manager with ing managers of deleting hours. A jury found Rentway, a chain that leases furniture and overtime. For our workers who are that Taco Bell managers in Oregon had rou- electronics. There, he and a co-worker, Wil- working more and more in this country tinely erased workers’ time. More than a liam Coombs, said, the workload was so in- and working longer hours than any dozen former Wal-Mart employees said in tense that they typically missed four lunch other industrialized country, we are interviews and depositions that managers breaks a week. Nonetheless, they said, their

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00009 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3744 CONGRESSIONAL RECORD — SENATE April 6, 2004 manager inserted a half-hour for lunch into to have shaved any amount of employee time increased productivity. While the economy, their time records every day, reducing their be terminated,’’ he said. He added that the as measured by the gross domestic product, pay accordingly. company’s investigation ‘‘revealed no more has been strong for some time now, ordinary ‘‘They told us to sign the payroll printouts than 21 instances over the past five years workers have gotten little more than the to confirm it was right,’’ Mr. Pooters said, where time shaving’’ had occurred. back of the hand from employers who have describing a confrontation last November. More than a dozen former Wal-Mart em- pocketed an unprecedented share of the cash ‘‘When we protested about what happened ployees said time records were altered in nu- from this burst of economic growth. with our lunch hours, the manager said, ‘If merous ways. Some said that when they What is happening is nothing short of his- you don’t sign, you’re not going to get clocked more than 40 hours a week, man- toric. The American workers’ share of the in- paid.’ ’’ agers transferred extra hours to the fol- crease in national income since November Mr. Coombs said: ‘‘They removed our lunch lowing week, to avoid paying overtime. Fed- 2001, the end of the last recession, is the low- hours all the time. We were told if we didn’t eral law bars moving hours from one week to est on record. Employers took the money sign the payroll sheets, we’d be terminated.’’ another. and ran. This is extraordinary, but very few Larry Gorski, Rentway’s vice president for Wal-Mart executives acknowledged that people are talking about it, which tells you human resources, said his company strictly one common practice, the ‘‘one-minute something about the hold that corporate in- prohibited erasing time. ‘‘As soon as we hear clock-out,’’ had cheated employees for years. terests have on the national conversation. this is going on, we jump all over it,’’ he It involved workers who clocked our for The situation is summed up in the long, said. lunch and forgot to clock back in before fin- unwieldy but very revealing title of a new Shannon Priller, who worked at a Family ishing the day. In such situations, many study from the Center for Labor Market Dollar store in Rio Rancho, N.M., sheepishly managers altered records to show such work- Studies at Northeastern University: ‘‘The acknowledged that she sometimes watched ers clocking out for the day one minute after Unprecedented Rising Tide of Corporate her district manager erase her hours. ‘‘The their lunch breaks began—at 12:01 p.m., for Profits and the Simultaneous Ebbing of manager and I would sit there and go over example. That way a worker’s day was often Labor Compensation—Gainers and Losers everybody’s time cards,’’ she said. ‘‘We were three hours and one minute, instead of seven from the National Economic Recovery in told not to go over payroll, or we would lose hours. 2002 and 2003.’’ our jobs. If we were over, my hours would get Ms. Williams, the Wal-Mart spokeswoman, Andrew Sum, the center’s director and lead shaved.’’ said Wal-Mart had broadcast a video to store author of the study said: ‘‘This is the first Some weeks, she said, she lost 10 or 15 managers last April telling them to halt all time we’ve ever had a case where two years hours, and her 6 a.m. clock-in time became 9 one-minute clock-outs. Under the new pol- into a recovery, corporate profits got a larg- a.m. Patricia Bauer, a clerk at the store, icy, when workers fail to clock in after er share of the growth of national income said her paycheck was sometimes cut to lunch, managers must do their best to deter- than labor did. Normally labor gets about 65 under 30 hours on weeks when she worked 40. mine what their true workday was. percent and corporate profits about 15 to 18 Like Mr. Pooters, these women have joined In interviews, five former Wal-Mart man- percent. This time profits got 41 percent and a lawsuit that accuses Family Dollar of eras- agers acknowledged erasing time to cut labor [meaning all forms of employee com- ing time and requiring off-the-clock work. costs. Victor Mitchell said that as an assist- pensation, including wages, benefits, salaries ‘‘It needs to stop,’’ said Ms. Priller, who now ant manager in Hazlehurst, Miss., in 1997, he and the percentage of payroll taxes paid by cleans houses. frequently shaved time. employers] got 38 percent.’’ Kim Danner said that when she ran a Fam- ‘‘We were told we can’t have any over- The study said: ‘‘In no other recovery from ily Dollar store with eight employees in Min- time,’’ he said. ‘‘It’s what the other assistant a post-World War II recession did corporate neapolis, her district manager urged her to managers were doing, and I went along with profits ever account for as much as 20 per- erase hours so that she never paid overtime it.’’ cent of the growth in national income. And or exceeded her allotted payroll. Federal law Mr. Mitchell said the store’s manager or- at no time did corporate profits ever increase generally requires paying time-and-a-half to dered them to stop. But he said that in 2002, by a greater amount than labor compensa- nonmanagerial employees who work more after becoming manager of a Wal-Mart in tion.’’ than 40 hours a week. Bogalusa, La., a new district ordered him to In other words, an awful lot of American Ms. Danner said her employees could not erase overtime. He said he refused. workers have been had. Fleeced. Taken to do all the unloading, stocking, cashier work Ms. Williams said Wal-Mart had increased the cleaners. and pricing of merchandise in the hours al- efforts to stop managers from shaving time The recent productivity gains have been lotted. ‘‘The message from the district man- or allowing off-the-clock work. widely acknowledged. But workers are not ager was, basically, ‘I don’t care how you do Wal-Mart has circulated a ‘‘payroll integ- being compensated for this. During the past it, just get it done,’ ’’ she said. rity’’ memo, saying that any worker, ‘‘hour- two years, increases in wages and benefits So she altered clock-out times and inserted ly or salaried, who knowingly falsifies pay- have been very weak, or nonexistent. And de- half-hour lunch breaks even when employees roll records is subject to disciplinary action spite the growth of jobs in March that had had worked through them. ‘‘I felt horrible up to an including termination.’’ the Bush crowd dancing in the White House that I was doing this,’’ she said. ‘‘I felt pres- Employees at Wal-Mart and other compa- halls last Friday, there has been no net in- sured, absolutely. If I refused, I would have nies complain that they receive no paper crease in formal payroll employment since been terminated easily.’’ time records, making it hard to challenge the end of the recession. We have lost jobs. After five months, she quit. management when their paychecks are There are fewer payroll jobs now than there Sandra Wilkenloh, Family Dollar’s com- inexplicably low. were when the recession ended in November munications director, declined to respond to Ms. Danner, the former Family Dollar 2001. the lawsuit, but said, ‘‘Family Dollar’s pol- manager, praised the system at the McDon- So if employers were not hiring workers, icy is to fully comply with all wage and hour ald’s restaurant she managed for seven and if they were miserly when it came to in- laws and to take appropriate disciplinary ac- years. At day’s end, she said, employees re- creases in wages and benefits for existing tion in any case where we determine that ceived a printout detailing total hours employees, what happened to all the money such policy has been violated.’’ worked and when they clocked in and out. from the strong economic growth? She said Family Dollar maintained a hot ‘‘We never had any problems like this at The study is very clear on this point. The line that employees could call anonymously McDonald’s,’’ she said. bulk of the gains did not go to workers, ‘‘but to report wage violations. Mr. HARKIN. I also ask unanimous instead were used to boost profits, lower Rosann Wilks, who was an assistant man- consent that yesterday’s article by Bob prices, or increase C.E.O. compensation.’’ ager at a Pep Boys in Nashville, said she was This is a radical transformation of the way fired in 2001 after refusing to delete time. Herbert be printed in the RECORD. the bounty of this country has been distrib- She said her district manager told her, There being no objection, the mate- uted since World War II. Workers are being ‘‘Under no circumstances at all is overtime rial was ordered to be printed in the treated more and more like patrons in a allowed, and if so, then you need to shave RECORD, as follows: rigged casino. They can’t win. time.’’ [From the New York Times, Apr. 5, 2004] Corporate profits go up. The stock market At first, she bowed to orders and erased goes up. Executive compensation sky- WE’RE MORE PRODUCTIVE. WHO GETS THE hours. Some employees began asking ques- rockets. But workers, for the most part, re- MONEY? tions, she said, but they refused to confront main on the treadmill. management. ‘‘They took it lying down,’’ (By Bob Herbert) When you look at corporate profits versus she said. ‘‘They didn’t want to lose their job. It’s like running on a treadmill that keeps employee compensation in this recovery, and Jobs are hard to find.’’ increasing its speed. You have to go faster then compare that, as Mr. Sum and his col- When she started feeling guilty and con- and faster just to stay in place. Or, as a fac- leagues did, with the eight previous recov- fronted her district manager, she said, ‘‘It all tory worker said many years ago, ‘‘You can eries since World War II, it’s like turning a came to a boil. He fired me.’’ work ’til you drop dead, but you won’t get chart upside down. Bill Furtkevic, Pep Boys’ spokesman, said ahead.’’ The study found that the amount of in- his company did not tolerate deleting time. American workers have been remarkably come growth devoured by corporate profits ‘‘Pep Boys’ policy dictates, and record productive in recent years, but they are get- in this recovery is ‘‘historically unprece- demonstrates, that any store manager found ting fewer and fewer of the benefits of this dented,’’ as is the ‘‘low share . . . accruing to

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00010 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3745 the nation’s workers in the form of labor an article saying ‘‘Will ‘Obstructionist’ ness or out of the activity for which compensation.’’ Label Stick?’’ Evidently, our majority they have trained all their lives, such I have to laugh when I hear conservatives leader last week said: Obstruction, ob- as delivering a baby. I have had meet- complaining about class warfare. They know struction, obstruction—every bill. That ings with doctors in my home State. I this terrain better than anyone. They launched the war. They’re waging it. And is according to Majority Leader FRIST, remember distinctly a doctor from they’re winning it. at least according to the article in Dover, a woman who loves to deliver Mr. HARKIN. Mr. President, the arti- Rollcall. babies. This is what really excites her I have the greatest respect for Sen- cle went on to point out that Kim Dan- about being a doctor. It is why she ator FRIST. He knows that. I like him ner used to manage a Family Dollar went to medical school. It is why she as a friend. But quite frankly, that will store with eight employees in Min- went to graduate school afterwards. not wash. The first ruling on FSC was neapolis. She says: But she has actually had to stop deliv- in 2002. ering babies. The only babies she now . . . her district manager urged her to erase Mr. President, I will continue my re- delivers are members of her own fam- hours so she never paid overtime or exceeded her allotted payroll. marks later today. ily. She has to get special dispensation The PRESIDING OFFICER. The Sen- from the hospital to do that because as She said her employees could not do ator from New Hampshire. an OB/GYN she cannot afford the insur- all of the unloading, stocking, cashier Mr. GREGG. I understand the motion ance necessary to cover her costs of de- work, and pricing in the hours allotted, to proceed has been reported. livering those children. so she altered clock-out times and in- The PRESIDING OFFICER. Yes. We have regions in our State, and it serted half-hour lunch breaks, even Mr. GREGG. We are now moving on is true in every State that has any sort when employees worked through lunch. to the issue of how we give the Amer- of rural atmosphere, where we literally She says: ican people better access to doctors, es- do not have any coverage at all, where I felt horrible that I was doing this. I felt pecially women who are having chil- a woman in northern New Hampshire pressured, absolutely. If I refused, I would dren, people who have experienced a who has decided to have a child has to have been terminated easily. traumatic event and have gone to the drive 10 miles—10 would be conserv- Instead of issuing new rules to offi- emergency room. ative—20, 30, 40 miles or more in order cially eliminate overtime for millions Regrettably, in our society today we to see an obstetric doctor, in order to of Americans, the Department of Labor are seeing a lot of highly qualified peo- get care during her pregnancy. ought to be cracking down on these un- ple in the medical professions—not It is darn dangerous in New Hamp- scrupulous companies. The Department only doctors, but nurse midwives and shire in the middle of the winter to of Labor ought to be enforcing the ambulance professionals, EMT profes- drive those miles, especially if you are overtime laws so American workers are sionals—giving up the practice which pregnant or, Lord forbid, you happen to not gouged and cheated out of their they love; in the case of an OB doctor, actually be in labor. The local hos- hard-earned pay. delivering a baby, and in the case of pitals do not have doctors on call, do Now we see clearly where the in- emergency room personnel, especially not have doctors, period, who are will- creased productivity is coming from. the doctor, trying to save lives—having ing to practice delivering babies. So American workers are working longer given up those professions or signifi- these women find themselves placed on hours, they are working through their cantly curtailed the extent to which the road in order to see a doctor. lunchtimes, but their hours are being they practice their profession because This is true across the country in our shaved. Their time is taken away from the cost of their liability insurance due urban areas. A lot of hospitals are find- them. Sometimes they clock out and to lawsuits has gotten so high there is ing it very hard to get coverage in they are made to come back to work. no way they can earn enough money to their emergency rooms—emergency Rather than making an example of cover the premiums they have to pay room closed. In Phoenix Memorial Hos- these companies and going after them, to purchase the liability coverage. Of pital—emergency room closed. the Department of Labor is coming course, there is no hospital in America Why was it closed? It was closed be- around the other side and saying, well, today which allows a doctor to practice cause the doctors who covered the that may be illegal, but what we are unless that doctor has adequate liabil- emergency room could not afford the going to do is make it legal to take ity coverage. cost of the insurance they had to pay away the overtime rights of up to 8 This is a crisis. It is a crisis in a lot to meet the demands of the trial bar million workers. In fact, even in the of States in this country. It is soon to which has been suing the doctors. They proposed rules, the Department offered be a crisis in even more States. There had to back out of the business or out employers helpful tips on how to avoid are 19 States which the American Med- of the activity of covering the emer- paying overtime to the lowest paid ical Association has identified as in gency room, so the emergency room workers, the very workers, of course, crisis. There is another group, I think got closed. supposedly helped by the new rules. 23, the American Medical Association You talk to hospitals across this For example, the Department of has said moving toward crisis. The red country, and they are finding it very Labor, in their own writing, suggests States on the chart are in crisis and difficult to get doctors to do the call, cutting a worker’s hourly wage so any the yellow States are the States mov- to do their period where they have to new overtime payments will not result ing toward crisis. There are 11 States come in and do their coverage respon- in a net gain to the employee. The De- which are doing pretty good, which sibilities because of the fact the local partment of Labor also recommends have their medical liability issues doctors do not want to put at risk their raising a worker’s salary slightly to under control. insurance premiums as a result of meet the threshold at which eligibility This bill attempts to create a na- going into the emergency room and for time-and-a-half pay ends. tional response to this problem so practicing 1 day a week or 2 days a Again, American workers face a dou- women who are having children or week, as has been the tradition. ble-barreled threat to their overtime want to have children can see a doctor. I know in the town I grew up in, rights. They face a threat from unscru- If you are in a car accident and you Nashua, NH, the medical community, pulous employers who deny overtime have a serious injury, or you are walk- the physicians, would take turns. They illegally and now they face a threat ing down the road and you slip and fall would come on rotation into the emer- from the Department of Labor which and have a serious injury, or you have gency room and cover the emergency wants to deny overtime legally. But any other type of physical injury and room. They were not all trauma spe- the result is the same: an assault on you go to your emergency room, you cialists, but that was sort of their re- the American worker’s right to time- will see a doctor who is capable of tak- sponsibility as being part of the med- and-a-half pay for hours worked in ex- ing care of you. That is what this bill ical community in the city of Nashua, cess of 40 hours a week. tries to address. and they were proud of it. We are going to continue to try to The issue, of course, is these doctors Today it is very hard to get doctors offer this amendment and to try to get want to deliver these services. It is not who are not trauma specialists into the a vote on it. In Rollcall today there is as if they want to get out of the busi- emergency room because of the fact

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00011 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3746 CONGRESSIONAL RECORD — SENATE April 6, 2004 these insurance premiums have gotten our support—the trial lawyers’ sup- system is broken. It is failing. It is fail- so out of control, and the trauma spe- port—allow this bill to be debated on ing the American people. It is failing cialists themselves cannot afford the the floor of the Senate. You shall not our communities. It is failing our hos- premiums because it is a low-paying allow a motion to proceed. So it is an pitals. It is failing our doctors. It is area of the medical profession. As a re- ironic situation, to say the least. failing our families. And, most impor- sult, they cannot work long enough We hear the Members of the other tantly, it is failing our patients. hours; and they work outrageous hours side saying they want to offer amend- The medical litigation system should already. There are not enough hours in ments, they want to get this issue up be strong. Its purpose is to promote the the day for them to work in order to and that issue up. Yet they are filibus- common good, first and foremost; and, cover the cost of their insurance. This tering a motion to proceed to a bill second, to improve health care for all is a crisis. which, if we did proceed to it, would Americans through the fair and effi- The same is true of baby doctors. I allow them to offer the exact amend- cient resolution of meritorious medical had a doctor in Laconia tell us—Laco- ments they claim they cannot raise. negligence claims. Indeed, those two nia, NH; a great town on Lake But it appears there is a countervailing purposes—to promote the common Winnipesaukee. I hope everybody will force here which is, maybe they do not good and to improve health care go up and visit this summer. It is a want to offer that amendment so much through the fair and efficient resolu- beautiful place to take your summer they would affront the trial lawyers by tion of meritorious medical negligence vacation. He told us he has to work 51⁄2 allowing this bill to proceed. That ap- claims—are noble goals. months of the year to pay the pre- pears to be the case. But instead of achieving these noble miums on his insurance because he de- But in the end, who is the loser? Who goals, our litigation system is out of livers babies, and they are down to two is the loser? Well, the loser is, obvi- control and patients are being hurt. doctors who do this in his area. That ously, the doctors who cannot practice Due to this broken system of medical makes it economically unviable for what they have been trained to do. We justice, medical liability premiums him to practice obstetrics. When it are about to hear from one member of today are unnecessarily skyrocketing. takes 51⁄2 months to pay your pre- that profession who is an extraordinary You will hear the words ‘‘sky- miums and 6 months to pay your taxes, example of that profession in quality rocketing’’ and ‘‘runaway’’ because you only have 2 weeks of the year you and ability. And, secondly, the most that is what is happening. The ulti- earn for yourself, and you still have to important, the women, especially in mate victims are the patients—the po- send your kids to college and maybe rural areas, who cannot see a doctor if tential patients, the future patients— even buy your wife something for they are having a baby; and people who and that means all of us, our families Christmas—you cannot do it—or your walk into that emergency room under and future generations. husband. A lot of the OB doctors are, extreme stress and trauma and sud- The ultimate victims are patients obviously, women. So it is serious. denly find there is nobody there to who see their access to care—to that Yet we have in this institution tried take care of them. obstetrician, to that emergency room, time and again to raise the issue, and Mr. President, I will reserve my fur- to that trauma center—threatened and, what has happened? We have been ther comments because I do see the in some cases, totally disappearing. stonewalled by the other side. Why leader is on the floor. Of course, this is The American Medical Association now would the other side not even be will- an issue which he has an intimate lists 19 States where access to care is ing to allow us to proceed to these knowledge of and an intense desire to threatened. The situation is a crisis bills? This is the third time we have move forward. I congratulate him for that is getting worse day by day by tried this, to get to these bills to dis- his efforts in this area, and thank him day. That is why as majority leader, in cuss how we are going to relieve the for making this time available to us. terms of scheduling in the Senate, we pressure on doctors who deliver babies I yield the floor. are going to keep bringing this issue and doctors who take care of emer- The PRESIDING OFFICER. The ma- back because the crisis is getting gency rooms. We are not even expect- jority leader. worse. If we are not successful, we will ing it necessarily to pass. We would Mr. FRIST. Mr. President, I will take come back again and again. like it to pass, but we at least want to a few moments to comment on a bill While the crisis does affect all people be able to debate it. Yet time and again that deserves to be debated on this who will need or who need appropriate the Democratic leadership of this insti- floor and brought to this floor because, access to care, it affects those who are tution has said: No, you are not even as the distinguished Senator from New seeking help from specialists in par- going to be allowed to proceed to the Hampshire said, the patients—not the ticular. When we say ‘‘high-risk spe- bill. That is what we are trying to get doctors and not the system; all of them cialist physicians,’’ they are the ones to today with the motion to proceed. It are disadvantaged—but it is the pa- who are responding to a trauma acci- is a technical motion, meaning it is a tients who suffer. dent or the neurosurgeon who has to be way to try to get the bill to the floor When people hear of patients, they highly trained to respond to a brain in- so it is up for action. say: That is somebody in a hospital jury, a contusion, a head injury. When I heard the Senator from Iowa out somewhere who is suffering. No, it is we say ‘‘high-risk medical specialist,’’ here railing about a rule at the Labor you and your children, and everybody we mean the cardiac surgeon, a high- Department, and he cannot get his who is listening to me. Who knows? risk specialty physician who is called amendment up. Well, one of the rea- You could be driving home today from in if trauma comes into an emergency sons he cannot get his amendment up work, and you might have an accident room. is because we cannot move to this bill. and have to go to the emergency room These patients who seek the high- If we could move to this bill, he could or the trauma room. Or after you pick risk medical specialist indeed are offer his amendment. So why is he vot- up your kids from school—or maybe among the most sick and the ones who ing against moving to this bill? Be- they are taking the bus home from most desperately need urgent atten- cause it appears he is more inclined to school today—if they are struck by a tion. But our litigation system is in- support the position of the trial law- car, or fall down and break a bone, creasingly forcing these medical spe- yers, who are resisting, in a manner of they have to go to the emergency cialists, such as neurosurgeons and ob- extreme intensity, any action in this room. Or if you are one of the millions stetricians, to drop their services alto- area to try to improve the ability of of women who anticipate the joy of gether and not do those higher risk re- doctors to deliver care, by making having a baby in the near future, it is sponses; to limit those services maybe more doctors available to women spe- you who will suffer as you look for an to certain hours to not provide those cifically, or more doctors available in obstetrician, as you look for an obste- services; not to offer those services in the emergency room, and who are re- trician who will be with you during the emergency setting but do them in a sisting that so aggressively they have that prenatal period or over the whole much more controlled environment. told the leadership of the other side, 9-month period. It is even causing these high-risk the Democratic leadership: You shall All of this comes down to a funda- medical specialists to pick up their not, if you expect to continue to get mental issue. Our medical litigation practices and move from one State,

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00012 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3747 say, from cities such as Philadelphia, of Tennessee, if somebody came in with gency room because today, as cardiac where premiums are skyrocketing, to a a knife wound to the chest, they would surgeons, cardiologists, heart special- city in California that has done a much call Dr. FRIST, and I would go down and ists—and it is very different today than better job and that is not in crisis be- repair the knife wound to the chest or 30 or 40 years ago—there are medicines cause they have legislated appro- to the heart, as a medical specialist. you can give and procedures you can do priately in terms of addressing what Based on that experience, I can tell you that can open up the blood supply when was 20 years ago a crisis in California that emergency care and trauma care you have a heart attack and get blood in medical liability. It causes these is an absolutely necessary and critical to the heart before the millions of cells neurosurgeons and obstetricians—the component of our overall health care die. Every moment counts. It is impor- two areas we are addressing in part system. tant to get that blood supply opened by with the legislation we are doing our Each year, there are 110 million vis- heart specialists. best to bring to the floor over the next its to the emergency room, and 90 per- Unfortunately, our broken litigation 24 hours—to retire from the practice of cent of these visits require urgent at- system is stretching those moments—if medicine altogether. They are saying: tention, emergency attention within 2 those specialists are not available to It is too much, $400,000 as a neuro- hours. These are emergencies. As I im- respond—into hours. It is stretching surgeon in some cities, just for liabil- plied earlier, no one can predict when them longer and longer, and that ity premiums. I can’t afford that. I am you are going to need that care. Driv- causes death of that heart muscle. going to leave the whole practice of ing home today, will you be in an acci- Of course, patients and most people neurosurgery. It does not make sense dent, or will your child fall down and listening today expect, if they have an for me anymore. break a bone climbing a tree this after- emergency and are going to be rushed That is the reality today. It is a re- noon? That is emergency care that you to the emergency room, that there will ality that is getting worse. And when want a response to immediately. be people to treat them, including we say it is a crisis, it is a crisis get- The Alliance of Specialty Medicine heart specialists who can rush down ting worse. And that demands a re- has documented the important details and open the blood vessels; or if they sponse by this body. As the services of this critical care. Approximately 28 have a brain injury or a concussion or these specialists provide become harder million Americans visit the emergency a contusion to the head, they expect and harder to find, who is hurt? Every- room each year due to an accident. there will be somebody there to re- body, yes, but the sickest and, indeed, Ninety-nine percent will recover after spond appropriately. the most vulnerable are the ones hurt receiving care; in many cases, life- However, that assumption is getting the worst; again, demonstrating the saving care. Over 3.5 million emer- to be less and less true, due in large perverse and unintended consequences gency room visits are related to bone part to our broken medical malpractice of a failing medical litigation system. fractures or to broken bones. Of these, litigation system. Because of runaway That is why this week we are bringing 888,000 require hospitalization, and medical malpractice costs, many med- to the floor this medical liability re- delays in treatment can result in loss ical specialists have been forced to stop form. It is for the patients. treating patients in the emergency The Pregnancy and Trauma Care Ac- of the use of that limb, amputation of room—the neurosurgeons; the ortho- cess Protection Act focuses liability that limb, or indeed permanent dis- pedics, or bone surgeons; the heart and reform on two areas: Emergency and ability. Over 1.5 million people suffer trauma care, and obstetrical services, traumatic head injury with damage to lung surgeons; the obstetricians; the where the services are provided right the brain itself. cardiologists; and the list goes on in before, during, and after the delivery of Neurosurgeons, a focus in the legisla- terms of specialists we have to respond babies. It is these two critical areas tion we are debating, perform over in the emergency room. They are sim- that are literally under siege today be- 36,000 emergency brain operations on ply saying: I will practice my spe- cause they rely on medical specialists head-injured patients each year. They cialty, but I am not going to do it in who are suffering the most from this place little intracranial monitoring de- the emergency setting. I will not sign lawsuit abuse. vices to control brain swelling in an- up for what we call ‘‘on-call’’ for the Of course, the true victims are those other 8,000 patients each year. Trauma emergency room or for the trauma who need to go to the emergency room, frequently inflicts damage to the spi- team because if I do, my own insurance as the distinguished Senator from New nal cord which runs through the body. premiums will skyrocket, or I cannot Hampshire said. It is not the physi- Indeed, over 70,000 Americans are hos- get the insurance at all. So fewer and cians themselves. It is the people who pitalized because of spinal injuries fewer specialists are volunteering for have to go to the emergency rooms and each year. Another 26,000 are hospital- this ‘‘on-call’’ in emergency rooms. wait longer for a specialist to be called ized with acute or emergency or sudden Because of the high-risk operations in because they are not in the hospital, neck injuries. they are called upon to perform in or there is nobody in the region. It is And, as we all know, nerve tissue these emergency situations, neuro- the expectant mother who is having heels in a very slow, different way. You surgeons, the specialty of the brain and difficulty even finding an obstetrician. cut off blood supply to the spinal cord spine, have been particularly hit hard And it is the stories that are increas- or to the brain and there is not an im- by the litigation process. According to ingly occurring of once you get an ob- mediate response. That tissue pretty the American Association of Neuro- stetrician, right after you become preg- much dies forever; very slow recovery. logical Surgeons and the Congress of nant, that obstetrician leaves and Thus that time of response becomes Neurological Surgeons, between the moves and another obstetrician comes critical. Delay in treating any sort of years 2000 and 2004, that 4-year period, in, and maybe that obstetrician stays a injuries to the spinal cord can cause the national average, of medical liabil- few months and then another obstetri- paresthesia or tingling, paralysis, can ity premiums for neurosurgeons in- cian. So we have a huge medical prob- cause permanent disability, and, of creased 100 percent. It literally prac- lem. It is our responsibility to respond. course, can cause death. tically doubled, from $45,915 up to Before coming to the Senate, I spent My own specialty was the chest and $91,848. 20 years both training and practicing was cardiothoracic, cardiovascular, the As I mentioned a few minutes ago, in as a thoracic surgeon, a chest surgeon, heart itself. When you look at emer- some States, neurosurgeons are now which is heart, lungs, trachea—really gencies coming in because of heart at- paying insurance premiums of almost everything between the diaphragm and tack or cardiovascular disease or $400,000 per year. That is not the cost of the neck. That is what I did. As a mem- stroke, the blood vessel is huge. Sixty- doing the medicine or delivering the ber of the thoracic surgical team at five million Americans have some form care or of the practice or being in the Vanderbilt University Medical Center, of heart and blood vessel, or cardio- operating room or paying the nurses to we handled all of the trauma to the vascular disease, which could lead to a help you or the cost of the equipment chest, the lungs, the heart. That is heart attack or stroke; and each year or the cost of the drugs or the cost of what I did every day. over 1 million Americans suffer a myo- your training; that is just a tax of At that level I trauma center, which cardial infarction, or a heart attack. $400,000 placed on top of all those ex- covered throughout the middle section You want to take them to the emer- penses that the physicians pay to have

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00013 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3748 CONGRESSIONAL RECORD — SENATE April 6, 2004 the opportunity to treat you if you death. Here is an example. According make themselves unavailable for emer- come into the emergency room. It to the Palm Beach Post, a Florida gency care. Indeed, that is why they doesn’t make sense. woman, Mildred McRoy, suffered a got into the business. Tragically, and It is a crisis. It is getting worse. It hemorrhagic stroke in February. That all too often, the medical litigation should be no surprise that this medical is where you actually bleed into the system, with these skyrocketing, out- malpractice liability crisis is having a brain itself, and because the skull is a of-control costs simply leaves them no negative effect on the way these much fixed cavity, when you bleed into the choice. In the end, our health care sys- needed specialists practice medicine. In brain, it swells and it requires an emer- tem suffers, but it is the patients who fact, a recent survey—a fascinating gency response. She was rushed to JFK really suffer. survey—showed that 70 percent of neu- Medical Center in Atlantis for treat- The story is the same for obstetri- rosurgeons responding said they have ment, but JFK stopped providing cians. Right now we know women are had to make at least one of five prac- around-the-clock neurosurgical cov- having a harder time finding an obste- tice changes. So if 100 responded, 70 erage in July because of the medical li- trician. As I said earlier, one might said they have had to do one of these ability crisis. In fact, there wasn’t a have two or three obstetricians over following things to narrow down or single neurosurgeon on call in all of one pregnancy period today because ob- change their practice in response to Palm Beach County when this oc- stetricians are having to move. A few the medical malpractice crisis: referred curred. Again, that shows how perva- weeks ago, we brought the Healthy complex cases, closed their practice, sive the impact is if you don’t have Mothers and Healthy Babies Access to moved to a different state, stopped pro- specialists signing up because of high Care Act to the floor of the Senate. viding patient care or retired. medical liability premiums. Ms. McRoy That bill specifically addressed the Runaway lawsuits are forcing neuro- was then transported 40 miles away to medical liability challenges we have fo- surgeons and other specialists to limit North Broward Medical Center. More cusing on OB/GYNs and women and the emergency services. Again, it is not the than 8 hours later she was operated on babies they serve. We did that because doctor who is being hurt, it is the pa- by a neurosurgeon but died after being all across the country, indeed in my in a coma for several days. tients who are being hurt, and it is fu- home State of Tennessee, the current That is the story. That is why we ture patients, and that means poten- must act. We know there is a problem, medical litigation system is forcing tially everybody listening to me now. many OB/GYNs to simply stop deliv- Many patients are rushed to these a crisis, and we know the crisis is get- ting worse. We know it is going to take ering babies. trauma centers. When I was on call at Floor discussions at that time sev- action on this floor to reverse it. Flor- Vanderbilt Trauma Center as a tho- eral weeks ago demonstrated the crisis. ida is one of the 19 States the AMA racic surgeon, we had somebody actu- considers in crisis. It showed the extent of the crisis. ally in the hospital, or very close to In a few cases, trauma centers and There is no reason at this juncture to the hospital, practically all the time. emergency rooms have been actually restate all of the arguments, but the For heart disease, heart attacks, you forced to shut down—as we saw on the doctor drain has gotten so bad that it need somebody there almost all the chart that was behind me a while ago, is clear that women are having a hard- time. Why is that? Because you have a which the Senator from New Hamp- er time finding doctors to give them golden hour, especially for spinal dis- shire had shown—because either the prenatal care and to deliver their ba- ease and heart disease. Every second emergency department physicians or bies. that goes by that you have the blood the on-call specialists could not obtain What happened several weeks ago? supply cut off, especially when you can medical liability insurance at any Unfortunately, opponents to this need- open that blood supply up, the patient price whatsoever. The most infamous ed medical liability reform filibustered is being hurt. example occurred in the summer of 2002 the mere consideration of the bill on Unfortunately, patients are having to when Las Vegas lost its only level I the floor of the Senate. We simply can- endure longer and longer waits as these trauma center. When I use that term, not allow people to keep their heads in precious lifesaving minutes tick by. If level I, that is the highest level. They the sand any longer. The crisis is real. you have a broken bone, a gunshot can take anything that comes. Level I It is time for us to act. wound, frequently you might be di- is the most sophisticated, most pre- The crisis is getting worse every day. verted from one facility to another be- pared, most responsive level of trauma As a physician and as a policymaker, cause of the lack of availability of a center that we have. Las Vegas lost as someone who has had the oppor- specialist or the resources in one of the their level I trauma center which, by tunity, a real blessing, to take care of hospitals. Then you have this frantic the way, was one of the 10 most busiest patients in the setting of trauma, the search of finding a needed specialist for in the country for several days, forcing emergency room, and responding to that broken bone, or that gunshot residents from that major city of Las their needs, I am simply not, as major- wound to the heart, or that stab Vegas to travel over 100 miles to seek ity leader, going to sit back and allow wound. urgent care. this crisis to continue to explode. According to a recent study—because For me as a physician who has gone The legislation itself we are consid- people say that could not be what is through 4 years of medical school and 8 ering, the Pregnancy and Trauma Care happening today, but it is what is hap- years of medical training, what is sad Access Protection Act, addresses these pening—76 percent of emergency de- and tragic is we are not getting rid of two areas—delivering babies and re- partments recently have diverted pa- a few bad doctors. Right now we have sponding to emergency care. Why? Be- tients to another facility because of a highly qualified, highly committed cause these areas have been hit the lack of specialty physician coverage. physicians, women and men, who have hardest. It is common sense in medical Of these, over 33 percent diverted pa- chosen to dedicate their lives to help- litigation reform that will protect our tients 6 or more times a month, and an ing their fellow man—really mankind, patients, our families from medical additional 28 percent have diverted pa- humanity broadly—through neuro- negligence with fair compensation. If tients to other facilities 3 to 5 times a surgery or obstetrics or heart surgery, somebody has been negligently injured, month. Over a quarter of hospitals re- and we are literally forcing them to they deserve just and fair compensa- port that the reason they have lost spe- leave the field they cherish, that they tion. If there are bad doctors, they cialty coverage is because of medical spent years working to become so they need to be punished accordingly. liability concerns. These concerns sim- can help other people. These are people The problem is the overall system is ply discourage specialists from offering who are devoting their professional broken. The overall system has these their services or volunteering their lives to healing others, and we are say- frivolous lawsuits with these runaway services for this on-call emergency cov- ing because of this medical litigation costs. The legislation is based on sound erage. system, which is out of control: You models that have worked in States, The medical litigation crisis is af- are no longer going to be able to do that have a demonstrated track record, fecting health care, patient care, all that. such as California. It is supported by across the country. The consequences They do not want to drop these spe- numerous medical specialty societies are obvious—the consequences of cialized services. They do not want to and speciality groups. The American

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00014 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3749 College of Obstetricians and Gyne- sider because the truth is their ob- score political points, trying to divert cologists, the American Association of struction of our ability to get meaning- the attention to other nonissues and Neurological Surgeons, the American ful medical liability reform is not hurt- will not allow us to do what we have Academy of Orthopedic Surgeons all ing doctors only, it is not hurting in- been sent here by the American people support this legislation and, of course, surance companies only, it is hurting to do and that is to pass legislation the list goes on. everyone who has been or will be a pa- that will meaningfully and signifi- I hope opponents of reform do not tient in a medical care facility or at cantly improve the quality of their make excuses. They seem to put the the hands of a doctor. lives. blame of the crisis everywhere except We have had the opportunity to dis- We have had a chance to deal with where it belongs—our medical litiga- cuss these issues before, as I said, but this medical liability problem before tion system. It is time to face that before I get into what I consider the and, unfortunately, we have not done simple fact that we need to reform our meat of this issue—and that is access so. My hope is that our colleagues will medical litigation system. It is in des- to good quality health care for all reconsider and we will do so today. If perate need of reform. It is hurting all Americans—let me say on other issues those on the other side of the aisle are patients. It is hurting our vulnerable that affect American competitiveness truly serious about their concern for patients the most. in terms of our ability to compete in a the American people and the quality of In addition, I should add that all of global economy, the ability of employ- health care they receive, I hope they this has a huge, unnecessary cost in ers to provide health insurance for will join us in passing the bill we are the practice of defensive medicine, the their employees, which is diminishing discussing today. reaction of our medical system to friv- day by day because the costs of health The solutions to their professed con- olous lawsuits. These are your health care continue to go up in part because cerns are right before us. They just care dollars that are being wasted. of our broken medical liability system, need to allow an up-or-down vote. I These are your health care dollars that that, in turn, puts pressure on the un- hope the American people are paying are taken from you and not being chan- insured in our society. Where employ- close attention to what is happening, neled back into better health care for ers are unable to carry medical insur- because if we do not get an up-or-down you. ance on their employees, that means vote it is they who will pay the price Congress should act now. I am very that too many people who cannot af- for those who would prefer to score po- hopeful we will be allowed to act now ford health care coverage are forced to litical points over actually producing by putting patients first rather than emergency rooms where they know results. the special interests who have been so they can and will be treated. In the The bill offered by the Senator from vocal in obstructing this bill. vast majority of those cases, they New Hampshire, the distinguished For the sake of all Americans who could be more efficiently, more hu- chairman of the HELP Committee, the will be forced to go to the emergency manely, and more cost-effectively Health, Education, Labor, and Pen- room this year and for the sake of all treated in a primary care setting in a sions Committee, is designed to im- expectant mothers, I ask my colleagues doctor’s office or in a clinic, but be- prove access to health care, both for to allow this debate to move forward cause of the pressures being put on our women who need obstetrical and gyne- tomorrow by voting to proceed to this health care system by a broken liabil- cological care and for patients who critical medical litigation reform bill. ity component, it is hurting us in so need emergency care. Mr. President, I yield the floor. many different ways. As I am sure every Member of this The PRESIDING OFFICER. The Sen- As I said, I want to talk about access, body has, I have heard complaints from ator from Texas. but it also hurts us in terms of our our constituents about how badly the Mr. CORNYN. Mr. President, I ask global competitiveness, in terms of job system is broken. unanimous consent that the following creation and job growth, and in terms There are those on the other side of Senators be added as cosponsors of S. of diminished access to health care be- the aisle who would say that, because 2207, the Pregnancy and Trauma Care cause people have nowhere else to turn we have been rejected twice before, by Access Protection Act: Senator FITZ- if they do not have medical insurance, bringing it up a third time this is GERALD, Senator CORNYN, and Senator except the emergency room where they somehow just a political exercise. I as- HATCH. know they can and will be treated but sure them that is not true. We were not The PRESIDING OFFICER. Without in a way that is insufficient, inhumane, allowed to vote before, despite support objection, it is so ordered. and certainly not cost effective and from a bipartisan majority. Mr. CORNYN. I thank the Chair. causes a host of other problems in all The bottom line is, we are simply un- I wish to express my gratitude to the of our big cities and everywhere else willing to put up with or to accept, majority leader for his important com- where emergency rooms are frequently without a fight, the kind of obstruction ments. He brings an expertise to this put on divert status because they are we have seen on this and so many other debate no one else in this body can so clogged up with cases that probably, important issues. offer by virtue of his training, edu- in a medical sense, should not be there This bill would provide desperately cation, and extensive practice as a because they could be treated more needed relief to a health care system medical doctor in Tennessee. I am not cost effectively and more humanely in that is in crisis, focusing especially on going to speak from the perspective of another setting, but they are there and emergency room doctors and obstet- a doctor because I am not one. I am then the true emergencies are diverted rics, baby doctors, to critical areas going to speak from the perspective of to emergency rooms that are farther that deserve our support. a patient because, like it or not, I will away. This chart has been seen before, and be one at some point in my life, and The majority leader, Dr. FRIST, my colleagues will notice that this from the standpoint of other prospec- talked about the medical consequences chart reflects in red States that are in tive patients which would include not of delayed treatment when people have crisis because of the difficulty of pur- only my family and loved ones, but lit- to travel sometimes many miles just to chasing medical liability insurance, erally everyone within the sound of my get treated, what complications can the huge increases in cost which have voice. occur because of a traumatic injury or simply caused medical doctors either I want to express again my apprecia- because a baby that is delivered be- to retire early or to move to States tion that the majority leader would cause the mother cannot find a hos- that have provided some commonsense bring this issue back up. This is our pital that can take her nearby. My reform or just discouraging people third attempt in recent months to point is, it creates a cascading of prob- from getting into the medical profes- enact significant medical liability re- lems that are not just limited to med- sion at all. form. The reason why it is so impor- ical liability but which have a lot of The States in red, including my tant to bring this issue back up is to ramifications and a huge ripple effect. State of Texas, are indicated as States ask our colleagues across the aisle who Unfortunately, our colleagues on the in crisis. The ones in yellow are the have obstructed our ability to go to a other side of the aisle are offering no States showing problem signs but do vote on this important issue to recon- solutions but are merely trying to not yet qualify as a crisis State, and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00015 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3750 CONGRESSIONAL RECORD — SENATE April 6, 2004 the ones in white are States that are stetrician-gynecologists, means that Sallard of Arizona. At 2 a.m. on the currently considered to be OK. I would out of 254 counties of Texas, 154 of morning of March 20, 2002, 22-year-old not suggest by saying that they are them have no OB/GYN specialist. In Melinda Sallard woke up with labor currently OK that they have no prob- other words, a woman who is pregnant pains. She and her husband hopped into lems. It is just that they have not got- and perhaps needs prenatal care, so in- their car and started driving the 45 ten to the point that conditions have creasing the chances her baby will be miles to Sierra Vista, which housed the in my State and other States indicated delivered healthy, must travel to an- only hospital within a 6000-square-mile in red. other county in order to get that pre- area with obstetricians able to deliver The truth is, this crisis is not some- natal care from a specialist; or once babies. En route, they passed the Cop- thing that just popped up this week. It she goes into labor, she must travel to per Queen Community Hospital, which is a crisis that we had last fall when we another county to have the doctor, was forced to close its maternity unit were blocked from bringing up com- medical specialist in obstetrics, deliver just 2 months earlier because all the prehensive medical liability reform for that baby. This means almost 6 out of practitioners able to deliver babies had an up-or-down vote. It was a crisis that the 10 counties in my home State alone lost their medical liability coverage. existed a month ago when we were have no doctor specializing in obstet- Just 3 miles past Copper Queen, blocked from having an up-or-down rics, representing approximately 2 mil- which is where they had a hospital that vote for legislation that offered imme- lion Texans in my State. could have delivered her baby but had diate help for mothers and their babies, Let me talk about another story, an- since closed its delivery facilities be- and it remains a crisis today even as other case that is worth referring to cause of medical liability concerns, we attempt to debate this legislation also in my State. Just last year a preg- just 3 miles past this hospital, while and bring it up for another vote. nant woman showed up at Dr. Lloyd her husband continued to drive their The fact is, frivolous lawsuits are Van Winkle’s Castroville office in car, Melinda delivered her own baby causing escalating medical malpractice south Texas. She showed up in Dr. Van girl, who you can see here in this pic- insurance premiums which are driving Winkle’s Castroville office less than 10 ture in her lap. She gave birth on a doctors out of practice. We can debate minutes from delivery of her baby. Her desert highway to her daughter, Su- what the cause of that is, but we can- family doctor in Uvalde, another Texas sanna. While Susanna, as you can tell not debate the result. It is a fact. In- town, had recently stopped delivering from this picture, looks healthy and deed, opponents of this legislation do babies altogether, citing medical liabil- thriving today, when she was born she not appear to debate the fact of the re- ity concerns, and this pregnant woman was not breathing. So Melinda, after sult—that is, doctors leaving, retiring, was trying to drive the 80 miles to her she had the baby by herself, unassisted, not going into practice, access being San Antonio doctor from her home in without a physician—because she denied. They just want to say there Uvalde. couldn’t get to a hospital that had ob- may be other causes, but they do not Let me give another story about a stetrical services in time—Melinda, want to deal with this cause because, woman by the name of Denise Payne. after she had her baby, cleared the unfortunately, an important constitu- Denise Payne walked into an emer- baby’s breathing passage and started ency, the personal injury trial lawyers, gency room recently. The doctors there CPR. Fortunately, the baby started simply are unwilling to agree that any did not want to treat her. She said, breathing and Melinda wrapped her change in this current broken system ‘‘They didn’t want to touch me because newborn in a sweater and held her to can be made. I was pregnant,’’ this 38-year-old preg- her chest as her husband drove them The problem is that those who are nant woman, who was 6 weeks along in all the way to Sierra Vista Hospital, preventing us from taking up this leg- her pregnancy at that time. where the ER staff cut the umbilical islation are simply caving in to the de- Luckily for Denise Payne the delay cord in the parking lot. mands of this narrow special interest getting treatment didn’t kill her. Al- As a result of the medical liability group that are prospering mightily, though she couldn’t get a kidney bi- crisis, Sierra Vista is now the only hos- that are getting rich off the current opsy in Corpus Christi on the gulf coast pital in a county of 140,000 residents system, at the same time that the rest of Texas, she was able to get one about that actually delivers babies. All high- of America is getting hurt. 150 miles away in San Antonio, but she risk patients are sent to Tucson, an This is a picture of a doctor formerly doesn’t blame the doctors. ‘‘I would say hour and a half away, in a neighboring who practiced in Fort Worth, TX, rep- it’s because of all the lawyers scaring county. I shudder to think what could resenting medical specialists, espe- the doctors,’’ she said. ‘‘They are have happened in Melinda’s case. cially neurosurgeons, orthopedic sur- scared to death to treat you.’’ Thankfully, as I said, Susanna Sallard geons, obstetricians, and emergency Indeed, that reminds me of other sit- is a healthy young girl—no thanks to a physicians, who are being forced to re- uations where I have heard doctors, medical liability system that almost tire early or move their practices to concerned about their patients, but left her as a casualty. States where effective liability reforms saying because of the broken liability The skyrocketing liability insurance are in place. system, every time you walk into an premiums have also affected emer- For example, Dr. Malone comes from examining room, every time you walk gency and trauma services for patients. my home State. He is an orthopedic into the emergency room, every time This is where the severity of the crisis surgeon who has practiced more than you walk into the delivery room, you becomes even more apparent. 20 years in Fort Worth, TX. He reluc- are putting at risk everything that you Let me tell you about Jim Lawson. tantly was forced to leave his practice, have worked a lifetime to build for This is a picture of Jim Lawson, Mary citing the extreme costs of liability in- yourself and your family. Physicians Rasar’s father. Mary lost her father in surance for physicians as being too and others are simply not able to put 2002 when Nevada’s only level I trauma much of a financial burden for him to up with it, resulting in a crisis that center was forced to close because of bear. even Ms. Payne, who no doubt was frus- skyrocketing medical liability costs. We simply cannot expect physicians trated by her inability to get doctors The majority leader, Dr. FRIST, told us to practice their chosen profession to treat her in Corpus Christi, had to earlier that level I trauma centers are after their lengthy education and drive 150 miles away to get treated be- the ones that handle the most serious training and not be able to provide for cause she was pregnant and she needed trauma cases. But Nevada’s only level I their families. We don’t expect them to a kidney biopsy. But because she was a trauma center was forced to close in do it at a loss to themselves and their higher risk patient who is at a higher 2002 because of skyrocketing medical families. I don’t think we can blame risk of medical complications but also liability costs. them, when the costs of doing business a higher risk of litigation, the doctors Jim Lawson was injured in a car ac- exceed what comes in the door such were scared to death to treat her, so cident in Las Vegas, where he suffered that they simply have no choice but to she had to travel a long way to get that multiple injuries and required imme- leave. treatment. diate care. The State’s only level I In the State of Texas, this crisis, par- These stories are not unique to trauma center, the University of Ne- ticularly as it regards baby doctors, ob- Texas. Let me tell you about Linda vada’s medical center, where Mr.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00016 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3751 Lawson should have been taken, was his head. After 7 hours, the emergency flown farther than Chicago, IL, for sur- forced to shut its doors just days before room could still not locate a neuro- gery. For a transfer from Harlingen to this accident because rising liability surgeon to treat this elderly man’s Houston, it would be like forcing a pa- costs had forced insurers to drop cov- head injury, even though they searched tient to fly from Washington almost to erage on high-risk specialists, high- in Corpus Christi, in San Antonio, and Buffalo, NY. For a transfer from San risk specialists like neurosurgeons, Austin. Unfortunately, this elderly Antonio to Houston, it is as if a patient like emergency room physicians, and man, with a head injury, died because were forced to fly from Washington to others who handle the most seriously he could not get timely medical treat- New York City. injured patients. ment for that condition. Can anyone in this body state they Unfortunately, as I indicated at the There are even more stories that il- would be content to have their family outset, this story does not have a lustrate the lengths to which patients or loved one suffer those sorts of delays happy ending. Mr. Lawson was rushed must go just to receive desperately in treatment if they really needed a to Desert Springs Hospital, where he needed care. medical specialist and couldn’t find died while awaiting air transport to Neurosurgeons in Houston, TX, are one? Of course, they wouldn’t accept the next nearest level I trauma center bombarded with trauma and emergency that. Neither should the American peo- facility, more than an hour away, at cases from around the State because ple. But that is what they are being Salt Lake City, UT. So this gentleman, doctors have dropped emergency serv- forced to do because of the inaction who was in a car accident in Las Vegas, ices in efforts to lower their profes- and obstruction of those on the other who could have been treated at the sional liability premiums just so they side of the aisle who will not allow us University of Nevada’s medical center can earn a living. to have a true debate and an up-or- but for the fact it had to shut down be- You can see Houston, TX, located in down vote on this reform to our broken cause it lost its medical liability cov- the southeast part of our State where medical liability system. erage, died because the only facility patients, let us say, down in the Rio The chief obstacle to making our that could treat him was more than an Grand Valley—this shows Harlingen, a health care system the best in the hour away in Salt Lake City. distance of 330 miles, which is close to world is our liability lottery. In the li- Let me tell you about Leanne and McAllen where that elderly man had a ability lottery, people aren’t free to act Tony Dyess. Leanne is a 48-year-old head injury and where he would have because doctors simply can’t meet the wife and mother of two from Mis- to be airlifted to Houston to receive demand, and Americans end up paying sissippi. This is Leanne and her family. those treatments by a qualified neuro- more for health care and suffering On July 5, 2002, Leanne’s husband Tony surgeon or other specialist. The time it medical complications because of it. was involved in a car accident in Gulf takes to travel 330 miles from the Rio It is not all bad news, I must say. I Port, MS, and suffered serious head in- Grand Valley to Houston, the time it am glad to say, in response to many of juries. After removing him from the takes to travel from the Rio Grand the concerns which I have raised that car, paramedics rushed Tony to Garden Valley to San Antonio, or San Antonio pertain to my State of Texas, the legis- Park Hospital in Gulfport, MS. But to Houston, or El Paso to Houston, ob- lature and the people of my State have there were no neurosurgeons there viously, has medical consequences acted. Last September voters took to available to treat Tony because rising which means people who are injured the ballot and passed Proposition 12, an medical liability costs forced doctors and suffer more serious injuries and amendment to the Texas Constitution in that community to abandon their people whose lives could have been providing caps on noneconomic dam- practice. Six critical hours passed be- saved lose their lives because of this ages and paving the way for the full fore Tony could be airlifted to Univer- medical liability crisis with which our implementation of important medical sity Medical Center. As a result of the colleagues on the other side of the aisle liability reform. inability to locate a specialist to pro- simply refuse to deal. We already have, even though this vide him immediate care, today Tony Houston neurosurgeon Bruce Ehni passed just last September, some of the is permanently brain damaged, men- described it like this. He said: early signs of beneficial results. One tally incompetent, and unable to care We are the recipient of much more serious medical liability insurance carrier has for himself or his children. and risky cases that would have otherwise reduced their medical liability pre- In addition to this tragedy and the been cared for locally. Here at our hospital miums by 12 percent, and another med- others I have mentioned, there are nu- in Houston we are receiving hemorrhages, ical liability insurance company has merous other examples from my home traumas and other dire emergencies from as canceled their planned 19-percent rate far away as El Paso on the opposite side of State of Texas of tragedies, or near the State, and Brownsville, which is down increase because of these reforms. tragedies, or worse than injuries as a near Harlingen in the southern part of the My home State of Texas recognizes result of the inability to get medical State—sometimes up to 600 miles or more the need for government to step in and care close by because of this crisis. away. help address this urgent problem. But Another couple of stories: George Some of the examples include a pa- more needs to be done, and there is Kuempe, who recently retired as a re- tient with head trauma and a blown still too little recourse for patients in porter for the Dallas Morning News not pupil flown in from Harlingen to Hous- States without reform. too long ago, fell from an oak tree and ton, more than 300 miles away; an Let me mention briefly some of those broke his back on a Sunday afternoon intracranial hemorrhage flown in from States. In Illinois, more than 15 per- in the Austin area. He had to be flown Laredo on the United States-Mexico cent of the neurosurgeons have left the to Scott & White Clinic in Temple, TX, border 300 miles away; and a brain State in the last 2 years. That is ac- because there were no neurosurgeons tumor causing an abrupt paralysis cording to the American Association of available in Austin, TX. There was a flown in from San Antonio, 200 miles Neurological Surgeons. There are cur- long delay in the amount of time nec- away. rently no hospitals in the northwest essary to treat his injuries in order to Dr. Ehni continued: suburbs of Chicago that have 24/7 neu- travel just 60 miles up the road. There All of these communities have neuro- rosurgery coverage. Most patients in were hours of delay. Dr. Path Crocker, surgeons. The ‘‘bad’’ cases end up in Houston need of care are transferred either to chief of emergency medicine at despite the presence of neurosurgeons locally Rockford, which is 60 miles away, or to Brackenridge Hospital in Austin, where because everyone is trying to avoid being the University of Illinois in Chicago, 45 he could have been and should have sued. It is bad for patients and it is bad for miles away—not quite the distances we been treated had a neurosurgeon been us. We are being dumped on endlessly. talked about in my State but still nev- available, said this is a warning flag to For the rest of this body, and perhaps ertheless consequential distances in the citizens of Texas that a major prob- others listening, let me put all of this terms of the delay in treatment of seri- lem is brewing. in perspective geographically. For a ous cases. In 2002, an elderly man was taken to medical transfer from El Paso to Hous- In the State of Massachusetts, the an emergency hospital room in ton, it would be as if a patient was hurt home State of Senator KENNEDY and McAllen, TX, in south Texas in the Rio in Washington, DC, and because he Senator KERRY, a third of the State’s Grand Valley after falling and injuring could not find a surgeon, he had to be hospital beds have closed in the past

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00017 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3752 CONGRESSIONAL RECORD — SENATE April 6, 2004 decade, and 32 percent of physicians I ask our colleagues to seriously re- whether to debate. We need to pass the say they plan to leave the State if the consider and not to obstruct this im- motion to proceed and get into amend- practice environment fails to improve. portant reform. We know it can help. If ments on the bill if amendments are In the 1990s in Massachusetts the num- they have other ideas they think will needed. ber of practicing obstetrician/gyne- add to the substantial beneficial effect This is the third time in this Con- cologists declined by more than 20 per- of this legislation, let them come to gress we have brought a medical litiga- cent. In New York, record numbers of the floor and talk about it. We will be tion reform bill to the Senate. We need people seeking emergency care are willing to talk to them and engage to pass this legislation. We need to overwhelming emergency departments them on it. If a consensus develops pass some legislation that deals with across the State in areas including that an even better package can be pro- this crisis. Passing this bill would be Long Island, Syracuse, Rochester, and duced as a result of the kind of debate the best thing we can do to stabilize Buffalo. Many doctors and higher risk and negotiations and compromise that medical liability premiums in the specialties are eliminating services, re- characterize this body and which this short term, which will allow us to re- tiring early, or contemplating leaving. body is so good at when it works prop- tain doctors in states like Wyoming, The exodus of 4,000 doctors in New erly, I say, bring it on. which will allow people to have access York alone from 2000 to 2002 has been I yield the floor and suggest the ab- to doctors. attributed to a litigious atmosphere in sence of a quorum. I proposed legislation aimed at solv- that State. The PRESIDING OFFICER. The ing this problem over the long term In North Carolina, in 2002 alone, med- clerk will call the roll. and I will speak to that later. But right ical liability rates increased by 50 per- The assistant legislative clerk pro- now, we need to vote in favor of ending cent and high-risk specialists are fac- ceeded to call the roll. this filibuster against this bill so we ing increases between 50 percent and Mr. ENZI. Mr. President, I ask unani- can begin to debate the bill. I am will- 100 percent. Physicians are simply mous consent that the order for the ing to consider any amendments my going out of business, leaving a State, quorum call be rescinded. colleagues in the minority might have, or substantially increasing prices as The ACTING PRESIDENT pro tem- but we cannot consider any of their they pass along costs, as they can, to pore (Mr. CORNYN). Without objection, amendments until they agree to end their patients. But the problem is espe- it is so ordered. this filibuster and begin debate on the cially acute for obstetricians, neuro- Mr. ENZI. Mr. President, I rise to bill. surgeons, and emergency physicians. speak about the Nation’s medical liti- I understand some Senators are con- Finally, the last State I will mention gation crisis. I begin by explaining cerned this bill would limit the ability is the State of Washington. Since 1998, where we are in this process. It is the of an injured patient to get fair com- Washington State has seen a 31-percent right of the majority leader to bring a pensation. This bill would do no such increase in its physicians moving out bill up for debate. On the Senate side, thing. This bill will not limit the abil- of the State, and between 1996 and 2001 it requires unanimous consent to have ity of an injured patient to get fair the number of retirements increased 50 that debate. We have been denied unan- compensation. This bill would permit percent with the average age of those imous consent to debate the medical full and fair compensation to patients retirees dropping from age 63 to age 58. We know this liability reform can litigation solution. for their economic losses. This is an What are the options? We can have a have a beneficial impact on reducing important point for everyone to keep cloture vote. We will have that tomor- costs and improving access because in mind. If a judge and jury were to de- row afternoon. The cloture vote re- some States have done it for a while. cide a person suffered an injury due to My State has done it since September quires 60 votes of approval in order to a doctor’s mistake or a hospital’s neg- and has not yet seen the full benefit al- debate the medical litigation crisis so- ligence, that person would still be enti- though we have seen some very hopeful lution. On most of the bills we see tled, under this bill, to receive full early signs. California has adopted brought up, the unanimous consent is compensation for their economic loss, something called MICRA, which has almost automatic. However, on this including everything from rehabilita- been the medical liability tort reform particular bill, we are not even able to tion to lost wages resulting from their package. With MICRA, California has debate the bill. We can debate it, but it injury. achieved a more stable marketplace has no effect. There can be no amend- I cannot stress this point strongly and lower premium increases over the ments. There can be no votes until the enough. This bill would not limit years than have other States without filibuster is broken. awards for economic losses. What the the kind of medical liability reform we What happens when the filibuster is bill would do is place a ceiling on non- are advocating today. According to the broken? Technically there can be 30 economic damages. The bill would data, California medical liability pre- hours of debate on that particular limit the maximum award for non- miums grew 167 percent over the past right to debate before the actual de- economic damages to $250,000 in States 25 years compared to 505 percent for bate begins. Then when we actually do that do not have their own limits on States without medical liability re- get to the debate, every single amend- such awards. Noneconomic damages form. ment can be filibustered and the bill are those for pain and suffering. I have taken more time than perhaps can be filibustered. Supposing we make I want to ask, How much pain and I should, but I thought it was impor- it past those roadblocks and the House suffering do you have if you cannot tant to go over in detail what the prob- passes the bill and there are differences even see a doctor? And if you cannot lem is, what we think the solution may between the two, there has to be a con- see a doctor, and you die, who do you be, at least in part, and demonstrate ference committee. At that point, sue? The trial lawyers? Maybe so. They for our colleagues on the other side of there can be three more filibusters. are a part of the problem. I am not the aisle, if they would allow an up-or- Our Founding Fathers intended for going to try to cover all of the parts of down vote on this legislation, we could the Senate to be the cooling saucer for the problem. We are trying to fix one see some very real, substantial bene- legislation. I don’t think they intended specific part of the problem. This bill fits, not just to physicians. it to become a stagnant pond. I do will not take care of the whole thing. I like physicians. I respect physi- think they intended the bills would be But I want to ask you, How much cians. But this is not something we debated and conclusions reached, there pain and suffering do you have if you ought to do to help members of the would be some time taken, but not all cannot even see a doctor? This is not medical profession. The reason we time taken. primarily a city problem. You can have ought to do it is to help patients. Like We have a medical litigation crisis in the problem in the city, and doctors it or not, all of us will be patients at this country. The system is broken. We are leaving cities as well. But in cities some future point in our lives. The best need to start working to fix it. I urge it gets glossed over a bit because there way we can ensure the good quality my colleagues to vote for cloture on are so many doctors. There are so health care is available for us and our the Gregg-Ensign bill. It is time to stop many doctors everybody anticipates loved ones, should we need it in the fu- filibustering and to start working. We they can find a doctor. Well, there are ture, is to pass this meaningful reform. should not be having this filibuster on also more people in cities, so there are

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00018 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3753 more people waiting in lines to see the have limits on noneconomic damage on the families they serve—the fami- doctors. There is a limit to how long awards. We do not have limits, despite lies who have grown comfortable with you want to wait in line to see a doc- evidence that shows reasonable limits the care these doctors provide. tor, particularly if you are having an on noneconomic damage awards have I commend Senators GREGG and EN- emergency. helped control the rising cost of med- SIGN and our majority leader, Dr. This bill only covers two categories; ical liability insurance premiums in FRIST, for trying again to pass a sen- one is emergency medical services, and other States. sible short-term solution to this Na- the other is people who deliver babies. As a result, people in Wyoming are tion’s crisis. They have developed a bill So I ask again: how long do you want losing access to affordable health care that is focused on providing relief to to wait in the emergency room? in their communities. The rising cost the doctors who serve mothers and Is this proposal for a limit of $250,000 of medical liability insurance in my their babies, and the doctors who save for noneconomic damages way out of State of Wyoming is forcing doctors to lives in our Nation’s emergency rooms. line? I do not know. I do know Cali- curtail their practices or close them Every day, thousands of patients de- fornia passed this limit. California put entirely. We have a shortage of doctors pend on these doctors when it comes a limit of $250,000 on noneconomic dam- in Wyoming as it is, and the cost of time to bring a new life into the world ages, and it has made a difference. medical liability insurance is making a or to save a life that is already here. They are one of the few States in the bad problem even worse. I hope we can all agree to support Nation that is not having the problem. I want my colleagues to know we this short-term solution that will Now, California, viewed by Wyoming have a full-fledged medical liability maintain access to the services these folks, where I am from, is considered to crisis on our hands in this country, and doctors provide. be very liberal. So if they did it, this particularly in Wyoming. Just last I have noticed something interesting could not be a conservative move. If month, the largest of the three insur- during the debate on the issue of med- California can have a $250,000 limit, ers in Wyoming announced they would ical liability reform. While we have why shouldn’t other places be able to? be leaving the Wyoming market later been debating the pros and cons of re- You may say: Well, States could pass this year. As a result, 381 doctors and 7 form, no one is standing up to defend their own. California did. States can. It hospitals are going to have to find new our current system of medical litiga- is a very long procedure for some insurance coverage. Of the two compa- tion. I have yet to hear a rousing de- States. Wyoming has very limited leg- nies that are left, one of them is not fense of our medical litigation system. islative time, and then a lengthy proce- writing new policies for emergency and Even some of the lawyers in this body dure for having votes of the people be- trauma care physicians. So the few have agreed that frivolous lawsuits are fore it then comes back to the legisla- emergency room specialists we have in a problem and that our medical liabil- ture for additional work. So there are Wyoming soon will have only one com- ity system needs reform. Why aren’t limitations in the States. pany to choose from for their profes- we hearing anyone defend the merits of This can be handled on a national sional insurance. our current medical litigation system? basis. If you hear this bill would limit These insurance company executives It is because it is indefensible. Our sys- an injured patient to receiving $250,000 are not dumb people. Just as doctors tem does not work. It does not work for in compensation, though, you can say are moving to States with better legal patients, nor does it work for their doc- that is simply false. There is no other environments, so are the insurance tors. way to put it. That contention is false. The bill we are debating today is a This bill would also only apply, as I companies. As I mentioned, some have left Wyo- good bill. It will help us stabilize insur- mentioned, to obstetrical services and ming. People say, well, yes, there go ance premiums and preserve access to emergency medical services. These are those rich insurance companies. They critical medical services. But even the two of the areas of medicine where pa- sponsors would probably admit it is a tients are in the most danger of losing are going to move somewhere else short-term measure that does not ad- their access to these services. where they can make a lot more Once more, I ask, how many will be money. Did you know some of them are dress the fundamental problems with harmed by not getting to see a doctor? going broke? If the profit is all that our medical litigation system. This is What do you do if you are a woman and prolific, why are some going broke? an important bill, but it is just a tour- you cannot see a doctor to deliver your One of the doctors in Wyoming was niquet to stop the bleeding. It is not baby? Baby doctors are particularly doing his calculation about whether to going to heal our broken system. hard hit because the child can sue stay in business or not, whether to de- It reminds me of the town that lived when the child reaches age, so the tail liver babies anymore or not. He ran a on the edge of a cliff. The town had a on their insurance is extremely long, calculation based on the rise in insur- tremendous problem because kids fell and that provides additional opportuni- ance premium costs he had, despite off of this cliff, and the fall killed a lot ties to sue, which means additional that he has not been sued at all. He of them. They decided they needed to cost for the insurance. found out $25 of each doctor visit goes do something about it. After extensive But we are also talking about the to pay the insurance. If you are paying meetings and committee work, they emergency medical services. In an $100 for a doctor visit, $25 of that is purchased the finest ambulance that emergency, as Senator FRIST, the doc- going to pay for the insurance. The could be found, and they put that am- tor of the Senate, pointed out, every other $75 is not all profit either. It has bulance at the base of the cliff. They single moment counts. There is, at to go to pay for the nurses, the sup- hired the best EMTs they could get so most, a ‘‘golden hour’’ in emergency plies, the building—all of those things. the person could be loaded on to the treatment. So if you have to spend that But $25 of each visit goes to insurance. ambulance and served while they got golden hour traveling 750 miles—as the I do not care which insurance compa- to the nearest hospital. Somebody then Senator from Texas showed on his nies are writing policies in my State, suggested: Why don’t you just put a chart of Texas showing how far some as long as there are some. But I do care fence on the cliff. And they said: No, people have to travel for specialized when good doctors leave the State. Wy- we don’t do fences. care—it could be too late. oming is a big State with a lot of small That is what we are doing with this Physicians are being hit with six-fig- communities. In fact, people out here medical litigation crisis. We are avoid- ure annual premiums in the medical in the East cannot even comprehend ing putting up the fence for the short- specialties of obstetrics and trauma the small communities we have. If you term solution and we are letting people care. As a result, they are curtailing grew up in a small town, you probably fall off the cliff; then we are trying to their practices, retiring early, or mov- got to know your family doctor pretty provide them with the best possible ing to States with better legal environ- well. Doctors are part of the fabric of service we can after they fall. What are ments, because a better legal environ- life in the small towns that dot the we going to do when they use this fine ment means lower insurance pre- map of my State. It is not easy for ambulance and these great EMTs and miums. them to pick up and leave, but that is they get to the hospital and there is no In Wyoming, we have one of those what is happening. As hard as it is for emergency room doctor? We need the bad legal environments. We do not the doctors to leave, it is even harder fence and the emergency room doctors

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00019 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3754 CONGRESSIONAL RECORD — SENATE April 6, 2004 too. This bill is designed to make sure able injuries and a schedule of com- bers take a serious look at S. 1518. My there is medical liability insurance so pensation for them and then establish basic reason for introducing S. 1518 is the doctors can continue to operate. an administrative board to resolve that most patients don’t want to sue We like to say that justice is blind. claims related to those injuries. A sci- their doctors. If their doctor made a With respect to our medical litigation entific process of identifying prevent- mistake, they want an apology. They system, I would say that justice is ab- able injuries and setting appropriate want to be compensated for their loss. sent and nowhere to be found. compensation for them might offer bet- They want the situation to be resolved Every Member of this body wants to ter results than the randomness of the quickly and fairly. I believe most phy- make sure that someone who is truly court system. sicians want the same thing. They injured by a medical error gets the Another State might want to provide want to apologize. They want to make compensation they deserve. But a num- health care providers and organizations amends financially. ber of studies have shown that many with immunity from lawsuits if they If patients and their doctors want the patients who were hurt by negligent make a timely offer to compensate an same thing, what stands in the way? actions received no compensation at injured patient for his or her losses. Our legal system, that is what. all for their losses. This could give a health care provider Our legal system pits doctors against I have also seen studies that suggest who makes an honest mistake the their patients. Doctors cannot apolo- that those who receive compensation chance to make amends financially gize to their patients because admit- end up with about 40 cents on every with a patient without the provider ting a mistake might end a doctor up dollar in insurance premiums, once the fearing that their honesty would land in court, and probably would. As a re- lawyers’ fees and their courtroom costs them in a lawsuit. sult, doctors order more expensive are subtracted. So the victim gets 40 The point of my bill is there are plen- tests and spend less time getting to cents on the dollar. Somebody else is ty of ideas for better ways to resolve know their patients—anything to pro- getting the other 60 cents. I don’t think medical disputes. One of the best ways tect against a career-threatening law- that sounds fair. Congress can help fix the flawed litiga- What is more, studies have dem- tion system in the long term is by en- suit. onstrated the likelihood of a doctor or couraging States to test alternatives Patients feel this distrust, and they hospital being sued, and the result of and to learn from them. respond in kind. If a patient has a bad such a suit, bears little relation to As I speak, some States are already medical outcome, they assume their whether the doctor or hospital was at looking into alternatives. My State of doctor was at fault, even if there was fault. Wyoming is one of them. Another is nothing their doctor would or could These facts led the congressionally Massachusetts, where the Governor is have done differently. chartered Institute of Medicine to issue working with Harvard University on an Sometimes bad outcomes happen in a report in 2002. That report called innovative project. Another is Florida, health care, and no one is at fault. But upon Congress to create demonstration where the Governor’s task force rec- if a doctor doesn’t feel free to say ‘‘I projects to encourage States to evalu- ommended projects for which my bill am sorry’’ when he or she makes a mis- ate alternatives to current medical could provide support. take, how will a patient know whether tort litigation. Believe it or not, both Newt Gingrich their doctor is at fault? It is hard to In response, I have introduced a bill and the editors of the New York Times blame the patient for assuming the have endorsed this idea. If Newt Ging- that would turn these expert rec- worst. ommendations into action. My bill, the rich and the New York Times can agree on something, maybe we can find This is a fundamental flaw in the Reliable Medical Justice Act, would way we resolve medical disputes today. authorize funding for States to create enough support for it in this Chamber as well. The courtroom stands between the peo- alternatives to current tort litigation. I want to remind my colleagues that ple who matter most—the patient and The funding would cover the costs of I support the Gregg-Ensign bill. It will the doctor. The courtroom ought to be planning and initiating proposals. My provide some short-term relief for this the last resort for resolving disputes, bill would require participating States medical liability crisis. We don’t have not the only resort. Patients and doc- and the Federal Government to work time just for testing at the moment. tors ought to be on the same side, together in evaluating the results of We are losing the doctors who provide working together; but fear of the legal the alternatives as compared to the emergency care and the doctors who system puts them in opposite corners traditional tort litigation. This way all deliver babies. In my own State, sev- and pits them against one another. States and the Federal Government eral of the doctors have quit delivering There has to be a better way. My bill could learn from new approaches. We babies because they can’t afford the in- would be another step toward replacing could see if there is not a way to get surance. Others have had to cut back the medical lawsuits with a better and people fairly and justly compensated, on the number of babies they deliver to fairer system for compensating and compensated more quickly, and to ac- be able to afford the insurance. That protecting patients. But it is a long- tually receive the majority of the means ladies having babies are not able term solution, and we do have a short- money, not just a small pittance. to get doctors with the necessary ex- term solution, the Gregg-Ensign bill. I The bill outlines some model ap- pertise. hope we can work together to find the proaches States could employ. For in- We need short-term relief from the long-term solution, but that we will do stance, one State might want to evalu- medical liability crisis, and I know the short-term solution now. ate the idea of health care courts many of my colleagues will join me in Again, our debate now is whether we where judges with special expertise voting for it. But I know that some could hear medical cases. This concept get to the debate the bill. Unless we will vote against it. Regardless of have cloture tomorrow, we won’t actu- is similar to the special courts we have whether you feel this is the right solu- for taxes, domestic violence, drugs, and ally get to debate the short-term solu- tion for the short term, let’s acknowl- tion. other complex and emotional issues. edge that our medical litigation sys- That way we would get some fairness tem is failing us and that we must I want to recap and remind you that between cases. One person with the work together to find a long-term solu- this bill doesn’t limit economic dam- same kind of hurt would get com- tion. ages. It will assure that we can have pensated the same way, approximately, Medical lawsuits are supposed to emergency care, that doctors who de- that somebody else with that same compensate people fairly and deter fu- liver babies can continue to deliver ba- hurt had, not based on who picked the ture errors, but most patients don’t get bies. best lawyer or who picked the best in- fair and timely compensation. There is If you don’t get care at all, how much jury—with fairness, quickness, and the nothing to show that lawsuits are de- pain and suffering will you have? How victim receiving the money. terring medical errors or making pa- much injury can be caused if you can- Another State might want to test an tients safer. not go to a doctor in your community administrative approach. For instance, I urge Members to vote for the and you have to travel extensively to a State could set up classes of avoid- Gregg-Ensign bill. I also ask that Mem- do it?

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00020 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3755 This bill is a limit on noneconomic women of childbearing age. One out of lances in the last 12 months. I will re- damages, similar to the limit in Cali- every 11 obstetricians nationwide has peat that. Three of four emergency de- fornia, where the crisis has been avert- stopped delivering babies and, instead, partments diverted ambulances in the ed. I ask my colleagues to support clo- scaled back their practices to gyne- last 12 months in part because no spe- ture on the motion to proceed so we cology only. In addition, one in six has cialists were available. can proceed to pass the Gregg-Ensign begun to refuse high-risk cases. Most Of these, one-third diverted patients bill, so we will have a short-term solu- alarming is recent data showing that six or more times a month, and an ad- tion to the medical liability crisis we for a third year in a row, the number of ditional 28 percent diverted patients face in our country, which keeps us obstetrics/gynecology residency train- three to five times a month. from getting the medical treatment we ing slots filled by U.S. medical stu- This is devastating, especially in need, when we need it. dents declined by 65.1 percent—the low- light of the volume of patients treated I yield the floor. est level ever. People are not going by emergency room physicians. Each The PRESIDING OFFICER (Mr. into residencies in OB/GYN and in ER. year there are 110 million visits to BURNS). The Senator from Ohio is rec- How does this affect a woman’s ac- emergency rooms in the United States. ognized. cess to care? As premiums increase, a Over 3.5 million ER visits are related Mr. VOINOVICH. Mr. President, I woman’s access to general care, includ- to bone fractures. Of these, some rise in strong support of S. 2207, the ing regular screenings for reproductive 885,000 people have such severe frac- Pregnancy and Trauma Care Protec- cancers, high blood pressure, choles- tures which can cut off or reduce blood tion Act of 2004. I strongly encourage terol, diabetes, and other serious flow to a limb or lead to shock. Pa- my colleagues to vote for this very im- health risks, will decrease. tients cannot afford delays in treat- portant legislation. With fewer health care providers of- ment which can lead to death, amputa- This is the third time in the 108th fering full services, the workload has tion of a limb, loss of use of a limb, or Congress that I have come to the floor increased significantly for those who permanent disability. to argue for medical liability reform. It still do. Wait time increases, putting Each year, over 1 million Americans should not be this difficult to pass a women at risk. suffer a heart attack. Approximately 20 piece of legislation that will improve Women receive less prenatal care in percent of heart attack victims will access of all Americans to timely and our current environment. Improved ac- die. Cardiologists and cardiovascular efficient medical care, reduce the cost cess to prenatal care has resulted in surgeons can perform lifesaving treat- of hospitalization insurance and health low infant mortality rates, an advance ments and, in some cases, can even re- insurance, and do something about the now threatened as OB/GYNs drop ob- verse heart damage if the patients are enormous cost of defensive medicine stetrics. As you may have read, for the treated promptly. Stroke patients being practiced today by physicians first time since 1958, the U.S. infant treated within 90 minutes of the onset throughout the country, which is con- mortality rate is up. According to the of their symptoms show the most im- tributing also to the high cost of preliminary data released this month provements. health insurance premiums. by the statisticians for the CDC, the We need this legislation to keep I start off today by telling a story of Nation’s infant mortality rate in 2002 these ERs open and fully staffed and to the Schweiterman family in Ohio’s was 7 per 1,000 births. That is up from make sure there are no delays in treat- rural west-central Mercer County. Doc- 6.8 in 2001, and some experts are attrib- ment that can result in death or per- tors Jim and Tom Schweiterman are uting that to poor access to quality manent injury. brothers who, along with their father, prenatal care. How does this affect a person’s access who is retired, have delivered about Another group of physicians that has to care in the emergency room or the 5,700 babies over the years. The family been significantly affected by the med- trauma care center? Today, in many has a 113-year history of bringing ba- ical liability crisis, and that we are hospitals, there is no neurosurgeon bies into the world. Their great-grand- trying to help out with this legislation, available to treat patients with major father started the current medical is emergency room physicians. When head trauma or no orthopedic surgeon practice in 1896. They have never been patients rush to the ER, they assume to care for patients with open frac- sued for a delivery. the hospital will be open and doctors tures. Yet this family is giving up deliv- will be there to treat them. However, According to a recent study, over 70 ering babies because of escalating mal- to secure affordable medical liability percent of the Nation’s hospitals, practice insurance costs. Their insur- insurance, or to minimize their risks of again, were forced to divert patients in ance rates rose from $32,000 6 years ago lawsuits, many physicians, including the past month. That is a startling sta- to this year’s quote of $78,000. Dr. Jim neurosurgeons, orthopedic surgeons, tistic. According to a recent study, Schweiterman stated he would con- cardiothoracic surgeons, obstetricians, over 70 percent of this Nation’s hos- tinue to deliver babies if he could just and cardiologists, are no longer able to pitals were forced to divert patients in break even, but unfortunately, because serve on-call to hospital emergency de- this past month, in part because of of insurance costs, he cannot. Their partments. In extreme cases—for exam- lack of specialists on call. last delivery will take place this Sep- ple, Nevada, Florida, and Pennsyl- Neurosurgeon Thomas Hawk of Co- tember. vania—emergency departments and lumbus stopped providing trauma and This is happening all over the United trauma centers have been forced to emergency care in an effort to reduce States. This legislation is a must. It is shut down completely because the phy- his liability premiums. He also writes important because the effects of med- sicians have been unable to secure to me: ical liability crises can be felt most medical liability insurance at any I see lots of patients each week from West acutely by obstetricians/gynecologists price. It is not available. Virginia who cannot find neurosurgical care and emergency room physicians. In fact, in the past 10 years, hundreds and are coming all the way to Columbus, OH, Data from the American Medical As- of emergency departments have closed to get care. sociation indicates that 19 States cur- in the United States in such States in- This is another problem, the trans- rently face a medical liability ‘‘crisis’’ cluding Arizona, Florida, Maryland, ferring of patients. Because of the and 25 States show ‘‘problem signs.’’ Mississippi, Nevada, Ohio, Pennsyl- growing scarcity of oncall specialists, That is 44 States out of our 50. The doc- vania, Texas, and West Virginia. Over patients now wait longer for care in tors in these 44 States will either leave the same period, the number of visits emergency departments. As I men- the practice of medicine entirely or in the Nation’s emergency departments tioned, many are being transferred to move their practice to a neighboring climbed over 20 percent. While more other facilities. This can be deadly for State with better malpractice insur- Americans are seeking emergency med- elderly patients experiencing heart at- ance rates. This phenomenon cries for ical care, emergency departments con- tacks or strokes which require imme- national legislation. tinue to lose staff and resources and diate medical attention. One category of patients impacted are almost at the breaking point. In fact, the emergency physicians at greatly by this crisis and who we are In addition, three in four of emer- Akron’s two level I trauma centers— trying to help with this legislation is gency departments diverted ambu- Akron is fortunate; they have two

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00021 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3756 CONGRESSIONAL RECORD — SENATE April 6, 2004 trauma centers, Akron General Med- orthopaedic surgeon was available, so the national average. Emergency depart- ical and Akron City Hospital—often adult orthopaedic trauma surgeon had the ments across the State are transferring treat patients from other areas of the child’s leg placed in traction, inserting a pin patients to other hospitals because of State, including Youngstown and just above the knee in order to hang the weights which pulled on the leg. The plan shortages of cardiologists. Cleveland. Youngstown is, I think, an was to keep the child in traction for a few Between 1998 and 2002, 30 professional hour away, and Cleveland is 45 minutes weeks, and then place the child in a cast. liability insurers left Florida. That is, away. I do not see how my colleagues The family, after 2 days at Loyola, desired the insurance companies have just left can claim we are not in the middle of transfer of care back to their home town. Florida because of the multiplicity of a crisis. The liability crisis has created a situation medical lawsuits that have been filed. When I have given speeches in the where this patient had to endure two useless Thirty-four percent of Florida physi- past, I have given testimonials from ambulance rides with a broken femur, sev- cians have stopped or reduced their dozens upon dozens of physicians in eral extra days of hospitalization, and inser- tion and removal of a traction pin. This emergency care coverage. Ohio who have been affected by this waste of resources and interference with At Orlando Regional Medical Center, crisis. Every week I see many of them. medical care is repeated endlessly across the where Disney World is located, is one But this time instead I would like to nation. of only six level I trauma centers in talk about some other States to show In New Jersey, according to the the State. Think about this. This is the that this crisis does not just affect my State Hospital Association, hospital li- State of Florida, one of the fastest home State of Ohio or States such as ability premiums jumped 50 percent on growing States in the United States. Nevada or Pennsylvania, but it is wide- average in 2003, and the average annual They have six level I trauma centers in spread throughout the country and hospital premium increased to $1.4 mil- the State. For those people who travel should cause many of my colleagues lion. to Florida, I am sure that one of these from other States to support this legis- In addition, a survey of more than days they are going to start taking lation or explain why they cannot. 1,000 obstetricians found 23 percent had that into consideration about going to In Illinois, according to the Amer- left their practices last year because the State of Florida because of the fact ican College of Emergency Physicians, they could not afford liability cov- they do not have the trauma centers fewer inpatient beds and staffing short- erage, and only one pediatric surgeon they need to take care of the people ages are contributing to severe over- is left in each of Ocean and Monmouth who come down from all over the coun- crowding and ambulance diversion. A Counties, according to the State med- try. 2003 report from the Metropolitan Chi- ical society. Some hospitals do not All of the neurosurgeons on staff at cago Health Care Council indicated the even have obstetricians on call. the Orlando Regional Medical Center, city’s hospitals are unprepared to meet Also in New Jersey, in January of which is one of the six level I, have the future health care needs of their 2002, there were 85 practicing neuro- what they call ‘‘gone bare’’ and no patients. According to the American surgeons in the State. A little more longer have any professional liability Association of Neurological Surgeons, than a year later, an estimated 20 have insurance. So what has the hospital more than 15 percent of Illinois neuro- been forced to stop practicing. Warren done to take care of the situation? Lis- surgeons have left the State in the past County residents, including its 200-bed ten to this. The hospital has resorted 2 years. hospital, saw its only two neuro- to paying the doctors $4,000 per day to In addition, since January of 2003, 59 surgeons leave in September 2002. The cover the call schedule and enable doctors have left the St. Clair-Madison closest neurosurgery center is now them to keep their door open to trau- County area. Just since October 2003, more than 1 hour away from these resi- mas. as premium renewals are considered at dents. In addition, Orlando Regional Sand the end of the year, over 10 physicians In North Carolina, the average size of Lake Hospital has had to eliminate have left, including 3 orthopedic sur- liability claims increased by approxi- both of its on-call orthopedics and geons. mately 80 percent over 10 years. Some urology coverage in its emergency de- Also in Illinois, according to a No- physicians are going out of business, partment due to a lack of physician vember 2002 survey, 63.5 percent of re- leaving the State or substantially in- availability. sponding Illinois OB/GYNs have been creasing prices as they pass on costs to The stories from Florida are particu- forced to make changes in their prac- their patients. The Senator from North larly egregious, so much so that I can- tice, such as quitting obstetrics, retir- Carolina, who was a Presidential can- not understand how my colleagues ing, relocating, decreasing gynecologic didate, should be very familiar with from that State are not supportive of procedures, and no longer performing those statistics. The problem is espe- this legislation. I cannot figure it out. major surgery. Almost 50 Illinois OBs cially acute for obstetricians, neuro- With what is going on in Florida, I can- stopped practicing obstetrics recently, surgeons, and emergency physicians. not understand why the two Senators forcing 7,776 pregnant Illinois women In fact, in nine counties in the rural from that State cannot be supportive to find new OB/GYNs to provide obstet- southern region, there has been a 3-per- of this legislation. rics care. cent decrease in specialty physicians, Dr. Richard Foltz from Fort Lauder- I don’t know how we can take this despite a nearly 8-percent increase in dale, FL, writes: situation. I have six grandchildren, and population between 1999 and 2002. At I cannot think of a worst situation There are no neurosurgeons in Palm Beach the same time, specialty physicians in to do brain surgeries or take ER call. They than if one of them had a problem preg- all rural counties have increased only 1 try to transfer patients across county lines nancy and were told by their OB/GYN: percent, while the general population all the time. I have no insurance and have I am sorry, I can’t handle it because if in those counties grew by 7 percent. gone bare. My last premium notice was over I do, my insurance premiums are going Neurosurgeons have been particu- $400,000 a year. to skyrocket. And yet in Illinois, 50 larly affected by the medical liability According to neurosurgeon Troy stopped practicing. crisis and many are stopping or lim- Tippett, there are no longer any neuro- An orthopedic surgeon in Oakbrook iting their trauma and emergency care surgeons in the Pensacola, FL, area Terrace, IL, told the story of a 5-year- in an effort to obtain affordable liabil- who treat pediatric patients who are old child who was struck by a car and ity insurance. As a result, many hos- often considered high risk in liability sustained a fracture of the femur and pitals, including Moore Regional Hos- terms. Children suffering from head small skull fracture with minimal un- pital in Pinehurst, NC, no longer have and spinal injuries are airlifted more derlying brain contusion. He stated: 24-hour neurosurgery coverage. Pa- than 200 miles away. Think about that, Such injuries would typically be treated by tients who suffer injuries during the airlifted 200 miles away to get treat- . . . an orthopaedic surgeon and then a neu- wrong time are transferred to Chapel ment they ought to be able to get in rosurgeon. . . . In this case, the neuro- their own community. surgeon on call would not see any patient Hill sometimes after waiting for hours. under 18. A pediatric orthopaedic surgeon What about Florida? In Florida, li- A Winter Park OB/GYN dropped his was in attendance . . . but without a neuro- ability premiums increased 75 percent obstetric practice after his premiums surgeon . . . a transfer to Loyola had to be in 2002. The average premium per phy- rose from $48,000 to $100,000. At that arranged. At Loyola, no pediatric sician was 55 percent higher than the rate, he would have to work 6 months

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00022 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3757 of the year just to pay his liability pre- health care and, in particular, the avail- with the anticipated future payment of miums. Instead he, along with four ability and pricing of medical malpractice claims. Losses from this portion of the in- other obstetricians, gave up obstetrics insurance. As Congress considers medical vested asset base have been minimal, al- altogether. malpractice liability reform (include S. 2207, though the rate of return available has de- the Pregnancy and Trauma Care Access Pro- clined. I could go on and on with one story tection Act of 2004), the subcommittee feels TORT REFORMS.—Tort reform has been pro- after another about the fact we are los- it is important to highlight certain mis- posed as a solution to higher loss costs and ing surgeons and we are losing obste- conceptions in the current debate so Con- surging rates. Reforms modeled after Cali- tricians all over this country. We are gress can more effectively address problems fornia’s Medical Injury Compensation Re- just talking about two of the special- related to the availability and affordability form Act, or MICRA, are proposed to allevi- ties right now. We are concentrating of this insurance. ate some of the financial pressure on the DETERMINING RATES.—Ratemaking is the medical malpractice insurance system. The on these two right now because we term used to describe the process by which know they are the most in need and Subcommittee, which takes no position for companies determine what premium is indi- or against tort reforms, observes the fol- the shortage is most acute. cated for a coverage. In the insurance trans- lowing: The legislation we are debating today action, the company assumes the financial A coordinated package of tort reforms is gets us on our way to turning these risk associated with a future, contingent more likely to achieve savings in mal- statistics around. It provides a com- event in exchange for a fixed premium before practice losses and insurance premiums than monsense approach to our litigation it knows what the true cost of the event is, an individual reform, like a cap on pain and problems that will keep consumers if any. The company must estimate those suffering or non economic damages only. costs, determine a price for it and be willing from bearing the costs of costly and While a cap on non economic awards could to assume the risk that the costs may differ, substantially reduce claim losses (on a per- unnecessary litigation while making perhaps substantially, from those estimates. event basis and at some level low enough to sure those with legitimate grievances A general principle of ratemaking is that the have an effect; such as MICRA’s $250,000) have recourse through the courts. rate charged reflects the expected costs for other tort reform elements, such as a manda- I would like to point out the argu- the coverage to be provided, not what has tory collateral source offset rule, are also ment that the insurance industry is been paid or is going to be paid on past cov- important. ripping off doctors—and we hear that erage. It does not reflect money lost on prior Such reforms may not assure immediate all the time on this floor—and raising investments. In short, a rate is a reflection rate reductions, particularly given the size rates to make up for investment losses of future costs. of some rate increases being implemented In general, the actuarial process used in currently. The actual effect, including is preposterous. I would again invite making these estimations for medical mal- whether the reforms are applied as intended, those Members who believe this to read practice insurance starts with historical loss will not be immediately known. the article I submitted for the RECORD experience for the specific coverage and, usu- These reforms are unlikely to eliminate during our last debate in February en- ally, for a specific jurisdiction. Rates are de- claim severity (or frequency) changes but titled ‘‘Did Investments Affect Medical termined for this coverage, jurisdiction, and they may mitigate them. The economic por- Malpractice Premiums,’’ where it is a fixed time period. To the appropriately tion of claims is not affected if a non-eco- concluded that asset allocation and in- projected loss experience, a company must nomic cap is enacted. Thus, rate increases incorporate consideration of all expenses, are still likely to be needed. vestments returns have had little, if the time value of money and an appropriate Such reforms should reduce concerns about any, correlation to the development of provision for risk and profit associated with large dollar awards containing significant the current malpractice problem. the insurance transaction. subjective non-economic damage compo- I am not going to bore my colleagues Some lines of insurance coverage are more nents and make the loss environment more today with statistic after statistic predictable than other lines. The unpredict- predictable. about what has happened to medical ability of coverage reflects its inherent risk Thank you very much for your consider- malpractice insurance companies in characteristics. Most companies would agree ation. Please do not hesitate to contact me that costs and, therefore, rates for auto- this country, but most of them are out or Greg Vass, the Academy’s Senior Casualty mobile physical damage coverage, for exam- Policy Analyst, at 202–223–8196 if you have of business. Most of them are limiting ple, are more predictable than for medical any questions or would like additional infor- what they make available to doctors malpractice insurance because automobile mation. based on the type of medicine the doc- insurance is relatively high frequency/low Sincerely, tor practices. severity coverage compared to medical mal- JAMES HURLEY, ACAS, MAAA, I would also like to point out testi- practice insurance. In the case of auto phys- CHAIRPERSON, mony given to the Ohio Medical Mal- ical damage, one has a large number of simi- Medical Malpractice Subcommittee. practice Commission by a man by the lar claims for relatively small amounts that Mr. VOINOVICH. Throughout my ca- name of James Hurley of the American fall in a fairly narrow range. In medical mal- reer in public service, health care has practice insurance one has a small number of Academy of Actuaries. In his testi- claims that have a much higher average been one of my top legislative prior- mony, Mr. Hurley tried to debunk a value and a significantly wider range of pos- ities and certainly was a high priority few misconceptions about the insur- sible outcomes. There also is significantly while I was Governor of the State of ance industry and medical malpractice, longer delay for medical malpractice insur- Ohio and mayor of the city of Cleve- one of which is the idea that insurers ance between the occurrence of an event giv- land. All of us want access to quality, are increasing rates because of invest- ing rise to a claim, the reporting of the affordable health care. When the qual- ment losses, particularly their losses in claim, and the final disposition of the claim. ity is not there, when people die or are the stock market. This longer delay adds to the uncertainty in- truly sick due to negligence or other herent in projecting the ultimate value of In response to this, Mr. Hurley states losses, and consequently premiums. medical error, they should be com- unequivocally, that in establishing RATES DON’T RECOUP PAST INVESTMENT pensated. rates insurers do not recoup invest- LOSSES.— The ratemaking process is forward When healthy plaintiffs file meaning- ment losses. looking. In establishing rates, both state in- less lawsuits to coerce settlements or I ask unanimous consent that a let- surance laws and actuarial standards of prac- to shake the money tree to get as ter of March 26, 2004, from James Hur- tice prohibit recoupment of past investment much as they can get, there is a snow- ley be printed in the RECORD. losses. Instead of trying to make up for past ball effect and all of us pay the price. There being no objection, the mate- losses, the general ratemaking practice is to For the system to work, we must choose an expected prospective investment rial was ordered to be printed in the yield and calculate a discount factor based strike a delicate balance between the RECORD, as follows: on historical payout patterns. For medical rights of aggrieved parties to bring AMERICAN ACADEMY malpractice, the insurer often expects to lawsuits and the rights of society to be OF ACTUARIES, have an underwriting loss that will be offset protected against frivolous lawsuits March 26, 2004. by investment income. Since interest yields and outrageous judgments that are dis- Hon. BILL FRIST, drive this process, when interest yields de- proportionate to compensating the in- U.S. Senate, crease, rates will increase. jured and made at the expense of soci- Insurers are restricted in their investment Washington, DC. ety as a whole. DEAR SENATOR FRIST: On behalf of the activity due to state insurance regulation American Academy of Actuaries’ Medical and competition in the market. The major- I repeat that again. For the system Malpractice Subcommittee, I appreciate the ity of invested assets are fixed-income in- to work, we must strike a delicate bal- opportunity to provide an actuarial perspec- struments. Generally, these are purchased in ance between the rights of the ag- tive on the issues related to patient access to maturities that are reasonably consistent grieved parties to bring lawsuits and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00023 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3758 CONGRESSIONAL RECORD — SENATE April 6, 2004 the rights of society to be protected held liable for harm they do not cause never having had a single penny paid out on against frivolous lawsuits and out- and physicians can focus on doing what my behalf in twenty-seven years as a physi- rageous judgments that are dispropor- they do best, practicing medicine and cian. Even worse, during this time the insur- tionate to compensating the injured providing health care. ance company has reduced the amount of coverage that I can purchase from $5 million and made at the expense of society as I, again, urge my colleagues to vote to only $1 million, while jury verdicts have a whole. for cloture so we can debate this issue skyrocketed, often exceeding $3-4 million. If I have been concerned about this and have an up-or-down vote on this I were to purchase this policy, I would be issue since my days as Governor, as I legislation. We owe it to the people of putting all of my family’s personal assets at mentioned. In 1996, I essentially had to this country to have a robust debate of risk every time that I delivered a baby or pull teeth in the Ohio legislature to this on the Senate floor. performed surgery. I refuse to do that. pass my tort reform bill which would I close my remarks this afternoon by I have therefore decided to retire from pri- have placed caps on noneconomic and reading a letter from Laurence E. vate practice on July 31, 2003, the final day of punitive damages, established propor- Stempel, an MD from Columbus, OH. may current liability insurance policy. This This is from the letter he sent to his is not a decision that I have taken lightly, tional liability, and created a rebutta- but unfortunately it has become necessary. ble presumption that a hospital was patients on June 23, 2003: For many of you, I have been part of your not negligent regarding negligent On June 17, 2003, I received my professional life for years. I have delivered your babies, credentialing, among other provisions. liability insurance rate quote for the upcom- and helped you through some of life’s most I signed the bill into law in October ing year, and it is 64 percent higher than last difficult challenges. It has truly been an of 1996. Three years later, the Ohio Su- year. I have seen my premiums almost triple honor. preme Court ruled it unconstitutional. during the past 2 years, despite never having There is always a silver lining in every Had that law withstood the supreme had a single penny paid out on my behalf in cloud. I am looking forward to being able to 27 years as a physician. Even worse, during devote more time to teaching medical stu- court scrutiny—and I think today it this time the insurance company has reduced would because we have a different su- dents and obstetric residents, a pursuit that the amount of coverage that I can purchase has occupied about a third of my profes- preme court—Ohioans would not be from $5 million to only $1 million . . . sional time during recent years. I will also facing the medical access problems In other words, his insurance has be able to spend more time with my wife and they are facing today—doctors leaving gone up astronomically and he is get- family, whom I have often neglected during their practice, patients unable to re- ting about 80 percent less coverage the past years due to the responsibility of ceive the care they need, and cost of than he had before. He said: my practice. I know that these changes will be a serious health insurance going through the while jury verdicts have skyrocketed, often inconvenience for many of you. For those of roof. exceeding $3.4 million. If I were to purchase you who are currently pregnant, I will try to Next to the economy and jobs, the this policy, I would be putting all of my fam- find each and every one you a competent and most important issue facing America ily’s personal assets at risk every time that caring obstetrician to help you through the I delivered a baby, or performed surgery. I today is health care. In fact, it is a rest of your pregnancy and delivery. For refuse to do that. part of the reason why our economy is those patients who have a gynecology ap- I have therefore decided to retire from pri- in trouble. We have too many unin- pointment schedule after July 31, it will be vate practice. . . .[T]he final day of my cur- sured, and those who have insurance necessary for you to reschedule with another rent liability insurance policy [is when that physician. I would like to recommend the face soaring premiums every year, will happen.] making it less likely they can continue This is not a decision I have taken lightly, physicians of Associates in Central Ohio Ob- to pay for them. but unfortunately it has become necessary. stetrics & Gynecology (phone 889–6117). This In addition, employers face spiraling For many of you, I have been part of your group has an office in Suite A of my build- costs and in some cases do not even life for years. I have delivered your babies ing, as well as a couple of other offices and helped you through some of life’s most around town. I have known all of these phy- provide insurance, and those that do sicians for years, and I taught most of them have been forced to increase their pre- difficult challenges. It has truly been an honor. when they were medical students or obstet- miums and pass on the added costs to ric residents. Furthermore, I have traded their employees, whose family budgets We have to stop this from happening call with this group for a number of years. are often already stretched razor thin. in this country. We have the power to They have agreed to be the custodian of my In other words, I see people in busi- do something about it on the floor of patients’ charts, and to see my patients if ness every day who say, Senator, I the Senate, and it is about time we they would like. If you would prefer to see want to provide health care for my em- faced up to our responsibility and did another physician, they have agreed to for- ployees but the cost of it has gone up something about it. ward the pertinent information upon receipt I ask unanimous consent that the en- of a signed request. to the point where I cannot afford to Thank you again for the honor of being provide it for them. Or, in the alter- tire letter be printed in the RECORD. There being no objection, the mate- your physician. I will miss each and every native, Senator, I am going to provide one of you. it for them, but I am going to ask them rial was ordered to be printed in the Sincerely, to pay for more of their premiums. RECORD, as follows: LAURENCE E. STEMPEL, M.D. And, Senator, in so many instances my LAURENCE E. STEMPEL, M.D., The PRESIDING OFFICER. The Sen- June 23, 2003. employees cannot pay the additional ator from Oregon. premiums, and because they cannot DEAR FRIENDS, As you know, our country is in the midst of its worst medical liability Mr. WYDEN. Mr. President, I ask pay the additional premiums, they lose crisis ever. Hardly a day passes without a unanimous consent to speak for up to their health insurance. mention of the ‘‘malpractice crisis’’ in the 15 minutes as in morning business. I believe that providing the sort of newspapers or on the nightly news. In fact, The PRESIDING OFFICER. Without commonsense approach found in the just a couple of weeks ago, it was Time Mag- objection, it is so ordered. Pregnancy and Trauma Care Access azine’s cover story. This is a national prob- Protection Act of 2004 is one way to lem, and a truly frightening one. For exam- EXTENDING TRADE ADJUSTMENT ASSISTANCE deal with this escalating cost of health ple, Las Vegas had 130 obstetricians a year Mr. WYDEN. Mr. President, software insurance in the United States. The ago. There are now 75, and by the end of the programmers in Beaverton, OR, every year, there will probably only be 40 left to day have to compete with those in Bei- bill will give patients greater access to care for the 23,000 women who deliver there care. It will provide medical liability each year. Women are driving to Utah and jing. I think it is very important for for those physicians who provide pre- California for prenatal care. Closer to home, the Senate to set in place bipartisan natal delivery and postpartum care to there were nine obstetricians in Athens, policies that are going to finally give a mothers and babies. Patients would not Ohio, a year ago. There are now four, and fair shake to our workers who are com- have to give away large portions of soon there will only be the two who teach at peting in tough global markets. their judgment to their attorneys. the medical school. Some hospitals around I come to the floor this afternoon be- Truly injured parties can recover 100 the nation have closed their obstetric units. cause I have developed, with the sup- On June 17, 2003, I received my professional percent of their economic damages. Pu- liability insurance rate quote for the upcom- port of Senator COLEMAN, our colleague nitive damages are reserved for those ing year, and it is 64% higher than last from Minnesota, a bipartisan proposal cases where they are truly justified. year’s rate. I have seen my premiums almost that would give the Senate a chance to Doctors and hospitals would not be triple during the past two years, despite help hundreds of thousands of laid-off

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00024 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3759 high tech workers and service employ- technology workers and service work- pay Indians a fifth of what they pay ees by extending trade adjustment as- ers whose jobs have been displaced by Americans.’’ sistance benefits to them so they can trade. But the reality is that assist- Another wrote: receive job training, income support, ance is not available because the trade [A]s a 50-year-old high-tech manufacturing and health insurance tax credits. assistance law, which was authored in engineer with 26 years’ experience, I was laid So often these workers have lost 1962 for displaced manufacturing work- off in December 2002. I am sure the new fac- their jobs through no fault of their ers, did not contemplate the tremen- tory the company is building in China will own, and we know—especially the dis- dous number of jobs we now have in the prevent my ever returning. I can’t even get tinguished Presiding Officer of the Sen- hired into an entry level position anywhere technology sector, with all of those because I am over-qualified. ate—these high tech workers have been software programmers and engineers the envy of our American workforce. and designers. The U.S. trade assist- These unemployed Oregonians and There is extraordinary ingenuity ance laws were designed for the manu- the hundreds of thousands of other in- among these hundreds of thousands of facturing era. formation technology professionals programmers and engineers and design- Since 1962, when workers lost their who have lost their jobs deserve an op- ers who have helped drive our economy jobs in a manufacturing plant as a re- portunity to get the training, health in this century. Their creativity has sult of trade, they could get help care, and income assistance so they generated an exceptional wave of eco- through the Trade Adjustment Assist- can get back on their feet and use their nomic prosperity, and trade agree- ance Act. The Trade Adjustment As- skills in the private marketplace. The ments on services and intellectual sistance Act has, in fact, helped hun- Trade Adjustment Assistance Act property helped carry the fruits of the dreds of thousands of those displaced would target these kinds of workers work of our workers around the globe. workers. But workers in the tech- who have been hurt by unfair competi- Information technology developed by nology and the services sector, which tion. American workers transformed the now accounts for four-fifths of the U.S. Globalization of information tech- world and the way business is done. workforce, have not been eligible for nology hardware production from 1995 Overseas cable costs have dropped by trade adjustment assistance. Time through 2002 cut information tech- as much as 80 percent in the last 5 after time when a displaced software nology hardware costs 10 to 30 percent, years which, as the distinguished Pre- developer, accountant, or someone who translating into higher productivity siding Officer knows, has spread the has worked in the telemedicine field growth and adding $230 billion to our Internet far and wide. The Internet has has gone knocking on the doors of the gross domestic product. Information made it a lot cheaper to send work Trade Adjustment Assistance Program, technology became affordable to busi- through a phone line than to ship a they have been turned away. The bipar- ness sectors that were previously by- bulky package on an airplane. tisan amendment I have developed with passed by the productivity boom. Globalization of technology has Senator COLEMAN will open the doors of We are now talking about the small globalized the technology workforce. the Trade Adjustment Assistance Act and midsized companies in health care, So, in fact, the workers I am honored to the hundreds of thousands of dis- construction, and a host of related to represent in Beaverton, OR, do have placed technology and service sector fields. But as information technology to compete against workers in Beijing, workers. hardware prices declined, the impor- and certainly geography is increasingly All of these workers who have been tance of information technology serv- less important in determining where a displaced by trade and by global mar- ices and software increased to almost job can be done. ketplace forces deserve the same kinds 70 percent of information technology But the transformation from an of benefits. All of them have a chance spending in 2001. With the growth in economy built on smokestacks to one to use these programs as a trampoline software and services outpacing hard- built on packages of light has come at back into the private economy, so they ware spending by almost two to one, a heavy price. So often trade agree- can capture the jobs for which their the demand for cheaper information ments in the past considered these high skills have blessed them. Our amend- technology services has lent strength technology and service workers as an ment will establish equity in the pro- to this whole trend to move these jobs afterthought. The irony is now some of gram between manufacturing and serv- offshore. No one appears to have antici- the very same workers who launched ice workers. pated the extraordinary speed in which the technology revolution have actu- The Wyden-Coleman amendment will all of this has taken place or the scale ally become its victims. Hardly a day cover three categories of trade-im- of jobs moving offshore. goes by without a front-page story in pacted service workers: those who lose The workers who lost their jobs and our country about an American pro- their jobs when their employer closes their livelihoods from jobs that have grammer on his way out who is having or lays off because of import competi- gone overseas cannot afford to wait for to train a foreign worker who will re- tion; public and private sector service the higher skilled jobs that economists place him. workers who lose their jobs when their keep telling them is right around the Senator COLEMAN and I have been facility moves overseas; and secondary corner. Higher value and higher paid working with a number of colleagues. service workers who provide services to systems integration jobs may come Senator BAUCUS on this side of the a primary firm where workers are eli- along, but in this period unemployed aisle has been exceptionally helpful. gible for trade adjustment assistance information technology professionals We talked with a number of colleagues and where a closure has caused a layoff seem to feel they are more likely to see on the other side of the aisle. Senator or closure at a secondary firm. Elvis than a sudden proliferation of COLEMAN and I have developed a bipar- This is an extraordinarily important new highly skilled information tech- tisan proposal to make sure these statute because it provides retraining, nology jobs. workers, who have not gotten a fair income support, health insurance tax At the end of the day, what I am say- shake in the past, do have an oppor- credits, and other benefits to workers ing, along with the distinguished Sen- tunity to get back into our market- who lose their jobs. It can also help ator from Minnesota, is it should be ir- place economy. secondary workers or individuals who relevant whether an individual works It is not a moment too soon. The supply parts or services and who may in today’s economy in the services and American Electronics Association 2003 have lost their jobs because their fa- technology sector or whether they Cyberstates report found unemploy- cilities shut down due to import com- work in the manufacturing area. Each ment among computer programmers petition or they move overseas. This is of our workers who has been displaced jumped from 4.5 percent in 2001 to 6.2 exactly the type of trade-displaced by trade should be eligible for the same percent in 2003. High tech employment service worker opportunity that our benefits. That is what our bipartisan fell by 540,000 jobs to 6 million in 2002 citizens need. proposal would do. The hundreds of and a further loss of 234,000 jobs was ex- A self-described ‘‘newly employed thousands of workers who have been pected in 2003. software engineer’’ from Hillsboro, OR, laid off in every part of our country in The average American may think the wrote in December that ‘‘my job was the technology sector and in the serv- Federal Government is helping those moved to India where the company can ice sector are looking to whether the

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00025 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3760 CONGRESSIONAL RECORD — SENATE April 6, 2004 Senate will modernize the trade adjust- Excessive litigation is adding billions nancy and Trauma Care Access Protec- ment laws so they finally can get a fair of dollars in increased costs. The Con- tion Act is an important step along shake and so they can pick up the gressional Budget Office estimates that that path. We must do better. skills and the health care and the in- total savings to Medicare, Medicaid Today’s proposed legislation address- come support that is going to let them and the Federal Employees Health Ben- es two areas in dire need of relief: trau- get back on their feet, use their inge- efit Program would be $15 billion in di- ma care and obstetrical care. nuity, and use their work ethic to have rect health care costs by passing med- Many physician groups are no longer a chance for a high-skill, high-wage job ical liability reform. A Department of able to be oncall for hospital emer- once again. Health and Human Services report esti- gency departments. As medical care to I call on the Senate in a time of dis- mates that we could save $70 billion to trauma victims, especially children, is cussion about gridlock and the inabil- $126 billion in defensive medicine costs. by its nature high risk, many doctors ity to move forward on important leg- And they are really on the conserv- can no longer afford to treat pediatric islation. This is an example of two Sen- ative side. I said 20 years ago, as a trauma patients. The problem is also ators who have worked with colleagues former medical liability defense lawyer acute for women who need obstetrical from both political parties to come up defending doctors, health care pro- and gynecological care because OB/ with a proposal that can help hundreds viders, nurses, and so forth, knowing GYN is among the top three specialties of thousands of workers in an economic that most of those suits were frivolous with the highest professional liability crunch today that is sure to continue. to begin with, that there was at least insurance premiums. This has led to We hope the Senate will move expedi- $300 billion in unnecessary defensive many doctors leaving their practice tiously on our legislation. medicine. Now we all want defensive and to a shortage of doctors in many It seems to me, to put it in the con- medicine. We want doctors to do every- States, including my own home State text of my home State, that when a thing they can to help. But I am talk- of Utah. For example, Utah physician worker who is a software programmer ing about unnecessary defensive medi- Dr. Catherine Wheeler would have to deliver more than 60 babies each year in Beaverton, OR, works hard and plays cine, unnecessary tests, unnecessary just to pay for her medical liability in- by the rules, it ought to be the job of costs, unnecessary x-rays, unnecessary surance, which is over $70,000. Although the Senate to say when that worker is MRIs, unnecessary CAT scans, unnec- she works 80 hours per week, after she up against a software programmer in essary cardiovascular tests, unneces- pays her malpractice premiums and Beijing and the Beijing worker works sary respiratory tests and other types for a fraction of the wages of the work- other costs, she takes home money for of tests that are not needed but are in- 1 er in Beaverton we create policies only 2 ⁄2 months of the year. sisted upon by doctors because they Utah Medical Association data show which are going to make it possible for want to have in their history every that medical liability insurance pre- our workers to move ahead to have the possible protection. miums continue to increase rapidly, kind of quality of life that will allow Even the American Medical Associa- creating pressure on doctors to restrict them to support a family and partici- tion admits there are at least $65 bil- service in Utah. In 2002, there was a 30- pate in the community. lion in unnecessary defensive medicine percent rise. Last year, premiums rose I call on the Senate to pass our bipar- costs. When you get the AMA to admit 20 percent. This year, they are pro- tisan proposal as soon as possible. that, you know it probably is a lot jected to increase 15 percent in Utah. I yield the floor. higher. In fact, it is costing every Studies by both the Utah Medical As- The PRESIDING OFFICER. The Sen- American, because we will not do any- sociation and the Utah Chapter of the ator from Utah. thing about getting these frivolous American College of Obstetricians and Mr. HATCH. Mr. President, what is suits under control. It is wrecking our Gynecologists, ACOG, underscore the the parliamentary situation? Are we health care profession in this country. problem in my State. back on the motion to proceed? The liability crisis is also reducing Utah Medical Association data show The PRESIDING OFFICER. We are access to high-quality health care. The that over half of the family practi- on the motion to proceed. 2004 survey by Medical Group Manage- tioners in Utah have already given up Mr. HATCH. Mr. President, today I ment Association of almost 13,000 phy- obstetrical services or have never prac- rise to speak in support of S. 2207, the sicians found that 15.6 percent of re- ticed obstetrics even though they were Pregnancy and Trauma Care Access sponding groups reported that their trained to do so. Of the remaining prac- Protection Act of 2004. physicians plan to retire, relocate or titioners who still deliver babies, near- This bill helps to remedy the explod- restrict their services over the next ly one-third say they plan to stop pro- ing medical liability and litigation cri- three years. viding OB services within the next dec- sis in our country, which is preventing These numbers have been consistent ade—most within 5 years. A Utah patients from receiving high-quality in large studies done in New York, ACOG survey found that 15 of the 106 health care—or, in some cases, any California, Colorado and my home members polled had already stopped care at all—because doctors are being state of Utah. practicing obstetrics, and 21 of the re- driven out of practice. In fact, this cri- However, the equally troubling sta- maining 91 plan to stop within 5 years. sis hits us on two fronts, preventing tistics are that only two percent of These changes in practice, such as re- many Americans from getting the vital cases with actual negligent injuries re- tiring, relocating, or dropping obstet- health care they need, and raising the sult in claims and less than one-fifth— rics because of the medical liability re- overall costs of health care for nearly 17 percent—of claims filed actually in- form crisis, leaves almost 1,500 preg- all Americans. volve a negligent injury. In other nant women in Utah without OB/GYN As you will recall, this legislation is words, the deserving injured are going care. not our first attempt to relieve this uncompensated, while a great deal of The medical liability crisis, while af- crisis in access to care. Most recently, litigants with spurious claims tie up fecting all medical specialties and we debated S. 2061, which failed to re- our court system and cost all of us un- practices, hits OB/GYN practices espe- ceive the 60 votes necessary to invoke necessary billions of dollars. cially hard. Astonishingly, over three- cloture in February, and we debated S. This situation has been likened to a fourths—76.5 percent—of obstetrician/ 11 prior to that. We can ill afford to ig- traffic cop who regularly gives out gynecologists report being sued at nore the many Americans whose doc- more tickets to drivers who go through least once in their individual careers. tors are retiring early or restricting green lights than to those who run red Indeed, over one-fourth of OB/GYN doc- their practices because of rising mal- lights. That is clearly no way to ensure tors will be sued for care given during practice costs. traffic safety, and we should not accept their residency. These numbers have This health care crisis is jeopardizing such an inefficient and inequitable discouraged Americans finishing med- access to health care in my home State method of ensuring patient safety. ical school from choosing this vital of Utah and around the country. These numbers are a searing indict- specialty. The medical liability crisis is also in- ment of the current medical liability Currently, one-third of OB-GYN resi- hibiting efforts to improve patient system. I believe we can do better for dency slots are filled by foreign med- safety and stifling medical innovation. the American people and the Preg- ical graduates, compared to only 14

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00026 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3761 percent one decade ago. OB/GYN doc- prove that they did everything possible That is what is happening. It is hap- tors are particularly vulnerable to un- to prevent any real problems with their pening in hundreds, perhaps thousands, justified lawsuits because of the tend- respective patients. Consequently, doc- of cases throughout the country. Most ency to blame the doctor for brain-in- tors have had to do that over the years of these cases should have never been jured infants, although research has because of the skyrocketing medical li- filed, however, there are a small num- proven that physician error is respon- ability claims being made, a good 90 ber of cases that are very serious and it sible for less than 4 percent of all percent of which are, for the most part, is appropriate for our judicial system neurologically impaired babies. spurious and frivolous. to take care of them. Jury awards have been escalating at The financial toll of defensive medi- Before coming to Congress, I liti- an alarming rate. Data from Jury Ver- cine is great, and especially significant gated several medical liability cases. I dict Research show that the average li- for reform purposes, as it does not have seen heart-wrenching cases in ability award increased 176 percent produce any positive health benefits. which mistakes were made, where from 1994 to 2001. The average jury Not only does defensive medicine in- there was negligence. But more often, I award is $3.9 million. Over half of all crease health care costs, it also puts have seen heart-wrenching cases in awards are $1 million or more. This cri- Americans at avoidable risk. Nearly which mistakes were not made. Doc- sis is threatening Americans’ con- every test and every treatment has tors were forced to spend valuable time fidence in our health care system to possible side effects; thus, every unnec- and resources defending themselves take care of their medical needs. Over essary test, procedure, and treatment against these frivolous lawsuits. three-fourths of Americans fear that potentially puts a patient in harm’s A recent Institute of Medicine report, skyrocketing medical liability costs way. Seventy-six percent of physicians ‘‘To Err is Human,’’ concluded that: could limit their access to care, and in- are concerned that malpractice litiga- The majority of medical errors do not re- deed that is already happening. AMA, tion has hurt their ability to provide sult from individual recklessness or the ac- the American Medical Association, quality care to patients. tions of a particular group. This is not a bad data show that 19 States—19 States— What can we do to address this cri- apple problem. More commonly, errors are have serious patient access problems, sis? The answer is, plenty; and there caused by faulty systems, processes, and con- and 25 more, including my own home are excellent examples of what works. ditions that lead people to make mistakes or fail to prevent them. State of Utah, are nearing crisis. Last March, HHS released a report de- An August 2003 GAO report concluded scribing how reasonable reforms in We need reform to improve the that actions taken by health providers some States have reduced health care health care system and processes that as a result of skyrocketing malpractice costs and improved access to quality allow errors to occur and to identify premiums have contributed to health health care. More specifically, over the better when real medical liability has care access problems. These problems last 2 years, in States with limits of occurred. The reform I envision would include reduced access to hospital- $250,000 to $350,000 on noneconomic address litigation abuses in order to based services for deliveries, especially damages, premiums have increased at provide swift and appropriate com- in rural areas. an average of just 18 percent compared pensation for malpractice victims, re- In addition, the report indicated that to 45 percent in States without such dress for serious problems, and ensure States that have enacted tort reform limits. medical liability costs do not prevent laws with caps on noneconomic dam- California enacted the Medical Injury patients from accessing the care they ages have slower growth rates in med- Compensation Reform Act, also known really need. So we need to move ahead ical malpractice premiums and claims as MICRA, more than a quarter cen- with legislation to improve patient payments. From 2001 to 2002, the aver- tury ago. MICRA slowed the rate of in- safety and reduce medical errors, and age premiums for medical malpractice crease in medical liability premiums we need to urgently address the med- insurance increased about 10 percent in dramatically without affecting nega- ical liability crisis so more women are States with caps on noneconomic dam- tively the quality of health care re- not denied access to quality medical ages. In comparison, States with more ceived by California State residents. As care because it has become too expen- limited reforms experienced an in- a result, doctors are not leaving Cali- sive for their OB/GYN doctors to con- crease of 29 percent in medical mal- fornia. tinue their practice, and so we do not practice premiums each year. Furthermore, between 1976 and the jeopardize trauma patients’ access to Medical liability litigation directly year 2000, premiums increased by 167 urgently needed medical attention. and dramatically increases health care percent in California, while they in- The Pregnancy and Trauma Care Ac- costs for all Americans. In addition, creased three times as much—505 per- cess Protection Act of 2004 will allow skyrocketing medical litigation costs cent—in the rest of the country. Now, us to begin ensuring that women, ba- indirectly increase health care costs by both percentage increases are high, but bies, and trauma patients get the med- changing the way doctors practice 505 percent is extremely high in com- ical care they need and deserve. medicine. parison to a very litigious State like Without tort reform, juries are ‘‘Defensive medicine’’ is defined as California. Consequently, Californians awarding astounding and unreasonable medical care that is primarily or solely were saved billions of dollars in health sums for pain and suffering. A sizable motivated by fear of malpractice care costs and Federal taxpayers were portion of those awards goes to the at- claims and not by the patient’s medical saved billion of dollars in the Medicare torney rather than the patient. It is condition. According to a survey of and Medicaid Programs because of the often estimated as high as 50 percent. 1,800 doctors published in the journal California restraint on medical mal- The result is doctors cannot get insur- entitled Medical Economics, more than practice claims, especially those that ance and patients cannot get the care three-fourths of doctors felt they must are not proper claims. they need. practice defensive medicine. A 1998 No one in this body, perhaps with the All Americans deserve the access to study of defensive medicine by Dr. exception of our colleague from Ten- care, the cost savings, and the legal Mark McClellan, using national health nessee, Dr. BILL FRIST, our majority protections States like California pro- expenditure data, found that medical leader, is more keenly aware of the de- vide their residents. Today’s bill will liability reform had the potential to re- fects in this system than I am. I used allow us to begin to address this crisis duce defensive medicine expenses by to try these cases, and I can say from in our health care system. It will give $69 billion to $124 billion in the year a practical standpoint that a lot of trauma patients and women and their 2001. You can imagine what that num- lawyers bring cases that really are friv- babies access to their doctors, and it ber is today. olous, because the cost of defending will enable doctors to provide high I remember, as a medical malpractice these cases can be in the hundreds of quality, cost-effective medical care. defense lawyer, I would tell doctors: thousands of dollars. America’s medical liability system is You are just pigeons in a shooting gal- Many insurance companies will pay broken. It is not ensuring patient safe- lery. The fact is, physicians have to off those defense costs to get rid of the ty, and it is causing shortages of vital have a history of treatments they have case rather than take the chance a run- health care throughout the country. provided to their patients so they can away jury will cost them even more. Congressional action to pass medical

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00027 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3762 CONGRESSIONAL RECORD — SENATE April 6, 2004 liability reform legislation is impera- piece of legislation written by lobby- injected into her artery rather than tive. I strongly support this legislation ists and special interests that is so bad her vein, and resulting circulatory and I urge my colleagues to support nobody even dares send it to a com- problems led to this musician having cloture and end this filibuster that will mittee—not even friendly committees. to have two amputation surgeries on now be the third time effective changes They send it right to the floor. her right arm. in these laws is being attempted. Our This is the third time the Repub- Ms. Levine sued the corporate giant, pregnant women deserve better. They licans have taken this partisan ap- Wyeth, for improper instructions for deserve the best quality care the med- proach. Last July they employed this using its drug, Phenergan. As she said: ical system can provide. Our trauma partisan tactic and failed to pass legis- I never expected to sue anyone in my life; victims deserve better. We are finding lation. Earlier this year, they tried to I’m not the suing type. all over the country trauma centers rush through the Senate a bill to limit Sometimes it takes something like are either starting to shut down or se- the legal rights of the most vulnerable this to make it known when a drug is verely cutting back because they can patients—mothers and infants—and not being used right. no longer afford to fight these frivolous they failed. Now they are again rushing There was a full trial. I remember cases. They can’t function in a health an extreme bill overriding the laws of reading the account of the trial. When care system that doesn’t work. That is each of the 50 States. This time, how- they went to swear Ms. Levine in for a tragedy, especially for those who suf- ever, the bill is not limited to obstet- her testimony, the bailiff asked her to fer from trauma-related injuries. rical and gynecological care. Now they raise her right hand. Of course, she had I hope our colleagues will vote for want to extend the restrictions on no right hand. That jury in Vermont— cloture on this bill. I hope we can pro- legal rights to trauma and emergency and our juries are pretty careful— ceed and pass medical liability reform care. The third time for this partisan found that Ms. Levine deserved $2.4 which is long overdue. I strongly sup- approach is no charm. Republicans’ million for her past and future medical port S. 2207 and urge my colleagues to mad dash to push through this proposal expenses, and $5 million for the ‘‘daily do what is in the best interest of pa- in this election year under the guise of pain she does suffer and for the loss of tients and health care providers reducing health care costs is a blatant enjoyment of her life.’’ Of course, most throughout the country. attempt not to reduce health care of that would have been slashed by this I yield the floor. costs, which we would all support, but legislation. Crowds of the children Ms. The PRESIDING OFFICER (Mr. to exploit their own political agenda. Levine had worked with on musical VOINOVICH). The Senator from I remember the article last year in projects—children she’d brought joy to Vermont. Washington Monthly, titled ‘‘Mal- as a musician—sat in the courtroom of Mr. LEAHY. Mr. President, it is re- practice Makes Perfect: How the GOP the Montpelier Superior Court. She markable that in 29 years here in the Milks a Phony Doctors’ Insurance Cri- said: Senate—several times the Senate sis.’’ This article was so good, it was That was the day they actually showed under the control of Democrats, sev- nominated for a National Magazine pictures of my dead hand . . . before amputa- eral times the Senate under the control Award. It shows how Republicans tion, with the gangrene. I worried about how of Republicans—I have never seen so launched a sophisticated lobbying cam- the kids would react to my disfigurement. I little accomplished and I have never paign with business interests to manip- told the mom to cover her eyes. But after- seen so much political posturing on the ulate the medical malpractice debate ward she came up to me and said, ‘‘We just Senate floor which then gets put into and change it from one about medical didn’t know what you have been through.’’ fundraising letters and fundraising ap- errors and fair compensation, pitting Now, Wyeth, of course, was well rep- peals. I have never seen so much spe- one political constituency against an- resented. They had a team of six law- cial interest legislation. But the bot- other. yers—two from Vermont and four from tom line is I have never seen so little I commend to my colleagues the arti- Washington, DC. They did, after all, accomplished. Probably there is a cor- cle to which I referred from the Wash- have 2003 revenues of $15.8 billion and ollary. ington Monthly of October 1, 2003, by keep a $1.3 billion reserve fund because Instead of doing the people’s busi- Stephanie Mencimer. of the ongoing litigation over their diet ness, we seem to be doing political ac- Mr. President, the article points out drugs. tion committee business. And that is clearly that even if we passed this leg- Again I say: This musician would why, of course, nothing gets done. islation, insurance rates would not have been cut out entirely if the U.S. Let’s talk about this. If there were have come down. There is no one who Senate were to overwrite the laws of ever a piece of legislation on which pol- with a straight face can say that if we our State. itics is being played, it is the medical pass this legislation, then insurance Mr. President, I ask unanimous con- malpractice bill. It is a one-size-fits-all rates will come down. Insurance com- sent that the article from the Bur- bill for a problem that is really dif- panies would not be spending so much lington Free Press be printed in the ferent from State to State. Basically money trying to get this passed if they RECORD. we are telling the 50 State legislatures thought so. There being no objection, the mate- and Governors that the Members of the Once again, Republicans have pro- rial was ordered to be printed in the U.S. Senate know a lot more about posed a plan that would cap non-eco- RECORD, as follows: their States’ needs than they do and nomic damages across the Nation at [From the Burlington Free Press, Mar. 16, that the U.S. Senate will dictate a $250,000—whether you live in Cali- 2004] change. We will override their courts fornia, Ohio, Vermont, or anywhere VT. WOMAN WINS $7.4M LAWSUIT and their legislatures. We will override else; no matter what the injury, that is (By Stephen Klernan) their laws and we will make life better the cap. A Marshfield musician who lost an arm to for them. But when we do, of course, The so-called medical malpractice re- a medical error has won one of the largest we yank away the rights of the States form debate too often ignores the men, lawsuit awards in Vermont history. and the people there. Whenever we tar- women and children whose lives have Diana Winn Levine, owner and creative di- get the rights of the public and we try been dramatically—and often perma- rector of Rebop Records, had sued the multi- national health products company Wyeth for to figure out ways to run roughshod nently—altered by medical errors. having improper guidelines for the drug that over a State, we ought to be pretty I will give you a real-life example in damaged her hand and forearm and led to careful how we do it. my State of Vermont. On April 7, 2000, amputation. Normally you would think we would Diana Winn Levine had a severe mi- A Montpelier jury on Friday awarded Le- have committee hearings. We would graine headache. That is something vine $7.4 million. try to have a bipartisan bill. We would that has probably happened to most of ‘‘Sometimes it takes something like this have something that would dem- us at one time or another. She went to to make it known, when a drug is not being used right,’’ Levine said Monday. onstrate to the States, as we take away a health center in Plainfield, VT. She The weeklong trial, pitting a central their rights, that such a move has been was a musician. She received a pain- Vermont bass player and guitarist against considered by all 100 Senators and killer and an injection of a mild seda- one of the world’s largest health products there is a consensus. Instead, we have a tive, Phenergan. This combination was companies, featured testimony by family

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00028 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3763 members and well-known Vermont musi- Attorneys for Wyeth did not return calls But this bill does nothing to actually cians, as well as gallery crowds of children seeking comment. reduce medical malpractice insurance involved in Rebop recordings. ‘‘But we did not make this case anti-drug rates. Of course, each State has a dif- NOT THE SUING TYPE company, or anti-out-of-state company,’’ Rubin said. ‘‘This case was really about ferent experience. Insurance remains Levine was suffering from a migraine April Diana’s loss of her ability to play and write largely a State-regulated industry be- 7, 2000, when she went to the Health Center music.’’ cause the States found that is the way in Plainfield. She received a painkiller, and ‘‘Music is my way of healing and proc- it works best. But each State ought to an injection of a mild sedative, Phenergan. essing everything that happens to me,’’ Le- look at and be left to solve their own In what she called ‘‘a medical blunder,’’ vine said. ‘‘The right hand is just the core of unique problems. We should not tell the drug entered her artery rather than her your playing. And so much of writing comes vein. Resulting circulatory problems led to their Governors and legislatures we are not from your head but from what your not going to let them solve their own two amputation surgeries on her right arm. hands do.’’ The case against Wyeth pertained to the Rubin said the suit sought $2.4 million for problems because we will take it over company’s instructions for using the drug, Levine’s past and foreseeable medical ex- for them. Levine said. penses, plus $5 million ‘‘for the daily pain We don’t have the kind of crisis in ‘‘I never expected to sue anybody in my she does suffer and for the lost employment Vermont that others do. We have life; I’m not the suing type,’’ she said. Then of her life.’’ worked very well with our legislature, she learned that ‘‘Phenergan, which is toxic, The amount of money seems large, he said, and we are still working hard to find can be given in three ways. The other two but is actually based on ‘‘an hourly rate. We are fine. What happened to me can happen, it answers, as other States have. You asked the jury to award $25 per hour for her know, it is funny. We hear so many is foreseeable.’’ pain and suffering, 16 hours a day, for the The trial, in which she was represented by next 20 years.’’ speeches that we want to get power out Richard Rubin, David Kidney and Kerry The jury deliberated about four hours be- of Washington. We want States to be DeWolfe, featured considerable drama. fore awarding her the entire $7.4 million. able to do what they want. We don’t IMPORTANCE OF MUSIC ‘‘The jury came in, and I’m like, ‘Prop me want Washington dictating everything. ‘‘We played a lot of music for the jury,’’ up,’ my knees were so weak,’’ Levine said. Well, not exactly. When you get some State Court Administrator Lee Suskin, Rubin said, ‘‘We showed videotapes of her very wealthy contributors and very said he could only recall one larger financial performing.’’ powerful PACs and say, Yes, but if you Folksinger Jonathan Gailmor testified on result from a suit. ‘‘We don’t keep track of these things, but it seems an usually large don’t let Washington take care of our Levine’s behalf. special interests, nobody will—sud- ‘‘Jon expressed it so amazingly, how im- award.’’ ‘‘That’s just on paper,’’ Levine said. ‘‘It’s denly it changes. portant music is in life, and how he couldn’t almost certain that they will appeal. My even imagine losing the ability to play,’’ she This is an attempt to tally points on bank account is no fuller than it was a said. some election year political scoreboard month ago.’’ Crowds of the children Levine has worked for powerful special interests at the Wyeth did make one strategic error, Rubin with on musical projects, such as Rebop’s public’s expense. I am looking at the said. latest CD ‘‘Even Kids Get the Blues,’’ sat in ‘‘There was nobody here from Wyeth who big picture. the courtroom in Monptelier Superior Court. knew about the drug and was prepared to de- Some States, such as my own, ‘‘That was the day they actually showed fend it from the corporate perspective,’’ he Vermont, while experiencing problems, pictures of my dead hand,’’ before amputa- said. ‘‘The jury never saw anyone from do not face as great a crisis as others. tion, with the gangrene,’’ Levine said. ‘‘I Wyeth but their lawyers.’’ Vermont’s legislature is considering worried about how the kids would react to Even if there is an appeal, Levine said, my disfigurement. I told the mom to cover legislation to find the right answers for ‘‘There’s something about retelling that our State, and the same process is un- her eyes. But afterward she came up to me helps you to finish it. And to move on.’’ and said, ‘We just didn’t know what you have derway now in other States. In con- CRACKING EGGS been through.’ ’’ trast, in States such as West Virginia, Levine said phantom pain, in which her PUBLIC AIRING Pennsylvania, Florida, and New Jersey, mind thinks she still has an arm, remains a doctors have walked out of work in Rubin said one powerful moment in the daily problem. ‘‘You look down there and trial came accidentally. you see, there is no arm there, kiddo. But protest over the exorbitant rates being ‘‘We’d spent all this time establishing what the brain thinks there is a giant Mickey extracted from them by their insurance it is like to lose your right hand, even if Mouse hand that always feels like pins and carriers. you’re not a musician. When someone offers needles, and as the day goes on it gets Instead of letting States find solu- to shake your hand, what do you do? When worse.’’ tions that are best for their citizens, someone is handing you change at the cash Her salvation is the children she works the Republicans prefer this attempt to register, what do you do?’’ with, she said, ‘‘They take my mind off it; tally points on some election year po- Then Levine’s turn on the witness stand they have become my healing partners.’’ arrived. The baliff came to swear her in, ask- Otherwise her life continues to be ‘‘an im- litical scoreboard for powerful special ing her to raise her right hand. provisation. I rode a bike the other day. . . . interests, at the public’s expense. In- ‘‘We looked at each other, and it hit me It was like being six years old all over again, stead of looking at the big picture—at first,’’ Levine said. ‘‘Then we cracked up. I’ve gone from feeling like I was battling overly broad antitrust immunity, ways There’s my prosthesis, so I said, ‘‘You mean one-handed, to feeling like I’m conducting to reduce medical errors, and at other this?’’ one-handed. . . . real issues that could make a real dif- ‘‘She laughed,’’ Rubin said, ‘‘but it was a ‘‘It has become pretty easy to crack an egg ference—the majority has chosen to poignant moment.’’ one-handed even if I do wind up with little coddle big insurance companies instead bits of shell in my eggs.’’ She was afraid to testify, Levine said, and of to cure the problem. publicly relive the experience of losing her Mr. LEAHY. We know a lot of our arm, ‘‘but once you get up there, it just Instead of letting the States continue health care system is in crisis. We to find solutions that are best for their comes out.’’ know some of the giants of our health Levine became comfortable enough, Rubin citizens, they would take a chainsaw to said, she showed the jury how her prosthesis care system would probably like this the legal rights of the American people works. legislation to go through so they can and to the prerogatives of each of the Levine said the ‘‘ultimate’’ was when her make higher profits. Much of our 50 States we represent here in the 21-year-old daughter testified. ‘‘What mother health care system is in crisis. That is United States Senate. gets a chance to have her daughter up there, what we ought to attack. Thoughful solutions to the situation basically saying all these things about how Dramatically rising medical mal- will require creative thinking, a gen- much she appreciated me, and her upbring- practice insurance rates are forcing uine effort to rectify the problem, and ing in a house full of music?’’ some doctors to abandon their prac- bipartisan consensus to achieve real re- DAVID VS. GOLIATH tices or to cross State lines to find form. Unfortunately, these are not the Wyeth had a team of six lawyers, Rubin more affordable situations. Patients characteristics of the bill before us. In- said, two from Vermont and four from Wash- who need care in high-risk specialties, deed, S. 2207 is a partisan bill that was ington, D.C. The company, with 2003 reve- such as obstetrics, and patients in nues of $15.8 billion, makes Robitussin, introduced only a few days ago without Advil, Centrum and many other health prod- areas already underserved by health any committee consideration. ucts. The company also has a $1.3 billion re- care providers, such as many rural Ignoring the central truth of this cri- serve fund for ongoing litigation over its diet communities, are too often left with- sis—that it is a problem in the insur- drugs. out adequate care. ance industry, not the tort system—the

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00029 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3764 CONGRESSIONAL RECORD — SENATE April 6, 2004 majority has proposed a plan that this overly broad exemption in the Overly broad antitrust immunity, would cap noneconomic damages McCarran-Ferguson Act. which the insurance companies have, across the Nation at $250,000 in medical More than a year ago, I introduced allows them to fix prices any way they malpractice cases. the ‘‘Medical Malpractice Insurance want, whether it is justifiable or not. The notion that such a one-size-fits- Antitrust Act of 2003,’’ S. 352. I want to Antitrust immunity allows them to all scheme is the answer runs counter thank Senators REID, KENNEDY, DUR- take their failed investments and try to the factual experience of the States. BIN, EDWARDS, ROCKEFELLER, FEINGOLD, to make it up by charging doctors Most importantly, the majority’s pro- BOXER and CORZINE for cosponsoring higher malpractice insurance. We posal does nothing to protect true vic- this essential and straightforward leg- ought to find ways to reduce medical tims of medical malpractice and noth- islation. errors. But the big thing is we end up ing to prevent malpractice in the first Our bill modifies the McCarran-Fer- coddling these insurance companies. place. guson Act with respect to medical mal- We don’t call them to task. We don’t We are fortunate in this Nation to practice insurance, and only for the get them to say whether they are have many highly qualified medical most pernicious antitrust offenses: spending out this money on mal- professionals, and this is especially price fixing, bid rigging, and market practice awards. Of course, they are true in my own home State of allocations. Only those anticompeti- not. A lot of their losses came because Vermont. Unfortunately, good doctors tive practices that most certainly will they speculated wrong in the stock sometimes make errors. It is also un- affect premiums are addressed. I am market. Suddenly, we have to bail fortunate that some not-so-good doc- hard-pressed to imagine that anyone them out. Get rid of their antitrust im- tors manage to make their way into could object to a prohibition on insur- munity, something that makes no the health care system as well. While ance carriers’ fixing prices or dividing sense in today’s day and age with con- we must do all that we can to support territories. After all, the rest of our glomerates. Make them actually say the men and women who commit their Nation’s industries manage either to what they base it on. You will find that professional lives to caring for others, abide by these laws or pay the con- they are not beginning to pay out the we must also ensure that patients have sequences. amounts their malpractice claims say access to adequate remedies should Many State insurance commissioners they are. they receive inadequate care. police the industry well within the We are fortunate in this Nation to High malpractice insurance pre- power they are accorded in their own have so many highly qualified medical miums are not the direct result of mal- laws, and some States have antitrust professionals. This is especially true in practice lawsuit verdicts. They are the laws of their own that could cover Vermont. But you have to know some- result of investment decisions by the some anticompetitive activities in the times good doctors make mistakes, insurance companies and of business insurance industry. Our legislation is a just as sometimes a good engineer will models geared toward ever-increasing scalpel, not a chainsaw. It would not make a mistake. But it is also unfortu- profits as well as the cyclical hard- affect regulation of insurance by State nate that sometimes not-so-good doc- ening of the liability insurance mar- insurance commissioners and other tors manage to make their way into ket. In cases where an insurer has State regulators. But there is no rea- the health care system. I think we made a bad investment, or has experi- son to continue, unexamined, a system should do all we can to support the enced the same disappointments from in which the Federal enforcers are pre- men and women who commit their pro- Wall Street that so many Americans cluded from prosecuting the most fessional lives to caring for others, but have, it should not be able to recoup its harmful antitrust violations just be- we also ought to have some way of re- losses from the doctors it insures. cause they are committed by insurance sponding when somebody gets highly The insurance company should have companies. inadequate medical attention. to bear the burdens of its own business Our legislation is a carefully tailored When you have a case, as I said be- model, just as the other businesses in solution to one critical aspect of the fore, like the Levine case in Vermont, the economy do. And a nationwide ar- problem of excessive medical mal- when you have somebody whose liveli- bitrary capping of awards available to practice insurance rates. I had hoped hood was playing musical instruments victims—as the majority has proposed for quick action by the Judiciary Com- and they lose an arm because Wyeth again and again—should not be the mittee and then by the full Senate to Pharmaceuticals made a mistake, then first and only solution turned to in a ensure that this important step on the there should be some way to respond. tough medical malpractice insurance road to genuine reform is taken before Under this legislation, they would not market. too much more damage is done to the be able to. The problem at hand deserves physicians of this country and to the The bottom line is, we have a piece of thoughtful and collaborative consider- patients they care for. But our legisla- legislation that is designed to be intro- ation in committee to achieve a sen- tion to narrow this loophole in the Na- duced not to improve the question of sible solution that is fair to patients tion’s anti-trust laws for medical mal- medical malpractice insurance, it is de- and that supports our medical profes- practice insurers has languished for signed not to make hospitals safer, it is sionals in their ability to practice more than a year in the Senate Judici- designed not to make patients safer, it quality health care. One aspect of the ary Committee. is designed not to save money. It is de- insurance industry’s business model re- Instead of conducting hearings and a signed to raise money. I guarantee you quires a legislative correction: Its markup on our bill, the majority now after the vote on this issue, all the blanket exemption from Federal anti- rushes a ‘‘tort reform’’ agenda item to fundraising letters will go out: Isn’t it trust laws. Insurers have for years—too the floor without any committee con- terrible, isn’t it terrible, the Senate is many years—enjoyed a benefit that is sideration. standing in the way of much-needed novel in our marketplace. The If Congress is serious about control- malpractice reform? McCarran-Ferguson Act permits insur- ling rising medical malpractice insur- It will not say: There were some in ance companies to operate without ance premiums, then we must limit the the Senate who were willing to stand being subject to most of the Federal broad exemption to Federal antitrust up and not let the Senate run rough- antitrust laws, and our Nation’s physi- law and promote real competition in shod over our State legislatures. cians and their patients have been the the insurance industry, as well as at- It will not say: There are some in the worse off for it. tack this problem at its core by reduc- Senate who were willing to stand up Using their exemption, insurers can ing medical errors across our health and say the insurance companies are collude to set rates, resulting in higher care system. Unfortunately, the par- not telling the truth on this issue. premiums than true competition would tisan bill before us is not designed for It will not say: Some in the Senate achieve—and because of this exemp- creating a solution to a serious prob- were saying the very powerful contrib- tion, enforcement officials cannot in- lem. Instead, it is designed purely for utors to the Republican Party with vestigate any such collusion. If Con- politics, and that is not only a waste of their $1 million ads are wrong and gress is serious about controlling rising the Senate’s time and of the public’s somebody had to say no. It won’t say premiums, we must objectively limit trust; it is also a shame. that.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00030 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3765 But what it will say is the Senate So 173 have been confirmed. Six of maybe some of their own Members would have wasted another week and a the most controversial have been might now be feeling more compassion whole lot of fundraising letters will go blocked. Two of them have been unilat- for these millions of Americans who out. erally appointed by the President dur- are out of work than they do for three JUDICIAL NOMINATIONS ing Senate recesses. One has withdrawn lifetime appointments? Mr. LEAHY. Mr. President, the to rejoin a lucrative job with a law Which priorities are they serving? thought occurred to me, even though firm. So three were blocked. I have Apparently not most working Ameri- we have not done much here in the last never heard so many tears shed for cans. They would not even allow a vote few days, the last few months, or so, we these three. I don’t see any tears shed on the Cantwell amendment. see a number of people come to the for the millions of Americans out of Then we tried to raise the minimum floor and say we have to have imme- work. I don’t see any tears shed for the wage. Why now? The last minimum diate votes on the handful of the re- millions of Americans whose jobs are wage was signed into law by President maining judicial nominations. They being outsourced, but one would think Clinton almost eight years ago. While say there is a handful out there we that, with these three, the whole Na- they are caterwauling about a $160,000 have to have. Interestingly, they are tion is collapsing. lifetime job for three nominees, do ignoring that 173 judges have already The irony is the same people coming they really believe that families could been confirmed, ignoring the fact that down here to the floor and crying meet their basic needs on a minimum when Democrats were in control of the about these three, sobbing about these wage of just $5.15 an hour? The people Senate we moved President Bush’s three, did not say one word when they who are making $5.15 an hour are real judges through a lot faster than Repub- blocked 61 of President Clinton’s nomi- Americans, and the Republicans will licans have. But I suppose if they talk nees. They blocked 61, and you would not even allow us to vote for the first enough about it, people will not realize think the sky is falling because we time in eight years to raise the min- the Republicans have moved far slower stopped three. Oh, give me a break. imum wage. The purchasing power of on President Bush’s nominees than the Let’s look at what they do not want today’s minimum wage is already Democrats did. But there is another to do. During the past two weeks, we below that of the minimum wage be- point. have wasted so many hours in quorum fore 1996. To save the same purchasing What they are really saying is that calls and cloture votes to serve the Re- power as it had in 1968, the minimum we have to give $163,000 a year lifetime publican leadership’s goal of avoiding wage would need to be $8. Even in jobs to three of the most controversial votes on votes that will help American Vermont, where our state leaders have judicial nominees submitted by Presi- families. The Republican leadership is helped working Vermonters earn wages dent Bush. To hear them talk, one blocking a vote on raising the min- that are somewhat more livable, the would think this is the number one pri- imum wage. They are blocking a vote minimum wage is still worth less than ority on the part of the American peo- on extending unemployment benefits. it was 35 years ago. ple: is giving three judges—highly con- They are blocking a vote on protecting More people are out of work, under- troversial, highly political, highly ide- employed, and struggling to keep roofs ological—a lifetime job paying $150,000, people from the new overtime regula- over their family’s heads and food on $160,000, $170,000 a year. tions of the Department of Labor. Frankly, I think a lot more people Why? the table than at any time since the are worried about the millions of During these past two wasted weeks, administration of Herbert Hoover. Americans who have lost their jobs and 687,000 more Americans filed first-time Today there are more economic pres- the millions more who worry they are claims for unemployment insurance, sures squeezing them, with health care going to be the next victims of out- yet Republicans are only talking about costs becoming unaffordable and gaso- sourcing. I think that is really what is three jobs. Give me a break. I suspect line prices reaching the highest level in on the mind of the American public, the reason they are talking about these my age. Despite the millions of Amer- not three more highly paid lifetime ju- three is because they do not want the ican families with children who would dicial appointments. They are far more American people to know they blocked directly benefit from a raise in the worried about the millions of Ameri- unemployment benefits, they blocked Federal minimum wage, Senate Repub- cans who are out of jobs, millions of raising minimum wage, they blocked licans blocked a vote on the Boxer- Americans who are seeing their jobs go protecting overtime compensation. Kennedy amendment to the welfare bill to India and everywhere else, and mil- These are the people who actually have that would raise the minimum wage to lions of American families where both to go out and pay their mortgages. $7 an hour in three steps over a 2-year mother and father bringing in pay- These are the people who actually try period. checks are barely making the mort- to figure out how they are going to pay The Republican leadership is also gage. They are not the ones getting the to send their children to school. These blocking the Senate from making sure $160,000 a year lifetime jobs. are the people who live from paycheck hard-working Americans are fairly For the public and for the Demo- to paycheck. compensated for working overtime. cratic Members of the Senate, our I say they blocked the Senate from The Bush administration will soon be higher priorities right now have to do extending unemployment benefits. Ac- releasing final regulations changing with the millions of Americans who are cording to figures recently released by the Federal rules on overtime pay. trying to find or keep their jobs. Our the Labor Department, the unemploy- They will cut eight million middle- higher priorities have to do with secur- ment rate held steady at 5.6 percent be- class Americans out of the ability to ing adequate health care for the mem- cause hundreds of thousands of people earn overtime pay. bers of our National Guard and Re- stopped looking for work. They could We give tens of thousands of dollars serves. Our priorities have to do with not find work. This has left too many in tax breaks to the people who go to getting decent health care for our vet- unemployed Americans without bene- these large fundraisers, but we take erans and our service men and women fits for months. away overtime for eight million Ameri- who have brought the injuries home They call it an economic recovery. It cans who are barely making it? In fact, from service in Afghanistan and Iraq. is a jobless economic recovery if it is the regulations are so slanted against To be charitable, these crocodile an economic recovery at all because American workers that they will in- tears about judicial nominations are millions of Americans still cannot find clude a list of cost-cutting suggestions just a tad disingenuous. Let’s review jobs. Our law gives them 26 weeks of for big businesses to show them pre- the record. unemployment benefits, and up until cisely how they can avoid paying over- The earlier Democratic-led Senate the last day of 2003, if you were still time compensation to workers not sin- confirmed more Bush judicial nominees looking for a job, our law would offer a gled out in the rules. than the Republican-led Senate has. 13-week extension. We tried to make a Bipartisan majorities in both the We confirmed 100 of the 173 Bush judi- 13-week extension. Can we do it? No. Senate and in the other body oppose cial nominees. Democrats actually did Do you know why? Because the Repub- what the Bush administration wants to better for the President than the Re- lican leadership will not even allow us do in taking away overtime pay from publicans have. to vote on it. Are they afraid that eight million Americans, but this year

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00031 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3766 CONGRESSIONAL RECORD — SENATE April 6, 2004 the President threatened to veto the Mr. GRASSLEY. Mr. President, we related to exports, there is a tariff on Omnibus appropriations bill if it in- all know we are likely to pass only a your exports in another country and we cluded provisions to overturn the over- few major tax bills this election year, aren’t competitive, those jobs aren’t time regulations. After all, too many and we know one of the most impor- going to exist very long. people who attend these large fund- tant tax bills is the jobs in manufac- Think about what that would do in raisers have been told we will find a turing bill that comes up for a cloture Waterloo, IA, for one-fifth of the trac- way for them to take those eight mil- vote tomorrow. We know the only way tors that come off the assembly line lion workers off the overtime rolls. the JOBS in manufacturing bill can being exported. We couldn’t afford to And unfortunately the Republican pass is a ‘‘yes’’ vote on the motion to lose one-fifth of the jobs at John Deere leadership in this and the other body stop debate or, as we call it in the Sen- in Waterloo, IA, because of these tar- said, yes, Mr. President, if you want to ate, cloture. That vote will be tomor- iffs. take those eight million off, we will go row. We can end the sanctions that are in along with you, we will take them off. Once again, we must ask, will the this bill, but will the Democrats say no Of course, we want to have another Democrats say no to cloture? Will they to cloture so we don’t end sanctions? vote, a vote on the Harkin amendment, say no to stopping debate? Will they This bill provides $75 billion of tax to express our disapproval of the labor refuse to allow us to get to finality on relief to our U.S.-based manufacturing regulations, either vote it up or down. this very important bipartisan legisla- sector to promote factory hiring here After all, the Republicans are in the tion that when it comes to a final vote in the United States. It is not going to majority in this body. If they want to will overwhelmingly pass in the Sen- benefit corporations for that portion of approve of the move of the administra- ate? Will they go on record opposing their manufacturing overseas. tion of President Bush to deny over- the provisions that are in this bill? Will the Democrats say no to $75 bil- time pay to eight million Americans, Democrats should not because this is a lion worth of help, and help create jobs then they can vote and say they agree bipartisan bill. This is a bill that every in factories in America, particularly with it. We want a vote one way or the Democrat member of the Senate Fi- considering the fact that every day you other, but they will not allow the vote. nance Committee voted yes on to re- hear comments about outsourcing, and They are blocking that vote. port it from committee. they expect us to do something about So I think we ought to talk about Keep in mind that the jobs in manu- outsourcing? This bill will do some- real people, people who live from pay- facturing bill could be the last train thing about outsourcing. check to paycheck. We ought to talk out of town this year. It has to get The jobs in manufacturing bill ex- about the votes that are being blocked done if we are going to end the sanc- tends the research and development to extend unemployment insurance, tions and tariffs that have been put on tax credit through next year. This is a the votes that are being blocked to U.S. exports to Europe as a result of domestic tax benefit that generates re- raise the minimum wage, the votes the United States not following our search and development in the United that are being blocked that might own trade agreements. States. That translates into good high- allow them to collect overtime pay for Each time a Member votes against paying jobs for workers in the United overtime work. One can imagine in the stopping debate, it lessens the chance States—not overseas. The amendment corporate boardroom they suddenly that this bill is going to go forward. In we had on research and development say, wait a minute, we could just have fact, it kills off many good measures in passed overwhelmingly with a bipar- somebody work another 20 hours and the jobs in manufacturing bill. From tisan vote. we do not have to pay any overtime, we the very beginning, this bill was over- Why would Democrats say no to a bi- do not have to hire extra people, man, whelmingly bipartisan. In fact, there partisan provision in this bill? Will this is wonderful for us. And they can was a bipartisan agreement that we they? I hope not. talk about it when they go out to the need to pass this bill because there is a The jobs in manufacturing bill ex- golf club. bipartisan agreement of long standing We ought to ask, where are the prior- that the United States agrees to inter- tends for 2 years many tax provisions ities of the American people? Where national trade agreements, and we that expired either last year or are are the Democratic priorities in the have an obligation to do our part and going to expire this year. This would Senate? Where are the Republican pri- live up to those agreements. include items such as a work oppor- orities in the Senate? Should our top A ‘‘no’’ vote on this motion tomor- tunity tax credit and the welfare-to- priority be right now to find good six- row is an obstruction to the bipartisan- work tax credit and make the merger figure jobs for a handful of the Presi- ship that is expressed in the language of those credits permanent. Senator AYH and Senator SANTORUM asked for dent’s most controversial activist judi- of this bill. B these provisions, and we included cial nominees, or should we give our I would like to briefly go through them. Will these Senators vote for clo- time and attention to the millions of some of the measures that are in this ture? They should. Americans living paycheck to pay- jobs in manufacturing bill. What I am check who need help, the eight million going to refer to is what a lot of Mem- Senator BREAUX and Senator SNOWE Americans who are suddenly going to bers of both political parties have asked for a provision that allows naval find they cannot earn overtime pay, asked for the consideration of by my shipbuilders to use a method of ac- and millions of Americans who have committee and for inclusion in the lan- counting which results in more favor- not had a raise in the minimum wage guage of this bill. I will go over what is able income tax credit treatment. We for eight years? in this bill and sincerely ask why the included that provision in this bill for I think the priorities of the Demo- Democrat leadership is willing to tell Senator BREAUX and Senator SNOWE. cratic Members of the Senate are the its members to kill the bill by voting They each have reasons to vote for clo- people’s priorities. Unfortunately, the no to stopping debate. ture to get these amendments to the priorities of my friends on the other This bill will end $4 billion a year of President for his signature. side seem to be the priorities of the sanctions against the United States There are enhanced depreciation pro- very privileged few. and our exports. As of March 1, those visions to help the ailing airline indus- I yield the floor, and suggest the ab- sanctions are being imposed against try. Senator LINCOLN, Senator BROWN- sence of a quorum. U.S. exports of grain, timber, paper, BACK, and Senator ROBERTS asked for The PRESIDING OFFICER. The and manufactured goods. these provisions. I hope they will vote clerk will call the roll. You will later hear my comments on to stop debate tomorrow so we can get The assistant legislative clerk pro- the products that are being hit right to finality on this legislation. ceeded to call the roll. now by sanctions. I think each Member There are what is referred to as new Mr. GRASSLEY. Mr. President, I ask ought to know how this is affecting the homestead provisions. These were re- unanimous consent that the order for economy of their district. quested by Senator DORGAN, Senator the quorum call be rescinded. First, manufacturing jobs are good BAUCUS, Senator THOMAS, Senator The PRESIDING OFFICER. Without jobs in America. They pay 15 percent ENZI, and Senator CRAPO. I hope these objection, it is so ordered. above the national average. If jobs are Senators will vote to stop debate so

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00032 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3767 what they have asked me to do can get duction that might bring the American velopment bonds to spur economic de- to the President for his signature. dream to a few more young people. velopment in rural areas. This was re- There are rural development provi- Our bill includes the tax credit for quested by Senator PRYOR and Senator sions to create businesses in counties employers for wages paid to reservists THOMAS. I hope they will vote for clo- that are losing population. For exam- who have been called to active duty. ture tomorrow. ple, they provide incentives for start- Senator LANDRIEU and Senator ALLEN We have bonds for rebuilding school ing or expanding rural businesses in a asked for this provision. I hope we will infrastructure. These were requested rural outmigration county when it hits have their vote tomorrow, if they are by Senator CONRAD. a certain percentage of outmigration. serious about helping our guardsmen We have included tribal bonds in the At the request of Senator DORGAN, we and reservists who have been called to jobs in manufacturing bill, requested also included a new market tax credit action because of the war on terrorism. by Senator CAMPBELL and Senator for high outmigration counties. These Otherwise, what is the point of asking JOHNSON. I am sure this is supported by credits help economic development in me to put this in the bill if they are Senator DASCHLE, as well, because he rural counties that have lost over 10 not helping us to move it to finality? has a record of supporting Native percent of their population. At the request of Senator SCHUMER American projects. These bonds allow There is only one way this homestead and Senator CLINTON, we have extended the same rules that apply to tax-ex- and the new market provisions can be- and enhanced the Liberty Zone bonds empt bonds for State and local govern- come law; that is, to have the Senate provided for the rebuilding of Lower ments to apply to Native American stop debate. That takes 60 votes. Manhattan. We also included $200 mil- tribes issuing tax-exempt bonds to fi- For Senators we have tried to work lion in new tax credits to be used for nance facilities on their reservations. with to get their provisions included, if rail infrastructure projects in the New That is just an explanation, not some- they aren’t willing to help stop debate York Liberty Zone; again, responding thing new. In other words, if it is good and move this bill along, why would to the needs of the people in New York for one State and local government, they even ask me to include provisions because of what happened on Sep- why shouldn’t it be good for the gov- in the bill if they do not want this bill tember 11. These two Senators came to ernance of our tribes? to move along? me and asked for consideration of these We have included tribal school bonds, The jobs in manufacturing bill in- provisions in this bill, and in a bipar- again, as requested by Senator JOHN- cludes brownfields revitalization which tisan way, we try to do things and we SON and Senator CAMPBELL. Under cur- was requested by Senators LAUTEN- have responded accordingly. rent law, there is no class of bonds des- BERG, DOLE, and INHOFE. The bill helps Are they serious about getting these ignated for the purpose of encouraging tax-exempt investors that invest in the provisions into law for their New York school construction on Indian reserva- cleanup and remediation of qualified constituents? If so, then they ought to tions. This provision fills that void. We brownfields sites. vote for cloture and move this bill to have a tribal new markets tax credit I hope those Senators who asked me finality. which was added at the request of Sen- to include their provisions in my bill We even included the renewable com- ator DASCHLE and Senator CAMPBELL. will decide they should vote to stop de- munities provisions requested by Sen- This amendment adds $50 million a ators CLINTON and SCHUMER. bate. Without getting over that hurdle, year to economic development on res- Will the Senate Democratic leader- you never get to final passage. ervation land. ship ask their members to vote against Will the Democrat leadership tell Senators BOB GRAHAM, BREAUX, and Liberty Zone funding for meeting the Democrats to vote against closing de- HATCH asked us to include the mort- needs of the people of New York by vot- bate and kill these Native American gage bonds revenue measure. It would ing no on cloture? We should not deny measures? Again, if they do not want repeal the current rule that doesn’t funding for the Liberty Zone just to to get it done, why did they come to allow revenue bond payments to be prove a political point on a proposed me and ask for me to include these used for issuing new mortgages. labor regulation that may never be fi- things? There are 70 cosponsors of this bill. nalized in the first place. Even if it is We have also included the Civil The 70 Members who took time to finalized, Congress can always overturn Rights Tax Fairness Act. This is at the study this provision on mortgage rev- it under the Congressional Review Act. request of Senator BINGAMAN and Sen- enue bonds and signed it surely want Hundreds of regulations are proposed ator COLLINS. This is very important. this bill to become law. Otherwise, why in Washington every week. Very few We have Senator CONRAD and Senator would they put their signature on it? make it to the finish line. So why is SANTORUM and Senator BUNNING asking That means that tomorrow those 70 the Democrat leadership holding up we add a change in section 815 of the Senators ought to be stopping debate funding for the Liberty Zone over a Tax Code. The provision suspends ap- so we can move on to finality. proposed regulation? This is not re- plicable rules imposing income tax on Another provision is allowing a de- sponsible governance. This is not re- certain distributions to shareholders duction for private mortgage insur- sponsible opposition. There is a legit- from the policyholder’s surplus ac- ance. This was asked for by Senator imacy in our form of government, one count of a life insurance company. This LINCOLN and Senator SMITH. It benefits party being in the opposition and the is included in the bill. people struggling to afford a home. I other party being in the majority. We have a special dividend allocation hope no one votes against their idea. They play a very important role in rule that benefits farmers’ coopera- Home ownership is the dream of all making people responsible. Do we hold tives. Senator LINCOLN and Senator Americans. It is the American dream. up every piece of legislation because it COLEMAN asked it be included. This provision helps that along a little is an election year and Members think We have other farm provisions that bit. next year they might be in a majority, give cattlemen tax-free treatment if Some might say we have the highest so they can do what they want to do? they replace livestock because of some- percentage of home ownership this All of these requests that are made thing beyond their own control, such country has ever seen at 68 percent. to me, why not hold them up until next as drought, floods, or weather-related Yes. But what about the other 32 per- year? Then I would not have to be con- conditions. Senator DASCHLE and Sen- cent? This might help some of those sidering them at this point. If they are ator THOMAS asked for that. people who might not otherwise be able important, we ought to move this leg- At the request of Senator CANTWELL to afford a home. islation along. In other words, we and Senator THOMAS, we included a In most cases, you have to buy mort- should have responsible opposition in provision that allows payments under gage insurance. If you buy mortgage the process of everybody making their the National Health Service Corps loan insurance, it costs money for lower in- points. repayment program to be exempt from come people who are on the edge of The Liberty Zone needs our help, and tax. This is an important measure to owning a home or not owning a home. we need to behave as adults and get enhance the delivery of medical serv- This might just help them get their this bill completed. ices in rural America. loan through. But a vote against clo- In the jobs in manufacturing act we We included the passenger rail infra- ture would be a vote against this de- increase small business industrial de- structure tax credits at the request of

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00033 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3768 CONGRESSIONAL RECORD — SENATE April 6, 2004 Senator CARPER. It provides $500 mil- a chance to stop debate and complete Let me emphasize, there is not one lion for intercity passenger rail capital this bill. provision in this JOBS bill that was projects. We also included the short- All the beneficial provisions I have not agreed to by both Republicans and line credits requested by Senator just discussed are being held hostage Democrats. I have already said, every SMITH and Senator BROWNBACK. this minute because the Democratic Democrat in the committee—all 10 of At the request of Senator ROCKE- leadership is pushing for a vote on an them—voted for this bill to be reported FELLER and Senator HATCH, we added a issue that is not even in this bill. The out of committee. We have acted in provision to allow taxpayers to apply vote is an attempt to embarrass the ad- good faith to produce a bill that pro- their bonus depreciation against the al- ministration in an election year about tects American manufacturing jobs and ternative minimum tax credits. This a proposed labor regulation on over- to make our companies globally com- measure is very important to the steel time. The Democrats said the regula- petitive—the same thing you hear Sen- mills of West Virginia; hence, Senator tion was going final, and they had to ator KERRY speaking about on the cam- ROCKEFELLER. add it to the jobs in manufacturing paign trail, about making our corpora- A provision benefiting Oldsmobile bill; otherwise, they would block this tions competitive. In fact, he even has dealers was included at the request of bill. That was 2 weeks ago. The regula- a proposal that would reduce corporate Senator BAUCUS and Senator BINGA- tion is still not final. And who knows, taxes the same way we do. MAN. The proposal provides tax-free the way bureaucracy moves, it may Let’s get on with the business at treatment for Oldsmobile dealers be- never be final but continue to tilt at hand and finish this bill; vote for clo- cause their franchise is being termi- windmills, and what will come. ture tomorrow, stop debate, put this nated. But it seems to me that it is politics bipartisan jobs in manufacturing bill How many times have we heard Mem- all the time. It is politics from the ahead of partisan politics. Then we can bers talk about the need to make Democrat leadership, and it is ob- show the people of this country that broadband available in rural commu- structing an important piece of legisla- the adults are in charge of the Senate, nities? We know it is essential to the tion. More importantly, right now, it is and we can get the JOBS bill—creating economic competitiveness of rural obstructing legislation that most of jobs in manufacturing—out of the Sen- America, particularly since we see so the members of the other party have ate and eventually to the President. many Asian companies, so far in ad- asked me to include in this bill. Now, I yield the floor. vance of the United States in why do you ask me to include it in the The PRESIDING OFFICER (Mr. broadband. To keep our economy com- bill if you are not going to vote to get CRAPO). The Senator from Mississippi. Mr. LOTT. Mr. President, I appre- petitive, it ought to be here. But we the bill to the President? This sort of ciate the chairman’s comments on the also know many Democratic Senators obstructionism is inexcusable because we have worked hard throughout this need to move this legislation forward. support this. It is, likewise, in the bill. process to make sure that everyone’s Mr. President, let me just inquire in Senator MURRAY and Senator SMITH terms of parliamentary procedure, are asked for the forest industry bond pro- concerns—both Republican and Demo- crat—were incorporated into this bill. we open for general debate? visions in this bill. That allows non- The PRESIDING OFFICER. We are profits to use tax-exempt bond financ- Why? Because I know you do not get anything done in this body that is not on the motion to proceed. There are no ing to acquire forest land, to achieve bipartisan. limits on debate. better balance between the goals of People who want to be partisan can Mr. LOTT. Thank you, Mr. President. conservationists and the timber indus- be partisan, but they are not going to I did come to the floor last week and try. Up to $1.5 billion in bonds may be get done what they want done either. speak to the need to move this very issued under this program. That, sir, is So you bring the Senate to a standstill. important jobs growth, FSC/ETI issue a lot of conservation money. We have tried, in the spirit of biparti- and not have a filibuster and complete At the request of Senator BOXER, we sanship, to respond. This legislation our work. If we do not, we are going to have included a proposal that would and all these amendments included are see that we are going to be hit by a allow employers to take a 50-percent responding to that bipartisanship. You continuing increase in fines by the Eu- tax credit against the FICA taxes for see that effort in the amendments I ropean Union because we are not com- wages paid to the first responders who just listed. plying with the World Trade Organiza- are called to active duty. We added a But if it were not overtime, it would tion ruling of over a year ago. second measure at Senator BOXER’s re- be something else to obstruct this bill. I also said we stand to benefit from quest. This proposal would allow farm- It could be the minimum wage; it could the tax proposals in this legislation, ers and ranchers to take a 30-percent be trade adjustment assistance for and I urged that we complete this credit for the installation of irrigation services; it could be some kind of work. In fact, I said we have no alter- equipment which reduces water use. health care issue—anything to block native but to complete this work. I am The credit would be limited to land the jobs in manufacturing bill at the glad the leadership is going to continue that has received drought assistance very same time people on the other to push this issue because we must get during the past 3 years. side of the aisle are complaining be- it done. Anyone who votes against cloture is cause we are not doing enough to stop I do want to say now that I under- voting to kill all the items I just listed. outsourcing. This bill will help do that. stand that perhaps a decision was made Why would people come to me as chair- It is all about the Democratic leader- to attach tax provisions from the En- man of the Senate Finance Committee ship keeping the European Union sanc- ergy bill to this bill, and I think that and ask me to include provisions in the tions in place to drive down the econ- was a mistake. I am going to have to bill if they do not want to get this bill omy, because if the economy is not review what that means in terms of my to the President for signature? Tomor- very good this fall, they think they own vote. Instead of helping move this row, they have their chance. have a better chance of electing their legislation, and other legislation, it We had debate extended on this bill 2 people. This is outrageous when you may have complicated both of them. weeks ago, and we had a vote to stop consider the bipartisan history of this But I hope we can find a way to get debate. Debate was not stopped. So to- jobs in manufacturing bill. this done. morrow we vote again. We have to get The JOBS bill is a completely bipar- Mr. President, the reason I came to over this hurdle to get all these provi- tisan bill. Construction of the bill the floor this afternoon, though, was to sions that have been requested in this began when Senator BAUCUS was chair- speak in support of S. 2207, the Preg- bill and to get it to the President for man of the Finance Committee in 2002. nancy and Trauma Care Access Protec- his signature. Senator BAUCUS and I have always tion Act of 2004. We have a health care I hope Members are sincere about all worked with our Finance Committee crisis in America. Health care is be- this legislation that is introduced. I colleagues on the bipartisan develop- coming more and more difficult to ob- hope Members are sincere in telling me ment of this Foreign Sales Corpora- tain, to afford, and to be assured that how important their amendments are tion/Extraterritorial Income Act repeal it is the quality that you might need. to this bill. I hope Members will show and also the international tax reform In rural States such as mine and Sen- that sincerity tomorrow when we have provisions of this bill. ator GRASSLEY’s State of Iowa, the

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00034 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3769 issues of access and distance, or being a national problem. This is not just a based on the amount of the judgment. able to get trauma care or care from problem in Mississippi, Alabama, Ar- These lawsuits should not be about at- obstetricians and gynecologists, kansas, or Iowa; it is a nationwide torneys’ fees. The lawsuits should be present real problems. problem. Very few States—even those about medical costs and medical liabil- I also think we have to acknowledge that have passed medical liability re- ity. What is a reasonable recovery that the cost is becoming more and forms—have been able to stem this tide when you do in fact have some legiti- more difficult and more and more pro- of abuse and costs that are really caus- mate claims? hibitive. The cost of health care insur- ing difficulties in a number of States Don’t get me wrong. I do think in the ance continues to go up. The cost of and in the health care of this country. American system of jurisprudence, you medical liability insurance continues So we have to do something. have a right to take your grievance to to go up. When you talk to trauma Here we are in the Senate with this court. I would defend that. I am an at- emergency care doctors, when you talk crisis looming out there that affects torney. But I do think the system is to OB/GYNs, they are paying $85,000, children, babies, mothers, elderly, being abused, and it has become more $100,000, $125,000 for medical liability emergency care needs; all of them have about attorneys’ fees than it has the coverage. How much will it be? There been held up while the Senate cannot injuries that were incurred. is no limit? even proceed to debate the legislation. The bill sets out qualifications for There is no question, in my mind, That is what we have here, the motion expert witnesses. Again, that is an area many of these doctors are now prac- to proceed. That is indefensible. How where there have been some abuses I ticing what we would describe as defen- could we not at least take this issue up am personally familiar with. It permits sive medicine. They are prescribing ad- and have a full discussion about its courts to reduce damages received by ditional procedures. They are taking dire consequences? the amount of collateral source bene- extra precautions to make sure they do Let’s talk a little bit about what the fits to which a claimant is entitled; in not get sued. That, by the way, con- bill does. This is not something that other words, money paid by another tinues to drive up the cost of health just popped out of a committee or entity such as a health insurance pro- care. So it has become a big problem in hasn’t been thought through clearly. vider. this country. This issue has been pending for a long It authorizes the award of punitive Escalating jury awards and the high time. Some of the legitimate concerns damages only where a high standard is cost of defending lawsuits, even the have been addressed. met of clear and convincing evidence frivolous ones, are increasing medical The bill provides reasonable guide- that a defendant acted with malicious liability premiums nationwide, and lines to govern liability claims related intent to injure or deliberately failed they are having devastating effects on to the provision of obstetrical, gyneco- to prevent injury that was certain to the health care of millions of Ameri- logical, emergency and trauma care occur. cans. Medical specialists, including goods and services. I want to empha- This is very good legislation. It is neurosurgeons, obstetricians, and size, this is a limited bill. This is not targeted. It is limited in the impact it emergency physicians, are being forced all medical professions. This is tar- would have on restricting the coverage, to cut services, retire early, or move geted to those people who treat us but also it is limited to these par- their practices to other States. when we are in the greatest need of ticular areas of specialty I have noted. This past Saturday night, I was in health care, when we are going into an Let me go to my own State of Mis- Augusta, GA, for an event for Congress- emergency room or a trauma facility sissippi, since our State is really being man NORWOOD, a Congressman who has adversely affected by these medical li- been very much involved in patients’ as a result of an automobile accident, or doctors who deliver and look after ability cases. It is one of those States rights and health care issues. I was in- which has been described as a judicial formed that one of the neurosurgeons our children and the mothers of those children. Can we not at least provide hellhole. I don’t like to hear that. in Augusta recently moved from my When various entities identify my State of Mississippi. It is not an iso- some medical liability reform and pro- tection there so we can keep these doc- State in that sort of way, I resent it. lated incident. It is a pattern. Augusta Even if they are right, I don’t like to has several neurosurgeons. Mississippi tors in the practice? hear it. But there is no question we has a declining number, even in places More and more in my State and all have had lots of problems in my State where they are needed to provide trau- across the country doctors who have in of Mississippi. We have had a tremen- ma care services in larger metropolitan the past practiced obstetrical and gyn- dous explosion of lawsuits in this areas. ecological work are dropping the obste- Nineteen States are in full-blown trician part because they are being health care area, very large verdicts. medical liability crisis now, and 25 sued. The insurance is becoming pro- Physicians who are practicing in Lou- States are showing signs of crisis. Only hibitively expensive in terms of the isiana, Mississippi, Texas, and West 6 States are considered stable, each of cost it is putting on these doctors. Virginia can clearly demonstrate how which has instituted reforms. The bill sets a statute of limitation medical lawsuits have hurt our health Ninety-eight percent of osteopathic of 3 years after the date of manifesta- care system. The doctors will tell you students acknowledged in a recent sur- tion of an injury or 1 year after the about that. vey that medical liability issues will claimant discovers or should have dis- A recent survey that was done by the influence their future career decisions. covered the injury. That is reasonable. American Tort Reform Association, in Seventy-three percent say medical li- You can’t say 5 years later: I had a cooperation with other groups such as ability issues will ‘‘significantly’’ in- problem back there. It says you have the Mississippi State Medical Associa- fluence their decisions—in other words, to exercise your right within 3 years or tion, points out 84 percent of the physi- where they practice, whether they 1 year after you discovered it. cians surveyed report they are very practice, and what kind of medicine It allows recovery of unlimited eco- concerned about the effect of medical they practice. nomic damages, but it limits non- litigation on the practice of medicine. Medical liability costs the Federal economic pain and suffering damages Eighty-one percent report they have Government well over $50 billion per to $250,000. This is obviously a place changed the way they practice medi- year. The source of that information is where some restraint needs to be em- cine because of litigation concerns. the Department of Health and Human ployed. This is where certain juries in That means more cost. That is what I Services. I have heard the discussions certain counties in certain States, was referring to at the beginning. They over the years: Well, you guys from mine included, have been rendering have been requiring and prescribing Mississippi, and other similar States, multimillion dollar decisions for pain more and more procedures to protect have always talked about the States and suffering. I think some reasonable themselves against these lawsuits. And should deal with these issues. This is a limits there clearly would be appro- by the way, in many instances, the pro- States rights issue. It is a State prob- priate. cedures are not necessary and not re- lem. This bill allows the court to restrict quired medically. They are required to Let me tell you what: When it costs the payment of attorney contingency defend yourself against a frivolous law- the Federal Treasury $50 billion, this is fees by applying a percentage scale suit.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00035 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3770 CONGRESSIONAL RECORD — SENATE April 6, 2004 Eighty-six percent of the physicians Increasing costs of medical liability insur- surance provider from the State of Mis- believe states with a liability crisis ance has reduced the number of neuro- sissippi did not occur before he was at- like Mississippi increase medical mal- surgeons in the State by one-third, creating tacked by a bank robber in a small practice insurance costs. And the list holes in the State’s trauma system. My rural county at Wilkinson County Sav- source is the Greenwood Commonwealth, goes on. There is no question it is cre- April 25, 2003. ings Bank where he served as presi- ating a real problem. One major medical liability insurer, St. dent. He would have most certainly Again, specifics: Half of my State’s 82 Paul Cos., has withdrawn from the Mis- died if he had not been able to get doc- counties now have fewer physicians to sissippi market, forcing as many as 1,000 tors to treat him almost immediately treat patients than were available in physicians to find other insurers. My source at Catchings Clinic in Woodville, MS. 2001. Mississippi has fewer physicians is the New Orleans Times Picayune, Feb- With the withdrawal of St. Paul as a per capita than 48 other States. So ruary 2, 2003. malpractice provider, seven of the when we lose a physician, it really In Cleveland, MS, three of the town’s six OB–GYNs have stopped delivering babies. eight doctors in the area, including hurts because we already are in dire Yazoo City’s 14,500 residents have no OB– those at Catchings Clinic, Field Clinic straits. In 16 Mississippi counties, the GYNs. According to the Mississippi State in Centreville, and Gloster Clinic were numbers of physicians remained un- Medical Association, insurance rates for OB– left without a malpractice insurance changed from 2000 to 2002, but the popu- GYNs have increased from 20–400 percent in provider beginning on June 30, 2002. lation in those counties increased dur- the previous year. My source is the Mis- The source of this information is the ing the same period. The population sissippi State Medical Society. Jackson Clarion-Ledger of June 27, growth in 62 percent of Mississippi Loss of doctors at Gulfport-Memorial: As 2002. counties outpaced a stagnant or de- of summer 2003, Gulfport-Memorial had 24 On April 18, 2003, John Fair Lucas IV hour neurosurgery coverage, and now they creasing base of physicians to treat have no neurosurgery coverage at all; had 6 of Greenwood received a severe head those patients. The source of this infor- neurologists, and now have 1; had 6 injury due to a one-person car acci- mation is the Mississippi State Medical orthopaedic surgeons, and now have 3; had 3 dent. Since the Delta Regional Medical Association. vascular surgeons, and now have 2; had 9 OB– Center no longer has around-the-clock Approximately 100 doctors have left GYNs, but 2 retired due to malpractice insur- neurosurgery services because of the or plan to leave the State of Mis- ance crisis, and now have 7. The source of my impact of the medical malpractice in- sissippi. The source of that information information is Dr. Arthur Matthews. surance crisis and the loss of that cov- is a Time magazine article of June 9, ‘‘Nursing homes in Mississippi have been faced with increases in total premiums as erage, John had to be airlifted to Jack- 2003. great as 900 percent in the past two years. son, losing valuable time because the Mississippi had a net loss of 73 physi- Since Medicare and Medicaid pay most of the distance from that area of Greenwood, cians in 2002. The number of physicians costs of nursing home care, these increased MS, down to Jackson is about a 2-hour licensed in the State in 2001 was 5,710. costs are borne by taxpayers, and consumer drive, or certainly a 30-minute heli- But in 2002, this number had dropped to resources that could otherwise be used to ex- copter ride, and he lost valuable time 5,637. Since the population is increas- pand health (or other) programs.’’ The for the surgical procedure needed to re- ing, since we have certain areas of the source of this information is a HHS medical duce pressure on the brain. Sadly, John litigation report, March 3, 2003. State that have experienced tremen- passed away on May 28, 2003. The dous growth, you would think we would Mr. LOTT. I want to make this point. source for that is the Greenwood Com- be increasing the number of physicians We used to have several, then we had monwealth newspaper, April 25, 2003. per capita. The numbers are going in three, now we have one insurance com- ‘‘Jill Mahaffey says she got lucky. the wrong direction. pany that is providing medical liability She and her husband are here, they live I ask unanimous consent that other insurance in my State of Mississippi. in the Delta, too. She got lucky. She statistics I have about what is hap- This is a problem that is of great con- heard she’s pregnant. She’s getting pening in my own State be printed in cern to leaders in the State of both there, getting ready. She goes to the the RECORD. parties, in the medical profession, in doctor, he says, I’ve got to leave—OB/ There being no objection, the mate- the business world, and those of us who GYN getting ready to leave because of rial was ordered to be printed in the are trying desperately to advance the lawsuits, because of the threats. Be- RECORD, as follows: State economically and have had some cause even if you’re a doctor who prac- This net loss of 73 physicians is all the success bringing major industries into tices good medicine, you’re going to more disturbing because the total number of the State. While a major industry may get sued in this State and in other physicians licensed in 2002 actually includes want to know, do you have a good States. Believe this or not, fortunately, 414 newly licensed doctors—meaning that interstate system, do you have inter- there were approximately 500 doctors prac- she was getting toxic and the doc in- ticing in the state in 2001 who were not prac- national airports, good schools, can duced labor before he quit his practice. ticing in the state by 2002. The source of my you provide affordable housing, they She says she was lucky. And she was.’’ information is a Mississippi State Medical don’t always immediately ask about This is a quote from President Bush’s Association news release of August 14, 2002. the accessibility of hospitals and do address to Madison High School in Furthermore, another disturbing trend is you have the doctors who are needed, Madison, MS August 7, 2002. the decrease in the number of medical li- but that is a question that eventually Amber Peterson’s obstetrician in censes that are being issued each year. In they come to. It is one that will affect Cleveland, Mississippi stopped prac- 2000, the medical board issued 470 new li- us in the future if we don’t do some- censes; in 2001 the number was 456; and in ticing 3 weeks before her due date, and 2002 the number was 414. The number of new thing about it. she had to drive out of State, over a licenses dropped steadily by 39 percent from Let me tell you what it means when hundred miles, to Memphis, Tennessee, 1997–2002. The source of my information is a you don’t have the doctors you need. I to get the care she needed. The source Mississippi State Medical Association news want to give some specific examples. of this information is the U.S. Depart- release of August 14, 2002. Tony Dyess of Vicksburg, MS, re- ment of Health and Human Services, Mississippi can’t afford to lose doctors ceived serious head injuries in a car ac- from a report dated July 24, 2002. when the state’s population increased by cident on July 5, 2002. Since a spe- Marine Hawkins, 20, of Boyle, Mis- 271,442—or 10.5 percent—between 1990 and 2000. The State population of 2,573,216 in 1990 cialist in brain injuries, or neuro- sissippi, was shocked to hear from her grew to 2,844,658 in 2000. The source of this surgery services, was not available in obstetrician that he was closing his information is the U.S. Census Bureau. Gulfport, MS, he had to be airlifted to practice—just 2 weeks before her due Only two neurosurgeons remain in practice another hospital which led to Tony date of July 21. The nearest doctor is 30 on the Mississippi Gulf Coast, and general having permanent brain damage and no minutes away. She doesn’t have a car surgeons are in short supply because of the longer having the ability to care for and will have to rely on relatives to get state’s medical liability crisis. ‘‘Everybody himself or to have a job. The source of there. ‘‘This isn’t what I needed now,’’ is reduced to the same low level of trauma that is the American Medical News, care that we had 20 years ago,’’ said Steve she said. The source of this informa- Delahousey, vice president of operations at May 26, 2003. tion is the Houston Chronicle, July 20, American Medical Response ambulance serv- Fortunately for Elmoe Kee III of 2002. ice. My source is the Biloxi Sun Herald, Jan. Woodville, the withdrawal of insurance In February 2003, Sharkey-Issaquena 29, 2003. coverage by St. Paul malpractice in- Community Hospital in Rolling Fork,

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00036 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3771 MS saw its insurance premiums rise each doctor paying $67,000. The source isiana. The doctors explain the possible from $163,000 to $223,000. Because of this of this information is The Daily Mis- departure from Mississippi by the clin- rise, the hospital was forced to close its sissippian June 10, 2003. ic’s malpractice insurer informing doors for 3 weeks while the hospital Drs. Blackwood and Baugh’s tem- them recently that their premiums will looked for an alternative insurance porary departure left no OBs in Cleve- increase 45 percent on Jan. 1, 2003. The policy after being discontinued by its land for about 10 days. Only one family source of my information is the Hat- previous insurer. During these 3 weeks, physician continues to deliver babies tiesburg American, Oct. 2, 2003. Sharkey-Issaquena had to contract at the local hospital. But the mal- OB/GYN Mark Blackwood of Cleve- paramedics to treat patients while practice insurance providers that are land has seen his practice load nearly they were being transported by ambu- protecting them are only ‘‘Band-Aid in- double since three physicians quit de- lance to the closest hospital. The surance.’’ The source of this informa- livering babies in the area. His insur- source of this information is the Amer- tion is American Medical News Sept. 9, ance lapsed in July, forcing him to ican Medical News May 26, 2003. 2002. close his clinic for ten days leaving In 2002, 10 physicians left Greenwood Dr. Kurt Kooyer left the small town dozens of patients without a physician Leflore Hospital because of the State’s of Rolling Fork after getting fed up to deliver their babies. He and his part- problems with medical liability insur- with lawyers filing suit against him ner have seen an increase in the num- ance. Also during 2002, the hospital’s li- without even the patients’ knowledge ber of suits filed against them since the ability insurance premium increased that they were filing suit against their new legislation passed. The source of from $150,000 per year to $1.3 million. physician. Dr. Kooyer was the only pe- this information is the Mississippi The source of this information is The diatrician among three physicians in State Medical Association Dec. 1, 2002. Greenwood Commonwealth, June 26, town who lowered the infant mortality Radiologist Ken Duff was able to get 2003. rate from an average of 10 deaths per coverage less than twenty-four hours On Sept. 30, 2002, officials at Forest 1,000 live births to 3.34 deaths per 1,000. before his old policy expired. He and General Hospital announced they are Dr. Kooyer now lives in North Dakota. his eleven partners cover two hospitals eliminating nearly 300 positions—200 of The source of this information is The in Hattiesburg, facilities ion Columbia, which were already vacant—to save an Clarion-Ledger Aug. 23, 2002. Collins and Tylertown, as well as two estimated $7.6 million in the new fiscal ‘‘Dr. Frothingham, you talk about a large outpatient facilities. Without di- budget. Citing causative factors that man with heart. You think Kooyer has agnostic radiology services patients have to wait longer to get test results, prompted the cuts, hospital president a heart? Wait until you hear and other physicians will have to find Bill Oliver stated that Forrest General Frothingham. He’s a great Mississip- new specialists to consult. The group was hit last year with a dramatic in- pian; grew up here; thought he might desperately needs new recruits to cover crease—about $4 million—in medical try to live in South Carolina, realized demand. The source of this information malpractice insurance. The source of what he was missing, came back to is the Mississippi State Medical Asso- this information is the Hattiesburg Mississippi. He’s a neurosurgeon. He talked with deep compassion about a ciation, Dec. 1, 2002. American Oct. 2, 2002. General Surgeon Brian Anthony of Mr. President, let me talk a little man who suffered a trauma, a fellow he Bay St. Louis practices more defensive was with—Johnny was with us today. about exactly what is happening with medicine and no longer does vascular He’s a guy who understands that prac- the doctors in my State. work. He plans to retire 10 years early In February 2003, 14 doctors in the ticing medicine is more than just tech- because of the litigious environment. Oxford area in various medical fields nology. It’s concern and care. They’re He says other physicians often consult were left without malpractice insur- running him out of business. There’s him in order to document their cases ance and were forced to close their too many frivolous lawsuits. And that and to reduce their exposure. He and doors because their insurer, Doctors In- hurts the state and it hurts the coun- the remaining surgeon in the area are surance Reciprocal, went into receiver- try. It hurts the people.’’ This quote is considering whether they will continue ship on February 13. Doctors are slow- from President Bush’s address to Madi- to provide trauma services. The source ly, surely leaving the area to go to big- son High School in Madison, MS, Au- of this information is the Mississippi ger areas, or even to other States. gust 7, 2002. State Medical Association Dec. 1, 2002. I was in my hometown area, On July 15, 2003, Drs. Derveloy and Neurosurgeon Terry Smith has not Pascagoula and Moss Point, MS, on the Gilmore, the only two heart surgeons had a vacation in five years because Gulf Coast, and met a new impressive in Oxford, are closing their practice. there is not enough neurosurgery cov- doctor in the community. He was also They contribute their relocation to a erage to take care of his patients. He is involved in the trauma unit because he shortage of key elements: facilities, one of only three neurosurgeons cov- was an orthopedic surgeon. He moved cardiologists, affordable medical mal- ering trauma cases for seven hospitals to Mississippi from the State of Mis- practice insurance and regional refer- on the Gulf Coast. When he lost his in- souri. He is an African-American doc- rals. Dr. Derverloy is joining an exist- surance in August 2002 he had to go on tor. He was doing a great job. He told ing group off heart surgeons who are staff with a hospital in order to con- me because of the insurance coverage practicing in Tupelo, and Dr. Gilmore tinue to practice in the area. The situation, even though his family recently accepted an offer to set up a source of this information is the Mis- wanted to stay on the Mississippi Gulf heart surgery program in Decatur, Ala. sissippi State Medical Association, Coast, it looked as if they might have The source of this information is The Dec. 1, 2002. to return to Missouri. Other doctors Oxford Eagle June 8, 2003. Otolaryngologist Gene Hesdorffer of have been either leaving the State or Also in Oxford, the two cardiologists Hinds County had to close his practice getting out of the practice of obstet- with the Oxford Heart Clinic, Dr. Nel- on December 31 and was forced into rics. son Little and Dr. Timothy Wright, are full-retirement because he could no In the case of Dr. Don Gaddy, as well merging their practices with a Tupelo longer afford insurance. His insurance as four other obstetricians and three office, but will keep their local office carrier informed him they were dou- nurse-midwives, they filed notice to open, which followed the loss of Ox- bling his rates despite the fact that he take a 1-year leave of absence from Me- ford’s only two heart surgeons, Drs. has never been sued. The source of this morial Hospital at Gulfport, MS, be- Derveloy and Gilmore. The source of information is the Mississippi State cause of extreme increases in medical my information is The Oxford Eagle, Medical Association, Dec. 1, 2002. malpractice insurance coverage. The June 8, 2003. OB/GYN Al Diaz of Ocean Springs has source of this information is the Biloxi Five doctors at the Family Practice/ insurance until December 2002. He has Sun-Herald, April 18, 2003. After Hours Clinic on U.S. 98 West have lived on the Coast for 20 years but is Dr. Gregory Patton, an OB–GYN with posted a sign on their doors informing now looking at practice in Mobile, Ala- the Oxford Obstetrics and Gynecology patients that no appointments are bama, and Slidell, Louisiana. Both his Associates PA in Oxford MS, reports being scheduled for 2003. The physi- son and daughter-in-law are training in that his malpractice insurance pre- cians are also filling out applications Louisiana but will not return to prac- miums have gone up 60 percent—with for licensing in Alabama and Lou- tice in Mississippi. The entire group of

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00037 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3772 CONGRESSIONAL RECORD — SENATE April 6, 2004 four OB/GYNs just renovated their sicians and surgeons in Mississippi. Family Practice physician David Wheeler clinic in Ocean Springs and opened an The main reason insurance companies of Mt. Olive. office in Biloxi when they were told give for hiking premiums and/or leav- DESOTO COUNTY (1): their insurance carrier would no longer ing the state is their concern about Family Practice physician Dr. Pravin be doing business in the State. The Mississippi’s civil justice system, Patel of Coldwater. source of this information is the Mis- which has generated over 100 verdicts FORREST COUNTY (1): sissippi State Medical Association, of $1 million in the last 6 years. The Ob-Gyn Hilda McGee of Hattiesburg. Dec. 1, 2002. source of this information is the Hat- FRANKLIN COUNTY (1): Surgeon Cecil Johnson of Lauderdale tiesburg American, Oct. 2, 2002. Family Practice physician Bo Gabbert. County plans to retire soon. Until then Fifteen medical malpractice insurers GRENADA COUNTY (1): he will continue to order more tests, x- have withdrawn from offering coverage rays and consultations in order to back in Mississippi in the past five years. Ob-Gyn Sidney Bondurant of Grenada. up diagnoses. He also plans to drop vas- The source of this information is an HARRISON COUNTY (3): cular surgery in hopes that he will be HHS medical litigation report, March Family Practice physician Karen Mullen of able to find more affordable insurance. 3, 2003. Biloxi. ‘‘We’ve had trouble recruiting and Ob-Gyn Maria Moman of Gulfport. The source of this information is the Ob-Gyn Oney Raines of Gulport. Mississippi State Medical Association, had physicians say they are not inter- HINDS COUNTY (3): Dec. 1, 2002. ested in coming to Mississippi because Internist Bob Lewis of Wilkinson of the malpractice insurance rates,’’ Family Practice physician Charles Guess County spent a week treating patients according to Dean Griffin, executive of- of Jackson. Family Practice physician Wayne Johnson. at the local emergency room while his ficer of Baptist Memorial-Golden Tri- Ob-Gyn Beverly McMillan of Jackson. clinic was closed. The group could not angle Hospital. The source of this in- HOLMES COUNTY (1): find coverage and the only quote they formation is The Associated Press, could get was $355,000. The four-man Family Practice physician Charles Camp- March 20, 2003. bell. group paid $67,000 last year. Family A poster on the large wooden doors Practice physician Jennings Owens and leading into Delta OB/GYN explains it JACKSON COUNTY (2): his group serve nearly 40,000 patients. all: ‘‘It is with much regret that we Ob-Gyn Tom Singley of Pascagoula. Ob-Gyn Jack Hoover of Pascagoula. He is upset that the hospital had to must inform you that our office will be hire physicians in order to insure closed effective 7/14/02 until further no- JEFFERSON COUNTY (1): them. The source of this information is tice. Due to the current malpractice Family Practice physician Shanti Pansey the Mississippi State Medical Associa- crisis in the State of Mississippi, our li- of Fayette. tion, Dec. 1, 2002. ability insurance has been canceled.’’ LAMAR COUNTY (1): ER physician Bob Corken had to find The source of this information is the Family Practice physician Stephen insurance from Lloyd’s of London for American Medical News, Sept. 9, 2002. Harless. this ER group which services a hospital Mr. President, I ask unanimous con- LEAKE COUNTY (1): in Washington County and three others sent that the entire list of physicians Family Practice physician David Moody of in the Delta and Central Mississippi. who are no longer delivering babies in Carthage. Corken found insurance at the eleventh Mississippi be printed in the RECORD. LEE COUNTY (1): hour in order to avoid work stoppages There being no objection, the mate- Ob-Gyn Jack Kahlstorf of Tupelo. rial was ordered to be printed in the and temporary closure of at least one LEFLORE COUNTY (3): RECORD, as follows: emergency room. The source of this in- Ob-Gyn S. R. Evans of Greenwood. formation is the Mississippi State Med- PHYSICIANS NO LONGER DELIVERING BABIES Ob-Gyn Ed Meeks of Greenwood. ical Association, Dec. 1, 2002. WITHIN MISSISSIPPI Ob-Gyn Terry McMillin of Greenwood. Orthopaedic Surgeon Alan Swayze, Total: 54. OKTIBBEHA COUNTY (2): MD of McComb took on more patients ADAMS COUNTY (3): Family Practice physician L. H. Brandon last year than ever before—partly be- Ob-Gyn T.L Purvis of Natchez. of Starkville. Family Practice physician Dr. Ana cause there are few orthopaedic sur- Family Practice physician John Hollister. geons in the area. Now he is leaving Leurinda of Natchez. Family Practice physician Jody Nance of PANOLA COUNTY (1): Mississippi and opening a practice in Natchez. Ob-Gyn Purnima Purohit. Georgia because his liability insurance ALCORN COUNTY (1): to practice in Mississippi skyrocketed PEARL RIVER COUNTY (2): Family Physician Dr. Erica Noyes of Cor- Ob-Gyn Anthony Grieco of Picayune. to $125,000 per year. His premium in inth. Georgia will be $14,000 annually. The Ob-Gyn James Blount of Picayune. AMITE COUNTY (1): hospital administrator in McComb said RANKIN COUNTY (1): Family Practice physician Mutahhar Family Practice physician John Boone of the prospects of recruiting replacement Ahmed of Liberty. physicians to McComb is ‘‘bleak.’’ The Brandon. ATTALA COUNTY (4): source of this information is the Enter- SIMPSON COUNTY (2): Family Practice physician Tim Alford of Family Physician Dr. Sherry Meadows of prise Journal, June 12, 2003. Kosciusko. In April 2002, State Commissioner Family Practice physician Anson Mendenhall. George Dale said, ‘‘It’s just a matter of Thaggard of Kosciusko. Family Physician Dr. Terry Meadows of time until insurance companies will Family Practice physician Richard Carter Mendenhall. say they’re not going to cover medical of Kosciusko. SUNFLOWER COUNTY (1): providers in Mississippi.’’ That time Family Practice physician Stanley Family Practice physician W. L. Prichard has arrived. Dozens of insurers have ei- Hartness of Kosciusko. of Indianola. BOLIVAR COUNTY (3): ther discontinued writing medical mal- WARREN COUNTY (2): practice in Mississippi or raised their Family Practice physician Don Blackwood Family Practice physician John Ford. of Cleveland. Family Practice physician Lamar premiums to such a level that doc- Family Practice physician Bill McArthur McMillim. tors—like those at the Family Prac- of Cleveland. tice/After Hour Clinic—are being forced Family Practice physician Scott Nelson of WASHINGTON COUNTY (3): to consider relocating out of state. Ac- Cleveland. Ob-Gyn Dr. Elmertha Burton of Greenville. cording to a survey conducted recently COAHOMA COUNTY (1): Family Practice physician James Adams. by the Rating Division at the Mis- Ob-Gyn Dr. Joseph O. Sims of Clarksdale. Family Practice physician Hernando Payne. sissippi Insurance Department, 36 com- COPIAH COUNTY (1): panies offered medical malpractice in- Family Practice physician Fred McDonnell WILKINSON COUNTY (1): surance in all categories in 2000. As of of Hazlehurst. Family Practice physician James Leake of Sept. 10, there are only two licensed COVINGTON COUNTY (2): Centreville. regulated, companies still providing Family Practice physician Word Johnston WINSTON COUNTY (2): medical malpractice insurance to phy- of Mt. Olive. Ob-Gyn Glen Peters of Louisville.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00038 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3773 Family Physician Dr. DeWitt Crawford of to workers, or pursuing any number of vanced to the NCAA Sweet 16 and the Louisville. worthwhile business activities. Elite Eight in 19 of the last 23 years. Mr. LOTT. Mr. President, this is not This is legislation that cannot wait. Tennessee is making its third straight a short list. This is a lengthy list, with It needs to be passed this week. A pre- Final Four appearance, setting a new probably as many as 40 counties listed. vious temporary replacement rate ex- NCAA record with 15 such appearances. In Adams County, they lost three phy- pired January 1 of this year, 2004. Un- The win over Stanford in the 2004 Mid- sicians who had been delivering babies. less the Senate acts prior to the recess, west Regional final gave the Lady Vols Attala County, in the center of the by the end of this week, companies will their 14th 30-win season in Coach Pat State, lost four family practice physi- be required to make the first of their Summitt’s 30-year career at Tennessee. cians who had been doing deliveries; inflated contributions based on the This is an especially big game for the they got out of the practice. In Har- flawed interest rate on April 15, while Lady Vols seniors. During their 4-year rison County, one of our more metro- we are not here. So this is it; the last stint at Tennessee, they have yet to politan areas on the Gulf Coast, three opportunity to address this great in- clinch a national championship. They doctors got out of delivering babies. equity is this week. Again, these are did garner a No. 1 seed for a nation The list goes on and on. funds that companies could otherwise leading 16th time in 2004. Pretty soon it is going to be hard to use to create jobs, invest in new equip- It is the seniors’ outstanding play have a baby delivered in my State. ment, and provide raises to workers. that has blazed the trail to the 2004 That causes me a great deal of concern. I believe I am safe in saying that NCAA championship game. Senior Mr. President, I hope we can get the every Member of the body has heard Tasha Butts scored the winning basket votes tomorrow to proceed on this from his or her constituents about the at the buzzer in both games of the Mid- issue and have a full debate and a vote. need to solve this problem before April west regional. Senior LaToya Davis This is not some massive tort reform, 15. The House recognized the urgency scored with 1.6 seconds left in Sunday although I think we need it. I hope we of this matter and passed this con- night’s Final 4 matchup to keep Ten- will later visit the issue of class action ference agreement on a bipartisan vote nessee’s national championship hopes reform. of 336 to 69 last Friday. That was an alive. This is very targeted legislation that overwhelming bipartisan recognition Butts, Davis, and fellow senior Ash- will address a serious problem in many that this conference report needs to be- ley Robinson accounted for one-third of States—the majority of States across come law and needs to become law the team’s total production in the 2004 this country, where we are losing the now. It is critically important that the NCAA Tournament. They have attrib- services of these physicians in these Senate do the same and send this to uted 47 percent of Tennessee’s points, critical areas. I would hate to have to the President for his signature before 77 percent of its assists, and 39 percent explain to my State how I would not April 15. of its three-pointers. Together these even vote to proceed, let alone not vote We spend a lot of time talking about exceptional student athletes have pro- to have some limits on medical liabil- jobs and job security on the Senate duced 30 points, 21 rebounds, 10 assists, ity for doctors who deliver babies and floor, and we should be talking about 4 steals, and 3 blocked shots per game. Tennessee, although a perennial pow- treat their mothers and who care for us jobs and job security. This pensions erhouse, has not won a national title when we have accidents and go to the conference report is an opportunity to since 1998. Under the tutelage of a bas- emergency room. stop talking and start acting. We ought ketball living legend, combined with I think this is very carefully drafted to seize this opportunity and pass this the heart of the Lady Vols’ seniors, legislation, very thoughtful. I certainly very much needed legislation this Tennessee hopes to bring the glory of hope the Senate will see fit to proceed week. to a full debate and vote on this crit- I yield the floor. women’s basketball back to Rocky ical legislation. The PRESIDING OFFICER. The ma- Top. I wish both teams good luck tonight, I yield the floor. jority leader is recognized. The PRESIDING OFFICER. The Sen- Mr. FRIST. Mr. President, I ask and I hope to join the Tennessee Lady ator from Kentucky is recognized. unanimous consent to speak as in Vols at a White House victory celebra- tion later this year. Go Vols. PENSION FUNDING EQUITY ACT morning business for up to 5 minutes. The PRESIDING OFFICER. Without I yield the floor. Mr. MCCONNELL. Mr. President, I The PRESIDING OFFICER. The Sen- objection, it is so ordered. want to briefly address a conference re- ator from Tennessee. port that we will hopefully be voting UNIVERSITY OF TENNESSEE LADY VOLS Mr. ALEXANDER. Mr. President, are on in the Senate this week; that is, the Mr. FRIST. Mr. President, I see my we in morning business? conference report called the Pension colleague from Tennessee in the Cham- The PRESIDING OFFICER. We are Funding Equity Act. ber. I know shortly he will be address- not. The Senate is considering a mo- The House of Representatives passed ing the issue under consideration, that tion to proceed. this bill overwhelmingly last week. of medical liability. In seeing him, I Mr. ALEXANDER. Mr. President, I This is a bill that addresses the urgent did want to, for a couple of minutes, wish to respond to the majority lead- need to establish an appropriate inter- talk about a very important event that er’s comments, if I may. I, as a great est rate for determining pension plan will occur later this evening. many Americans, am going to be liabilities. The conference agreement The State of Tennessee, which both watching the Connecticut-Tennessee provides for a temporary replacement he and I represent, is once again at the basketball game tonight at 8:30 eastern only for the 30-year Treasury bond in height of March Madness. Congratula- time. determining the pension plan’s liabil- tions to the University of Tennessee Connecticut has a wonderful tradi- ities. Lady Vols, who will play for their sev- tion, a terrific coach, and great play- The Government stopped issuing this enth NCAA title tonight against a fa- ers. They have won the last couple of bond in 2001, and continuing to use this miliar foe, the University of Con- years. But the Naismith Coach of the outdated interest rate would require necticut Huskies. Year this year is Pat Summitt. For companies to make unnecessarily large Coach Pat Summitt has maintained a those of us in Tennessee, she is the contributions to the pension plans. championship basketball program at coach of the year every year. If this change is not made, the ad- the University of Tennessee for three Senator FRIST has mentioned her ministration estimates it will cost decades. This upcoming matchup, to be achievements as a coach, which I think American companies $80 billion over played in a few hours, will be the Ten- we must take for granted in Tennessee. the next 2 years. This is $80 billion over nessee native’s 102nd NCAA tour- We expect Pat Summitt to be in the the next 2 years, not the standard 10 nament game. Coach Pat Summitt has Final Four. We expect her team to be years by which we usually measure leg- led the team to an overall record of 851 in the finals. We expect her often to islation. wins and 166 losses in 30 seasons. win, and we sometimes forget how hard This is $80 billion that companies Under the watchful eye of the that is. could put to better use creating jobs, winningest coach in women’s basket- Twenty-five years ago, it might have purchasing equipment, providing raises ball history, the Lady Vols have ad- been easy when women’s basketball

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00039 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3774 CONGRESSIONAL RECORD — SENATE April 6, 2004 was starting. Today, there is a lot of being coach every year and for effort in cialists are available in the emergency parity. There are a good many great the incredible graduation rate of the rooms of this country and Tennessee to coaches. There are many teams in- young women who have played for her care for these patients. spired by Pat Summitt. It is an enor- and helping them grow into woman- In 2002, the average net medical li- mous accomplishment for Coach hood and to represent our State and ability premium for an OB/GYN in Ten- Summitt to have this team in the our country in that sport very well. nessee was $33,600. In 2003, the premium finals once again. One day, when she is Mr. President, if I may speak on an- was up to $41,980. In 2004, it increased finished—and I hope that is no time other subject, I come to the floor today again to $49,408. This is a 47-percent in- soon—I will look back and say how to express my concern, once again, crease in medical malpractice insur- could that have happened, and how with the rising cost of medical liability ance premiums over the past 3 years. much could one woman build this game insurance and what this means for pa- This is not sustainable over time if we and make such a difference? tient access to medical care in Ten- expect to have doctors, specialists in She does one other thing that I think nessee. This is a subject we have talked the hospitals, in the emergency rooms, is important to hear. This is a time about many times on this floor, and it to care for mothers and babies and the when we hear about athletes, which we is a subject I hear about often when I most vulnerable in our society. Two years ago, I met a young woman wish we hadn’t heard, young men and am in Tennessee. who had just graduated from the Uni- women suddenly exposed to fame, Last February, we debated this issue versity of Tennessee Medical School. money, and television with bad results. right here and, unfortunately, we were She was looking forward to going into You do not hear about many of Pat not even able to get to a vote on it. We her OB/GYN practice in a rural area of Summit’s young women. It was true a were not able to invoke cloture, we Tennessee. She told me her medical few years ago when I was president of were not able to vote on the issue of malpractice insurance premium 2 years the University of Tennessee that every medical liability insurance. ago was $70,000 a year and she had single young woman who completed Today we are limiting our debate to never delivered a baby in her practice. her eligibility at Tennessee on a Pat just this issue: the care for mothers I believe S. 2207, the Pregnancy and Summitt team has received her degree and babies and for anyone with an Trauma Care Access Protection Act, or is in the process of completing her emergency medical condition. That is will help protect access to care for degree requirements—every single one. all we are talking about in this legisla- mothers and babies and Tennesseans in That was true 10 years ago. I suspect it tion—mothers and babies and anyone emergency medical conditions. This is still true today. of any age with an emergency medical bill will still allow unlimited economic If you watch those young women condition. damages, but it places a sensible cap on when they are interviewed, before, These are the individuals who have non-economic damages. I hope we can after the game, or any other time, they the highest need for medical care in agree to have a vote to reach cloture look like future coaches. They speak our country, and the lack of access to on this important legislation. well. They conduct themselves well. that care can prove deadly. I often express my concern for fed- They are graceful toward their oppo- The increasing cost of medical liabil- eralism, for the importance of allowing nents. They make us proud to be Ten- ity insurance is creating a patient ac- States and local governments to exer- nesseans when we see them. So this cess crisis because doctors are leaving cise their rights and responsibilities team not only wins, its coach and play- the practice of medicine rather than and not be overridden by the Federal ers conduct themselves brilliantly as pay the high cost of medical mal- Government except when it is abso- scholars and as competitors, and they practice insurance. lutely necessary. In this case, this leg- bring out the best in our country. For example, in the Hardin County islation allows States to set their own Pat Summitt, I suppose, is not for General Hospital in Savannah, in west caps if they prefer a lower cap or if every young woman who wants to play Tennessee, the only OB/GYN doctor they prefer a higher cap. In this case, college basketball. She is a tough com- left the hospital to practice in another we ought to act because Americans petitor. I think that is one reason why State because Tennessee’s insurance should have an equal opportunity to she is such a good coach and why she premiums were too high. High medical health care, particularly if they are gets many of the greatest players. She liability insurance is one more reason mothers, children and the most vulner- and her staff bring out the best in play- it is difficult to recruit specialists to able and poor in our society. ers, and they want to play for Pat rural areas. I ask that the full Senate agree that we vote—be it up, or down, and I will Summitt. There are little girls around We need to make certain we ensure vote yes—on this important legislation this country who play basketball in access to good care in emergency to help those who need help the most. sixth, seventh, and eighth grade who rooms for all Americans, all Ten- dream of growing up to play for Pat I suggest the absence of a quorum. nesseans. Yet neurosurgeon Rick Boop The PRESIDING OFFICER (Mrs. Summitt. of Memphis, TN, wrote me to say: One other thing I would add. Pat DOLE). The clerk will call the roll. I have seen three children die recently of Summitt has kept her coaching team The legislative clerk proceeded to shunt malfunctions in emergency rooms call the roll. together for a long time. Mickie which did not have a neurosurgeon who Mr. GRASSLEY. Mr. President, I ask DeMoss, her assistant, left for the Uni- could perform procedures on children. All unanimous consent that the order for versity of Kentucky to take a well-de- neurosurgeons can provide a simple shunt re- the quorum call be rescinded. served head coaching position there. vision, but many are being forced to stop The PRESIDING OFFICER. Without Mickie DeMoss is a great recruiter and caring for children in order to retain or re- duce their liability premiums. objection, it is so ordered. will be a great head coach, I believe. Mr. GRASSLEY. Mr. President, I rise Many people thought when Mickey All three of these children died to continue to speak about the Foreign went to Kentucky, Pat would not be awaiting helicopter transport to a chil- Sales Corporation Extraterritorial In- able to recruit as well. I am sure the dren’s hospital— come Act that is before Congress that competitive urge in Pat Summitt Where there was a specialist who we call the JOBS and manufacturing caused her to go out and recruit what could perform that type of procedure. act. I wish to bring the Senate up to is already being called the ‘‘Fabulous More and more Americans are seek- date on the status of this not just as a 6,’’ the All America player of the year ing emergency room care. In Ten- jobs bill but as a major economic pol- for the last 2 years and five other nessee, for example, the number of icy legislation. young women who are coming to the emergency room visits increased by al- This, of course, is bipartisan legisla- University of Tennessee next year on most one-third, 31 percent, over a 3- tion. This is legislation that was de- scholarships. Many basketball analysts year period. The largest increase in signed to respond to the World Trade say it is the best women’s recruiting usage was among individuals in our Organization’s adverse ruling on a ben- class ever. TennCare program, our Medicaid pro- efit under the old law for U.S. export- Senator FRIST and I salute Coach Pat gram. These are the people who need ers and to bring our law into con- Summitt, not just for being Coach of the most help, our poorest people in formity with that World Trade Organi- the Year this year, but, in our book, for Tennessee. We need to make sure spe- zation ruling, but to do it in a way that

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00040 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3775 actually creates jobs in America and questioned the wisdom of the founda- agenda. There is, however, a reflective emphasizes domestic manufacturing so tion of this bill—the tax deduction for responsibility on the part of the minor- American manufacturers are going to domestic manufacturers. That Member ity leadership and its members where benefit from this legislation on what took to task, as he said, the authors of the legislative item is a bipartisan they do in the United States, not what the legislation. product. That seems to me to be a re- they do overseas. I wonder if that Member bothered to sponsibility to be constructive. It is ir- Foreign corporations that come into check to see the authors were also Re- responsible then for minority leader- the United States are going to benefit publicans and Democrats on the Senate ship and members of the minority to under this legislation as long as they Finance Committee. In fact, every obstruct a consensus item. set up plants and manufacture in the member of the Senate Finance Com- It is the height of irresponsibility to United States. This bill has an acro- mittee who is a Democrat voted for obstruct and delay when the item is a nym, J-O-B-S, and it is truly jobs-cre- this bill to come out of committee. bipartisan compelling matter such as ating legislation. In any event, with the exceptions this bill is. It is simple. Is the United We have problems with this now be- noted—meaning one Democrat plus States going to abide by international cause some people who even support Senator KYL and Senator NICKLES, agreements we have already approved this legislation want to stall it so they also—there is general agreement on in this Senate? can use it as a vehicle for getting some both sides that we need to replace cur- It is our responsibility to set an ex- of their pet projects through the Sen- rent law with a manufacturing benefit ample for the rest of the world because ate. When everybody is saying, and which will agree with the General we are outstanding in exemplifying the rightly so, that we have not created Agreement on Tariffs and Trade, the rule of law and the protection of indi- enough jobs in manufacturing and we international agreement that decides vidual freedoms. Some people might have a bill before the Senate that will the rules of trade. say we ought to give that notoriety to do it, I do not know why anybody Conversely, I have not heard anyone England because our law comes from would want to hold this bill up, but say it is wise to sit idly by while our England. But I think you would all there is a playing of politics and, in my exports get hit with tariffs put on our agree when it comes to individual free- view, then when one plays politics, the products in a legal way by Europe, dom we have even advanced beyond people’s business is neglected. causing our products to be uncompeti- England. First, there is a lot in this bill on tive. Are we going to have a constructive which we all agree: The tax benefit I In general, both sides agree we need approach to this legislation? I have to refer to is the foreign sales corporation to deal with this tariff problem. We say to my fellow Senators: It is in our extraterritorial income benefit. That need to deal with this adverse World hands. Either we can continue to play benefit provides a roughly 5-percent Trade Organization ruling. Both sides these political games or we can do the corporate rate tax cut for U.S. export- agree we have a responsibility to re- job we were elected to do. ers of manufactured products. move the tariffs against our exports. Some have said something such as we As everyone knows, there is a dis- But yet there doesn’t seem to be agree- will take a limited time on amend- turbing economic statistic about U.S. ment it should have been done yester- ments. That misses the point. The manufacturing and that was that there day. It is OK if it is done down the road point is the majority is led by Senator was a downturn in the manufacturing in another 6 months when we have an- FRIST. We have all played this game index starting March of 2000. I empha- other 6 percent tariff put on. At least straight. The majority amendments to size that because everybody thinks this that appears to me to be the way some this bill have improved the bill in ways recession started under President people are acting. that will get even more votes for it. All Bush, but if one looks at the manufac- If we agree on the problem and on the those amendments we have offered turing index, they would find the man- substance of this bill, why can’t the job have been bipartisan. ufacturing index started to turn down be done? Why can’t this bill get to the For example, the Hatch-Murray March of 2000. It just now has bottomed President? It appears to me the two amendment on research and develop- out and it is just now that it looks as sides disagree on the outcome for this ment credit and the Bunning-Stabenow if there is going to be an increase in bill. amendment on accelerating the manu- hiring in manufacturing. I think dealing with this bill goes to facturing deduction—you recognize Fortunately, with the tax relief in the heart of our responsibility as a those Senators’ names immediately place in this bill and with other stimu- Senate. We take an oath to uphold the and know there is one Democrat and lative measures that have been passed Constitution. The Constitution pro- one Republican. That is the way things last year, manufacturing has come vides Senators with a unique power get done in the Senate. back. Unfortunately, manufacturing somewhat different than in the House The Democratic leadership has taken employment has not come back to pre- of Representatives. That unique power this bipartisan bill and turned it into a vious levels, and that is what this bill also carries unique responsibilities. political football. deals with. Both sides, meaning both Where there is a compelling public pol- We have an amendment on overtime Democrat and Republican, agree there icy problem and there is a consensus that was previously voted on and that is a problem with the loss of manufac- around the legislation that solves that is a sticking point. turing jobs. Both sides also agree that problem, it is our responsibility as Sen- There are other showstoppers the loss of this previous benefit will re- ators to do everything in our power to planned by the Democratic leadership. sult in a tax increase on U.S. manufac- make it happen. In this case, you have one side—the turers. Following the simple rules of Said another way: If we have a bill majority—using the power of setting Economics 101, if something is taxed before the Senate that is going to pass the agenda in a constructive way. I de- higher, there is less of it. the Senate 90–10, or by a wider margin fine that constructive way as bipar- There is some dissent on my side of than that, and there is an agreement it tisan because nothing gets done in the the aisle, the Republican side, which I ought to be done, why doesn’t it get Senate that is not bipartisan. want to mention so that I am candid in done? Then you have the other side—the not everybody who opposes this bill is We all know the Senate is an institu- Democratic side—using its power of on the Democrat side. tion that renders easily to gridlock and amendments and the power of delay We have Senator KYL and Senator to delay. I suppose we would have to solely for politically destructive pur- NICKLES, as an example. They are Re- blame our Founding Fathers because poses. publicans. They question the wisdom of they contemplated a Senate where the That imbalance can’t last for long. If the current law benefit. majority would set the agenda and the it does last for long, the Senate is I was also surprised to hear last week minority defines its agenda with brought to a halt. It is kind of like the that one Member from the other side— amendments and debate. Those powers law of physics. For every action there quite a liberal Member, as a matter of of delay and obstruction are properly is a reaction. fact—in effect agreed with Senator KYL resorted to when the majority is ram- There shouldn’t be this kind of ten- and Senator NICKLES. That Member ming something through on a partisan sion on a must-do—in other words, a

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00041 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3776 CONGRESSIONAL RECORD — SENATE April 6, 2004 must-pass—bipartisan bill. When it is tisan amendments. They are amend- licans went to Philadelphia for our re- this way on a must-pass bipartisan bill, ments that have improved the bill. treat in January to make our plans for something is out of whack. Repub- Who can argue with the domestic job this year, told me. I want to move this licans will eventually be fed up with benefit extended by the research and JOBS bill; do not let the Republicans the gamesmanship on the other side. It development credit? That was a bipar- include this JOBS bill in the reconcili- will mean the Republican political tisan bill. Who can argue with enhanc- ation because reconciliation is obnox- amendments—those which the Demo- ing the manufacturing deduction? That ious to the bipartisanship of the Sen- crats do not like—are going to be was a bipartisan amendment. Demo- ate. It is obnoxious to the minority. brought up because for every action cratic Members were accommodated in When we were making our plans in there is a reaction. That is going to the committee and on the floor with a Philadelphia, my colleagues responded lead to a vicious circle and this bipar- managers’ package. Senator BAUCUS to that request from my Democrat tisan bill will be more bogged down and I developed that package shoulder ranking Member and we did not include than it is presently. to shoulder. this bill in the process of reconcili- Another route Republicans could The latest version includes the bipar- ation. It happens that my view was not take is to switch to an agenda item tisan package of energy tax incentives shared by the House leadership or even that is not like this one. It would be a approved by the Senate Finance Com- by the Senate leadership or by the bill that has heavy political overtones. mittee last year for farmers in the Mid- White House. I took the position in It would not be as compelling as this west, the South, timber harvesters in leadership meetings and in the Senate bill. It probably wouldn’t necessarily the Northwest, or wind farms across Budget Committee Republican caucus be a must-pass bill. the country. This package is going to deliberations that the Democratic Again, if we were to do that, the vic- produce and create jobs. This package leadership would not politicize this tim would be this very good must-pass has twice passed the Senate without bill; we would get it passed. bipartisan bill. dissent. I was ambushed on March 3rd. In From the Republican side, let me say For all the Senators from my region fact, it looks like I was wrong and oth- to every Democrat, we don’t want to go and other places who said they could ers were right. that way. We will do everything we can not support cloture on the Energy bill So we have a second goalpost here. It to avoid going that way. last winter because of the MTBE issue, was the amendment of my colleague Maybe the Democratic leadership here is your chance to vote for an en- from Iowa on overtime. It did not mat- thinks a designed plan to deter us from ergy bill that does not have anything ter that we had voted on that amend- taking care of the people’s business is to do with MTBE. Members do not have ment previously. It did not matter that good politics. Blame the Republicans, to worry about your personal injury the amendment dealt with proposed— they may be thinking. They may be lawyer friends calling upon you to not final, proposed—Department of thinking: We have a liberal press, we fight the MTBE thing because they Labor regulations. No, none of that can get away with it. They will protect want to protect their own income. mattered. That amendment was and us. They do all the time, anyway. It is Members do not have to worry about still is a showstopper to this bipartisan kind of an encouragement. Maybe they offending them. That is not in this bill. bill that everyone agrees ought to pass think it is more important than actu- Members got a chance to vote an en- the Senate. When it comes to a final ally helping the workers which this bill ergy bill they wanted. vote, it will pass overwhelmingly. will help; and the U.S. businesses that This maneuvering bothers me. So I We are now at that second goalpost. are at risk because of this Euro tax; in brought along a chart that draws from The demands of the Democratic leader- other words, the European tariff on our a favorite activity in the Midwest. I am ship still change. We were talking products going from the United States talking about a game of football. The about a single-digit list of amend- to Europe. gridiron does not necessarily have any- ments. Not anymore. Now that it looks It isn’t that simple. There will be ac- thing to do with the gridlock that is like an overtime vote may be in the countability. There has always been in occurring on this bill, but it illustrates picture, there is a goalpost yet farther the case of cloture votes. We don’t the problems we have. away. For the first time, we are hear- want to go the route of a cloture vote. This JOBS bill is very near the Sen- ing of other amendments not even in None of us want to go there again. But ate goalline. Unfortunately, politics is the jurisdiction of the Finance Com- we could go there again. There is a pe- driving the Democratic leadership to mittee, such as an increase in the min- tition on file. The American people ex- move the goalposts. When we came imum wage, another showstopper. We pect us to do our jobs and not play pol- into session in January, Senator FRIST cannot finish the bill, we are told, even itics. was criticized by the Democratic lead- though we are told the substance is I have talked about our responsi- ership for not moving to the JOBS bill great. This is the greatest bill since bility as Senators. Let me put it in the right away. At that time, the goalpost sliced bread is the opinion of people all context in my role as chairman of the was very clear, very close, right there over the Senate. But we cannot finish Senate Finance Committee. Thanks to where it always is on the football field. the bill because of this new goalpost. the good people of Iowa, I have senior- That was in January. Heaven help us how that might turn ity to chair the oldest standing com- After we finished the highway bill out. mittee in the Senate, the Finance and a couple of other things, Senator There is a final goalpost out there. It Committee. I am pleased to work with FRIST attempted to move the jobs in is way, way out there, as you can see. my friend, our ranking Democratic manufacturing bill. Much to my sur- It is getting to conference. We may member, Senator BAUCUS. Not to toot prise, we were ambushed by the Demo- move through all of these goalposts but our horns too much, but I am proud of cratic leadership with unrelated then be blocked from going to con- our committee. We respond to big, amendments. I thought I had an under- ference because the Democrats have tough issues in a businesslike, profes- standing as floor manager. That under- decided they should never agree to go sional manner. We do not always agree, standing was we were going to do to conference on a bill unless they can but most of the time we do agree. amendments first that were related to dictate the outcome. Effectively, that From my view, this foreign sales cor- the bill and then move to other amend- does not just shut down the Senate; poration replacement bill has been ments. That agreement was not carried that shuts down the whole Congress. handled in the best bipartisan tradition out. Now, let me ask you: Is this any way of our Finance Committee. Senator From my standpoint, this was an un- to legislate? Is this a proper exercise of BAUCUS and I developed this bill as fortunate event. In budget discussions, leadership? Is this right when jobs are partners. All Democrats, even Senators I made clear I opposed putting this on the line and people back home ex- Daschle and Kerry, participated in and JOBS bill in the reconciliation package pect us to move consensus legislation? supported this bill out of the Finance because I had assurances that the You have to wonder: Is all this obstruc- Committee. They are Members of this Democratic leadership wanted the bill tion really worth it? committee. All of the amendments I passed. In fact, my ranking Member, Now, my sense is, the political imper- put up for this bill have been bipar- Senator BAUCUS, 2 days before Repub- ative of stopping this bipartisan bill is

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00042 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3777 very strong. It seems the Democratic Ms. COLLINS. Madam President, I apply are not regulations developed for leadership is so fearful or resistant to ask unanimous consent that the order the Internet, broadband, or a voice- getting a bipartisan JOBS bill to the for the quorum call be rescinded. over-Internet-protocol application. President’s desk that they are going to The PRESIDING OFFICER. Without They are really designed for a copper do anything to block it. Just keep objection, it is so ordered. wire circuit switch telephone network moving the goalposts; pretty soon you Ms. COLLINS. Madam President, I that was invented 100 years ago and for will not see them. I think the record ask unanimous consent to proceed as which most of these State regulations reflects this view I have that somehow in morning business for not to exceed were developed in the 1930s, 1940s, and there can be no JOBS bill that gets to 12 minutes. 1950s. It is an outdated system and we the President of the United States. The PRESIDING OFFICER. Without should not be trying to force old regu- objection, it is so ordered. Now, do you know what I would be latory structures on this new tech- (The remarks of Ms. COLLINS per- willing to do? If there is something nology. with the title of this bill, called a taining to the introduction of S. 2288 JOBS bill, that is obnoxious to the mi- are printed in today’s RECORD under Third, the VOIP Regulatory Freedom nority, because it might make a Re- ‘‘Statements on introduced bills and Act of 2004 that I have introduced will publican President look good, well, I joint resolutions.’’) clarify the definition for information will change the name of it. You guys The PRESIDING OFFICER (Mr. FITZ- services, for VOIP applications, in a name this bill. It is OK with me. The GERALD). The Senator from New Hamp- way that can be easily understood title has nothing to do with the sub- shire. given new and emerging technologies. Mr. SUNUNU. I ask unanimous con- stance of it in the sense of legislative I was not in Congress at the time, but sent that I be allowed to speak for 5 dominance, but we try to say, in the Congress wrote the 1996 Telecommuni- title of a bill, what we are intending to minutes as in morning business, and I further ask consent that immediately cations Act that talked about informa- accomplish. What we are intending to tion services and telecommunications. accomplish in this jobs in manufac- after my remarks Senator HARKIN be recognized. Quite frankly, it did not envision these turing bill is to stop this outsourcing kinds of voice applications being of- that you hear so much about, to create The PRESIDING OFFICER. Without objection, it is so ordered. fered over the public Internet or over jobs in manufacturing in America, and private networks. So as a result, we not just jobs but good jobs, because VOICE OVER INTERNET PROTOCOL REGULATORY RELIEF ACT have had lawsuits, not surprisingly. In manufacturing jobs that are related to Mr. SUNUNU. Madam President, I America, if one is unsure of what is exports pay 15 percent above the na- rise to speak today on legislation I in- happening, if one does not like the law, tional average. They are good jobs. get a lawyer and sue, but we have had I have predicted they cannot let this troduced this week called the VOIP Regulatory Freedom Act of 2004. This lawsuits because of the lack of clarity bill get to the President of the United in some of these definitions. My bill States for political reasons. I hope I am is legislation that deals with the issue of voice communications sent using would clarify the definition of voice- proven wrong in the next few days. But over-Internet-protocol. It states clear- I can say this: It is time to get the job Internet protocol that many Members of this body may not be familiar with ly what it is and what it is not from a done. In a few days, I hope we can move regulatory perspective, and then treats back and pass this jobs in manufac- or may not have heard a great deal it much like we would any other infor- turing legislation. It is, in fact, a bi- about; but it is a new technology that mation service that uses Internet pro- partisan piece of legislation. It is, in takes advantage of the growing tocol, whether it is an e-mail, an in- fact, a piece of legislation that de- broadband networks that are in place stant message, or sending other data serves better treatment than it has re- in this country to send voice messages, over the Internet. ceived so far. much the same as one might send an e- So tomorrow I hope, for all these rea- mail or an instant message. It is a This bill does address a lot of key sons, particularly the reasons I gave growing area of technology and innova- concerns regarding telecommuni- earlier this afternoon—that there are tion, but it is one where there is not a cations and the old telephone circuit so many amendments that have been very clear path regarding regulatory switch telephone network. The bill added to this bill at the request of and taxing jurisdiction, and there are makes sure that voice-over-Internet- Democrats and Republicans alike, but I not a lot of laws on the books that protocol providers participate in exist- emphasize the Democrats—they have clearly address this new technology. ing Federal universal service programs. something in this bill they have asked In order to encourage continued in- In other areas, such as E–911 emer- for. They have asked for me to consider vestment in and continued use of this gency calling, and disability access, it. If they do not vote to stop debate application and this system for sending the bill calls for an industry group to tomorrow, to move on this legislation, voice traffic and in order to make sure work out the implementation of these get it to the President, why did they consumers continue to have the bene- important features for the new tech- come to me in the first place and ask fits of lower costs, new features, and nology. S. 2281 will make sure we do me to put their favorite piece of legis- better service that is the potential of not apply the old access charges to this lation in this bill? this technology, I have introduced leg- new technology. We put forward a re- It is all good legislation. I do not find islation this week. quirement for the FCC to work out a First and foremost, S. 2281 declares fault with the people who have asked new system for intercarrier compensa- this is a technology that uses national me to do it. It is all good public policy. tion and, of course, we recognize law and global broadband data networks, But, also, it was not something real enforcement will need access to these the Internet, that we have all read and pertinent to the primary purpose of new voice-over-Internet-protocol appli- heard so much about by this point in this legislation. But we are helping cations and state it has to be the same time. It recognizes these are inter- them get their bill passed by cooper- or better access but no less than the national networks, global networks, ating with them. I would like a little access available for information serv- and therefore we should have Federal cooperation in return. I would like to ices that currently exist today. have all the Members who we have jurisdiction in this area. tried to accommodate—both Repub- Second, it takes the step of pre- Finally, the bill protects consumers lican and Democrat—vote to stop de- empting States from regulating in this by ensuring that this new service won’t bate and move on to final passage of area, the area related to voice-over- be taxed at the State level. Everyone this bill, so we can create jobs in man- Internet-protocol applications, because knows the more you tax something the ufacturing. what we do not need is a patchwork of less you get. If you want to discourage I yield the floor and suggest the ab- 50 different sets of regulations that investment, innovation, and capital sence of a quorum. would stifle the innovation, the invest- from moving into important new serv- The PRESIDING OFFICER. The ment, and the productivity we all hope ices like this, then raise the taxes and clerk will call the roll. will come from this technology. discourage that investment. From my The assistant legislative clerk pro- Even worse, the regulations some perspective, this would be the wrong ceeded to call the roll. States have already begun to try to direction.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00043 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3778 CONGRESSIONAL RECORD — SENATE April 6, 2004 I think this bill provides for enor- last 3 years unlike anything we have I said at that time in January I was mous opportunity for consumers, in- seen in 70 years. going to find any vehicle I could to try cluding robust features and functions, This chart shows that not since the to revisit this issue because the Con- more options, and lower prices. Great Depression have we had a loss of gress had spoken; that we did not want It is important to note that we have jobs for any President during his first these rules to go into effect which narrowly tailored this bill to deal with term—some more than others, but we would take away the rights of up to 8 the voice-over-Internet-protocol appli- have always had a positive indication million American workers to get paid cations. It should be clear that is not of job creation. time-and-a-half overtime if they an effort to rewrite the 1996 Tele- It is interesting to note that most of worked over 40 hours a week. communications Act. these took place under Democratic ad- The first bill I could do this on was I urge my colleagues to take a look ministrations—Roosevelt, Truman, and the FSC bill, which was brought out by at the legislation and step forward. Let Eisenhower had a little bit but still the Finance Committee to the floor. me know your views and thoughts. We had some; Kennedy, we had good job They termed it a jobs bill. are likely to have hearings on this bill creation; Johnson, very healthy job I pointed out then, and I point out in the Commerce Committee in the creation; even under Nixon, pretty again today: How can you have a mean- coming months. I look forward to a good; Ford, back down; Carter; even ingful jobs bill on the floor of the Sen- vigorous and substantive debate. under Reagan; Bush, it is down; Clin- ate if we are not going to speak about ECONOMIC MALPRACTICE ton, up a little bit more. All positive, it, debate it, and vote on whether we Mr. HARKIN. Mr. President, before Republicans and Democrats, until this are going to take away the rights of us right now is a motion to proceed to President, the only President in 70 people in this country to get paid time what is called the medical malpractice years to have negative job growth. and a half for over 40 hours a week? Yet bill, for short. In fact, that is what it That is why I call it the economic that is what happened. I offered the is—to change the tort system in Amer- malpractice of the Bush administra- amendment. The majority will not per- ica to take away the right of any per- tion—the only President in all of those mit a vote on it. They tried all kinds of son who has been injured to seek re- years to preside over negative job parliamentary maneuvers, tactics, re- dress in court for noneconomic dam- growth in our country. commits, all kinds of funny parliamen- ages and also for punitive damages. It Not only are we not discussing on the tary games just to keep us from voting is called the medical malpractice bill. Senate floor these issues pertaining to on it. We have had it here a number of times workers, but we are precluded by the I don’t know what they are so afraid before. It is not going anywhere be- majority from even offering amend- of. Are they afraid members of the cause it is not a true compromise. ments and getting a vote on them. President’s own party might vote to There may be a compromise that could I tried earlier on the so-called FSC say those rules shouldn’t go into ef- be worked out on this issue, but this bill that everyone talks about, the so- fect? They did last summer. I com- bill represents a one-sided view. It is called JOBS bill they had here, to offer pliment them for it. That is courage. I not going anywhere. The Republicans my amendment to disallow the promul- know the President and his Depart- know this. They know it is not going gation of proposed rules that would ment of Labor want to drastically anywhere, but they brought it up. change the overtime laws in our coun- change our overtime laws. They want I thought the FSC bill—the JOBS try. to do it through the regulatory proc- bill—which they brought up earlier was Last year, to refresh everyone’s ess—not through the legislative proc- a must-do bill. There was a jobs bill. memory, about this time—a year and a ess. They are going to put people to work. month ago, as a matter of fact—the De- Quite frankly, the Bush administra- Yet it languishes somewhere. partment of Labor came out with a tion thought they could put these new In the meantime, we brought up the proposed change in overtime rules. rules into effect quietly with no hear- TANF bill. Now we brought up the The Fair Labor Standards Act has ings before anyone knew what was medical malpractice bill. been in existence since 1938. We have going on. But they were wrong. They It makes you wonder what the prior- had changes in basic overtime laws. got caught with their hand in the cook- ities are of the majority party in the But in every single case, when it has ie jar. Senate. There is a lot of talk about been done, it has always been done The fact is, public outrage over the who is obstructing what around here. with consultation with Congress after proposed new overtime rules has gotten But I think it is clear to any casual ob- open hearings with the public having stronger and stronger as Americans server that the majority is basically input. learn more about the details. At this kind of filibustering their own bills, ob- These proposed rules came like a bolt point, the administration has about as structing their own bills. And some- of lightning in the midnight hour. No much credibility on the issue of over- times, as in the case of the gun bill public hearings were held. Not one pub- time as they do on the weapons of mass that was up before us a few weeks ago, lic hearing was held on these proposed destruction in Iraq. In other words, the the Republican majority even voted changes in overtime rules. No hearings administration has zero credibility on against its own bill. But it chews up a were held by Congress. No witnesses this issue. lot of time. It takes up a lot of time on were called to talk about what these The Department of Labor claims it the Senate floor, but nothing goes any- proposed changes might mean in the simply wants to give employers clearer where. workplace. They just put the rules out guidance as to who is eligible for over- That is what we are facing again there. time pay. But ordinary Americans are with this so-called medical malpractice Now the Department of Labor is not buying this happy talk. They know bill, or the motion to proceed to it. The about to issue its permanent change in the administration is proposing a rad- majority party knows it is not going regulations. ical rewrite of the Nation’s overtime anywhere. So they want to talk about That is why last summer this Sen- rules. American workers know these medical malpractice. There has been a ator offered an amendment on the Sen- new rules will strip them of their right few speakers on the floor today on the ate floor to disallow these rules from to fair compensation. So we will con- Republican side talking about medical going into effect. The Senate adopted tinue to press for a vote on this and on malpractice. my amendment on a bipartisan vote. a couple of other issues. I think what the country wants us to We had quite a few Republicans vote Last week on the TANF bill, the tem- focus on and wants to hear us debate for it. The House of Representatives porary assistance to needy families, and discuss and vote on is the eco- then voted to instruct its conferees to Senator BOXER of California offered the nomic malpractice of the Bush admin- go along with the Senate on that provi- amendment to raise the minimum istration. That is right, the economic sion. That was on the appropriations wage, now at $5.15 an hour, to $7 an malpractice of the Bush administra- bill. The White House came in and got hour over 2 years. The majority will tion. it knocked out. Then we were forced to not vote on that, either. So that bill I mean by that the fact we have had vote on the appropriations bill without has gone by the wayside, too, because a loss in jobs in this country over the that provision in it. they do not want to face the music and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00044 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3779 vote on whether we increase the min- store in Albuquerque. He was stunned Three, you extend benefits for the long- imum wage. Mr. President, $5.15 is the by what he found his manager doing. term unemployed, again, who, by ne- minimum wage now—mostly women, . . . his manager was sitting at a computer cessity, are spending every dollar they heads of households with children. and altering workers’ time records, secretly receive. Four, you pass a highway bill I point out again, since 1967, if the deleting hours to cut their paychecks and that is as generous as possible. minimum wage had just kept pace with fatten his store’s bottom line. We need to rebuild our Interstate inflation, the minimum wage would be ‘‘I told him, ‘That’s not exactly legal,’ ’’ Highway System in this country. Take said Mr. Pooters, who ran the electronics de- a drive on any one of them. They are over $8 an hour right now. Yet we are partment. Then he out-and-out threatened only asking for $7 an hour. me to not talk about what I saw. beat up. They are disintegrating. They I wonder what the hue and cry would are a patchwork here and there. They Mr. Pooters quit. Then he got a job be in this country if we had indexed are causing delays in trucking. They managing a Family Dollar store, one of CEO compensation the way we indexed are beating up our cars and taking 5,100 in that discount chain. Top man- the minimum wage increases since away from the productivity of Amer- agers there ordered him not to let em- 1968. We would probably be better off in ica. Our bridges need to be replaced. ployee total hours exceed a certain this country, to tell you the truth. Sewer and water systems need to be amount each week. One day he said the So we tried to bring up a minimum upgraded. wage increase. We tried to stop these district manager told him to use a These are good jobs. These are jobs rules on overtime from going into ef- trick to cut payroll, delete some hours that employ Americans. When you fect to strip people of their overtime. electronically. think about construction jobs in this Experts on compensation say the ille- We have tried to increase unemploy- country, that is what I call insourcing gal doctoring of hourly employees’ ment compensation, to get more unem- jobs rather than outsourcing jobs be- time records is far more prevalent than ployment compensation to workers cause, you see, if you are building a most Americans believe. The practice, whose unemployment benefits had run bridge or a highway, a sewer and water called ‘‘shaving time,’’ is easily done out. There are 1.1 million workers this system, or maybe a new school, when and hard to detect with the simple last week who lost their unemploy- you think about it, most of the prod- matter of computer keystrokes. ment benefits because of time running ucts are made in America. Think about I earlier had this article printed in out. We want to extend that. The ma- it. The cement is made here. The the RECORD. jority will not let us. The article revealed in Toys ‘‘R’’ Us, rebars, the rerods, and all that for con- The administration is all for an eco- in Dollar Stores, Taco Bell, Pep Boys, struction are made here. When you put nomic stimulus when it involves tax Wal-Mart employees, et cetera, work- up a building, you put up wallboard. breaks for people making more than ers are basically being cheated out of That is made here—and electrical wir- $200,000 a year. When it comes to eco- their fair compensation. Many are ing, electrical conduits, electrical nomic stimulus involving raising the being cheated out of overtime. switches, electrical lights, plumbing. income of people at the bottom of the Here is what the Wall Street Journal When you think about all that goes economic ladder, whether by increasing article said about this: into construction, most—the vast ma- the minimum wage or creating jobs di- jority—of the products are made in this rectly, which is what the highway bill While employees like overtime pay, a lot of employers don’t. Violations are so com- country. will do, the President is even threat- mon that the Employer Policy Foundation, Guess what else. All of the labor done ening to veto the highway bill. an employer-supported think tank in Wash- is here in America. You do not We passed a bipartisan highway bill ington, estimates that workers would get an outsource those jobs. Those are Amer- in the Senate. The House passed some- additional $199 billion a year if the rules ican jobs. What do you get out of it? thing substantially less. The President were observed. That estimate is considered You put a lot of people to work. You has threatened to veto that. Actually, conservative by many researchers. improve the productivity of America. the House bill for my own State of American workers are being cheated You get a lasting benefit of things that Iowa would mean 12,000 jobs less than out of over $199 billion a year by un- last for a long time, and that helps us that passed by the Senate. Yet the scrupulous employers. be a more productive and vibrant Na- President has threatened to veto even Here we have the Department of tion. the House version. Labor legally—trying to do it legally— It seems we can spend billions of dol- There is a frustration among Amer- taking away workers’ rights to over- lars in Iraq and Afghanistan to rebuild ican workers right now. They know time pay. The Steven Greenhouse arti- those countries. We need to invest they are working harder. They know cle in the New York Times showed on money like that here in America. For they are working longer. But some- Sunday there is a rampage in this every $1 billion spent on these projects, thing is wrong. They are not getting country of illegal activities taking we sustain or create more than 47,000 adequate compensation. As this chart away workers’ rights to their adequate jobs for American workers. That is the indicates American workers are work- pay. Why isn’t the Department of direction we ought to be going, rather ing longer hours per year than workers Labor focusing its time and energy in than more tax cuts for those who make in any other industrialized country. In going after these unscrupulous employ- over $200,000 a year. fact, since 1979, every single industrial ers, making an example of them so oth- I do not have it with me, but I saw a country has reduced its work hours ex- ers will not be encouraged to do the cartoon in the paper today that I cept one, the United States. In Japan, same thing rather than trying to le- thought said it all. There was a gaso- since 1979, they have gone down 286 gally take away workers’ rights to line pump, with gas that cost about hours a year. Germany has gone down overtime? $1.90 a gallon. This American worker 489 hours per year. Even Canada went That is why I say this Bush adminis- had obviously just filled his tank, and down 31 hours a year. Australia went tration is committing economic mal- he was up at the window paying. In down 44 hours per year. But the United practice. back of the window sat what looked States went up an average of 32 hours You do not have to be from Iowa to like one of the Saudi Arabian princes per year. We are the only country in- know that you do not fertilize a tree saying, ‘‘Thank you,’’ and taking our creasing the number of hours worked from the top down. You fertilize the American worker’s money. The caption per year. roots. That is how we need to stimu- below it was: There goes the tax cut. Not only that, as we found out ear- late the American economy, by apply- How many American workers, who lier—I quoted the New York Times ing stimulus directly to the roots. are told by this President they got a Sunday article by Steven Greenhouse— There are obvious ways to do this. One, tax cut for this or that, are now seeing unscrupulous businesses in America instead of tax cuts for the wealthy, you it go to pay for imported oil, to pay for are cheating people out of their over- focus tax cuts on working people. Sec- the increased price of gasoline because time. I may not have mentioned a guy ondly, you increase the minimum this administration will not take their by the name of Drew Pooters, retired wage. You put more money in the friends in Saudi Arabia to task to keep member of the Air Force military po- pockets of hard-working people who, by these prices low, will not let some of lice. He went to work in a Toys ‘‘R’’ Us necessity, have to spend every penny. the oil out of our Strategic Oil Reserve

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00045 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3780 CONGRESSIONAL RECORD — SENATE April 6, 2004 right now to counter these increased with kids to feed, who is being cheated close to $67,000. That is what your OB/ prices? So we find whatever little out of her overtime pay; when you are GYN doctor has to pay before he or she money the worker may have gotten in talking about a family whose unem- can even think about delivering your a tax cut going to pay for the increased ployment benefits have run out, and baby. That is the cost we have driven price of gasoline. Again, economic mal- they do not know where to turn, it is up. practice, economic malpractice by this not political. It is just focusing on the My colleague from Iowa talked about administration. real needs of America—our working the large number of people who can’t So we can go to the medical mal- families—and not focusing on giving afford health insurance. This is one of practice bill. Quite frankly, again, we yet more tax breaks to those who al- the reasons they can’t afford health in- are focusing on medical malpractice ready have too much in our society. surance. We have so driven up the cost and whether someone can sue for dam- Mr. President, I will close my re- of practicing medicine and the cost of ages, and this and that. While there marks—I see others want the floor—to health care by virtue of this broken may be a reasonable compromise on say we will be back. I do not like to tort system that a lot of people can’t this issue at some point, this bill is not quote too much the present Governor afford insurance and, in fact, employ- it. But I wonder—I truly wonder—how of California but: I’ll be back. ers can’t afford to provide insurance many of the 43 million Americans who Time and time again, I will be back for them. Let’s do something about it. have no health insurance coverage to offer this overtime amendment, This legislation does something about whatsoever would think this is the until we have a vote on it, and until we it. major health care issue that we ought can express ourselves on these onerous I would like to share the account of to be debating and voting on in the rules that the Department of Labor a physician in Paradise Valley, AZ, a Senate Chamber. They are not inter- wants to foist on the American worker. woman with whom I spoke about 3 or 4 ested in medical malpractice or suing. Mr. President, I yield the floor. weeks ago who told me the story of her They just need health insurance. They The PRESIDING OFFICER. The Sen- desire from the time she was a preteen need coverage for themselves and their ator from Arizona. to deliver babies and how she worked families. Here we are talking about Mr. KYL. Mr. President, tomorrow hard all through school to get good lawsuits, when what we ought to be we will cast an important vote for our grades so she could go to medical talking about is how we are going to constituents. Once again we have come school and eventually complete her get health care coverage to people in back to the Senate floor to press for residency. She did that. She had start- America. legislative change on an issue that is ed out as a little girl volunteering in The other side can talk all they want critical to health care for all Ameri- the hospital. She always wanted to de- about obstructionism and who is hold- cans. Time and again we have at- liver babies. After hard work and her ing up what. We have said, time and tempted to stop skyrocketing health degree, she ultimately delivered more time again, as I said on my overtime care costs due to the runaway tort sys- than 5,000 babies over the course of 17 amendment—I am not obstructing any- tem under which trial lawyers abuse years. By the way, the vast majority thing. I will take a time agreement. We the court system with spurious claims were without any complications, and have already had enough discussion. In that drive up insurance premiums for she has one of the best reputations as a 15 minutes we can have a vote. In 15 physicians and hospitals and drive physician in our community. minutes we can have a vote on the them to practice expensive defensive On one occasion, much to the sur- minimum wage. In 15 minutes we can medicine; in other words, performing prise and dismay of the labor and deliv- have a vote on extending unemploy- costly and unnecessary procedures to ery team, a baby was delivered with ment compensation. be sure they won’t be sued. complications and cerebral palsy. Who is obstructing what around Last year I was a cosponsor of S. 11, While a group of doctors conducted a here? It is simply that the majority the Patients First Act of 2003. The peer review of the case and determined side does not want to have these votes Democratic minority precluded us there was no fault on the part of any of under the time-honored tradition of from completing work on that legisla- the physicians, the doctor who deliv- the Senate to debate, discuss, and vote. tion. In February, we targeted a very ered the baby—this woman of whom I It seems as if the majority side now narrow range of the medical profession speak—3 years after the incident got wants to turn the Senate into just an- to try to see if our colleagues would sued. other House of Representatives—come help us out in one area, the OB/GYN Initially the plaintiff requested $2 out with a closed rule. I know that specialty, with S. 2061, called the million which was her insurance policy sounds kind of funny. What does that Healthy Mothers and Healthy Babies limit. Deciding it was better to settle mean? What it means is the majority Access to Care Act. Again the Demo- and avoid long, costly litigation, the party brings out a bill. You cannot cratic minority denied us cloture so we insurance company persuaded her to amend it. You cannot change it. You could not consider the bill. offer to settle the case, which she did. either have to vote for it the way it is It is time to stop this obstruc- But then the plaintiff asked for $10 mil- or not vote. If they have the majority tionism. Here we are again. This time I lion from the physician and another $5 votes, they want to pass it. hope my colleagues will join in voting million from the hospital. This highly That is not the way to run the Sen- for cloture so we may enact the needed competent, highly dedicated, and moti- ate. It is not the way to debate and reforms to the medical liability sys- vated physician found herself con- vote in the Senate. The way to do it is tem. sciously practicing medicine dif- to have our debates, have our votes, This legislation addresses lawsuits ferently. For instance, performing a lot and move on. Sometimes you win; for health care liability claims related more cesarean deliveries in order to sometimes you do not. But, to me, that to the provision of obstetrical, gyneco- lessen the risk of complications to the is what the American people want us to logical, emergency, or trauma care. baby, just in case. She was filled with do. With good reason, we again include the a new anxiety that had never been We are doing nothing in the Senate OB/GYN specialty. The dramatic in- present before. Frankly, she said it right now—nothing. The reason we are crease in OB/GYN premiums—more took a lot of joy out of the work she doing nothing is because the other side than 160 percent over the last 16 had enjoyed so much for the previous will not let us vote. So here we sit with years—has greatly outpaced the rate of 17 years. bill after bill that is brought out, try- inflation, and many physicians and Eventually she stopped delivering ba- ing to game the system so we cannot hospitals have been unable to keep up bies because of the skyrocketing insur- have votes on these meaningful issues. with these escalating costs. In my ance premiums due to the claim that They say: Well, these are just polit- State of Arizona, OB/GYN practices had been filed against her and, can- ical games. No, they are not political. face premiums averaging $67,000, up 16 didly, because of the trepidation she When you are talking about taking percent in just 1 year’s time. Think of felt now she had been sued and the fact away a worker’s right to overtime pay; this for a moment. I am not sure what she might be sued again. Incidentally, when you are talking about increasing the average salary or wage of an Amer- her case was ultimately settled for less the minimum wage for a single mother ican earner is today, but it is nowhere than the policy limits. But here is a

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00046 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3781 physician who was a tremendous con- The bill will allow for unlimited I ask my Senate colleagues to join me tributor to the profession, to our com- awards of economic damages but place in support of S. 2207 so we can provide munity, to the health of mothers, and reasonable caps on the so-called non- quality health care to citizens across the health and viability of a lot of new economic damages or pain and suf- this Nation. babies. She is no longer practicing her fering damages. If we can pass S. 2207, Mr. President, our constituents de- profession because of the tort system. we should therefore see tremendous serve nothing less, and that is all we This physician’s story is far too com- benefits: a reduction in the backlog of are asking for tomorrow—to give our mon. It needs to be addressed, and we these cases in our courts; a reduction constituents a chance to receive the can address it through the legislation and perhaps elimination of these exces- best health care they can receive, the before us. sive jury awards; a reduction in the best health care our system can pro- In addition to the reforms for obste- amount of money paid by the insurance vide. That is not occurring today and, tricians and gynecologists, S. 2207 will companies to settle the cases. They far worse, it is going to continue to de- cover physicians who treat patients in incur great expenses in defending the teriorate in the future if we allow the emergency circumstances—not just in cases in court and even processing the trial lawyers and those who serve the the emergency room but in any emer- claims for settlement. Even those that trial lawyers to continue to obstruct gency circumstance—from frivolous are dismissed cost money. Physicians this commonsense legislation. lawsuits. Many physicians find them- spend a large amount of money to de- I urge my colleagues to end the ob- selves distanced from what led them fend themselves even in those cases structionism, end the partisan bick- into the profession in the first place— they win. A large number of these ering. Our constituents sent us here to their desire to help people, just as the cases are settled out of court to pre- accomplish and work together for physician I talked about. Emergency vent the so-called mega award, the big sound results. Everyone knows we need rooms and trauma centers are flooded award that can bankrupt a practice. this kind of reform. The vote tomorrow with patients who need help from acci- But something else will happen if we is a vote to determine whether there dents and disasters, all very unfavor- pass this bill. As I said, my colleague will be a final vote on the bill. It only able situations. These professionals from Iowa complained about too many takes 40 Senators on the other side to give their very best to try to address people not having insurance and one of say, no, we won’t allow a vote to occur. the patient regardless of the cir- the reasons why is because it has been That is a filibuster. That is obstruc- cumstance, without even asking expensed beyond their ability to pay or whether they have the ability to pay, tionism. That is a negative, partisan their employer’s ability to pay. Why? focused on stabilizing the patients and unwillingness to allow the will of the Because the insurance company has to providing excellent care. majority to work on behalf of the peo- Imagine the effect on the physician take into account these malpractice ple of this country. and the hospital when after treating a awards, even the possibility a physi- I urge my colleagues tomorrow to patient in an emergency situation, cian will be sued. Imagine this: When a please support the cloture vote, which they are faced with a lawsuit, particu- physician has to pay $67,000 in pre- will enable us to get to a final vote on larly a lawsuit that does not have miums for the ability to deliver babies, this important bill. If we do that, I merit or seeks an excessive award. The think about how that additional cost think we can go home this fall and all result is frequently the emergency has to be shifted to the beneficiaries, be very proud, whether we are Demo- rooms are understaffed, sometimes the patients, the people who receive crats or Republicans, or others, tell our even have to close. The trauma centers the care, because the insurance compa- constituents we accomplished some- are losing specialists and, in some nies have to make sure whatever hap- thing for them in the area that per- cases, closing. The physicians are not pens, their costs are covered. haps, other than freedom, is most im- there to provide this kind of emergency So if we are going to talk about mak- portant for every one of us, and that is care. ing it easier for people to get insur- quality health care. We owe our con- Since no one knows exactly whether ance, making it easier for physicians to stituents nothing less. and where an emergency will take be able to continue their practices, for Mr. President, I suggest the absence place, this legislation covers emer- hospital emergency rooms to continue of a quorum. gency services anywhere, not just to stay open, and all of the other kinds The PRESIDING OFFICER. The those that occur in the emergency of care to be provided, even that situa- clerk will call the roll. room. For example, if a family practi- tion where you have a wreck on the The bill clerk proceeded to call the tioner assists a person in an emergency side of the road and a doctor stops and roll. at a mall where somebody had a heart renders emergency care to you—any Mr. SESSIONS. Mr. President, I ask attack, the doctor would be subject to one of those situations—then we need unanimous consent that the order for the protection of this bill. If an inter- to deal with this bill tomorrow. the quorum call be rescinded. nist helps a person in an automobile This has been around far too long, The PRESIDING OFFICER (Mr. accident at the side of the highway and and tomorrow is our opportunity to ALEXANDER). Without objection, it is so assists that individual, that care would right this wrong, vote for cloture, and ordered. also be protected by this legislation. enable us to take a final vote on the Mr. SESSIONS. Mr. President, the The benefit of this legislation is bill. We should not condone a system Pregnancy and Trauma Care Access while it makes specific reference to the that literally forces physicians to re- Protection Act of 2004 that is now be- OB/GYN doctors, it also addresses any tire early, as the physician from Para- fore the Senate is a matter of very real emergency services, not just those per- dise Valley I spoke of had to do. Some- importance to real Americans. I have a formed by emergency room physicians times they relocate to a different State good friend, an obstetrician, in Mobile, or in a trauma center. with friendlier laws. We should not AL. We go to church together. He As with previous bills, this legisla- force that either. Sometimes they drop teaches Sunday school class. He is a tion will hold physicians and insurers high-risk services or they go into former president of the State associa- accountable for medical expenses in in- teaching or hospital administration. tion, as I recall. He was talking to me stances when they are clearly wrong. We lose a lot of very competent physi- at church a few months ago about a S. 2207 will maximize returns to the pa- cians that way. This leads not just to doctor who left the practice. His mal- tients instead of the trial lawyers by improper staffing among physicians, practice insurance was around $80,000, setting percentage caps on contingency obviously; more important, it com- and he delivered around 80 children a fees. These are the fees the lawyers re- promises patient care. year. That is $1,000 per delivery that ceive. The bill would allow lawyers to We have heard the patient and physi- doctor paid for malpractice insurance. be well compensated for their work but cian stories and we have seen the This is a reality. I was with a doctor not at the unfair expense of the plain- charts about the skyrocketing costs. I know from the group that treats my tiffs. Patients would have 3 years from We know of the facilities that have had mother in Mobile, AL, just a week ago, the date of injury to bring forth a to close, emergency rooms and labor and he told me people in the profession claim. In the case of minors, that stat- and delivery sections—all as a result of are retiring earlier and earlier because ute of limitations would be extended. the high cost of a broken tort system. they are getting tired of the stress and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00047 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3782 CONGRESSIONAL RECORD — SENATE April 6, 2004 strain of being micro-managed through impacting health care in America. It is ous abuse of the legal system, it en- litigation; that people do not have to reducing the number of physicians who courages the notion that personal re- do that after a number of years and are willing to practice, particularly to sponsibility is no longer a factor in good people are leaving the practice deliver babies. American life. over this issue. I was in Ashland, AL, the hometown I ask my friend from Alabama if he is Everybody in this body will say we of Gov. Bob Riley of Alabama, in Clay also disturbed about this growing no- need to do something about it; it is County. I visited their hospital because tion that I have no responsibility for time for us to fix it; there is a problem; our prescription drug bill did a lot for the outcomes in my life, if anything and we need to do this and that. But rural hospitals. We had a big meeting goes wrong it must be somebody else’s there is a strong influence, I have to and everybody was there. They talked fault and obviously the solution to say, from the trial bar in the Senate. about how the year before they had that is to sue. They are very active politically, every- given up the delivery of babies in Ash- Mr. SESSIONS. I think the Senator body knows it. They are aggressive, land, AL, at that hospital. They no from Kentucky is exactly correct. We and they contribute large sums of longer deliver babies in the State. I do have far too much of that. We have money. Just a very few lawyers con- have some numbers that were pretty a lawsuit lottery mentality, jackpot tribute large sums of money to polit- dramatic to me that indicated how justice. People file suits and they seek ical campaigns, and so far they have many of these hospitals had quit deliv- huge amounts of money in hopes they been able to block reforms. ering children. Why? Because they get will recover. The Senator from Kentucky, the as- sued. The amount of malpractice it My daughter does some defense work sistant majority leader, Mr. MCCON- takes to do that is rather dramatic. in a law firm. She is a lawyer. She was NELL, proposed legislation that would According to the Alabama Depart- telling me about a nursing home case, eliminate lawsuits against restaurants ment of Public Health, only 58 hos- and a person had bed sores, and there and food companies if somebody gets pitals in Alabama have labor and deliv- was a big lawsuit. She said, you know fat. You go to the store and you ask for ery services. That is down from 70 in what they discovered? They had Little Debbie’s. They sell them to you. 1999. Twelve hospitals since 1999 have learned in some way that Ronald That is what you want, isn’t it, for quit delivering children. Only 14 of the Reagan had bed sores. Heaven’s sake? They want to sue the hospitals that are left have full-time These kind of things can happen, but company that gave the customer what neonatologists and neonatal intensive they were having to pay a large they wanted. It is legal, so there should care units. Those 14 are located in the amount of money. Maybe they were not be a cause of action under any defi- five biggest cities: Birmingham, Mont- negligent, maybe they deserved to pay, nition of law. gomery, Mobile, Huntsville, and Tusca- but I just say there is this mentality At that hearing, the premier witness, loosa. that if something goes wrong somebody without a doubt, was Professor Those are big issues. Thirty-four of has to pay. As the Senator from Ken- Schwartz, who is the editor of the most the 67 counties in the State do not tucky knows, the one who pays is the widely used textbook on torts in Amer- have OB delivery services. That was one who has insurance. That means the ica. We got into a little bit of a philo- not true 30 years ago. This is a recent hospital or the doctor normally. They sophical discussion because some peo- trend. Sometimes it is better, I will are the ones who are getting whacked. ple suggest that it somehow is not le- admit, that a person go to a hospital, It may be that nobody investigated to gitimate that we in Congress should but we have a lot of people who believe see if maybe the mother drank alcohol pass a law involving lawsuits; that it in midwives because of the bonding and too much during the pregnancy or ought to be left to the sanctified the personal attention a mother gets. something. Any number of things could courts; that they are somehow better They believe in that. I am not a be- have occurred that would have caused than the political branch, and that we liever in that. But a good doctor who that. ought to never pass a law that affects knows the family, who knows the I conclude by saying I am pleased to the courts. Of course, that is hogwash. mother, maybe they go to church to- see this legislation move forward. It is I asked him about that, and he said it gether, who cares about the family, not insignificant. I am hearing from plainly and we discussed it at some used to deliver babies in a large way in my physicians that they feel strongly length. Alabama. That kind of practice is that the quality of their lives, as well Congress says what the statute of going away today. We are creating a as the excellence of their practice, limitations is. If you file a lawsuit circumstance in which fewer and fewer have been adversely impacted by liti- within 2 years, 5 years, 6 years, but 1 people are willing to undergo that type gation. day late, you have no lawsuit; it is out; of practice. A doctor was in my office recently the statute of limitations runs. Con- Health insurance is way up. The de- who is a leader in the medical associa- gress sets that limitation. Every State livery of health care has been con- tion. He said, Jeff, I am telling you has limitations on damages. We create stricted as a result of unnecessary, of- maybe as much as 50 percent of the causes of actions that have never ex- tentimes illegitimate lawsuits. In fact, medicine we practice is driven out of isted before by explicit statutory ac- it has almost gotten to the point where fear of lawsuits. We could reduce the tion. a physician who delivers a child is held cost of medicine by a tremendous de- There is a law in the code that if to be a guarantor of the healthiness of gree if we could contain the threat of somebody rolls back your odometer that child. lawsuits. and you sue them, you get an auto- If something is wrong, too often There is no doubt that lawsuits have matic $1,500 if you can prove they somebody looks around to find some- recompensed people who needed it for a rolled back your odometer. In Ken- body to sue; the doctor who did it or wrong. When a person commits a tucky, I am sure they roll back some the hospital in which it was delivered wrong, they should pay. There is no odometers. Most cars we get in Ala- is the one who is sued. doubt about it. I know the Presiding bama are rolled back in Tennessee, Mr. Mr. MCCONNELL. Will the Senator Officer and the Senator from Ken- President, and are shipped to the yield for a question? tucky, in their law school there was a State. We created that cause of ac- Mr. SESSIONS. I would be delighted community standard of excellence. tion—it never existed before—for ac- to. Everybody is not expected to be the tual damages, whatever would be suffi- Mr. MCCONNELL. It occurs to the best surgeon in America. Everyone is cient. I filed a lawsuit under it one Senator from Kentucky, in listening to not expected to be the best lawyer in time. observations of the Senator from Ala- America. Take somebody who is a pro- I say all that to say Professor bama, what has evolved in America is fessional and they were expected to Schwartz is correct. We have every that we believe we are a society of vic- give the best skilled work they could right to look at what is happening in tims, everybody is a victim? If some- give under the circumstances. They America. I am not going to talk at body is wrong in my life, if I have a bad should not be found negligent. They length tonight, but I say we have a se- outcome in my life, it must be some- should not ignore a patient. They rious problem in this country that is body else’s fault. So beyond the obvi- should not fail to give the kind of care

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00048 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3783 that everybody knows ought to be maybe the Senate will let us at least back to the Senate to try once again to given. But just because one person has pass a very modest legal reform bill give our colleagues on the other side of a steadier hand or has more experience that deals with a problem that is be- the aisle a chance to join us in imple- maybe and can do a surgery slightly ginning to evolve in our society of menting real reforms for a problem better than another one does not mean, victimhood. that is all too real for many of our fel- and never has meant under American Mr. SESSIONS. If the Senator will low citizens. law, that there is a liability question. yield, I would note that Professor As we did the last two times, we I think the Senator from Kentucky is Schwartz, as I said, the editor of the brought reform legislation to the floor. correct. What has concerned me is the most utilized textbook on lawsuits and We are offering the American people a erosion of the standard of negligence torts in America, strongly supports the proven remedy—not a placebo. The bill and error. A physician or a hospital legislation. He feels it is appropriate. I we hope our colleagues will let us con- should commit an error, negligence, will ask the Senator, does he not agree, sider, like its two predecessors, is before they should be required to com- based on his experience as an attorney, based upon California’s successful pensate someone who has had an unfor- that we have muddled over and glossed MICRA reforms. The Pregnancy and tunate result in that hospital. We have over the question of fault? Trauma Care Access Protection Act gotten away from that. In the Senator’s bill, if they sell food would allow plaintiffs to recover un- This bill, of course, allows for full that is contaminated and a person gets limited economic damages—up to a recompense for damages and injury for sick, if they sell food that has a bug in quarter of a million dollars in non- any cost for medical care; any cost for it or something, somebody can still economic damages and punitive dam- future treatment or hospitalization, sue. If the food is unhealthy a person ages up to the greater of a quarter mil- which in a lifetime could be millions of can sue, but if it is perfectly healthy lion dollars or twice the economic dollars; $250,000 in pain and suffering, food and it is the food one ordered they damages. in addition to the compensatory costs; ought not to be able to bring a lawsuit. We recognize the reluctance of some and $250,000 or twice the compensatory Is that not the intent of the Senator’s of our colleagues to implement damages for punitive damages. Those legislation? MICRA’s reform on a nationwide scale, things are allowed for in the bill; it Mr. MCCONNELL. The Senator from proven though these reforms are. So just simply says there is a limit. Alabama is correct. That is, of course, rather than propose the comprehensive When a person can sue somebody for the underlying principle of this legisla- reform we tried to advance last year $50 million and get a jury—juries really tion. I thank him for having the hear- for all medical practitioners, we are at- have a difficult time deciding between ing and for giving people an oppor- tempting a modest first step. The pro- $2 million and $30 million, and they tunity to come forward and have their visions in S. 2207 would apply only to come up with $15 million. How did they say on this important legislation. two of the medical specialties that are As I said, it is at the desk and we come up with that number? This says suffering the most in this crisis: OB/ hope sometime during the course of the that one gets fully compensated for GYNs and emergency care services. second session of this Congress we will however much it costs, for any dam- That is all this bill would touch. have a chance to address it. Though extremely modest in scope, ages that are sustained as a result of Mr. SESSIONS. One more question. this bill is crucial to protecting the the negligence of a physician. In addi- Has not the question of fault always doctors who practice in these two areas tion to that, one can get punitive dam- been the cornerstone of American law and the millions of American patients ages and pain and suffering, but it is with regard to lawsuits and negligence who rely on them. For example, OB/ limited. I think that would go a long and liability, that somebody has to be GYNs provide some of the most critical way to making lawsuits settleable so at fault, have done something beyond medical services. Sadly, they also bear both sides know the framework they the standard of care to cause a dam- the highest premiums. As a result, are operating under. Then a lawsuit age? That is when there is a lawsuit. Is women and children across our country can be settled. Without a limit on the not getting away from that one of the are placed in danger as they struggle top, it is very difficult to settle that reasons that we are having so much oftentimes unsuccessfully to find even lawsuit. abuse in the legal system? basic obstetrics care. I believe this is good legislation. I Mr. MCCONNELL. That is what we In addition, emergency room doctors hope it can move forward. I hope we do always were taught. As the Senator in- are the primary care physicians for not see it obstructed and blocked as we dicated, in school that is what tort law many Americans. According to the Al- have others. I hope we can get an up- was about. If one was not negligent, if liance of Specialty Medicine, each year or-down vote. they did not cause the harm, they there are 110 million visits to emer- I yield the floor. should not be held liable. We have got- gency departments. More than 90 per- The PRESIDING OFFICER. The as- ten away from that in this country. It cent of these visits are patients who sistant majority leader. is a very dangerous trend. It is time for need to be seen in 2 hours or less. And Mr. MCCONNELL. Mr. President, be- the Congress of the United States to approximately 28.3 million Americans fore the Senator from Alabama leaves, begin to redress this imbalance. I visit the emergency room each year I want to thank him again for the hear- thank my friend from Alabama. due to an accident or unintentional in- ings he held on the Commonsense Con- Mr. President, on the matter before jury. Ninety-nine percent of those pa- sumption Act, not the bill before us us upon which we will be voting cloture tients will recover after receiving life- today but another measure that on the motion to proceed tomorrow, saving care from an ER or trauma cen- makes, as the title implies, common the Pregnancy and Trauma Care Pro- ter. sense. The common sense embedded in tection Act introduced by Senator Thus, when ER doctors and trauma that bill is that it is improper to sue a GREGG and Senator ENSIGN, this is our care physicians curtail their practices food manufacturer or a distributor for third attempt this Congress and our or go out of business altogether be- damages claiming that the seller made second attempt in 6 weeks to try to do cause of the medical liability crisis, you overweight. It is simple justice. It something about the medical liability the people who suffer the most obvi- would not deny any of the traditional crisis that is forcing patients all across ously are the American families. claims against a distributor or manu- the country to go without critically Let us turn to the crisis in Kentucky. facturer of food, but it would prevent important medical services. On both This chart illustrates Kentucky’s crisis such a ridiculous lawsuit. previous occasions, a majority of the in obstetric services. The American people overwhelm- Senate has voted to try to solve this Sixty percent of Kentucky’s counties ingly support this legislation by well problem. are without OB/GYNs. up into the 80 percent. The legislation Unfortunately, though, only one This chart takes a look at the coun- passed the House of Representatives by brave soul on the other side of the aisle ties. The red counties, which the occu- an overwhelming bipartisan vote and is voted to support even taking up such a pant of the Chair and our colleagues at the desk in the Senate. Hopefully measure. can see, are many counties. Sixty-nine sometime this year we will get an op- But hope springs eternal and maybe of one hundred twenty counties in Ken- portunity to call that up and see if the third time is a charm. So we come tucky have no OB/GYN.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00049 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3784 CONGRESSIONAL RECORD — SENATE April 6, 2004 In addition to that, the next chart il- All told, 82 of Kentucky’s 120 coun- We will have an opportunity tomor- lustrates the availability of emergency ties have no OB’s or have just one OB. row, once again—as I said earlier, hope- services in Kentucky. 43 percent of Now, you may be thinking that, al- fully a third time will be a charm—to Kentucky’s counties are without emer- though this is far from ideal, couldn’t take the simple step of going to the bill gency room physicians. That is 52 of the women in these situations simply and giving us an opportunity in the the 120 counties. go to the emergency room and have an Senate of addressing what is indeed a All of the red counties all across the ER doctor deliver their baby? Maybe in national medical crisis. Commonwealth of Kentucky have no the old days women could do this, but f ER doctor at all—none. they can’t do this anymore. Another 21 percent of Kentucky Another casualty in the medical li- MORNING BUSINESS counties have only one specialist in ability crisis has been in the provision Mr. MCCONNELL. Mr. President, I emergency medicine for the entire of emergency medical services. Accord- ask unanimous consent that the Sen- county. ing to the Kentucky Medical Associa- ate now proceed to a period of morning So you can see in our State, the Com- tion, medical liability premiums for monwealth of Kentucky, there is a se- business with Senators permitted to ER physicians increased, on average, speak for up to 10 minutes each. rious crisis—an absence of OB/GYN an astounding 204% from 2001 to 2002! care and an absence of emergency room The PRESIDING OFFICER. Without The situation of Dr. David Stanforth objection, it is so ordered. doctors. A principal reason for that, is illustrative. He is a partner in an not surprisingly, is the medical mal- emergency medicine group serving f practice crisis that we have in the three hospitals in Northern Kentucky. LOCAL LAW ENFORCEMENT ACT Commonwealth of Kentucky. Dr. Stanforth had his malpractice in- OF 2001 This is a serious problem. We have surance cancelled 3 years ago and then Mr. SMITH. Mr. President, I speak county after county in crisis. Just to switched insurance policies to obtain about the need for hate crimes legisla- give you an example, Perry County in coverage. His premiums have since tri- southeastern Kentucky technically has tion. On May 1, 2003, Senator KENNEDY pled to $800,000 per year, even though a practicing OB/GYN. But that one doc- and I introduced the Local Law En- there wasn’t a malpractice award tor stopped delivering babies during forcement Enhancement Act, a bill against his ER group during that pe- the last year. If you are in Perry Coun- that would add new categories to cur- riod. ty, it doesn’t do you much good. They rent hate crimes law, sending a signal The result of situations like Dr. have an OB/GYN but she does not de- that violence of any kind is unaccept- Stanforth’s are all-too-predictable. liver babies. According to the Kentucky Depart- able in our society. Eighty-two of Kentucky’s one hun- ment of Public Health, 43% of Ken- On February 29, 2004, a transsexual dred twenty counties don’t have either tucky counties do not have any doctors man who was planning to undergo an an obstetrician or have one obstetri- specializing in emergency medicine. operation to make him a woman, was cian. found shot to death in his car parked This is a serious problem in the Com- Another 21% of Kentucky counties have only one emergency room physi- outside his apartment in Georgia. The monwealth of Kentucky. Atlanta Police are canvassing local Six weeks ago, when we were asking cian. All told, then, 64% of Kentucky counties do not have any ER doctors or bars seeking information from anyone our colleagues to consider the Healthy who knew the victim. Mothers and Healthy Babies Access to have only one ER doctor for the entire county. I believe that Government’s first Care Act—S. 2061— I discussed the cri- duty is to defend its citizens, to defend sis in obstetric and gynecological serv- To come back to the crisis in obstet- ric services that I was discussing, if them against the harms that come out ices in my home State of Kentucky. of hate. The Local Law Enforcement Kentucky does not have liability re- you are a woman in eastern Kentucky Enhancement Act is a symbol that can form. Not surprisingly, liability insur- who is delivering a baby, not only are become substance. By passing this leg- ance rates for OB’s in Kentucky, for ex- you not going to be able to find an O.B. islation and changing current law, we ample, increased 64 percent in just 1 to delivery your baby. You are not can change hearts and minds as well. year, from 2002 to 2003. Also not sur- going to be able to find an ER doctor to prisingly, in just the last 3 years, Ken- help you either. Instead, you are going f to have to drive until you find some tucky has lost one-fourth of its obste- NATIONAL PUBLIC HEALTH WEEK tricians. Moreover, Kentucky has lost doctor—any doctor—if you’re lucky, to nearly half its potential obstetric serv- help with your delivery. Mr. SARBANES. Mr. President, I rec- ices during this time, when one factors Unfortunately, too many women are ognize the American Public Health As- in doctors who have limited their prac- not so lucky. They end up delivering sociation’s 14th annual National Public tices. their babies in the backseat of a car or Health Week. I specifically want to ac- According to the Kentucky Medical on the side of the road. knowledge and commend the Associa- Association, 60 percent of the counties This situation cannot continue. I ap- tion on its theme this year: ‘‘Elimi- in Kentucky do not have any OB-GYNs. plaud Senators GREGG and ENSIGN for nating Health Disparities: Commu- Other counties, such as Perry County their determination to do something nities Moving from Statistics to Solu- in southeastern Kentucky, technically about this crisis. I hope my colleagues tions.’’ have a practicing OB-GYN, but that on the other side will let us try to Our public health practitioners affect one doctor has stopped delivering ba- solve this problem with meaningful re- all areas of life as they fulfill their bies within the last year. So if you are form and will vote to invoke cloture on mission of promoting health and pre- in Perry County, that doesn’t do you the motion to proceed. venting disease at the broader ‘‘popu- much good. I thank the Chair. lation’’ level. The American Public Another 8 counties—like Greenup, I will conclude by saying the prin- Health Association is the oldest and Lawrence, and Johnson Counties in cipal reason for the crisis is the rising largest organization of public health northeast Kentucky—have just one OB- cost of medical malpractice insurance, professionals and has had an enormous GYN in each county. and the inability of these physicians, influence on public health priorities So if you are a woman in these coun- dedicated though they may be to public and policies for over 100 years. ties, you had better hope that there health and serving people in the Com- As we begin National Public Health isn’t another woman having a baby at monwealth of Kentucky, who simply Week, it is clear how the Association’s the same time you are, or that the doc- can’t afford to stay in business. They selection of a particular theme can tor is not out of town or busy with an- cannot make a living doing what they make a significant difference in how other patient. If that happens, then went to medical school to do and what we develop our health agenda as a na- you are going to have to drive through they want to do with their lives, which tion. I think this year’s choice will be the hills on the back roads of eastern is to take care of women and babies no exception and that it will be an im- Kentucky to try to find a doctor to de- and to save people in the emergency petus for frank and thoughtful discus- liver your baby. rooms of the Commonwealth. sion about what should be one of the

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00050 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3785 Nation’s most critical priorities, the graphic location, disability or sexual this coming Monday. I will also get a need to address health disparities. orientation. chance to thank some of the members The first NIH Working Group on Again, I commend the American Pub- of Operation Enduring Love personally. Health Disparities defined health and lic Health Association for focusing the However, I wanted to take this oppor- health care disparities as ‘‘differences Nation’s attention on this important tunity to tell this inspiring story here in the incidence, prevalence, mortality, issue and for serving to increase the on the Senate floor, and record for pos- and burden of diseases and other ad- dialogue to rid the country of these in- terity the names of those businesses verse health conditions that exist equities. I hope my colleagues offer and performers who have participated. among specific population groups in their support to this important effort They are: the United States.’’ I take a moment to as well. L’Eglise, Inc. of Abbeville, Let’s Talk Din- highlight just a few of these dif- f ner Personal Chef Service of Lafayette, Crys- ferences. tal Weddings of Lafayette, Occasions Cake Statistics from the Department of OPERATION ENDURING LOVE Boutique of New Iberia, Sugar Art Wedding Health and Human Services Report en- Ms. LANDRIEU. Mr. President, we Cake, American Legion Post 69 988–0799 of titled ‘‘National Health Care Dispari- all know that the war in Iraq is not Lafayette, Viet Nam Veterans of America, ties’’ bear out that minorities are less without its controversies or detractors. Acadiana Chapter No. 141 of Fontenot, Mary Ellen’s Tux Shop of Lafayette, Antoinette’s likely to be given appropriate cardiac But it is also important to note that Bridals & Formals of Lafayette, Chef Bobby medications or to undergo bypass sur- the spirit of the American people is & Dot’s Le Bon Manger Catering of Kaplan, gery, and are less likely to receive kid- transcendent. Whether you supported Sugar Art, A La Carte of Lafayette, Tsunami ney dialysis or transplants. The same the war in Iraq, as I did, or whether of Lafayette, Schilling Distributing Co Inc. study has shown that minorities are you opposed it, the people of this Na- of Lafayette, Glazer’s Companies of Lafay- less likely to receive the most sophisti- tion are very conscious of the sacrifice ette, Quality Brands Inc. of Lafayette, Inte- cated treatments for HIV infection, that our military men and women are rior Plant Services of New Iberia, Paul’s which could forestall the onset of making for us all are grateful. I rise Jewelry of Lafayette, Spedale Spedale’s of Lafayette, Beyond Flowers of Lafayette. AIDS. Our minority communities are today to give one small example of the Cajun Cottage Gifts of Erath, Flowerland instead more likely to receive less de- American people’s spirit from Lafay- of Lafayette, The Gardenaire at River Ranch sirable, non state-of-the-art proce- ette, LA. of Lafayette, Steve’s Flowers of Lafayette, dures, such as lower limb amputations The soldiers of the 256th Army Na- Floral Design Classes of ULL of Lafayette, for diabetes and other conditions. tional Guard Infantry Brigade were re- Flower’s Etc. of Lafayette, Sam’s Club—Flo- These disparities also put our chil- cently put on alert and notified that ral Dept. of Lafayette, Louisiana Wholesale dren at significant risk. In my own they could be heading to Iraq soon. As Florists, Aveda Institute of Lafayette, JM State of Maryland, the Infant Mor- for any Guard unit, such deployments French Skin Care Line of Rayne, Studio One 2 One of Lafayette, Royal Day Spa & Salon tality rate for African Americans is mean a tremendous disruption in the of Lafayette, The Client Salon & Day Spa of two times higher than for Caucasian lives of the citizen soldiers who make Abbeville, Creative Memories Photography, Americans. up this brigade. They miss work, they Robin May Photography of Lafayette, Ken And these disparities do not only miss graduations, they miss birthdays, Romero Photographer, Shane Falgout, Pho- occur along racial lines. Healthy Peo- they miss reunions, and sadly, for tographer, Dominick Cross Photography, ple 2010 and the National Health Care some, they miss weddings. Fast Forward Multi-Media of Lafayette, Re- Disparities Report show that those who When the announcement went out gent Broadcasting of Lafayette. live in our more rural communities that the 256th could be deploying, Spec. Dr. Paul Baker, Beth Fontenot, Mike Vidallier, Lynn Broussard and Company, face similar inequitable treatment. Jeremy Meyers and his fiancee, Amy Kurt Boudreaux, Tommy Benoit String Rural community residents have less Glorioso, decided that they needed to Quartet, Limousines Limited of Lafayette, contact and fewer visits with physi- move up their wedding date. But as ev- Diamond Limousine Inc. of Lafayette, Gabri- cians, even though these residents tend eryone knows, weddings are expensive, el’s Jewelers, WHC, Inc., Shady Acres of to have a heightened need for health and food, flowers, and venues have to Abbeville, Crystal Cottage of Lafayette, care. Indeed, injury rates in rural com- be reserved and paid for months in ad- Armentor Jewelers of Abbeville, Jean’s Brid- munities are 40 percent higher than in vance. Changes to wedding dates can al Accessories of Patterson, Jolie Mariee urban areas. mean thousands of dollars in additional ‘‘Weddings By Anne,’’ Best Western Hotel Acadiana of Lafayette, Right Angle of Lafay- Women are 20 times more likely than costs. ette, Special T Ice Company of Abbeville, men to die from a heart attack. Statis- But thanks to the organization and and Pictage, Inc. of Torrance, CA. tics from the Agency for Health Care drive of Merilyn Crain, the owner of f Research and Quality reflect that L’Eglise in Vermilion Parish, and the women receive less aggressive treat- patriotism and dedication of businesses ADDITIONAL STATEMENTS ment for heart related ailments than throughout the Lafayette region, seven men, and are less likely to receive life couples will enjoy their dream wed- (At the request of Mr. DASCHLE, the saving drugs such as lidocaine, beta- dings—earlier than planned—and for following statement was ordered to be blockers and aspirin for heart attacks. free. printed in the RECORD.) Persons with disabilities face signifi- This act of generosity is the perfect cant disparities in the care they are af- symbol of the deep appreciation and TEMPORARY EXTENSION OF PRO- forded as do the indigent; the list goes love that all Americans feel for their GRAMS UNDER THE SMALL on and on. These are just a few exam- soldiers, sailors, airmen, and marines. BUSINESS ACT AND THE SMALL ples of how this inequity affects our The people of the Lafeyette region, and BUSINESS INVESTMENT ACT population. all of Louisiana should be proud of the ∑ Mr. KERRY. Mr. President, I want to The State of Maryland has engaged example they have set in rallying make a statement about a small busi- in a number of statewide and local ini- around the men and women of the ness bill that the Senate passed last tiatives to address health care dispari- 256th. As the Bible teaches us, ‘‘No week. I am referring to H.R. 4062, ties in our communities. At the Fed- greater love hath any man than this, which, among other things, provides a eral level, I have cosponsored S. 1833, that he should lay his life down for an- temporary solution to the administra- the Healthcare Equality and Account- other.’’ It is therefore appropriate that tion’s self-created funding crisis for the ability Act, which seeks to eliminate we should repay the debt we owe our SBA’s largest small-business lending racial and ethnic health disparities in military, by assisting them with cere- program, commonly referred to as the health care. I hope we can use the mo- monies that celebrate the love between 7(a) Loan program. In many ways, the mentum created by this week and re- two people. bill is similar to legislation I intro- double our efforts to ensure com- Mr. President, I congratulate the duced four weeks ago, S. 2186. For ex- prehensive quality health care for all businesses and individuals whose gen- ample, it adopts my provision to keep of America’s citizen’s regardless of erosity made these efforts possible. I the 504 program operating through the their race, ethnicity, socioeconomic will have the privilege of meeting the rest of this fiscal year instead of sub- status, gender, education level, geo- members of the 256th and their families jecting the 504 borrowers and lenders to

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00051 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3786 CONGRESSIONAL RECORD — SENATE April 6, 2004 another series of disruptive temporary The administration contends that term Band-Aid. The ICBA continues to extensions. Similar to my bill, it also the pilot expansion would only be vol- oppose the SBA’s efforts to squeeze the lifts the $750,000 cap on loans, lifts the untary and therefore harmless if not 7(a) program out of existence and hopes restriction on combination or piggy- used. While SBAExpress has worked a genuine good faith resolution can be back loans, gets loans to those small well for relatively small loans, those part of the FY 2005 budget.’’ businesses denied 7(a) loans since the averaging around $150,000, lenders have The American Bankers Association program shutdown in January, and ex- testified before our Committee that as quoted in the ‘‘American Banker’’ tends the operation of the SBA overall, SBA Express is not workable for all on April 1, 2004: ‘‘The need to avoid an including the Small Disadvantaged sizes of loans and that the volume of even lower loan-size cap is why the Business Program and the Surety Bond SBAExpress loans is not likely to in- ABA supported the compromise, de- program. crease. In fact, the smallest SBA lend- spite having serious reservations about In general, H.R. 4062 is a step in the ers, community banks, have testified the expansion of the SBAExpress and right direction and I commend Con- that to mandate SBAExpress would the additional fees on lenders. ‘We are gressman MANZULLO and Congress- drive virtually all community banks not totally pleased with it, but we’re woman VELA´ ZQUEZ for their work. I do, from the program. Yet the administra- not going to write a letter opposing it’, however, have some concerns about the tion argues this voluntary authority is said Mr. [James] Ballentine [Director bill, concerns shared by many in the necessary because, when combined of Community Development]. ‘We be- small business community, and I regret with other program changes, it would lieve the lenders bent over backwards that the Senate Republicans blocked a reduce the subsidy rate, thereby to restart this program, and we’ve seen bi-partisan Snowe-Kerry amendment to stretching the 7(a) loan funding, get- very little movement on the part of the address those concerns. ting the program closer to their latest Agency.’’’ For example, H.R. 4062 did not ad- program volume projections. Mr. President, we are all glad that dress the pressing need to correct the This can only be true, however, if the the program is back in business for the outdated funding formula for the SBA’s volume of SBAExpress loans increase. rest of the year, particularly for the Women’s Business Centers program. To date, the administration has not small businesses that have been hung The law needed to be changed before produced any documentation sup- out to dry since the January shutdown the Agency awards this year’s grants porting that contention, and the small of the program. The delays imposed on because more than 50 Centers around business lenders fear that the adminis- the FY2004 fix for the 7(a) loan program the country are at risk of losing their tration will circumvent the require- were unnecessary. There were several opportunities—bills or amendments— matching federal money. I had been ad- ment that this be strictly voluntary by since March 10th to mitigate the fund- vocating for this change since I intro- showing preferential treatment to ing shortfall or all together fix it, but duced S. 2186 on March 9, and the lenders who use the SBAExpress pro- they’ve been blocked or stalled. Snowe-Kerry amendment included my gram. They believe this will occur in Mr. President, waiting has a price. provision. Unfortunately, one or two order to steer loans away from the reg- Not only to the qualified small busi- Senate Republicans objected to the ular program, which has a higher guar- nesses waiting for needed loans and for provision and blocked its passage. antee of 75 percent to 85 percent. Con- those who had been promised loans in ´ As for the 7(a) Loan Program, I am gresswoman VELAZQUEZ held strong to January only to have the administra- concerned about the extent of the fee including very good provisions aimed tion abruptly impose a crippling loan increases, the lack of data justifying at protecting the loan program from cap, but also to the taxpayer. If either the increases, the rapid expansion of such tinkering, and she is to be com- of the changes Senator SNOWE and I the SBAExpress pilot program, and the mended for her effective advocacy. Un- had proposed in our bills, S. 2186 and S. precedent that these changes will have fortunately, even with these safe- 2193, had been enacted as part of H.R. on developing a workable approach to guards, I believe it was premature to 3195 in mid-March, we could have saved next year’s 7(a) funding problem cre- enact the administration’s SBAExpress more than $100,000 a day, leveraging at ated by the President’s request for zero proposal until better data could be ob- least another $150 million in small funding for fiscal year 2005. The Snowe- tained and analyzed. Further, since business loans in this fiscal year. These Kerry amendment took a much more H.R. 4062 is a temporary extension of delays are fiscally irresponsible. measured approach to the fee in- SBA’s authority until June 4th, 2004, The Republican obstructionists will creases, adopting the levels supported there would have been time for this justify their delay tactics by arguing in S. 2186 and S. 2193, with flexibility and other proposals to be properly vet- that the earlier bills did not solve the for the SBA to increase the fees up to ted and, if appropriate, adopted. entire funding problem for the rest of the levels in the House bill should the Extreme changes like expanding the the year. However, there are numerous need arise to keep the program running SBAExpress program 700 percent were problems with such a claim. One, time for the remainder of the year without driven by the administration. The was of the essence for the small busi- restrictions. For example, instead of groups agreed to live with them only nesses that had been shutout since temporarily charging a lender fee on because it was better than the alter- January. Two, no one knows if the ad- the commercial portion of a combina- natives—further reducing the loan cap ministration’s estimates are accurate tion or piggyback loan of .5 percent, from $750,000 to $500,000, another shut- and the confidence in the econometric H.R. 4062 charges 40 percent more, im- down, or the administration’s proposal model that predicts future program posing a fee of .7 percent. Senator to mandate all loans be made through costs has gone down as a result of the SNOWE devised the discretionary stair- the 50 percent guarantee SBAExpress SBA’s latest estimates. For example, step compromise in our amendment program. Let me read to you a few how could imposing a fee on piggyback and it was preferred by the lending quotes by the small business commu- loans of .5 percent, a fee that will gen- community. It is unfortunate that the nity that reflect the feelings of many erate new income for the program, not lenders may be required to pay higher expressed to this Committee: offset the costs at all? And, if that is fees than necessary to reach the goal: The Independent Community Bank- true, how could additional savings Congress seeks to keep access to 7(a) ers of America: ‘‘The ICBA did not op- from increasing that fee by 40 percent, loans available to small businesses for pose a short-term fix bill that would to .7 percent be only one one-hundredth the rest of this year, fiscal year 2004. open up much needed lending to small of one percent? I don’t know of one The Snowe-Kerry amendment also businesses, but only because the alter- lender who believes that claim. Three, took a more measured approach in ex- native pushed by the SBA was far it would have been better to take a panding the SBAExpress program. H.R. worse and would have choked off lend- step in the right direction and imme- 4062 includes a controversial provision ers’ ability to continue making SBA diately reduce the cost of the program proposed by the administration that loans. We didn’t want to punish small to the extent possible in order to would expand the current SBAExpress business because of the unwillingness stretch the lending dollars. This option reduced guarantee pilot program from of the SBA to ask for the funds they would have allowed for future refine- loans of $150,000 to $2 million. An in- knew were needed to keep the 7(a) pro- ments while saving precious appro- crease of 700 percent. gram viable. This bill is only a short priated dollars in the process. Four,

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00052 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3787 there would have been (and still are) sense and has long been their practice. NATIONAL ASSOCIATION OF several other opportunities to make We all appreciate their work to fix GOVERNMENT GUARANTEED LENDERS, adjustments later in the fiscal year. these problems, and for the contribu- Stillwater, OK, March 10, 2004. With respect to the other important tion they make to cultivating small Re SBA 7(a) funding crisis and S. 2186. provisions of H.R. 4062, I am glad that startup and growing small businesses Hon. JOHN F. KERRY, the bill includes my measure from S. in our communities. Russell Senate Office Building, 2186 that allows the 504 Loan Guar- Washington, DC. Mr. President, I ask that several let- DEAR SENATOR KERRY: As Congress con- antee Program to operate through the ters addressing the issue at hand be siders how to solve the ongoing SBA 7(a) pro- rest of the fiscal year; however, I am printed in the RECORD. I thank my col- gram funding crisis, we are writing to ex- very disappointed that, despite bipar- leagues for their support of small busi- press our support for S. 2186, which includes tisan support, the Republican leader- nesses and for considering immediate provisions that both Small Business Com- ship refused to include a Snowe-Kerry passage of this bill. mittees and the 7(a) industry have already amendment to promote women in busi- The letters follow. agreed are equitable. ness and safeguard one of their only While NAGGL is generally opposed to pro- MARCH 10, 2004. grammatic fee increases, the 2004 budget for dedicated resources of support: the na- DEAR REPRESENTATIVE: Today, as the the 7(a) program has made his concession tionwide network of women’s business House prepares to vote on H.R. 3915, we are necessary. NAGGL testified in 2003 that 2004 centers. The Republicans that blocked writing to express our concerns with this program demand would be nearly $12 billion, our amendment—in support of the ad- legislation. We are very disappointed that it but the Administration adamantly disagreed ministration’s policy to eliminate ex- does not include a SBA 7(a) program solu- with our estimate, providing program level perienced, efficient and effective wom- tion. Without a solution the 7(a) program of only $9.5 billion. The Administration has will not be allowed to create much needed en’s business centers in favor of new also failed to reprogram any additional jobs to help our economy. money to the 7(a) program or offer a supple- and untested centers—are potentially The SBA’s flagship 7(a) loan program, the mental appropriations request. depriving thousands of women in busi- single largest provider of long-term start-up As a result, the SBA’s flagship 7(a) loan ness access to much-needed assistance. and expansion loans to America’s small busi- program, the single largest provider of long- The Snowe-Kerry amendment, like S. nesses, has been crippled since the beginning term start-up and expansion loans to Ameri- 2267, would have made a small adjust- of this fiscal year, when the SBA tempo- can’s small businesses, has been crippled ment to the Women’s Business Center rarily shut it down due to a funding short- since the beginning of this fiscal year, when program that corrects an outdated fall. When the Agency reopened the program the SBA temporarily shut it down due to a a week later, it implemented an artificial funding formula, without added cost to funding shortfall. When the Agency reopened loan cap of $70,000—a reduction of more than the program a week later, it implemented an the Treasury. The adjustment would 50% of the program’s statutory loan limit of artificial loan cap of $750,000—a reduction of have changed the portion of funding al- $2 million—and a prohibition on piggyback more than 50% of the program’s statutory lowed for women’s business centers in loans, which would have allowed lenders to loan limit of $2 million—and a prohibition on the sustainability part of the program make loans in excess of a loan cap. piggyback loans, which would have allowed to keep up with the increasing number Businesses who had already submitted ap- lenders to make loans in excess of a loan cap. of centers that will need funding this plications for loans in excess of the new cap Businesses who had already submitted ap- fiscal year. Without it, all grants to were then told their deals would not qualify plications for loans in excess of the new cap for the program. These applicants had gone were then told their deals would not qualify sustainability centers in 39 States through months of financial planning and for the program. These applicants had gone could be cut in half—or worse, 23 expe- had been promised their loans would be ap- through months of financial planning and rienced centers could lose funding com- proved. Many had already begun purchasing had been promised their loans would be ap- pletely. Our amendment was a bipar- equipment and hiring employees. If their proved. Many had already begun purchasing tisan compromise intended to maintain deals do not get done, many will lose earnest equipment and hiring employees. And if an effective women’s business center money they had taken from personal savings their deals don’t get done, many will lose network; a compromise that was and retirement plans to inject into these earnest money they had taken from personal loans. savings and retirement plans to inject into agreed to by Chair SNOWE, myself, and Other potential applicants who would ordi- these loans. the bipartisan leadership of the House narily qualify for the 7(a) program have Other potential applicants who would ordi- Small Business Committee. It was sup- since been told there is no alternative to fi- narily qualify for the 7(a) program have ported by women’s groups across the nance their start-up or expansion. The net since been told there is no alternative to fi- country, and it is my sincere hope that result to these small businesses is a loss of nance their start-up or expansion. The net my colleagues in Congress will support faith in the U.S. government. The net result result to these small businesses is a loss of this change in the very near future. to the economy is a loss of jobs. faith in the U.S. government. The net result I thank the broad coalition of small A solution to this lingering problem does to the economy is a loss of jobs. The provisions of S. 2186 fix this problem, business trade associations that have exist and it has been communicated to the House Small Business Committee. This pro- and the bill has NAGGL’s full support. As worked on the various bills and sup- posal has bipartisan support on the Small the trade association representing lenders ported the provisions in my bill, S. Business Committee, as well as the support who make over 80% of loans in the 7(a) pro- 2186: The trade association of Women of banking and small business trade groups. gram every year, we can attest to the fact Impacting Public Policy (WIPP) and The proposed solution would increase fees for that the minimal fee increases in S. 2186 are the National Association of Women’s lenders to ensure that there is no budget im- ones that lenders will pay and will not be Business Owners (NAWBO), the Na- pact. It would maintain the 7(a) program. passed along to borrowers. We also continue tional Association of Government However, H.R. 3915 ignores this solution. to oppose the SBA’s legislative proposal to reduce the guarantee on all 7(a) loans to 50% Guaranteed Lenders (NAGGL), the Without a 7(a) solution, approximately $3 billion in loans will remain unavailable to and allow the legislation that provided for American Bankers Association, the small businesses for the remainder of FY lender and borrower fee decreases through Independent Community Bankers Asso- 2004—a net loss of approximately 90,000 jobs. the end of this fiscal year to simply sunset. ciation and the U.S. Chamber of Com- We also fear that if a swift and equitable so- Without the provisions of S. 2186, $3 billion merce for endorsing the provisions re- lution is not enacted, many 7(a) lenders will in loans will remain unavailable to small lating to the 7(a) Loan Guarantee Pro- flee the program, leaving a void in avail- businesses for the remainder of FY 2004—a gram; WIPP, NAWBO, and the Associa- ability of the long-term financing that is so net loss of approximately 90,000 jobs. We also tion of Women’s Business Centers for crucial to small businesses’ success. fear that if a swift and equitable solution is We request that Congress bolster economic not enacted, many 7(a) lenders will flee the fully supporting the provisions relating recovery and the small businesses that drive program, leaving a void in availability of the to the Women’s Business Centers pro- it by enacting a 7(a) program solution that long-term financing that is so crucial to gram, as well as the cosponsors of S. has the full support of Congress and the in- small businesses’ success. This will be occur- 2186. I think anyone who knows of dustry. ring at a time when our economy is in des- these groups, their members and their Sincerely, perate need of a shot in the arm. leadership, knows that they work very American Bankers Association. We request that you press for swift passage well with both sides of the aisle and America’s Community Bankers. of S. 2186 to bolster economic recovery and Independent Community Bankers of Amer- the small businesses that can drive it. Thank with the leadership of our Committee ica. you in advance for your consideration. and also the House Committee on National Association of Government Guar- Sincerely, Small Business. Working cooperatively anteed Lenders. TONY WILKINSON, in a bipartisan fashion makes good The Financial Services Roundtable. President and CEO.

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CRYSTAL COLLECTION, est SBA 7(a) lender, is a strong supporter of ment and Budget to reopen the 7(a) loan Suwanee, GA, April 5, 2004. the Senate and House bill that is also sup- guarantee program and remove the $750,000 Hon. JOHN KERRY, ported by the ‘‘Access to Capital Coalition loan cap as soon as possible. Ranking Member, Committee on Small Business Organization,’’ which will permit the reopen- Sincerely, and Entrepreneurship, Russell Senate Office ing of a viable 7(a) loan program in America. DONALD WILSON, Building, Washington, DC. This means once law, SBA would be required President. DEAR SENATOR KERRY: Please support the to drop the prohibition against ‘‘piggyback 7a loan so more small business can succeed. loans’’ and eliminate the current loan cap. COMPASS BANK, The following suggestions from the National As most every 7(a) lending organization has Houston, TX, January 12, 2004. Association of Women Business Owners indicated since early January 2004, it is abso- Senator JOHN KERRY, (NAWBO): lutely critical that these 7(a) program im- Russell Senate Office Building, Allow piggyback loans, but charge 0.50 per- pediments be dropped at the earliest possible Washington, DC. cent lender fee for each; date. As you are aware, no knowledgeable DEAR SENATOR KERRY: I am writing to Raise Lender Fees by 0.10 percent; and trade organization or 7(a) lending entity sup- alert you to an economic crisis that should For loans that are under $150,000, have ports a mandatory 50% maximum loan guar- have been avoided but can still be remedied. lenders pass the SBA the 0.25 percent fee anty, as it would represent a slow death of The U.S. Small Business Administration that lenders currently keep for themselves. the 7(a) loan program. Most every commu- (SBA) claims it has run out of money for its This only applies to these small loans. nity in America utilizes the 7(a) loan pro- flagship 7(a) loan program. This is because Thank you for your support. gram as a major part of their economic de- the Administration did not request adequate Sincerely, velopment/job creating/job retention pro- funds for the program for fiscal year 2004. SHELLY BLOOM, gram. If one removed from our economy all The Administration only requested a pro- President. businesses and the jobs they create directly gram level of $9.3 billion, even though the and indirectly, who at one time or another program did $11.3 billion last year, even with LINDEN INTERNATIONAL, received 7(a) loan assistance, this would be a a $500,000 loan cap in place for nearly half of Wayne, PA. totally different country. To assist the re- the fiscal year. NAGGL estimated that de- Hon. JOHN KERRY, covery of our economy and the retention and mand would be $12.5 billion beginning with Ranking Member, Senate Committee on Small creation of jobs, it is absolutely essential our budget testimonies in February 2003. Business and Entrepreneurship, Russell that the 7(a) loan program be returned to its Loan volume for the first three months of Senate Office Building, Washington, DC. prior dynamic status. Thank you for your fiscal year 2004 was $3.137 billion, a level of DEAR SENATOR KERRY: I would greatly ap- leadership in this matter. Please encourage demand that clearly supports NAGGL’s esti- preciate your support for the 7a program the Administration and your colleagues to mates of demand. ‘‘rescue’’. I favor the following to help me support the House and the Senate bill that Because the Administration did not seek and many other small businesses rebound would solve this current dilemma! sufficient program level, the SBA has now and re-grow: Respectfully submitted, shut down the 7(a) program until further no- 1. Allow piggyback loans, and charge a 0.50 DERYL K. SCHUSTER, tice, depriving small businesses of the cap- percent lender fee; Executive Vice President, ital they need in order to expand their busi- 2. Raise lender fees by 0.10 percent; and Director, Governmental Affairs. nesses, hire new people, and aid the Amer- 3. For loans under $150,000, have lenders ican economic recovery. The shutdown oc- pay the SBA the 0.25 percent fee that the ASSOCIATION OF SMALL BUSINESS curred just a few weeks after SBA Adminis- lender now keeps for themselves. DEVELOPMENT CENTERS, trator Barreto told the NAGGL Annual Con- We are all keening for help to re-establish Burke, VA, January 9, 2004. ferees that the ‘‘program would not be shut- ourselves and assure a firm foundation for Hon. JOHN KERRY, down, and that the $9.3 billion program re- the future of small businesses in the US. U.S. Senate. quest would be sufficient.’’ Sincere thanks. DEAR SENATOR KERRY: I am writing about In unprecedented fashion, the SBA is now Very truly yours, the recent decision by the U.S. Small Busi- rejecting and returning all loan applications. MARY KAY HAMM, ness Administration (SBA) to suspend mak- During previous funding shortages, the SBA President and CEO. ing loan guarantees for small businesses continued to accept and process loan appli- under the 7(a) loan program. cations. The loans would then be funded PROACTIVE SOLUTIONS INC., As you know, the SBA announced on De- when loan funds became available. The Plantation, FL, March 24, 2004. cember 23rd that it would begin imposing a SBA’s action, to make small businesses pay Hon. JOHN KERRY, $750,000 cap on 7(a) loan guarantees effective for its own mismanagement, is unconscion- Ranking Member, Committee on Small Business January 8th, even though Congress has au- able. and Entrepreneurship, Russell Senate Office thorized loan guarantees up to $2 million. Because small businesses are the chief en- Building, Washington, DC. The SBA’s announcement led small busi- gine of economic recovery, America can ill DEAR SENATOR KERRY: My name is Sheila nesses with loan applications for more than afford a halt in funding to small businesses Tobier and I am the president elect of $750,000 to submit their applications before in this time when the economy is just re- NAWBO (National Association of Women the announcement deadline. As a result, the gaining steam. Business Owners). We ask the following from SBA experienced a significant increase in Though the SBA has been implored by the committee. 7(a) loan applications and suspended the pro- members of both major political parties to Absent the SBA asking Congress for addi- gram until further announcement, on the immediately seek an equitable solution, the tional funding, NAWBO supports increasing grounds that the increase in loan applica- Administration has thus far not come for- fees on lenders as an approach to adequately tions had led to a shortfall in funding. ward with any positive solutions. The Ad- funding the SBA 7(a) program and lifting re- Small businesses throughout the country ministration has thus far responded only strictions. have seen their loans put in jeopardy as a with loan caps, program shutdowns, and ex- Specifically, NAWBO would like the pro- consequence of this decision, and applicants cuses why this is Congress’ fault. gram to: for loans above $750,000 may be unable to ob- One conclusion could be that the Adminis- Allow piggyback loans, but charge a 0.50 tain loan guarantees—or be forced to re- tration desires to either dismantle or signifi- percent lender fee for each; apply—even if the 7(a) loan program is re- cantly change the SBA and the 7(a) program. Raise lender fees by 0.10 percent; and opened. The ASBDC is hearing from Small I’m asking you not to let this happen. For loans that are under $150,000, have Business Development Center (SBDC) coun- The Administration should either request lenders pay the SBA the 0.25 percent fee that selors in the field that the decision to sus- a reprogramming of funds or submit a sup- lenders currently keep for themselves. This pend the 7(a) loan program could pose a se- plemental appropriation request sufficient to only applies to these small loans. vere hardship for many SBDC clients. fund the 7(a) program to $12.5 billion this Thank you for assisting us in this endeav- In the past three years, the 7(a) loan guar- year. The SBA should be required to lift both or. antee program has helped make financing the current program freeze and the artificial Sincerely, available to more than 40,000 start-up small $750,000 cap it has put in place to restrict SHEILA TOBIER, businesses and 99,000 existing small busi- small business access to capital. The SBA President. nesses—leading to the creation of more than should be required to stop the budget gim- one million new jobs. Suspending this vital micks and put forward a credible budget re- BUSINESS LOAN EXPRESS, small business lending program at this crit- quest that ensures this program is funded Wichita, KS, March 5, 2004. ical stage of the economy’s recovery from properly in fiscal year 2005 and beyond with- Hon. JOHN F. KERRY, the recession will prevent the start-up and out fee increases to borrowers and lenders. Ranking Minority Member, Committee on Small the expansion of small businesses through- Don’t let this Administration dismantle a Business, U.S. Senate, Russell Senate Office out the country, and stymie the economy’s program that has served small businesses so Building, Washington, DC. creation of new jobs. well for so long. DEAR MR. KERRY: Please be advised that I appreciate all that you do to support Sincerely, Business Loan Center, LLC, aka Business small business. I urge you to continue to HARRIET BOSHAW, Loan Express, LLC, the nation’s third larg- work with the SBA and the Office of Manage- SBA Lending Department.∑

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00054 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3789 COMMEMORATING HENRY MANCINI and fellow composer, Jack Elliott. The added an additional $101 million for re- ∑ Mrs. FEINSTEIN. Mr. President, it is Henry Mancini Institute’s mission is to search, a 25 percent increase. my pleasure to honor Henry Mancini, a nurture the future of music by pro- Now that the CARES process is wrap- fine composer, conductor, and ar- viding comprehensive professional ping up, VA can begin new construc- ranger. Mr. Mancini was one of the training and multilevel outreach pro- tion projects. We will be watching to most versatile musical talents and one grams that make a direct impact in make sure the Secretary carefully con- of America’s most celebrated musi- people’s lives. Mr. Mancini himself es- siders all proposed closings. I look for- cians of the twentieth century. He lent tablished scholarships and fellowships ward to seeing new hospitals and clin- his talents to many films and tele- at the Nation’s top music schools. ics opened in Kentucky and around the vision series, the themes and melodies Many of tomorrow’s composers, con- Nation. Last year I told the Secretary that of which are recognizable to listeners ductors, and arrangers have benefited VA had come a long way in fixing its the world over, even if they are unfa- from Mancini programs at New York’s problems but there was still a long way miliar with the name of the composer. Julliard School of Music his alma April 16 would have been Henry mater, and in Los Angeles at USC and to go. I am glad to say that the system Mancini’s 80th birthday. Even though UCLA. is stronger this year, but we must not Mr. Mancini passed away in 1994 after a I would also like to recognize the let up. We must keep working to make long battle with cancer, his contribu- Mancini family, who has gracefully sure our veterans receive the assist- tion to music and the arts has not been embraced Henry’s legacy and allowed ance they need in a timely and conven- ient manner. I am committed to doing forgotten. for future generations of musicians to The United States Postal Service will celebrate his accomplishments and just that. Finally, I recognize all the Kentucky unveil the Henry Mancini commemora- contributions. My good friend Ginny veterans in the hearing room. I had a tive stamp next week. The unveiling Mancini, whom he married in 1947, has good visit with some of you in my of- ceremony on April 13 will take place at relentlessly worked to bring about the fice earlier this week. Thank you for the Music Center Plaza in Los Angeles creation of this stamp, as have their making the trip today and thank you and will be hosted by our distinguished children: Christopher, Monica, and for your service to our Nation and your former colleague, John Glenn, a long- Felice. fellow veterans.∑ time friend of Mancini. Senator Glenn, Honoring Henry Mancini with this it might be added, took a recording of commemorative stamp will serve as a f Mancini’s timeless classic, ‘‘Moon lasting tribute, just as his music is a MESSAGES FROM THE PRESIDENT ∑ River,’’ on his return to space in Octo- lasting gift to the world. Messages from the President of the ber 1998. f United States were communicated to In his lifetime, Henry Mancini’s mas- COMMITTEE ON VETERANS’ the Senate by Mr. Williams, one of his terful talents were recognized with 72 AFFAIRS secretaries. Grammy Award nominations and 20 Grammy wins, eighteen Academy ∑ Mr. BUNNING. Mr. President, it is a f Award nominations and four Oscar pleasure to be here today with our col- EXECUTIVE MESSAGES REFERRED wins, and a Golden Globe. leagues from the House Veterans Af- As in executive session the Presiding While awards are a notable measure fairs Committee and the members of Officer laid before the Senate messages of talent, the scope of Mr. Mancini’s the Veterans of Foreign Wars. The from the President of the United work is more impressive than the VFW has a rich tradition in enhancing States submitting sundry nominations nominations he received for that work. the lives of millions through its com- which were referred to the appropriate During the 1950s, Mr. Mancini had a munity service programs and special committees. hand in the scores of over 100 films pro- projects, and I am proud to have their (The nominations received today are duced by Universal-International Stu- services in the Commonwealth of Ken- printed at the end of the Senate pro- dios. It was also at Universal that Mr. tucky. ceedings.) The work of our committees is as im- Mancini met Blake Edwards, and to- f gether they worked on 26 films over 30 portant as ever because of the thou- years. These collaborations produced sands of new wartime veterans leaving EXECUTIVE AND OTHER some of Mancini’s most popular and the service and the increasing needs of COMMUNICATIONS award-winning compositions, including our aging veterans. We owe all our vet- The following communications were the ‘‘Peter Gunn’’ television series, erans a debt of gratitude and I am com- laid before the Senate, together with ‘‘Breakfast at Tiffany’s,’’ ‘‘The Pink mitted to making sure we provide them accompanying papers, reports, and doc- Panther’’ films, and ‘‘Victor/Victoria.’’ with ample benefits and quality med- uments, and were referred as indicated: In all, over 500 of Mr. Mancini’s ical care. EC–6984. A communication from the Sec- works were published. Mr. Mancini re- President Bush has proposed signifi- retary of Agriculture, transmitting, a draft corded over 90 albums with styles from cant increases in spending for our vet- of proposed legislation relative to pre- jazz to classical, including eight al- erans, but it is important to keep in scribing, adjusting, and collecting fees in- bums certified gold by the Recording mind that his budget is only a starting curred for activities under the Animal Wel- Industry Association of America. As an point. Each year he has requested in- fare Act; to the Committee on Agriculture, Nutrition, and Forestry. in-demand concert performer, he creases in funding for the VA and Con- EC–6985. A communication from the Execu- logged over 600 symphony perform- gress has provided even more beyond tive Director, Commodity Futures Trading ances, and conducted such symphony those requests. Commission, transmitting, pursuant to law, orchestras as the London Symphony The last 2 years Congress has pro- the report of a rule entitled ‘‘17 CFR Part 1, Orchestra, the Israel Philharmonic, the vided unprecedented increases in fund- Investment of Customer Funds (69 FR 6140, Los Angeles Philharmonic, and the ing for VA health care. I support an- February 10, 2004)’’ (RIN3038–AC01) received Royal Philharmonic Orchestra. other substantial increase for VA on April 5, 2004; to the Committee on Agri- culture, Nutrition, and Forestry. Andy Williams said at Mancini’s 70th health care this year and I am con- EC–6986. A communication from the Prin- birthday celebration: ‘‘The wonders of fident we will deliver. In fact, the budg- cipal Deputy, Office of the Under Secretary Henry Mancini will be heard in every et resolution currently before the Sen- of Defense for Personnel and Readiness, De- corner of the world right up to the ate provides for an extra $1.3 billion for partment of Defense, transmitting, pursuant minute this planet cools and shrinks to the VA and rejects the proposed co-pay to law, the report of the authorization of of- the size of an eighth note.’’ But it is increases and enrollment fees. ficers to wear the insignia of brigadier gen- more than the music he composed that VA conducts some of the most spe- eral; to the Committee on Armed Services. cialized medical research in our Na- EC–6987. A communication from the Reg- will be Henry Mancini’s legacy. ister Liaison Officer, Department of Defense, In honor of Mancini’s dedication to tion. That research is especially impor- transmitting, pursuant to law, the report of educating young musicians, the Henry tant to disabled veterans. I oppose the a rule entitled ‘‘Appeals and Hearings Proce- Mancini Institute was founded in Los proposed cut in VA research. The Budg- dures’’ (RIN0729–AA74) received on April 5, Angeles in 1997 by his longtime friend et Committee rejected that cut and I 2004; to the Committee on Armed Services.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00055 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3790 CONGRESSIONAL RECORD — SENATE April 6, 2004 EC–6988. A communication from the Chair- ulations’’ (RIN2126–AA32) received on April 5, erel, Squid, and Butterfish Fisheries; Closure man and President, Export-Import Bank of 2004; to the Committee on Commerce, of Fishery for Loligo Squid for Quarter I’’ re- the United States, transmitting, pursuant to Science, and Transportation. ceived on April 5, 2004; to the Committee on law, a report involving exports to Mexico; to EC–6999. A communication from the Regu- Commerce, Science, and Transportation. the Committee on Banking, Housing, and lations Officer, Federal Highway Adminis- EC–7008. A communication from the Direc- Urban Affairs. tration, Department of Transportation, tor, National Institute of Standards and EC–6989. A communication from the Chair- transmitting, pursuant to law, the report of Technology, Department of Commerce, man and President, Export-Import Bank of a rule entitled ‘‘Federal Lands Highway Pro- transmitting, pursuant to law, the report of the United States, transmitting, pursuant to gram; Transportation Planning Procedures a rule entitled ‘‘Advanced Technology Pro- law, the Bank’s Annual Report to Congress; and Management Systems Pertaining to the gram’’ (RIN0693–ZA56) received on April 5, to the Committee on Banking, Housing, and National Park Service, Including the Park 2004; to the Committee on Commerce, Urban Affairs. Roads and Parkways Programs’’ (RIN2125– Science, and Transportation. EC–6990. A communication from the Gen- AE52) received on April 5, 2004; to the Com- EC–7009. A communication from the Direc- eral Counsel, National Credit Union Admin- mittee on Commerce, Science, and Transpor- tor, National Institute of Standards and istration, transmitting, pursuant to law, the tation. Technology, Department of Commerce, report of a rule entitled ‘‘12 C.F.R 702 EC–7000. A communication from the Chief, transmitting, pursuant to law, the report of Prompt Corrective Action’’ received on April Regulations and Administrative Law, Coast a rule entitled ‘‘Procedures for Implementa- 5, 2004; to the Committee on Banking, Hous- Guard, transmitting, pursuant to law, the re- tion of the National Construction Safety ing, and Urban Affairs. port of a rule entitled ‘‘Safety/Security Zone Team Act’’ (RIN0693–AB53) received on April EC–6991. A communication from the Sec- Regulations: Suisun Bay, Concord California 5, 2004; to the Committee on Commerce, retary of the Treasury, transmitting, pursu- [COTP San Francisco Bay 04–006]’’ (RIN1625– Science, and Transportation. ant to law, a report on the national emer- AA00) received on April 5, 2004; to the Com- EC–7010. A communication from the Direc- gency declared in Executive Order 13224 of mittee on Commerce, Science, and Transpor- tor, National Institute of Standards and September 23, 2001, with respect to persons tation. Technology, Department of Commerce, who commit, threaten to commit, or support EC–7001. A communication from the Chief, transmitting, pursuant to law, the report of terrorism; to the Committee on Banking, Regulations and Administrative Law, Coast a rule entitled ‘‘Summer Undergraduate Re- Housing, and Urban Affairs. Guard, transmitting, pursuant to law, the re- search Fellowships (SURF) Gaithersburg and EC–6992. A communication from the Under port of a rule entitled ‘‘Drawbridge Regula- Boulder Programs; Availability of Funds’’ Secretary for Industry and Security, Depart- tions (Including 7 Regulations): [CGD07–04– (RIN0693–ZA53) received on April 5, 2004; to ment of Commerce, transmitting, pursuant 033], [CGD08–04–008], [CGD08–04–007], [CGD01– the Committee on Commerce, Science, and to law, a report relative to new foreign pol- 04–008], [CGD01–04–022], [CGD01–04–018], Transportation. icy-based regional stability export controls [CGD07–04–035]’’ (RIN1625–AA09) received on EC–7011. A communication from the Ad- on certain items on the Commerce Control April 5, 2004; to the Committee on Com- ministrator, Federal Aviation Administra- List; to the Committee on Banking, Housing, merce, Science, and Transportation. tion, Department of Transportation, trans- and Urban Affairs. EC–7002. A communication from the Assist- mitting, pursuant to law, the Administra- EC–6993. A communication from the Trial ant Administrator for Fisheries, National tion’s report required by the FAA Reauthor- Attorney, Federal Railroad Administration, Marine Fisheries Service, Department of ization Act of 1996; to the Committee on Department of Transportation, transmitting, Commerce, transmitting, pursuant to law, Commerce, Science, and Transportation. pursuant to law, the report of a rule entitled the report of a rule entitled ‘‘Final Rule to EC–7012. A communication from the Sec- ‘‘Railroad Locomotive Safety Standards: Establish Referendum Procedures and a retary of Energy, transmitting, pursuant to Clarifying Amendments; Headlights and Vote-Weighting Formula for a Gulf of Mex- law, a report relative to the Exxon and Auxiliary Lights’’ (RIN2130–AB58) received ico Red Snapper Individual Fishing Quota Stripper Well oil overcharge funds; to the on April 5, 2004; to the Committee on Com- Program’’ (RIN0648–AR48) received on April Committee on Energy and Natural Re- merce, Science, and Transportation. 5, 2004; to the Committee on Commerce, sources. EC–6994. A communication from the Attor- Science, and Transportation. EC–7013. A communication from the Assist- ney, Office of the Chief Counsel, Transpor- EC–7003. A communication from the Assist- ant Secretary for Policy, Management, and tation Security Administration, transmit- ant Administrator for Fisheries, National Budget, Department of the Interior, trans- ting, pursuant to law, the report of a rule en- Marine Fisheries Service, Department of mitting, pursuant to law, the Department’s titled ‘‘Security Threat Assessment for Indi- Commerce, transmitting, pursuant to law, revised Strategic Plan for Fiscal Years 2003 viduals Applying for a Hazardous Materials the report of a rule entitled ‘‘Final Rule to through 2008; to the Committee on Energy Endorsement for a Commercial Drivers Li- Remove Expiration Date of Regulations Im- and Natural Resources. cense’’ (RIN1652–AA17) received on April 5, plemented Under the AFA’’ (RIN0648–AR13) EC–7014. A communication from the Chair- 2004; to the Committee on Commerce, received on April 5, 2004; to the Committee man, Nuclear Regulatory Commission, trans- Science, and Transportation. on Commerce, Science, and Transportation. mitting, pursuant to law, a report relative to EC–6995. A communication from the Senior EC–7004. A communication from the Direc- the status of the Commission’s latest month- Attorney, Research and Special Programs tor, Office of White House Liaison, Depart- ly report on the status of its licensing and Administration, Department of Transpor- ment of Commerce, transmitting, pursuant regulatory duties; to the Committee on En- tation, transmitting, pursuant to law, the re- to law, the report of a vacancy and nomina- vironment and Public Works. port of a rule entitled ‘‘Pipeline Integrity tion for the position of Deputy Secretary, EC–7015. A communication from the Chair- Management in High Consequence Areas Department of Commerce, received on April man, Nuclear Regulatory Commission, trans- (Gas Transmission Pipelines); Corrections to 5, 2004; to the Committee on Commerce, mitting, pursuant to law, a report relative to Final Rule’’ (RIN2137–AD54) received on Science, and Transportation. the status of the Commission’s latest month- April 5, 2004; to the Committee on Com- EC–7005. A communication from the Assist- ly report on the status of its licensing and merce, Science, and Transportation. ant Administrator for Fisheries, National regulatory duties; to the Committee on En- EC–6996. A communication from the Regu- Marine Fisheries Service, Department of vironment and Public Works. lations Officer, Federal Motor Carrier Safety Commerce, transmitting, pursuant to law, EC–7016. A communication from the Assist- Administration, Department of Transpor- the report of a rule entitled ‘‘Final Rule; ant Secretary, Legislative Affairs, Depart- tation, transmitting, pursuant to law, the re- Final 2004 Specifications for the Atlantic ment of State, transmitting, pursuant to port of a rule entitled ‘‘Safety Performance Deep-Sea Red Crab Fishery’’ (RIN0648–AR58) law, the report of a rule entitled ‘‘Passport History of New Drivers’’ (RIN2126–AA17) re- received on April 5, 2004; to the Committee Procedures—Amendment to Passport Regu- ceived on April 5, 2004; to the Committee on on Commerce, Science, and Transportation. lations’’ (RIN1400–ZA05) received on April 5, Commerce, Science, and Transportation. EC–7006. A communication from the Assist- 2004; to the Committee on Foreign Relations. EC–6997. A communication from the Regu- ant Administrator for Fisheries, National EC–7017. A communication from the Assist- lations Officer, Federal Motor Carrier Safety Marine Fisheries Service, Department of ant Secretary, Legislative Affairs, Depart- Administration, Department of Transpor- Commerce, transmitting, pursuant to law, ment of State, transmitting, pursuant to tation, transmitting, pursuant to law, the re- the report of a rule entitled ‘‘Prohibiting Di- law, the report of a rule entitled ‘‘Depart- port of a rule entitled ‘‘Minimum Training rected Fishing for Pacific Cod by Vessels ment of State Acquisition Regulation’’ Requirements for Longer Combination Vehi- Catching Pacific Cod for Processing by the (RIN1400–AB06) received on April 5, 2004; to cle (LCV) Operators and LCV Driver-Instruc- Offshore Component in the Western Regu- the Committee on Foreign Relations. tor Requirements’’ (RIN2126–AA08) received latory Area of the Gulf of Alaska’’ received EC–7018. A communication from the Assist- on April 5, 2004; to the Committee on Com- on April 5, 2004; to the Committee on Com- ant Secretary, Legislative Affairs, Depart- merce, Science, and Transportation. merce, Science, and Transportation. ment of State, transmitting, pursuant to EC–6998. A communication from the Regu- EC–7007. A communication from the Assist- law, a report relative to the prevention of lations Officer, Federal Motor Carrier Safety ant Administrator for Fisheries, National nuclear proliferation; to the Committee on Administration, Department of Transpor- Marine Fisheries Service, Department of Foreign Relations. tation, transmitting, pursuant to law, the re- Commerce, transmitting, pursuant to law, EC–7019. A communication from the Assist- port of a rule entitled ‘‘Transportation of the report of a rule entitled ‘‘Fisheries of the ant Secretary, Legislative Affairs, Depart- Household Goods; Consumer Protection Reg- Northeastern United States; Atlantic Mack- ment of State, transmitting, pursuant to the

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00056 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3791 Arms Export Control Act, the certification Staff, Food and Drug Administration, trans- systems on land, on water, or through the of a proposed license for the export of de- mitting, pursuant to law, the report of a rule air, and for other purposes; to the Com- fense articles or defense services sold com- entitled ‘‘Prior Notice of Imported Food mittee on the Judiciary. mercially under a contract in the amount of Under the Public Health Security and Bio- f $100,000,000 or more to Japan; to the Com- terrorism Preparedness and Response Act of mittee on Foreign Relations. 2002; Correction’’ (Doc. No. 2002N–0278) re- SUBMISSION OF CONCURRENT AND EC–7020. A communication from the Assist- ceived on April 5, 2004; to the Committee on SENATE RESOLUTIONS ant Secretary, Legislative Affairs, Depart- Health, Education, Labor, and Pensions. The following concurrent resolutions ment of State, transmitting, pursuant to EC–7032. A communication from the Direc- law, the Department’s Inventory for Fiscal tor, Regulations Policy and Management and Senate resolutions were read, and Year 2003; to the Committee on Govern- Staff, Food and Drug Administration, trans- referred (or acted upon), as indicated: mental Affairs. mitting, pursuant to law, the report of a rule By Mr. FEINGOLD: EC–7021. A communication from the Dep- entitled ‘‘Prior Notice of Imported Food S. Res. 332. A resolution observing the uty Archivist of the United States, National Under the Public Health Security and Bio- tenth anniversary of the Rwandan Genocide Archives and Records Administration, trans- terrorism Preparedness and Response Act of of 1994; to the Committee on Foreign Rela- mitting, pursuant to law, the report of a rule 2002; Correction’’ (Doc. No. 2002N–0278) re- tions. entitled ‘‘Publication of Revised Bylaws of ceived on April 5, 2004; to the Committee on f the Interagency Security Classification Ap- Health, Education, Labor, and Pensions. peals Panel’’ received on April 5, 2004; to the EC–7033. A communication from the Dep- ADDITIONAL COSPONSORS Committee on Governmental Affairs. uty General Counsel, Small Business Admin- EC–7022. A communication from the Sec- S. 1316 istration, transmitting, pursuant to law, the retary, Postal Rate Commission, transmit- report of a rule entitled ‘‘Small Business At the request of Mr. BROWNBACK, the ting, pursuant to law, a report of activities Size Standards; Testing Laboratories’’ name of the Senator from Illinois (Mr. under the Government in Sunshine Act for FITZGERALD) was added as a cosponsor calendar year 2003; to the Committee on Gov- (RIN3245–AE78) received on April 5, 2004; to ernmental Affairs. the Committee on Small Business and Entre- of S. 1316, a bill to treat payments EC–7023. A communication from the Acting preneurship. under the Conservation Reserve Pro- Director, Office of Government Ethics, trans- EC–7034. A communication from the Dep- gram as rentals from real estate. uty General Counsel, Small Business Admin- mitting, pursuant to law, the Office’s au- S. 1411 dited financial statements for Fiscal Year istration, transmitting, pursuant to law, the At the request of Mr. KERRY, the 2003; to the Committee on Governmental Af- report of a rule entitled ‘‘Small Business fairs. Size Standards; Information Technology name of the Senator from Illinois (Mr. EC–7024. A communication from the Acting Value Added Reseller’’ (RIN3245–AE80) re- DURBIN) was added as a cosponsor of S. Director, Office of Government Ethics, trans- ceived on April 5, 2004; to the Committee on 1411, a bill to establish a National mitting, pursuant to law, the Office’s Annual Small Business and Entrepreneurship. Housing Trust Fund in the Treasury of Program Performance Report for Fiscal Year EC–7035. A communication from the Direc- the United States to provide for the de- 2003; to the Committee on Governmental Af- tor, Regulations Management, National velopment of decent, safe, and afford- fairs. Cemetery Administration, transmitting, pur- EC–7025. A communication from the Chair- suant to law, the report of a rule entitled able housing for low-income families, man, Federal Communications Commission, ‘‘State Cemetery Grants’’ (RIN2900–AH46) re- and for other purposes. transmitting, pursuant to law, the Commis- ceived on April 5, 2004; to the Committee on S. 1549 sion’s Annual Program Performance Report Veterans’ Affairs. At the request of Mrs. DOLE, the for Fiscal Year 2003; to the Committee on f name of the Senator from New Mexico Governmental Affairs. EC–7026. A communication from the Audi- INTRODUCTION OF BILLS AND (Mr. BINGAMAN) was added as a cospon- tor of the District of Columbia, transmit- JOINT RESOLUTIONS sor of S. 1549, a bill to amend the Rich- ting, pursuant to law, a report entitled ard B. Russell National School Lunch ‘‘Audit of Advisory Neighborhood Commis- The following bills and joint resolu- Act to phase out reduced price lunches sion 1D for Fiscal Years 2000 through 2003, as tions were introduced, read the first and breakfasts by phasing in an in- of June 30, 2003’’; to the Committee on Gov- and second times by unanimous con- crease in the income eligibility guide- ernmental Affairs. sent, and referred as indicated: EC–7027. A communication from the Audi- lines for free lunches and breakfasts. tor of the District of Columbia, transmit- By Mr. NELSON of Nebraska (for him- S. 1709 self and Mr. BROWNBACK): ting, pursuant to law, a report entitled ‘‘Cer- At the request of Mr. CRAIG, the S. 2284. A bill to expand the medicare rural tification of the Fiscal Year 2004 Revenue Es- name of the Senator from Iowa (Mr. timate in Support of the District’s community hospital demonstration program to include outpatient services; to the Com- HARKIN) was added as a cosponsor of S. $173,995,000 General Obligation Bonds (Series 1709, a bill to amend the USA PA- 2003B) and $140,325,000 Multimodal General mittee on Finance. Obligation Bonds (Series 2003C and 2003D)’’; By Mr. HATCH (for himself and Mr. TRIOT ACT to place reasonable limita- to the Committee on Governmental Affairs. BENNETT): tions on the use of surveillance and the EC–7028. A communication from the Sec- S. 2285. A bill to direct the Secretary of the issuance of search warrants, and for retary of Health and Human Services, trans- Interior to convey a parcel of real property other purposes. to Beaver County, Utah; to the Committee mitting, pursuant to law, a report relative to S. 1948 child welfare outcomes; to the Committee on on Energy and Natural Resources. Health, Education, Labor, and Pensions. By Mr. VOINOVICH (for himself, Mrs. At the request of Mr. REID, the name EC–7029. A communication from the Direc- DOLE, and Mr. DEWINE): of the Senator from Hawaii (Mr. tor, Regulations Policy and Management S. 2286. A bill to designate the Orville INOUYE) was added as a cosponsor of S. Staff, Food and Drug Administration, trans- Wright Federal Building and the Wilbur 1948, a bill to provide that service of mitting, pursuant to law, the report of a rule Wright Federal Building in Washington, Dis- the members of the organization entitled ‘‘Prescription Drug Marketing Act trict of Columbia; to the Committee on En- known as the United States Cadet vironment and Public Works. of 1987; Prescription Drug Amendments of Nurse Corps during World War II con- 1992; Policies, Requirements, and Adminis- By Ms. LANDRIEU: trative Procedures; Delay of Effective Date’’ S. 2287. A bill to adjust the boundary of the stituted active military service for (RIN0905–AC81) received on April 5, 2004; to Barataria Preserve Unit of Jean Lafitte Na- purposes of laws administered by the the Committee on Health, Education, Labor, tional Historical Park and Preserve in the Secretary of Veterans Affairs. and Pensions. State of Louisiana, and for other purposes; S. 2072 to the Committee on Energy and Natural Re- EC–7030. A communication from the Direc- At the request of Mr. CRAIG, the sources. tor, Regulations Policy and Management names of the Senator from Montana Staff, Food and Drug Administration, trans- By Ms. COLLINS: mitting, pursuant to law, the report of a rule S. 2288. A bill to amend the Public Health (Mr. BURNS) and the Senator from entitled ‘‘Skin Protectant Drug Products for Service Act to assist States in establishing, Idaho (Mr. CRAPO) were added as co- Over-the-Counter Human Use, Astringent maintaining, and improving systems to re- sponsors of S. 2072, a bill to amend the Drug Products; Final Monograph, Direct duce the diversion and abuse of prescription Internal Revenue Code of 1986 to allow Final Rule; and Confirmation of Effective drugs; to the Committee on Health, Edu- a nonrefundable tax credit for elder Date; Correction’’ (RIN0910–AA01) received cation, Labor, and Pensions. care expenses. on April 5, 2004; to the Committee on Health, By Mr. SESSIONS: S. 2207 Education, Labor, and Pensions. S. 2289. A bill to amend title 18, United EC–7031. A communication from the Direc- States Code, to combat terrorism against At the request of Mr. CORNYN, his tor, Regulations Policy and Management railroad carriers and mass transportation name and the names of the Senator

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00057 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3792 CONGRESSIONAL RECORD — SENATE April 6, 2004 from Illinois (Mr. FITZGERALD) and the (Mr. LUGAR) and the Senator from Ne- tel and non-OPEC countries that par- Senator from Utah (Mr. HATCH) were braska (Mr. HAGEL) were added as co- ticipate in the cartel of crude oil pro- added as cosponsors of S. 2207, a bill to sponsors of S. Con. Res. 83, a concur- ducing countries the position of the improve women’s access to health care rent resolution promoting the estab- United States in favor of increasing services, and the access of all individ- lishment of a democracy caucus within world crude oil supplies so as to uals to emergency and trauma care the United Nations. achieve stable crude oil prices. services, by reducing the excessive bur- S. RES. 221 AMENDMENT NO. 2918 den the liability system places on the At the request of Mr. SARBANES, the At the request of Mrs. CLINTON, the delivery of such services. names of the Senator from North Caro- name of the Senator from Minnesota S. 2212 lina (Mrs. DOLE), the Senator from (Mr. DAYTON) was added as a cosponsor At the request of Ms. COLLINS, the Georgia (Mr. MILLER), the Senator of amendment No. 2918 intended to be name of the Senator from Ohio (Mr. from Massachusetts (Mr. KENNEDY) and proposed to S. 1637, a bill to amend the VOINOVICH) was added as a cosponsor of the Senator from Missouri (Mr. BOND) Internal Revenue Code of 1986 to com- S. 2212, a bill to amend title VII of the were added as cosponsors of S. Res. 221, ply with the World Trade Organization Tariff Act of 1930 to provide that the a resolution recognizing National His- rulings on the FSC/ETI benefit in a provisions relating to countervailing torically Black Colleges and Univer- manner that preserves jobs and produc- duties apply to nonmarket economy sities and the importance and accom- tion activities in the United States, to countries. plishments of historically Black col- reform and simplify the international S. 2244 leges and universities. taxation rules of the United States, At the request of Mrs. HUTCHISON, the S. RES. 298 and for other purposes. name of the Senator from Georgia (Mr. At the request of Mr. CAMPBELL, the AMENDMENT NO. 2945 CHAMBLISS) was added as a cosponsor of names of the Senator from South Da- At the request of Mrs. BOXER, the S. 2244, a bill to protect the public’s kota (Mr. DASCHLE), the Senator from name of the Senator from Maryland ability to fish for sport, and for other Utah (Mr. HATCH) and the Senator from (Mr. SARBANES) was added as a cospon- purposes. New Jersey (Mr. CORZINE) were added sor of amendment No. 2945 proposed to S. 2261 as cosponsors of S. Res. 298, a resolu- H.R. 4, a bill to reauthorize and im- tion designating May 2004 as ‘‘National At the request of Mr. DEWINE, the prove the program of block grants to name of the Senator from Louisiana Cystic Fibrosis Awareness Month’’. States for temporary assistance for (Mr. BREAUX) was added as a cosponsor S. RES. 311 needy families, improve access to qual- of S. 2261, a bill to expand certain pref- At the request of Mr. BROWNBACK, the ity child care, and for other purposes. names of the Senator from Georgia erential trade treatment for Haiti. f (Mr. CHAMBLISS) and the Senator from S. 2262 Georgia (Mr. MILLER) were added as co- STATEMENTS ON INTRODUCED At the request of Mr. BINGAMAN, the sponsors of S. Res. 311, a resolution BILLS AND JOINT RESOLUTIONS names of the Senator from New Hamp- calling on the Government of the So- shire (Mr. GREGG), the Senator from By Mr. NELSON of Nebraska (for cialist Republic of Vietnam to imme- South Dakota (Mr. JOHNSON), the Sen- himself and Mr. BROWNBACK): diately and unconditionally release Fa- ator from West Virginia (Mr. ROCKE- S. 2284. A bill to expand the medicare ther Thadeus Nguyen Van Ly, and for FELLER), the Senator from Arkansas rural community hospital demonstra- other purposes. (Mr. PRYOR) and the Senator from Ne- tion program to include outpatient S. RES. 317 vada (Mr. REID) were added as cospon- services; to the Committee on Finance. sors of S. 2262, a bill to provide for the At the request of Mr. HAGEL, the Mr. NELSON of Nebraska. Mr. Presi- establishment of campaign medals to name of the Senator from Michigan dent, today I introduce legislation to be awarded to members of the Armed (Ms. STABENOW) was added as a cospon- continue the relief to six hospitals in Forces who participate in Operation sor of S. Res. 317, a resolution recog- Nebraska that have been struggling fi- Enduring Freedom or Operation Iraqi nizing the importance of increasing nancially under the current Medicare Freedom. awareness of autism spectrum dis- payment structure. orders, supporting programs for in- S. 2267 Local hospitals can best meet the creased research and improved treat- unique needs of rural communities At the request of Ms. SNOWE, the ment of autism, and improving train- name of the Senator from Montana which is why I am committed to ensur- ing and support for individuals with ing that these hospitals have the re- (Mr. BURNS) was added as a cosponsor autism and those who care for individ- sources they need. Vital services like of S. 2267, a bill to amend section 29(k) uals with autism. of the Small Business Act to establish hospitals are increasingly important S. RES. 328 funding priorities for women’s business for the survival of our rural commu- At the request of Mr. NELSON of Flor- centers. nities. Towns can’t adequately serve ida, the name of the Senator from Mas- residents—or attract new residents— S. 2270 sachusetts (Mr. KERRY) was added as a without access to basic services. We At the request of Mr. DEWINE, the cosponsor of S. Res. 328, a resolution need to focus on ensuring that hos- name of the Senator from Oregon (Mr. expressing the sense of the Senate re- pitals and other vital services have the WYDEN) was added as a cosponsor of S. garding the continued human rights resources they need, so that commu- 2270, a bill to amend the Sherman Act violations committed by Fidel Castro nities will have the essential services to make oil-producing and exporting and the Government of Cuba. they require. cartels illegal. S. RES. 330 Last year, Senator BROWNBACK and I S. 2273 At the request of Mr. WYDEN, the proposed legislation to provide cost- At the request of Mr. MCCAIN, the names of the Senator from California based reimbursement for rural commu- names of the Senator from Texas (Mrs. (Mrs. BOXER), the Senator from New nity hospitals. Rural Community Hos- HUTCHISON), the Senator from Illinois Jersey (Mr. CORZINE), the Senator from pitals (RCH) are hospitals with be- (Mr. FITZGERALD), the Senator from Connecticut (Mr. DODD), the Senator tween 25–50 beds. Those hospitals had Hawaii (Mr. INOUYE), the Senator from from New Jersey (Mr. LAUTENBERG), been adversely affected by Medicare Louisiana (Mr. BREAUX), the Senator the Senator from Florida (Mr. NELSON), formulas that set rates for reimburse- from North Dakota (Mr. DORGAN) and the Senator from Rhode Island (Mr. ment nationwide. These rates did not the Senator from New York (Mr. SCHU- REED) and the Senator from Michigan take into account the higher costs of MER) were added as cosponsors of S. (Ms. STABENOW) were added as cospon- practicing medicine in rural areas as 2273, a bill to provide increased rail sors of S. Res. 330, a resolution express- these areas do not have the benefits of transportation security. ing the sense of the Senate that the volume that larger hospitals enjoy. S. CON. RES. 83 President should communicate to the RCHs are also too large to qualify for At the request of Mr. BIDEN, the members of the Organization of Petro- critical access designation given to names of the Senator from Indiana leum Exporting Countries (‘OPEC’) car- hospitals with fewer than 25 beds.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00058 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3793 I am pleased that provisions from tions, in order for Beaver County to af- from illicit drugs. Nationwide, emer- this legislation were included in the ford management of the day to day op- gency room visits for prescription drug Medicare Prescription Drug, Improve- erations of the would-be county park, problems more than doubled in the last ment, and Modernization Act of 2003 as they would need to sell some of the decade. a pilot program. The program provided property to private investors. However, The number of Americans who divert cost-based reimbursements for inpa- it was not until after park manage- prescription drugs from their intended tient services. ment responsibility was transferred to purposes and abuse them was esti- The legislation Senator BROWNBACK the county that the BLM pointed out mated at 4 million in 1998. Today, the and I are introducing today will expand that the state had not yet acquired the estimate is 11 million Americans. At a the pilot program to cover outpatient property through the Recreation and time when, according to the National services as well. This legislation will Public Purposes Act process. The plan Institute on Drug Abuse, our young again address a critical shortcoming in for Beaver County to sell some of the people are turning away from mari- current reimbursement practices and land to pay for park operation, how- juana, cocaine, ecstasy, and even alco- help Rural Community Hospitals serve ever, is not allowed under the Recre- hol, they unfortunately are turning to their communities and invest in the fu- ation and Public Purposes Act lease, the medicine cabinet. ture of rural health care. which only allows the property to be Nearly one in five of our Nation’s Six Nebraska hospitals would be af- developed for recreation or other pur- high school juniors and seniors say fected by expanding the scope of the poses. The only way for Beaver County they abuse prescription drugs. pilot program. Those hospitals are: Be- to undertake responsibility for park is The cost of drug abuse to our society atrice Community Hospital, Columbus to remove the current Federal restric- in treatment, health care, lost produc- tivity, crime, and incarceration ex- Community Hospital, McCook Commu- tions on the property. nity Hospital, Jennie Melham Memo- Today, Beaver County faces financial ceeds $150 billion a year. The cost to its rial Medical Center in Broken Bow, constraints in operating this park that victims is incalculable. That is why Phelps Memorial Health Center in threaten its continued use. Due to the today I am introducing the Prescrip- tion Drug Stewardship Act. I use the Holdrege, and Tri County Hospital in prevailing restrictions in the Recre- word ‘‘stewardship’’ to emphasize our Lexington. ation and Public Purposes Act lease, responsibility as individuals and as a We made some progress for our rural initiated more than 40 years ago, the society to see that these beneficial hospitals by creating the RCH pilot good people of southern Utah and visi- medications are used for their intended program last year. This legislation tors to the area will not be able to ac- purposes, not to cause addiction, dis- would expand on that victory by ensur- cess and enjoy this county park. The ing that all Medicare treatments, ability, and even death. campsites would be littered and This legislation attacks the spiraling whether inpatient or outpatient, would unkept. The boat ramp and the boat cycle of diversion and abuse with three receive cost-based reimbursement. Ex- docks would have to be closed. The key stewardship activities: panding this program will make a big park would become a destitute recre- First, computerized prescription drug difference to these hospitals and more ation area, because there would be no systems to better track the flow of importantly, the patients they serve. one to administer park maintenance medications. and upkeep. The only public access to Second, ongoing practitioner train- By Mr. HATCH (for himself and Minersville Reservoir, which features a ing to help our busy medical profes- Mr. BENNETT): converted blue ribbon trout fishery, sionals keep current with the trends in S. 2285. A bill to direct the Secretary would go to waste because of the Fed- diversion treatment and abuse. of the Interior to convey a parcel of eral government’s current Recreation Third, and perhaps most important, real property to Beaver County, Utah; and Public Purposes Act lease restric- public education to help our citizens to the Committee on Energy and Nat- tion. better understand the dangers posed by ural Resources. I don’t believe that letting manage- the misuse of these drugs. Mr. HATCH. Mr. President, I rise ment of the park revert to the BLM is I have found in talking with experts today to introduce a bill that would di- a viable option either. The intensive, in this field that many individuals who rect the Secretary of the Interior to day to day management this small would never think of trying heroin, for convey a parcel of property to Beaver park requires can be best accomplished example, will take leftover prescrip- County, UT. This bill would allow Bea- to local officials. If Beaver County ac- tion drugs that may, in the long run, ver County in Southwestern Utah to quires the property, it will continue to be equally addictive and just as harm- obtain and maintain, without restric- make this park an excellent rec- ful. tions, the former Minersville State reational refuge, a superb fishery, and Combined with improved and more Park. In sum, this bill is necessary to a great place to visit. Beaver County accessible substance abuse treatment allow County officials to sell a small will be able to provide a clean and safe programs, the legislation I am intro- portion of this land—which has essen- park enjoyed by all who visit. That is ducing would help to stem the rising tially been under their control for over why I am introducing this legislation tide of abuse and addiction that has 40 years—in order to offset funding this legislation that would convey the swamped families and weakened com- needed to maintain the remainder of Minersville Park land to Beaver Coun- munities in my State and across the the park. ty. country. Some history might be beneficial at I thank the Senate for the oppor- My bill would authorize per year for this point. In 1961, Beaver County ob- tunity to address this issue today, and each of the next 3 years to fund pre- tained a lease for 207 acres of land from I urge my colleagues to support this scription drug monitoring and edu- the Bureau of Land Management legislation. cation programs at the State level. It (BLM) to develop a recreational locale would create competitive grant pro- under the Recreation and Public Pur- By Ms. COLLINS: grams which would be administered by poses Act. In 1963, Beaver County S. 2288. A bill to amend the Public the Substance Abuse and Mental turned over the acreage to the State Health Service Act to assist States in Health Services Administration. They for the development of a park. Over the establishing, maintaining, and improv- would require States to demonstrate course of nearly 40 years, the State of ing systems to reduce the diversion and their commitment to stewardship with Utah spent about one million dollars to abuse of prescription drugs; to the matching funds and also to meet the develop campsites, a boat ramp, a Committee on Health, Education, privacy requirements under current dock, and other camping amenities to Labor, and Pensions. law as they carry out these important turn this area into the Minersville Res- Ms. COLLINS. Mr. President, the activities. ervoir State Park. In 2002, in an en- abuse of prescription drugs has reached What we have found is that the most deavor to reduce operating costs, Utah epidemic proportions in this country. abused medications are those that re- State Parks transferred control of the In many States, including my home lieve pain and anxiety. For millions of area back over to Beaver County. As State of Maine, deaths from prescrip- legitimate patients suffering from ill- County officials stated during negotia- tion drug overdoses now exceed deaths ness or injury, these medicines are

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It treatment counselors, and from many cation to them through one-on-one is tragically clear, however, that these others who are expert in drug addiction small group mentoring in their offices medications, many of them as powerful and abuse. The picture they painted or in their hospitals. or as addictive as illegal drugs, in- was a startling one. It showed that The second part of my legislation creasingly are being diverted from drug abuse, and abuse of prescription would provide grants for such men- their legitimate use to trafficking and drugs in particular, is a problem toring projects so practitioners with abuse. throughout the entire State of Maine. special training in drug abuse issues I want to emphasize that the prob- My legislation would provide States, can pass along this vital knowledge to lems is not with these medications such as Maine, with the resources to their colleagues who are practicing in when they are prescribed, dispensed, carry out three critical stewardship ac- communities all over America. Experts and consumed responsibly. In fact, we tivities. The first would help States to also tell us a major reason so many know that pain is still undertreated in monitor the flow of prescription drugs Americans with no history of abusing this country, and that most physicians from practitioner to pharmacy to pa- illegal drugs now are abusing prescrip- are extremely responsible in trying to tient. We know that prescription drugs tions drugs is many people have a ter- relieve pain felt by their patients. The often find their way to the street when rible misconception that these pre- problem is what happens when the unscrupulous individuals obtain mul- scription drugs are somehow safe to chain of responsibility breaks. tiple prescriptions from multiple doc- abuse, that it is safe to take someone Oversight of the licensing and prac- tors. These so-called doctor shoppers else’s prescription. After all, they tices for prescribing and dispensing of operate in every State. Sometimes think they are researched in high-tech these medications has long been a mat- they act alone and sometimes they act laboratories, manufactured in modern ter of State jurisdiction. As a former in concert with organized gangs of factories, prescribed and dispensed by State regulator who was in charge of criminals. Each can divert hundreds, highly trained medical experts; there- licensing boards for physicians and even thousands, of pills per day. Many fore, they must be safe. When they are pharmacists, for example, I certainly of these drugs have a street value 10 used properly, they are, but as the have no desire to change that system. times the cost at the pharmacy. overdose and addiction statistics prove, The States have not shirked their Twenty States now have prescription when used improperly they can be stewardship responsibility. They sim- tracking systems. Maine began oper- fatal. ply have been overwhelmed by this epi- ating such a system or putting it to- We need an aggressive public edu- demic of diversion and abuse, and they gether just this summer. About half of cation campaign to warn our citizens need some Federal assistance, not to these systems use the latest computer about the dangers of abusing prescrip- take over their programs, but to help technology and have proven that ille- tion drugs. The reduction in smoking them in a partnership to make them gal diversion can be curtailed without rates, in illicit drug use, even in drunk- more effective. reducing access to these medications driving deaths is testament to the This national calamity has hit rural by legitimate patients and without progress we can make with seemingly States particularly hard. The Presiding breaching that essential doctor-patient intractable problems when we commit Officer’s home State of North Carolina confidentiality. the resources for public education cam- is one of those States that has felt the We want to make sure any system we paigns in partnership with the States. I devastating impact of this epidemic. put in place does not chill a doctor’s believe the same approach can help our Kentucky, Virginia, West Virginia all ability to prescribe legitimate medica- citizens become better stewards of pre- report prescription drug abuse at epi- tion for patients who are suffering and scription medications. demic levels. But no State, unfortu- need help with their pain. I urge my colleagues to join me in nately, has been hit harder than my These systems have also dem- support of the legislation I am intro- State of Maine. onstrated an effective prescription ducing today to address the increas- From 1997 to 2002, the number of acci- drug system more than pays for itself ingly devastating problem of prescrip- dental deaths in Maine from all drugs by reducing the tremendous costs asso- tion drug abuse. soared from 19 to 126, an increase of ciated with drug abuse and addiction. more than 500 percent, and prescription Thirty States, however, have no sys- By Mr. SESSIONS: drugs were present in 60 percent of tem whatsoever for monitoring or S. 2289. A bill to amend title 18, these deaths. tracking prescription drugs in a way United States Code, to combat ter- The 2002 Main Youth Drug and Alco- that would help us identify and put a rorism against railroad carriers and hol Survey found that a disturbing 25 stop to doctor shopping. My legislation mass transportation systems on land, percent of my State’s high school jun- would provide the States with the re- on water, or through the air, and for iors and seniors abuse prescription sources to start up such a system to other purposes; to the Committee on drugs. That is an astonishing number help improve its quality or to maintain the Judiciary. Mr. SESSIONS. Mr. President, I ask and a very disturbing statistic. In the it. unanimous consent that the text of the last 5 years, enrollment in Main clinics The testimony I heard last August in bill be printed in the RECORD. that treat opiate addiction has in- Bangor, ME, before the Governmental There being no objection, the bill was creased tenfold. Affairs Committee, along with my col- ordered to be printed in the RECORD, as These shocking numbers from Main league Senator SUNUNU, provided the follows: demonstrate that drug abuse and ad- basis not only for that provision of our diction is not longer a big-city prob- bill but also for two others. The testi- S. 2289 lem. It is a problem that afflicts our mony we heard that day from those Be it enacted by the Senate and House of Rep- resentatives of the United States of America in citizens no matter where they live, who are on the front lines, law enforce- Congress assembled, whether it is Los Angeles, CA, or Ca- ment, hospital emergency room physi- SECTION 1. SHORT TITLE. lais, ME. In fact, a hearing I helped put cians, and treatment clinic personnel, This Act may be cited as the ‘‘Railroad together last year demonstrated that was alarming. They told us medical Carriers and Mass Transportation Protection there is a terrible problem in Wash- practitioners need our help. Our doc- Act of 2004’’. ington County in Downeast, ME. Some tors, our physician assistants, our SEC. 2. ATTACKS AGAINST RAILROAD CARRIERS estimates are that as many as 1,000 of nurses are busy professionals, often far AND MASS TRANSPORTATION SYS- TEMS. the citizens of this county of only too busy. Many simply do not have the (a) IN GENERAL.—Chapter 97 of title 18, 35,000 citizens are struggling with drug time to travel to seminars where they United States Code, is amended by striking addiction and abuse. This was a hear- would receive information about the sections 1992 through 1993 and inserting the ing before the HELP Committee. It ac- latest trends in drug abuse, learn how following:

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‘‘§ 1992. Terrorist attacks and other violence ‘‘(b) AGGRAVATED OFFENSE.—Whoever com- ‘‘(6) the term ‘high-level radioactive waste’ against railroad carriers and against mass mits an offense under subsection (a) of this has the meaning given to that term in sec- transportation systems on land, on water, section in a circumstance in which— tion 2(12) of the Nuclear Waste Policy Act of or through the air ‘‘(1) the railroad on-track equipment or 1982 (42 U.S.C. 10101(12)); ‘‘(a) GENERAL PROHIBITIONS.—Whoever, in a mass transportation vehicle was carrying a ‘‘(7) the term ‘mass transportation’ has the circumstance described in subsection (c), passenger or employee at the time of the of- meaning given to that term in section knowingly— fense; 5302(a)(7) of title 49, except that the term in- ‘‘(1) wrecks, derails, sets fire to, or disables ‘‘(2) the railroad on-track equipment or cludes school bus, charter, and sightseeing railroad on-track equipment or a mass trans- mass transportation vehicle was carrying transportation; high-level radioactive waste or spent nuclear portation vehicle; ‘‘(8) the term ‘on-track equipment’ means ‘‘(2) with intent to endanger the safety of fuel at the time of the offense; a carriage or other contrivance that runs on any passenger or employee of a railroad car- ‘‘(3) the railroad on-track equipment or rails or electromagnetic guideways; rier or mass transportation provider, or with mass transportation vehicle was carrying a a reckless disregard for the safety of human hazardous material at the time of the offense ‘‘(9) the term ‘railroad on-track equipment’ life, and without previously obtaining the that— means a train, locomotive, tender, motor permission of the railroad carrier— ‘‘(A) was required to be placarded under unit, freight or passenger car, or other on- ‘‘(A) places any biological agent or toxin, subpart F of part 172 of title 49, Code of Fed- track equipment used, operated, or employed destructive substance, or destructive device eral Regulations; and by a railroad carrier; in, upon, or near railroad on-track equip- ‘‘(B) is identified as class number 3, 4, 5, ‘‘(10) the term ‘railroad’ has the meaning ment or a mass transportation vehicle; or 6.1, or 8 and packing group I or packing given to that term in chapter 201 of title 49; ‘‘(B) releases a hazardous material or a bio- group II, or class number 1, 2, or 7 under the ‘‘(11) the term ‘railroad carrier’ has the logical agent or toxin on or near the prop- hazardous materials table of section 172.101 meaning given to that term in chapter 201 of erty of a railroad carrier or mass transpor- of title 49, Code of Federal Regulations; or title 49; tation provider; ‘‘(4) the offense results in the death of any ‘‘(12) the term ‘serious bodily injury’ has ‘‘(3) sets fire to, undermines, makes un- person; the meaning given to that term in section workable, unusable, or hazardous to work on 1365; or use, or places any biological agent or shall be fined under this title or imprisoned ‘‘(13) the term ‘spent nuclear fuel’ has the toxin, destructive substance, or destructive for any term of years or life, or both. In the meaning given to that term in section 2(23) device in, upon, or near any— case of a violation described in paragraph (2), ‘‘(A) tunnel, bridge, viaduct, trestle, track, the term of imprisonment shall be not less of the Nuclear Waste Policy Act of 1982 (42 electromagnetic guideway, signal, station, than 30 years; and, in the case of a violation U.S.C. 10101(23)); depot, warehouse, terminal, or any other described in paragraph (4), the offender shall ‘‘(14) the term ‘State’ has the meaning way, structure, property, or appurtenance be fined under this title and imprisoned for given to that term in section 2266 ; used in the operation of, or in support of the life and be subject to the death penalty. ‘‘(15) the term ‘toxin’ has the meaning operation of, a railroad carrier, without pre- ‘‘(c) CIRCUMSTANCES REQUIRED FOR OF- given to that term in section 178(2); and viously obtaining the permission of the rail- FENSE.—A circumstance referred to in sub- ‘‘(16) the term ‘vehicle’ means any carriage road carrier, and with intent to, or knowing section (a) is any of the following: or other contrivance used, or capable of or having reason to know such activity ‘‘(1) Any of the conduct required for the of- being used, as a means of transportation on would likely, derail, disable, or wreck rail- fense is, or, in the case of an attempt, threat, land, on water, or through the air.’’. road on-track equipment; or or conspiracy to engage in conduct, the con- (b) CONFORMING AMENDMENTS.— ‘‘(B) garage, terminal, structure, track, duct required for the completed offense electromagnetic guideway, supply, or facil- would be, engaged in, on, against, or affect- (1) The table of sections at the beginning of ity used in the operation of, or in support of ing a mass transportation provider or rail- chapter 97 of title 18, United States Code, is the operation of, a mass transportation vehi- road carrier engaged in or affecting inter- amended— cle, without previously obtaining the permis- state or foreign commerce. (A) by striking ‘‘RAILROADS’’ in the chap- sion of the mass transportation provider, and ‘‘(2) Any person travels or communicates ter heading and inserting ‘‘RAILROAD CAR- with intent to, or knowing or having reason across a State line in order to commit the of- RIERS AND MASS TRANSPORTATION SYS- to know such activity would likely, derail, fense, or transports materials across a State TEMS ON LAND, ON WATER, OR THROUGH disable, or wreck a mass transportation vehi- line in aid of the commission of the offense. THE AIR’’; cle used, operated, or employed by a mass ‘‘(d) NONAPPLICABILITY.—Subsection (a) (B) by striking the items relating to sec- transportation provider; does not apply to the conduct with respect to tions 1992 and 1993; and ‘‘(4) removes an appurtenance from, dam- a destructive substance or destructive device (C) by inserting after the item relating to that is also classified under chapter 51 of ages, or otherwise impairs the operation of a section 1991 the following: railroad signal system or mass transpor- title 49 as a hazardous material in commerce tation signal or dispatching system, includ- if the conduct— ‘‘1992. Terrorist attacks and other violence ing a train control system, centralized dis- ‘‘(1) complies with chapter 51 of title 49 and against railroad carriers and patching system, or highway-railroad grade regulations, exemptions, approvals, and or- against mass transportation crossing warning signal, without authoriza- ders issued under that chapter, or systems on land, on water, or tion from the rail carrier or mass transpor- ‘‘(2) constitutes a violation, other than a through the air.’’. tation provider; criminal violation, of chapter 51 of title 49 or (2) The table of chapters at the beginning a regulation or order issued under that chap- ‘‘(5) with intent to endanger the safety of of part I of title 18, United States Code, is any passenger or employee of a railroad car- ter. amended by striking the item relating to rier or mass transportation provider or with ‘‘(e) DEFINITIONS.—In this section— chapter 97 and inserting the following: a reckless disregard for the safety of human ‘‘(1) the term ‘biological agent’ has the life, interferes with, disables, or incapaci- meaning given to that term in section 178(1); ‘‘97. Railroad carriers and mass trans- tates any dispatcher, driver, captain, loco- ‘‘(2) the term ‘dangerous weapon’ means a portation systems on land, on motive engineer, railroad conductor, or weapon, device, instrument, material, or water, or through the air ...... 1991’’. other person while the person is employed in substance, animate or inanimate, that is (3) Title 18, United States Code, is amend- dispatching, operating, or maintaining rail- used for, or is readily capable of, causing road on-track equipment or a mass transpor- death or serious bodily injury, including a ed— (A) in section 2332b(g)(5)(B)(i), by striking tation vehicle; pocket knife with a blade of less than 21⁄2 ‘‘(6) engages in conduct, including the use inches in length and a box cutter; ‘‘1992 (relating to wrecking trains), 1993 (re- of a dangerous weapon, with the intent to ‘‘(3) the term ‘destructive device’ has the lating to terrorist attacks and other acts of cause death or serious bodily injury to any meaning given to that term in section violence against mass transportation sys- person who is on the property of a railroad 921(a)(4); tems),’’ and inserting ‘‘1992 (relating to ter- carrier or mass transportation provider that ‘‘(4) the term ‘destructive substance’ rorist attacks and other acts of violence is used for railroad or mass transportation means an explosive substance, flammable against railroad carriers and against mass purposes; material, infernal machine, or other chem- transportation systems on land, on water, or ‘‘(7) conveys false information, knowing ical, mechanical, or radioactive device or through the air),’’; the information to be false, concerning an material, or matter of a combustible, con- (B) in section 2339A, by striking ‘‘1993,’’; attempt or alleged attempt that was made, taminative, corrosive, or explosive nature, and is being made, or is to be made, to engage in except that the term ‘radioactive device’ (C) in section 2516(1)(c) by striking ‘‘1992 a violation of this subsection; or does not include any radioactive device or (relating to wrecking trains),’’ and inserting ‘‘(8) attempts, threatens, or conspires to material used solely for medical, industrial, ‘‘1992 (relating to terrorist attacks and other engage in any violation of any of paragraphs research, or other peaceful purposes; acts of violence against railroad carriers and (1) through (8); ‘‘(5) the term ‘hazardous material’ has the against mass transportation systems on shall be fined under this title or imprisoned meaning given to that term in chapter 51 of land, on water, or through the air),’’. not more than 20 years, or both. title 49;

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00061 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3796 CONGRESSIONAL RECORD — SENATE April 6, 2004 SUBMITTED RESOLUTIONS (D) experience sustained economic growth cent State Department human rights and development that improves the standard report on Rwanda makes reference to of living in Rwanda. ‘‘politically motivated disappearances; Mr. FEINGOLD. Mr. President, I rise arbitrary arrest and detention, particu- SENATE RESOLUTION 322—OBSERV- today to submit a resolution com- larly of opposition supporters.’’ ING THE TENTH ANNIVERSARY memorating the 10th anniversary of No one with even a cursory grasp of OF THE RWANDAN GENOCIDE OF the 1994 Rwandan genocide. Ten years Rwanda’s history could fault the gov- 1994 ago, a deliberate, centrally-planned, ernment for being sensitive to eth- Mr. FEINGOLD submitted the fol- and organized campaign of violence nically divisive forces. But, not all dis- lowing resolution; which was referred was set in motion, and eventually it sent is divisive, and history teaches us to the Committee on Foreign Rela- took the lives of some 800,000 that imposing order alone is not tions: Rwandans. The campaign targeted eth- enough to guarantee stability and se- nic Tutsis, but also ethnic Hutus who curity. Order without justice tends to S. RES. 332 espoused moderate political beliefs and crumble. Suppressing legitimate dis- Whereas 10 years ago, during a 3-month pe- paid for their commitment to equal agreements, allowing intimidation to riod in 1994, 800,000 Rwandans were killed in silence citizens—these acts undermine an organized campaign of genocide that tar- rights for all Rwandans with their geted ethnic Tutsis and political moderates; lives. Millions were displaced, and the security rather than enhance it. The Whereas the United Nations Assistance institutions and infrastructure of the people of Rwanda, including the leader- Mission for Rwanda was dramatically scaled country were shattered. ship of the country, find themselves in back as the genocide occurred; As this horror unfolded, the inter- a tremendously difficult position. I can Whereas by mid-July 2004, 2,000,000 national community, including the imagine, but I cannot know, the chal- Rwandans became refugees and another United States, failed to act. The United lenges of governing in the wake of a 1,000,000 were internally displaced due to the Nations Mission for Rwanda was scaled tragedy of this magnitude. But I do genocide and civil war; know that those of us in the inter- Whereas in 1994, the United Nations Secu- down when the massacres started rath- rity Council established the International er than being reinforced. The U.S. en- national community only compound Criminal Tribunal for Rwanda to hold ac- gaged in semantic strategies of avoid- our past mistakes when we do not in- countable those responsible for the atroc- ance, referring to massacres and atroc- terest ourselves in the future of the ities; ities and finally ‘‘acts of genocide,’’ but Rwandan people today, when we do not Whereas in March 1998, President William refusing to acknowledge the truth for concern ourselves with freeing the next Jefferson Clinton acknowledged that ‘‘we in fear it should make plain our responsi- generation from fear. the United States and the world community bility. I urge my colleagues to support this did not do as much as we could have and If some of the Rwandan voices that resolution of solemn commemoration. should have done to try to limit what oc- It acknowledges the terrible past, but curred in Rwanda in 1994’’; will be heard during this time of com- Whereas in 1999, the Independent Inquiry memoration and reflection sound it also expresses hope for the future. into the Actions of the United Nations dur- angry, well, we have to accept that The people of Rwanda have picked ing the 1994 Genocide in Rwanda found that their anger is justified. The world had themselves up and have set about re- ‘‘the failure by the United Nations to pre- said ‘‘never again’’ to genocide. And building their lives and their country. vent, and subsequently, to stop the genocide then we abandoned the people of Rwan- The world failed them ten years ago. in Rwanda was a failure by the United Na- da to an unspeakable national night- Let us resolve not to fail them again. tions system as a whole’’; mare. Whereas the Rwandan genocide and its f Today, the people of Rwanda still aftermath played a significant part in the AMENDMENTS SUBMITTED AND struggle to cope with the legacy of the destabilization of the entire Great Lakes re- PROPOSED gion over the last decade; and genocide, with the trauma of their na- Whereas today, the vast majority of Rwan- tional experience, and with the search SA 3016. Mr. SPECTER submitted an dan refugees have returned to their country, for justice and accountability. And amendment intended to be proposed to and the Government of Rwanda is working to amendment SA 3011 proposed by Mr. FRIST they still struggle with fear. to the bill S. 1637, to amend the Internal address the backlog of genocide-related cases The United States can and should in- awaiting trial through the formal justice Revenue Code of 1986 to comply with the sist that those who devised and imple- World Trade Organization rulings on the sector and through community-based gacaca mented the plan for genocide be held courts: Now, therefore, be it FSC/ETI benefit in a manner that preserves Resolved, That the Senate— accountable for their actions. Four jobs and production activities in the United (1) solemnly observes the tenth anniver- years ago I was proud to introduce leg- States, to reform and simplify the inter- sary of the Rwandan genocide of 1994; islation that extended the Rewards for national taxation rules of the United States, (2) recognizes and is saddened by the fail- Justice program, so that today the U.S. and for other purposes; which was ordered to ure of the international community, includ- lie on the table. is helping to track down those who SA 3017. Mr. SANTORUM submitted an ing the United States, to prevent the geno- have been indicted by the International amendment intended to be proposed to cide; Criminal Tribunal for Rwanda and are amendment SA 3011 proposed by Mr. FRIST (3) reaffirms its commitment to the Con- still at large. In addition, we can and to the bill S. 1637, supra; which was ordered vention on the Prevention and Punishment do assist the Government of Rwanda in to lie on the table. of the Crime of Genocide, done at Paris on SA 3018. Mr. SANTORUM submitted an December 9, 1948; strengthening its own capacity to ad- dress the backlog of genocide-related amendment intended to be proposed to (4) supports ongoing efforts to educate the amendment SA 3011 proposed by Mr. FRIST people of the United States and of the world cases awaiting trial, sometimes to the bill S. 1637, supra; which was ordered about the Rwandan genocide; through the formal justice system, and to lie on the table. (5) commits to continuing efforts to sometimes through the community- SA 3019. Mr. SANTORUM submitted an strengthen institutions working to bring to based gacaca courts. amendment intended to be proposed to justice those responsible for the genocide; But today I want to urge my col- amendment SA 3011 proposed by Mr. FRIST and to the bill S. 1637, supra; which was ordered (6) urges the President and the inter- leagues to seize on this moment not only to reflect on the past, not only to to lie on the table. national community to seize on the occasion SA 3020. Mr. SANTORUM submitted an of this anniversary to focus attention on the honor the dead, but to think about the amendment intended to be proposed to future of Rwanda, and to support the people future and to care for the living. And amendment SA 3011 proposed by Mr. FRIST of Rwanda so that they may— the people of Rwanda today do need as- to the bill S. 1637, supra; which was ordered (A) be free from the fear of ethnic violence, sistance. Too many Rwandans live in a to lie on the table. mob violence, or state-sponsored violence; context of crushing poverty. Approxi- SA 3021. Mr. SANTORUM submitted an (B) enjoy full civil and political rights and mately 9 percent of the adult popu- amendment intended to be proposed to feel free to voice legitimate disagreements lation is HIV positive, and life expect- amendment SA 3011 proposed by Mr. FRIST honestly and publicly without fear of vio- to the bill S. 1637, supra; which was ordered lence or intimidation; ancy is about 40 years. There is much to lie on the table. (C) have confidence in the independence of development work yet to be done. SA 3022. Mr. SANTORUM submitted an the judiciary and the rule of law in Rwanda; In Rwanda today, basic human rights amendment intended to be proposed to and are still not guaranteed. The most re- amendment SA 3011 proposed by Mr. FRIST

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00062 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3797 to the bill S. 1637, supra; which was ordered to the bill S. 1637, supra; which was ordered SA 3041. Ms. COLLINS submitted an to lie on the table. to lie on the table. amendment intended to be proposed to SA 3023. Mr. SANTORUM submitted an SA 3032. Mr. DAYTON submitted an amendment SA 3011 proposed by Mr. FRIST amendment intended to be proposed to amendment intended to be proposed by him to the bill S. 1637, supra; which was ordered amendment SA 3011 proposed by Mr. FRIST to the bill S. 1637, supra; which was ordered to lie on the table. to the bill S. 1637, supra; which was ordered to lie on the table. SA 3042. Mr. WYDEN (for himself, Mr. to lie on the table. SA 3033. Mr. DAYTON submitted an COLEMAN, and Mr. DAYTON) submitted an SA 3024. Mrs. CLINTON (for herself and Mr. amendment intended to be proposed by him amendment intended to be proposed by him DAYTON) submitted an amendment intended to the bill S. 1637, supra; which was ordered to the bill S. 1637, supra; which was ordered to be proposed to amendment SA 3011 pro- to lie on the table. to lie on the table. posed by Mr. FRIST to the bill S. 1637, supra; SA 3034. Mr. DAYTON submitted an which was ordered to lie on the table. amendment intended to be proposed by him SA 3025. Mr. KYL submitted an amend- to the bill S. 1637, supra; which was ordered f ment intended to be proposed to amendment to lie on the table. SA 3035. Mr. DAYTON submitted an SA 3011 proposed by Mr. FRIST to the bill S. TEXT OF AMENDMENTS 1637, supra; which was ordered to lie on the amendment intended to be proposed by him table. to the bill S. 1637, supra; which was ordered SA 3016. Mr. SPECTER submitted an SA 3026. Mr. KYL submitted an amend- to lie on the table. amendment intended to be proposed to ment intended to be proposed to amendment SA 3036. Mr. BAUCUS (for himself and Mr. SA 3011 proposed by Mr. FRIST to the bill S. THOMAS) submitted an amendment intended amendment SA 3011 proposed by Mr. 1637, supra; which was ordered to lie on the to be proposed by him to the bill S. 1637, FRIST to the bill S. 1637, to amend the table. supra; which was ordered to lie on the table. Internal Revenue Code of 1986 to com- SA 3027. Mr. KYL submitted an amend- SA 3037. Ms. MURKOWSKI submitted an ply with the World Trade Organization ment intended to be proposed to amendment amendment intended to be proposed to rulings on the FSC/ETI benefit in a SA 3011 proposed by Mr. FRIST to the bill S. amendment SA 3011 proposed by Mr. FRIST manner that preserves jobs and produc- to the bill S. 1637, supra; which was ordered 1637, supra; which was ordered to lie on the tion activities in the United States, to table. to lie on the table. SA 3028. Mr. COLEMAN submitted an SA 3038. Mr. SANTORUM (for himself and reform and simplify the international amendment intended to be proposed to Mr. LIEBERMAN) submitted an amendment taxation rules of the United States, amendment SA 3011 proposed by Mr. FRIST intended to be proposed to amendment SA and for other purposes; which was or- to the bill S. 1637, supra; which was ordered 3011 proposed by Mr. FRIST to the bill S. dered to lie on the table; as follows: to lie on the table. 1637, supra; which was ordered to lie on the SA 3029. Mr. COLEMAN submitted an table. At the end of the instructions, add the fol- amendment intended to be proposed by him SA 3039. Ms. LANDRIEU submitted an lowing: to the bill S. 1637, supra; which was ordered amendment intended to be proposed to TITLE V—MISCELLANEOUS PROVISIONS to lie on the table. amendment SA 3011 proposed by Mr. FRIST SA 3030. Mr. COLEMAN submitted an to the bill S. 1637, supra; which was ordered SEC. 501. TEMPORARY DUTY REDUCTIONS FOR amendment intended to be proposed to to lie on the table. CERTAIN COTTON SHIRTING FAB- amendment SA 3011 proposed by Mr. FRIST SA 3040. Mr. NICKLES (for himself and Mr. RIC. to the bill S. 1637, supra; which was ordered THOMAS) submitted an amendment intended (a) CERTAIN COTTON SHIRTING FABRICS.— to lie on the table. to be proposed to amendment SA 3011 pro- (1) IN GENERAL.—Subchapter II of chapter SA 3031. Mr. COLEMAN submitted an posed by Mr. FRIST to the bill S. 1637, supra; 99 is amended by inserting in numerical se- amendment intended to be proposed by him which was ordered to lie on the table. 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 (provided 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 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- ufacturers and the annual quantity restric- (b) GRANTS.— TITY OF IMPORTS.—The U.S. Notes to chapter tions under each such license. A licensee (1) GENERAL PURPOSE.—From amounts in 99 are amended by adding at the end the fol- may assign the authority (in whole or in the Pima Cotton Trust Fund, the Secretary lowing: part) to import fabric under subheading of Commerce is authorized to provide grants ‘‘17. For purposes of subheadings 9902.52.08 9902.52.08 of such Schedule. to spinners of United States grown pima cot- and 9902.52.09, the term ‘making’ means cut- (2) LICENSES UNDER U.S. NOTE 18.—For pur- ton, manufacturers of men’s and boys’ cot- ting and sewing in the United States, and the poses of U.S. Note 18 to subchapter II of ton shirting, and a nationally recognized as- term ‘manufacturer’ means a person or enti- chapter 99 of the Harmonized Tariff Schedule sociation that promotes the use of pima cot- ty that cuts and sews in the United States. of the United States, as added by subsection ton grown in the United States, to assist ‘‘18. The aggregate quantity of cotton fab- (a)(2), a license shall be issued within 60 days such spinners and manufacturers in maxi- rics entered under subheading 9902.52.08 from of an application containing a notarized affi- mizing United States employment in the January 1 to December 31 of each year, in- davit from an officer of the manufacturer production of textile or apparel products and clusive, by or on behalf of each manufacturer that the manufacturer is eligible to receive a to increase the promotion of the use of of men’s and boys’ shirts shall be limited to license and stating the quantity of imported United States grown pima cotton respec- 85 percent of the total square meter equiva- cotton woven fabric purchased during cal- tively. lents of all imported cotton woven fabric endar year 2000 for use in the cutting and (2) TIMING FOR GRANT AWARDS.—The Sec- used by such manufacturer in cutting and sewing men’s and boys’ shirts in the United sewing men’s and boys’ cotton shirts in the States. retary of the Treasury shall, not later than United States and purchased by such manu- (3) AFFIDAVITS.—For purposes of an affi- 90 days after the date of enactment of this facturer during calendar year 2000.’’. davit described in this subsection, the date section, establish guidelines for the applica- (b) DETERMINATION OF TARIFF-RATE of purchase shall be— tion and awarding of the grants described in QUOTAS.— (A) the invoice date if the manufacturer is paragraph (1), and shall award such grants to (1) AUTHORITY TO ISSUE LICENSES AND LI- not the importer of record; and qualified applicants not later than 180 days CENSE USE.—To implement the limitation on (B) the date of entry if the manufacturer is after the date of enactment of this section. the quantity of imports of cotton woven fab- the importer of record. Each grant awarded under this section shall rics under subheading 9902.52.08 of the Har- SEC. 502. COTTON TRUST FUND. be distributed to the qualified applicant in 2 monized Tariff Schedule of the United (a) IN GENERAL.—There is established in equal annual installments. States, as required by U.S. Note 18 to sub- the Treasury of the United States a trust (3) DISTRIBUTION OF FUNDS.—Of the chapter II of chapter 99 of such Schedule, for fund to be known as the ‘‘Pima Cotton Trust amounts in the Pima Cotton Trust Fund— the entry, or withdrawal from warehouse for Fund’’, consisting of $32,000,000 transferred to (A) $8,000,000 shall be made available to a consumption, the Secretary of Commerce the Pima Cotton Trust Fund from funds in nationally recognized association estab- shall issue licenses designating eligible man- the general fund of the Treasury. lished for the promotion of pima cotton

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grown in the United States for the use in 2-ply in warp purchased during calendar year (c) AUTHORIZATION.—There are authorized textile and apparel goods; 2002; to be appropriated, and are appropriated out (B) $8,000,000 shall be made available to (C) that the manufacturer maintains in- of the amounts in the general fund of the yarn spinners of pima cotton grown in the voices along with other supporting docu- Treasury not otherwise appropriated, such United States, and shall be allocated to each mentation (such as price lists and other sums as are necessary to carry out the provi- spinner based on the percentage of the spin- technical descriptions of the fabric qualities) sions of this section, including funds nec- ner’s production of ring spun cotton yarns, showing the dollar value of such fabric pur- essary for the administration and oversight measuring less than 83.33 decitex (exceeding chased, the date of purchase, and evidencing of the grants provided for in this section. 120 metric number), from pima cotton grown the fabric as woven cotton fabric of 80s or in the United States in single and plied form higher count and 2-ply in warp; and during calendar year 2002 (as evidenced by an (D) that the fabric was suitable for use in SA 3017. Mr. SANTORUM submitted affidavit provided by the spinner), compared the manufacturing of men’s and boys’ cotton an amendment intended to be proposed to the production of such yarns for all spin- shirts. to amendment SA 3011 proposed by Mr. ners who qualify under this subparagraph; (5) DATE OF PURCHASE.—For purposes of the FRIST to the bill S. 1637, to amend the and affidavit required by paragraph (4), the date (C) $16,000,000 shall be made available to of purchase shall be the invoice date, and the Internal Revenue Code of 1986 to com- manufacturers who cut and sew cotton shirts dollar value shall be determined excluding ply with the World Trade Organization in the United States and that certify that duty, shipping, and related costs. rulings on the FSC/ETI benefit in a they used imported cotton fabric during the (6) AFFIDAVIT OF YARN SPINNERS.—For pur- manner that preserves jobs and produc- period January 1, 1998, through July 1, 2003, poses of paragraph (3)(B), an officer of a com- tion activities in the United States, to and shall be allocated to each manufacturer pany that produces ringspun yarns shall pro- reform and simplify the international on the bases of the dollar value (excluding vide a notarized affidavit affirming— duty, shipping, and related costs) of im- (A) that the manufacturer used pima cot- taxation rules of the United States, ported woven cotton shirting fabric of 80s or ton grown in the United States during the and for other purposes; which was or- higher count and 2-ply in warp purchased by period January 1, 2002, through December 31, dered to lie on the table; as follows: the manufacturer during calendar year 2002 2002, to produce ring spun cotton yarns, Add at the end of the instructions the fol- (as evidenced by an affidavit from the manu- measuring less than 83.33 decitex (exceeding lowing. facturer) used in the manufacturing of men’s 120 metric number), in single and plied form and boys’ cotton shirts, compared to the dol- during 2002; TITLE IX—MISCELLANEOUS PROVISIONS lar value (excluding duty, shipping, and re- (B) the quantity, measured in pounds, of lated costs) of such fabric for all manufac- ring spun cotton yarns, measuring less than SEC. 901. CERTAIN STEAM GENERATORS OR turers who qualify under this subparagraph. 83.33 decitex (exceeding 120 metric number), OTHER GENERATING BOILERS USED (4) AFFIDAVIT OF SHIRTING MANUFACTUR- in single and plied form during calendar year IN NUCLEAR FACILITIES AND CER- TAIN REACTOR VESSEL HEADS USED ERS.—For purposes of paragraph (3)(D), an of- 2002; and IN SUCH FACILITIES. ficer of the manufacturer of men’s and boys’ (C) that the manufacturer maintains sup- shirts shall provide a notarized affidavit af- porting documentation showing the quantity (a) IN GENERAL.— firming— of such yarns produced, and evidencing the (1) Subheading 9902.84.02 of the Harmonized (A) that the manufacturer used imported yarns as ring spun cotton yarns, measuring Tariff Schedule of the United States is cotton fabric during the period January 1, less than 83.33 decitex (exceeding 120 metric amended by striking ‘‘12/31/2006’’ and insert- 1998, through July 1, 2003, to cut and sew number), in single and plied form during cal- ing ‘‘12/31/2012’’. men’s and boys’ woven cotton shirts in the endar year 2002. (2) Subchapter II of chapter 99 of the Har- United States; (7) NO APPEAL.—Any grant awarded by the monized Tariff Schedule of the United States (B) the dollar value of imported woven cot- Secretary under this section shall be final is amended by inserting in numerical se- ton shirting fabric of 80s or higher count and and not subject to appeal or protest. quence the following new heading:

‘‘ 9902.84.03 Reactor vessel heads for nuclear reactors (provided for in subheading 8401.40.00) ...... Free No change No change On or before 12/31/2012 ’’.

(b) EFFECTIVE DATE.—The amendments Internal Revenue Code of 1986 to com- Add at the end of the instructions the fol- made by subsection (a)(2) shall apply to ply with the World Trade Organization lowing: goods entered, or withdrawn from ware- rulings on the FSC/ETI benefit in a house, for consumption on or after January TITLE IX—NON-REVENUE PROVISIONS 1, 2005. manner that preserves jobs and produc- tion activities in the United States, to SEC. 901. PLASMA DISPLAY PANELS. SA 3018. Mr. SANTORUM submitted reform and simplify the international (a) IN GENERAL.—Subchapter II of chapter an amendment intended to be proposed taxation rules of the United States, 99 of the Harmonized Tariff Schedule of the to amendment SA 3011 proposed by Mr. and for other purposes; which was or- United States is amended by inserting in nu- FRIST to the bill S. 1637, to amend the dered to lie on the table; as follows: merical sequence the following new heading:

‘‘ 9902.85.23 Plasma display panels for use in plasma flat screen televisions (provided for in subheading 8529.90.53) ...... Free No change No change On or before 12/31/2006 ’’.

(b) EFFECTIVE DATE.—The amendment Internal Revenue Code of 1986 to com- Add at the end of the instructions the fol- made by this section applies with respect to ply with the World Trade Organization lowing: goods entered, or withdrawn from warehouse rulings on the FSC/ETI benefit in a for consumption, on or after the 15th day TITLE IX—NON-REVENUE PROVISIONS after the date of the enactment of this Act. manner that preserves jobs and produc- tion activities in the United States, to SEC. 901. LCD PANEL ASSEMBLIES. SA 3019. Mr. SANTORUM submitted reform and simplify the international (a) IN GENERAL.—Subchapter II of chapter an amendment intended to be proposed taxation rules of the United States, 99 of the Harmonized Tariff Schedule of the to amendment SA 3011 proposed by Mr. and for other purposes; which was or- United States is amended by inserting in nu- FRIST to the bill S. 1637, to amend the dered to lie on the table; as follows: merical sequence the following new heading:

‘‘ 9902.85.24 LCD panel assemblies for use in LCD projection type televisions (provided for in subheading 9013.80.90) ...... Free No change No change On or before 12/31/2006 ’’.

(b) EFFECTIVE DATE.—The amendment to amendment SA 3011 proposed by Mr. reform and simplify the international made by this section applies with respect to FRIST to the bill S. 1637, to amend the taxation rules of the United States, goods entered, or withdrawn from warehouse Internal Revenue Code of 1986 to com- for consumption, on or after the 15th day and for other purposes; which was or- after the date of the enactment of this Act. ply with the World Trade Organization dered to lie on the table; as follows: rulings on the FSC/ETI benefit in a Add at the end of the instructions the fol- manner that preserves jobs and produc- SA 3020. Mr. SANTORUM submitted lowing: an amendment intended to be proposed tion activities in the United States, to

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00064 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3799 TITLE IX—NON-REVENUE PROVISIONS SEC. 901. ELECTRON GUNS FOR CATHODE RAY TUBES. (a) IN GENERAL.—Subchapter II of chapter 99 of the Harmonized Tariff Schedule of the United States is amended by inserting in numerical sequence the following new heading: ‘‘ 9902.85.25 Electron guns actually used for cathode ray tubes (CRT’s) with a high defi- nition television screen aspect ratio of 16:9 (provided for in subheading 8540.91.50) ...... Free No change No change On or before 12/31/2006 ’’.

(b) EFFECTIVE DATE.—The amendment ‘‘(1) IN GENERAL.—Except as provided in ‘‘(1) beginning on the later of January 1, made by this section applies with respect to paragraph (2), nothing in any provision of 2004, or the date that such facility is placed goods entered, or withdrawn from warehouse law shall be construed as providing that an in service, and for consumption, on or after the 15th day escrow account, settlement fund, or similar ‘‘(2) ending on the earlier of the date which after the date of the enactment of this Act. fund is not subject to current income tax. is 4 years after the date such period began or The Secretary shall prescribe regulations December 31, 2009.’’. SA 3021. Mr. SANTORUM submitted providing for the taxation of any such ac- an amendment intended to be proposed count or fund whether as a grantor trust or SA 3024. Mrs. CLINTON (for herself to amendment SA 3011 proposed by Mr. otherwise. and Mr. DAYTON) submitted an amend- FRIST to the bill S. 1637, to amend the ‘‘(2) EXEMPTION FROM TAX FOR CERTAIN SET- ment intended to be proposed to Internal Revenue Code of 1986 to com- TLEMENT FUNDS.—An escrow account, settle- amendment SA 3011 proposed by Mr. ment fund, or similar fund shall be treated ply with the World Trade Organization FRIST to the bill S. 1637, to amend the as beneficially owned by the United States Internal Revenue Code of 1986 to com- rulings of the FSC/ETI benefit in a and shall be exempt from taxation under this manner that preserves jobs and produc- subtitle if— ply with the World Trade Organization tion activities in the United States, to ‘‘(A) it is established pursuant to a consent rulings of the FSC/ETI benefit in a reform and simplify the international decree entered by a judge of a United States manner that preserves jobs and produc- taxation rules of the United States, District Court, tion activities in the United States, to and for other purposes; which was or- ‘‘(B) it is created for the receipt of settle- reform and simplify the international dered to lie on the table; as follows: ment payments as directed by a government taxation rules of the United States, entity for the sole purpose of resolving or Insert at the appropriate place the fol- and for other purposes; which was or- satisfying one or more claims asserting li- dered to lie on the table; as follows: lowing: ability under the Comprehensive Environ- SEC. ll. WAIVER OF 10 PERCENT EARLY WITH- mental Response, Compensation, and Liabil- Insert at the appropriate place the fol- DRAWAL PENALTY TAX ON CERTAIN ity Act of 1980, lowing: DISTRIBUTIONS OF PENSION PLANS ‘‘(C) the authority and control over the ex- SEC. ll. TRANSMISSION OF PERSONALLY IDEN- FOR PUBLIC SAFETY EMPLOYEES. penditure of funds therein (including the ex- TIFIABLE INFORMATION TO FOR- EIGN AFFILIATES OR SUBCONTRAC- (a) IN GENERAL.—Clause (v) of section penditure of contributions thereto and any 72(t)(2)(A) is amended by inserting ‘‘(age 50 TORS. net earnings thereon) is with such govern- (a) DEFINITIONS.—As used in this section, in the case of a distribution to a qualified ment entity, and public safety employee from a government the following definitions shall apply: ‘‘(D) upon termination, any remaining (1) BUSINESS ENTERPRISE.—The term ‘‘busi- plan (within the meaning of section 414(d)) funds will be disbursed upon instructions by which is a defined benefit plan)’’ before the ness enterprise’’ means any organization, as- such government entity in accordance with sociation, or venture established to make a comma at the end. applicable law. (b) DEFINITION OF QUALIFIED PUBLIC SAFETY profit. For purposes of this paragraph, the term (2) COUNTRY WITH ADEQUATE PRIVACY PRO- EMPLOYEE.—Section 72(t) (relating to sub- ‘government entity’ means the United section not to apply to certain distributions) TECTION.—The term ‘‘country with adequate States, any State or political subdivision privacy protection’’ means a country that is amended by adding at the end the fol- thereof, the District of Columbia, any pos- lowing new paragraph: has been certified by the Federal Trade Com- session of the United States, and any agency mission as having a legal system that pro- ‘‘(10) QUALIFIED PUBLIC SAFETY EMPLOYEE.— or instrumentality of any of the foregoing.’’. For purposes of this subsection, the term vides adequate privacy protection for person- (b) EFFECTIVE DATE.—The amendment ‘qualified public safety employee’ means any ally identifiable information. made by this section shall apply to taxable employee of any police department or fire (3) HEALTH CARE BUSINESS.—The term years beginning after December 31, 2003. department organized and operated by a ‘‘health care business’’ means any business State or political subdivision of a State if enterprise or private, nonprofit organization the employee provides police protection, SA 3023. Mr. SANTORUM submitted that collects or retains personally identifi- firefighting services, or emergency medical an amendment intended to be proposed able information about consumers in rela- services for any area within the jurisdiction to amendment SA 3011 proposed by Mr. tion to medical care, including— of such State or political subdivision.’’. FRIST to the bill S. 1637, to amend the (A) hospitals; (c) EFFECTIVE DATE.—The amendments Internal Revenue Code of 1986 to com- (B) health maintenance organizations; made by this section shall apply to distribu- ply with the World Trade Organization (C) medical partnerships; (D) emergency medical transportation tions after the date of the enactment of this rulings of the FSC/ETI benefit in a Act. companies; manner that preserves jobs and produc- (E) medical transcription companies; SA 3022. Mr. SANTORUM submitted tion activities in the United States, to (F) banks that collect or process medical an amendment intended to be proposed reform and simplify the international billing information; and to amendment SA 3011 proposed by Mr. taxation rules of the United States, (G) subcontractors, or potential sub- contractors, of the entities described in sub- FRIST to the bill S. 1637, to amend the and for other purposes; which was or- dered to lie on the table; as follows: paragraphs (A) through (F). Internal Revenue Code of 1986 to com- (4) PERSONALLY IDENTIFIABLE INFORMA- ply with the World Trade Organization At the end of the instructions insert the TION.—The term ‘‘personally identifiable in- rulings of the FSC/ETI benefit in a following: formation’’ includes— manner that preserves jobs and produc- SEC. ll. EXTENSION OF CREDIT FOR PRO- (A) name; tion activities in the United States, to DUCING FUEL FROM A NONCONVEN- (B) bank account information; TIONAL SOURCE. reform and simplify the international (C) social security number; Section 29 (relating to credit for producing taxation rules of the United States, (D) address; fuel from a nonconventional source) is (E) telephone number; and for other purposes; which was or- amended by adding at the end the following (F) passwords; dered to lie on the table; as follows: new subsection: (G) mother’s maiden name; and At the appropriate place in the instruction ‘‘(i) EXTENSION FOR OTHER FACILITIES.— (H) date of birth. insert the following: Notwithstanding subsection (f)(2), in the case (b) TRANSMISSION OF INFORMATION.— SEC. ll. TAXATION OF CERTAIN SETTLEMENT of a facility for producing coke or coke gas (1) IN GENERAL.—A business enterprise may FUNDS. which was placed in service before January 1, transmit personally identifiable information (a) IN GENERAL.—Subsection (g) of section 1993, or after June 30, 1998, and before Janu- regarding a citizen of the United States to 468B (relating to clarification of taxation of ary 1, 2007, this section shall apply with re- any foreign affiliate or subcontractor lo- certain funds) is amended to read as follows: spect to coke and coke gas produced in such cated in a country that is a country with ‘‘(g) CLARIFICATION OF TAXATION OF CER- facility and sold during the during the pe- adequate privacy protection in accordance TAIN FUNDS.— riod— with paragraph (2).

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00065 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3800 CONGRESSIONAL RECORD — SENATE April 6, 2004 (2) CONSENT REQUIRED.—A business enter- FRIST to the bill S. 1637, to amend the (b) AMENDMENT OF 1986 CODE.—Except as prise may not transmit personally identifi- Internal Revenue Code of 1986 to com- otherwise expressly provided, whenever in able information regarding a citizen of the ply with the World Trade Organization this Act an amendment or repeal is ex- United States to any foreign affiliate or sub- rulings on the FSC/ETI benefit in a pressed in terms of an amendment to, or re- contractor located outside of the United manner that preserves jobs and produc- peal of, a section or other provision, the ref- States unless— erence shall be considered to be made to a (A) the business enterprise discloses to the tion activities in the United States, to section or other provision of the Internal citizen whether the country to which the in- reform and simplify the international Revenue Code of 1986. formation will be transmitted has been cer- taxation rules of the United States, (c) TABLE OF CONTENTS.— tified under subsection (d); and for other purposes; which was or- Sec. 1. Short title; amendment of 1986 Code; (B) the business enterprise obtains consent dered to lie on the table; as follows: table of contents. from the citizen, before a consumer relation- Strike section 662 of the instructions and TITLE I—PROVISIONS RELATING TO RE- ship is established or before the effective insert the following: PEAL OF EXCLUSION FOR EXTRA- date of this section, to transmit such infor- SEC. 662. NONATTRIBUTION OF CERTAIN MANU- TERRITORIAL INCOME mation to such foreign affiliate or subcon- FACTURING BY PERSONS OTHER Sec. 101. Repeal of exclusion for extra- tractor; and THAN CONTROLLED FOREIGN COR- territorial income. (C) the consent referred to in subparagraph PORATION. (B) is renewed by the citizen within 1 year (a) IN GENERAL.—Section 954(d) (defining TITLE II—REDUCTION OF TOP before such information is transmitted. foreign base company sales income) is CORPORATE TAX RATE (3) LIABILITY.—A business enterprise shall amended by adding at the end the following Sec. 201. Reduction in corporate income tax be liable for any damages arising from the new paragraph: rate. improper storage, duplication, sharing, or ‘‘(5) NONATTRIBUTION OF CERTAIN MANU- TITLE III—ALTERNATIVE MINIMUM TAX other misuse of personally identifiable infor- FACTURING ACTIVITIES.—For purposes of this RELIEF mation by the business enterprise or by any subsection, in determining whether income Sec. 301. Reduction in corporate AMT rate. of its foreign affiliates or subcontractors of a controlled foreign corporation is foreign Sec. 302. Increase in exemption from AMT that received such information from the base company sales income, any manufac- for small corporations. business enterprise. turing, production, or construction by a per- Sec. 303. Foreign tax credit under alter- (4) RULEMAKING.—The Chairman of the son other than an individual who is an em- native minimum tax. Federal Trade Commission shall promulgate ployee of the corporation shall not be attrib- TITLE IV—ADDITIONAL PROVISIONS uted to the corporation, and property manu- regulations through which the Chairman Subtitle A—Provisions Designed To Curtail factured, produced, or constructed by such may enforce the provisions of this subsection Tax Shelters person for the corporation pursuant to a con- and impose a fine for a violation of this sub- Sec. 401. Clarification of economic substance section. tractual arrangement shall not be considered as property sold on behalf of another person doctrine. (c) HEALTH CARE INFORMATION.— Sec. 402. Penalty for failing to disclose re- by the corporation.’’. (1) IN GENERAL.—A health care business portable transaction. (b) EFFECTIVE DATE.— shall be liable for any damages arising from Sec. 403. Accuracy-related penalty for listed (1) IN GENERAL.—The amendment made the improper storage, duplication, sharing, transactions and other report- by this section shall apply to taxable years or other misuse of personally identifiable in- able transactions having a sig- of controlled foreign corporations beginning formation by the business enterprise or by nificant tax avoidance purpose. on or after the date of the enactment of this any of its foreign affiliates or subcontractors Sec. 404. Penalty for understatements at- Act, and to taxable years of United States that received such information from the tributable to transactions lack- shareholders with or within which such tax- business enterprise. ing economic substance, etc. (2) NO OPT OUT PROVISION.—A health care able years of foreign corporations end. Sec. 405. Modifications of substantial under- business may not terminate an existing rela- (2) NO INFERENCE.—Nothing in the statement penalty for non- tionship with a consumer of health care serv- amendment made by this section shall be reportable transactions. ices to avoid the consent requirement under construed to infer the proper treatment of Sec. 406. Tax shelter exception to confiden- subsection (b)(2). manufacturing, production, or construction tiality privileges relating to (3) RULEMAKING.—The Secretary of Health for taxable years beginning before the date taxpayer communications. and Human Services shall promulgate regu- of the enactment of this Act. Sec. 407. Disclosure of reportable trans- actions. lations through which the Secretary may en- Mr. KYL submitted an force the provisions of this subsection and SA 3026. Sec. 408. Modifications to penalty for failure impose a fine for the violation of this sub- amendment intended to be proposed to to register tax shelters. section. amendment SA 3011 proposed by Mr. Sec. 409. Modification of penalty for failure (d) CERTIFICATION.— FRIST to the bill S. 1637, to amend the to maintain lists of investors. Sec. 410. Modification of actions to enjoin (1) IN GENERAL.—Not later than 6 months Internal Revenue Code of 1986 to com- after the date of enactment of this Act, the ply with the World Trade Organization certain conduct related to tax shelters and reportable trans- Federal Trade Commission shall— rulings on the FSC/ETI benefit in a (A) certify those countries that have legal actions. manner that preserves jobs and produc- Sec. 411. Understatement of taxpayer’s li- systems that provide adequate privacy pro- tion activities in the United States, to ability by income tax return tection for personally identifiable informa- preparer. tion; and reform and simplify the international Sec. 412. Penalty on failure to report inter- (B) make the list of countries certified taxation rules of the United States, ests in foreign financial ac- under subparagraph (A) available to the gen- and for other purposes; which was or- dered to lie on the table; as follows: counts. eral public. Sec. 413. Frivolous tax submissions. (2) CERTIFICATION CRITERIA.—In deter- In the instructions strike section 662. Sec. 414. Regulation of individuals prac- mining whether a country should be certified ticing before the Department of under this subsection, the Federal Trade SA 3027. Mr. KYL submitted an Treasury. Commission shall consider the adequacy of amendment intended to be proposed to Sec. 415. Penalty on promoters of tax shel- the country’s infrastructure for detecting, amendment SA 3011 proposed by Mr. ters. evaluating, and responding to privacy viola- FRIST to the bill S. 1637, to amend the Sec. 416. Statute of limitations for taxable tions. Internal Revenue Code of 1986 to com- years for which required listed (3) EUROPEAN UNION DATA PROTECTION DI- ply with the World Trade Organization transactions not reported. RECTIVE.—A country that has passed com- rulings on the FSC/ETI benefit in a Sec. 417. Denial of deduction for interest on prehensive privacy legislation that meets underpayments attributable to the requirements of the European Union manner that preserves jobs and produc- nondisclosed reportable and Data Protection Directive shall be certified tion activities in the United States, to noneconomic substance trans- under this subsection unless the Federal reform and simplify the international actions. Trade Commission determines that such leg- taxation rules of the United States, Sec. 418. Authorization of appropriations for islation is not commonly observed within and for other purposes; which was or- tax law enforcement. such country. dered to lie on the table; as follows: Subtitle B—Other Corporate Governance (e) EFFECTIVE DATE.—This section shall Strike all after the enacting clause of the Provisions take effect on the date which is 90 days after instructions and insert the following: Sec. 421. Affirmation of consolidated return the date of enactment of this Act. SECTION 1. SHORT TITLE; AMENDMENT OF 1986 regulation authority. CODE; TABLE OF CONTENTS. Sec. 422. Increase in criminal monetary pen- SA 3025. Mr. KYL submitted an (a) SHORT TITLE.—This Act may be cited as alty limitation for the under- amendment intended to be proposed to the ‘‘Jumpstart Our Business Strength payment or overpayment of tax amendment SA 3011 proposed by Mr. (JOBS) Act’’. due to fraud.

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Subtitle C—Enron-Related Tax Shelter Sec. 474. Consistent amortization of periods (2) BINDING CONTRACTS.—The amendments Provisions for intangibles. made by this section shall not apply to any Sec. 431. Limitation on transfer or importa- Sec. 475. Reform of tax treatment of leasing transaction in the ordinary course of a trade tion of built-in losses. operations. or business which occurs pursuant to a bind- Sec. 432. No reduction of basis under section Sec. 476. Limitation on deductions allocable ing contract— 734 in stock held by partnership to property used by govern- (A) which is between the taxpayer and a in corporate partner. ments or other tax-exempt en- person who is not a related person (as de- Sec. 433. Repeal of special rules for FASITs. tities. fined in section 943(b)(3) of such Code, as in Sec. 434. Expanded disallowance of deduc- PART IV—ADMINISTRATIVE PROVISIONS effect on the day before the date of the en- tion for interest on convertible Sec. 481. Clarification of rules for payment actment of this Act), and debt. of estimated tax for certain (B) which is in effect on September 17, 2003, Sec. 435. Expanded authority to disallow tax deemed asset sales. and at all times thereafter. benefits under section 269. Sec. 482. Extension of IRS user fees. Sec. 436. Modification of interaction be- Sec. 483. Doubling of certain penalties, fines, (d) REVOCATION OF SECTION 943(e) ELEC- tween subpart F and passive and interest on underpayments TIONS.— foreign investment company related to certain offshore fi- (1) IN GENERAL.—In the case of a corpora- rules. nancial arrangement. tion that elected to be treated as a domestic Subtitle D—Provisions to Discourage Sec. 484. Partial payment of tax liability in corporation under section 943(e) of the Inter- Expatriation installment agreements. nal Revenue Code of 1986 (as in effect on the Sec. 441. Tax treatment of inverted cor- Sec. 485. Extension of customs user fees. day before the date of the enactment of this Sec. 486. Deposits made to suspend running porate entities. Act)— Sec. 442. Imposition of mark-to-market tax of interest on potential under- (A) the corporation may, during the 1-year on individuals who expatriate. payments. period beginning on the date of the enact- Sec. 443. Excise tax on stock compensation Sec. 487. Qualified tax collection contracts. ment of this Act, revoke such election, effec- of insiders in inverted corpora- PART V—MISCELLANEOUS PROVISIONS tive as of such date of enactment, and tions. Sec. 491. Addition of vaccines against hepa- (B) if the corporation does revoke such Sec. 444. Reinsurance of United States risks titis A to list of taxable vac- election— in foreign jurisdictions. cines. (i) such corporation shall be treated as a Sec. 445. Reporting of taxable mergers and Sec. 492. Recognition of gain from the sale domestic corporation transferring (as of such acquisitions. of a principal residence ac- date of enactment) all of its property to a Subtitle E—International Tax quired in a like-kind exchange foreign corporation in connection with an Sec. 451. Clarification of banking business within 5 years of sale. exchange described in section 354 of such Sec. 493. Clarification of exemption from tax for purposes of determining in- Code, and for small property and casualty vestment of earnings in United (ii) no gain or loss shall be recognized on States property. insurance companies. Sec. 494. Definition of insurance company such transfer. Sec. 452. Prohibition on nonrecognition of (2) EXCEPTION.—Subparagraph (B)(ii) of gain through complete liquida- for section 831. Sec. 495. Limitations on deduction for chari- paragraph (1) shall not apply to gain on any tion of holding company. table contributions of patents asset held by the revoking corporation if— Sec. 453. Prevention of mismatching of in- (A) the basis of such asset is determined in terest and original issue dis- and similar property. Sec. 496. Repeal of 10-percent rehabilitation whole or in part by reference to the basis of count deductions and income tax credit. such asset in the hands of the person from inclusions in transactions with Sec. 497. Increase in age of minor children whom the revoking corporation acquired related foreign persons. whose unearned income is taxed such asset, Sec. 454. Effectively connected income to in- as if parent’s income. (B) the asset was acquired by transfer (not clude certain foreign source in- come. TITLE I—PROVISIONS RELATING TO RE- as a result of the election under section Sec. 455. Recapture of overall foreign losses PEAL OF EXCLUSION FOR EXTRA- 943(e) of such Code) occurring on or after the on sale of controlled foreign TERRITORIAL INCOME 1st day on which its election under section corporation. SEC. 101. REPEAL OF EXCLUSION FOR EXTRA- 943(e) of such Code was effective, and Sec. 456. Minimum holding period for for- TERRITORIAL INCOME. (C) a principal purpose of the acquisition eign tax credit on withholding (a) IN GENERAL.—Section 114 is hereby re- was the reduction or avoidance of tax (other taxes on income other than pealed. than a reduction in tax under section 114 of dividends. (b) CONFORMING AMENDMENTS.— such Code, as in effect on the day before the (1)(A) Subpart E of part III of subchapter N Subtitle F—Other Revenue Provisions date of the enactment of this Act). of chapter 1 (relating to qualifying foreign (e) GENERAL TRANSITION.— PART I—FINANCIAL INSTRUMENTS trade income) is hereby repealed. (1) IN GENERAL.—In the case of a taxable Sec. 461. Treatment of stripped interests in (B) The table of subparts for such part III bond and preferred stock funds, is amended by striking the item relating to year ending after the date of the enactment etc. subpart E. of this Act and beginning before January 1, Sec. 462. Application of earnings stripping (2) The table of sections for part III of sub- 2007, for purposes of chapter 1 of such Code, rules to partnerships and S cor- chapter B of chapter 1 is amended by strik- a current FSC/ETI beneficiary shall be al- porations. ing the item relating to section 114. lowed a deduction equal to the transition Sec. 463. Recognition of cancellation of in- (3) The second sentence of section amount determined under this subsection debtedness income realized on 56(g)(4)(B)(i) is amended by striking ‘‘114 or’’. with respect to such beneficiary for such satisfaction of debt with part- (4) Section 275(a) is amended— year. nership interest. (A) by inserting ‘‘or’’ at the end of para- (2) CURRENT FSC/ETI BENEFICIARY.—The Sec. 464. Modification of straddle rules. graph (4)(A), by striking ‘‘or’’ at the end of term ‘‘current FSC/ETI beneficiary’’ means Sec. 465. Denial of installment sale treat- paragraph (4)(B) and inserting a period, and any corporation which entered into one or ment for all readily tradeable by striking subparagraph (C), and more transactions during its taxable year be- debt. (B) by striking the last sentence. ginning in calendar year 2002 with respect to PART II—CORPORATIONS AND PARTNERSHIPS (5) Paragraph (3) of section 864(e) is amend- which FSC/ETI benefits were allowable. Sec. 466. Modification of treatment of trans- ed— (3) TRANSITION AMOUNT.—For purposes of fers to creditors in divisive re- (A) by striking: this subsection— organizations. ‘‘(3) TAX-EXEMPT ASSETS NOT TAKEN INTO (A) IN GENERAL.—The transition amount Sec. 467. Clarification of definition of non- ACCOUNT.— applicable to any current FSC/ETI bene- qualified preferred stock. ‘‘(A) IN GENERAL.—For purposes of’’; and ficiary for any taxable year is the phaseout Sec. 468. Modification of definition of con- inserting: percentage of the base period amount. trolled group of corporations. ‘‘(3) TAX-EXEMPT ASSETS NOT TAKEN INTO (B) PHASEOUT PERCENTAGE.— Sec. 469. Mandatory basis adjustments in ACCOUNT.—For purposes of’’, and (i) IN GENERAL.—In the case of a taxpayer connection with partnership (B) by striking subparagraph (B). using the calendar year as its taxable year, distributions and transfers of (6) Section 903 is amended by striking ‘‘114, the phaseout percentage shall be determined partnership interests. 164(a),’’ and inserting ‘‘164(a)’’. under the following table: PART III—DEPRECIATION AND AMORTIZATION (7) Section 999(c)(1) is amended by striking Sec. 471. Extension of amortization of intan- ‘‘941(a)(5),’’. The phaseout gibles to sports franchises. (c) EFFECTIVE DATE.— Years: percentage is: Sec. 472. Class lives for utility grading costs. (1) IN GENERAL.—The amendments made by 2004 ...... 80 Sec. 473. Expansion of limitation on depre- this section shall apply to transactions oc- ciation of certain passenger curring after the date of the enactment of 2005 ...... 80 automobiles. this Act. 2006 ...... 60.

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(ii) SPECIAL RULE FOR 2004.—The phaseout TITLE II—REDUCTION OF TOP (B) by striking ‘‘such last 2 sentences’’ and percentage for 2004 shall be the amount that CORPORATE TAX RATE inserting ‘‘section 11(b)(5)’’. bears the same ratio to 100 percent as the SEC. 201. REDUCTION IN CORPORATE INCOME (c) EFFECTIVE DATE.—The amendments number of days after the date of the enact- TAX RATE. made by this section shall apply to taxable ment of this Act bears to 365. (a) IN GENERAL.—Subsection (b) of section years beginning after December 31, 2003. (iii) SPECIAL RULE FOR FISCAL YEAR TAX- 11 (relating to tax imposed on corporations) TITLE III—ALTERNATIVE MINIMUM TAX PAYERS.—In the case of a taxpayer not using is amended by redesignating paragraph (2) as RELIEF the calendar year as its taxable year, the paragraph (6) and by striking paragraph (1) SEC. 301. REDUCTION IN CORPORATE AMT RATE. phaseout percentage is the weighted average and inserting the following new paragraphs: (a) IN GENERAL.—Section 55(b)(1)(B)(i) (re- of the phaseout percentages determined ‘‘(1) FOR TAXABLE YEARS BEGINNING AFTER lating to amount of tentative tax for cor- under the preceding provisions of this para- 2009.—In the case of taxable years beginning porations) is amended by striking ‘‘20 per- graph with respect to calendar years any after 2009, the amount of the tax imposed by cent’’ and inserting ‘‘19 percent (19.5 percent portion of which is included in the tax- subsection (a) shall be determined in accord- for taxable years beginning in 2004 or 2005)’’. payer’s taxable year. The weighted average ance with the following table: (b) EFFECTIVE DATE.—The amendment shall be determined on the basis of the re- ‘‘If taxable income is: The tax is: made by this section shall apply to taxable spective portions of the taxable year in each Not over $50,000 ...... 15% of taxable income. years beginning after December 31, 2003. calendar year. Over $50,000 but not over $7,500, plus 25% of the ex- SEC. 302. INCREASE IN EXEMPTION FROM AMT $75,000. cess over $50,000. FOR SMALL CORPORATIONS. (C) SHORT TAXABLE YEAR.—The Secretary Over $75,000...... $13,750, plus 33% of the (a) IN GENERAL.—Paragraph (1) of section shall prescribe guidance for the computation excess over $75,000. 55(e) (relating to exemption for small cor- of the transition amount in the case of a ‘‘(2) FOR TAXABLE YEARS BEGINNING IN 2006, porations) is amended— short taxable year. 2007, 2008, OR 2009.—In the case of taxable years (1) by striking ‘‘$7,500,000’’ in the heading (4) BASE PERIOD AMOUNT.—For purposes of beginning in 2006, 2007, 2008, or 2009, the and the text of subparagraph (A) and insert- this subsection, the base period amount is amount of the tax imposed by subsection (a) ing ‘‘$15,000,000’’, the FSC/ETI benefit for the taxpayer’s tax- shall be determined in accordance with the (2) by striking subparagraph (B), and able year beginning in calendar year 2002. following table: (3) by redesignating subparagraphs (C) and (5) FSC/ETI BENEFIT.—For purposes of this ‘‘If taxable income is: The tax is: (D) as subparagraphs (B) and (C), respec- subsection, the term ‘‘FSC/ETI benefit’’ Not over $50,000 ...... 15% of taxable income. tively. means— Over $50,000 but not over $7,500, plus 25% of the ex- (b) EFFECTIVE DATE.—The amendments (A) amounts excludable from gross income $75,000. cess over $50,000. made by this section shall apply to taxable under section 114 of such Code, and Over $75,000 ...... $13,750, plus 33.5% of the excess over $75,000. years beginning after December 31, 2003. (B) the exempt foreign trade income of re- SEC. 303. FOREIGN TAX CREDIT UNDER ALTER- ‘‘(3) FOR TAXABLE YEARS BEGINNING IN 2005.— lated foreign sales corporations from prop- NATIVE MINIMUM TAX. In the case of taxable years beginning in erty acquired from the taxpayer (determined (a) IN GENERAL.— 2005, the amount of the tax imposed by sub- without regard to section 923(a)(5) of such (1) Subsection (a) of section 59 is amended section (a) shall be determined in accordance Code (relating to special rule for military by striking paragraph (2) and by redesig- with the following table: property), as in effect on the day before the nating paragraphs (3) and (4) as paragraphs date of the enactment of the FSC Repeal and ‘‘If taxable income is: The tax is: (2) and (3), respectively. Not over $50,000 ...... 15% of taxable income. (2) Section 53(d)(1)(B)(i)(II) is amended by Extraterritorial Income Exclusion Act of Over $50,000 but not over $7,500, plus 25% of the ex- 2000). $75,000. cess over $50,000. striking ‘‘and if section 59(a)(2) did not In determining the FSC/ETI benefit there Over $75,000...... $13,750, plus 34% of the apply’’. (b) EFFECTIVE DATE.—The amendments shall be excluded any amount attributable to excess over $75,000. made by this section shall apply to taxable a transaction with respect to which the tax- ‘‘(4) FOR TAXABLE YEARS BEGINNING IN 2004.— years beginning after December 31, 2004. payer is the lessor unless the leased property In the case of taxable years beginning in was manufactured or produced in whole or in 2004, the amount of the tax imposed by sub- TITLE IV—ADDITIONAL PROVISIONS significant part by the taxpayer. section (a) shall be determined in accordance Subtitle A—Provisions Designed To Curtail (6) SPECIAL RULE FOR AGRICULTURAL AND with the following table: Tax Shelters HORTICULTURAL COOPERATIVES.—Determina- ‘‘If taxable income is: The tax is: SEC. 401. CLARIFICATION OF ECONOMIC SUB- tions under this subsection with respect to Not over $50,000 ...... 15% of taxable income. STANCE DOCTRINE. an organization described in section 943(g)(1) Over $50,000 but not over $7,500, plus 25% of the ex- (a) IN GENERAL.—Section 7701 is amended $75,000. cess over $50,000. of such Code, as in effect on the day before by redesignating subsection (n) as subsection Over $75,000 but not over $13,750, plus 34% of the (o) and by inserting after subsection (m) the the date of the enactment of this Act, shall $10,000,000. excess over $75,000. be made at the cooperative level and the pur- Over $10,000,000...... $3,388,250, plus 34.5% of following new subsection: ‘‘(n) CLARIFICATION OF ECONOMIC SUB- poses of this subsection shall be carried out the excess over $10,000,000. STANCE DOCTRINE; ETC.— in a manner similar to section 199(h)(2) of ‘‘(1) GENERAL RULES.— such Code, as added by this Act. Such deter- ‘‘(5) PHASEOUT OF LOWER RATES FOR CER- ‘‘(A) IN GENERAL.—In any case in which a minations shall be in accordance with such TAIN TAXPAYERS.— ‘‘(A) GENERAL RULE.—In the case of a cor- court determines that the economic sub- requirements and procedures as the Sec- stance doctrine is relevant for purposes of retary may prescribe. poration which has taxable income in excess of $100,000 for any taxable year, the amount this title to a transaction (or series of trans- (7) CERTAIN RULES TO APPLY.—Rules similar of tax determined under paragraph (1), (2), (3) actions), such transaction (or series of trans- to the rules of section 41(f) of such Code shall actions) shall have economic substance only apply for purposes of this subsection. or (4) for such taxable year shall be increased by the lesser of (i) 5 percent of such excess, if the requirements of this paragraph are (8) COORDINATION WITH BINDING CONTRACT or (ii) $11,000 ($11,750 in the case of taxable met. RULE.—The deduction determined under years beginning before 2006 and $11,375 in the ‘‘(B) DEFINITION OF ECONOMIC SUBSTANCE.— paragraph (1) for any taxable year shall be case of taxable years beginning after 2005 and For purposes of subparagraph (A)— reduced by the phaseout percentage of any before 2010). ‘‘(i) IN GENERAL.—A transaction has eco- FSC/ETI benefit realized for the taxable year ‘‘(B) HIGHER INCOME CORPORATIONS.—In the nomic substance only if— by reason of subsection (c)(2) or section case of a corporation which has taxable in- ‘‘(I) the transaction changes in a meaning- 5(c)(1)(B) of the FSC Repeal and come in excess of $15,000,000 for taxable years ful way (apart from Federal tax effects) the Extraterritorial Income Exclusion Act of beginning in 2004, the amount of the tax de- taxpayer’s economic position, and 2000, except that for purposes of this para- termined under the foregoing provisions of ‘‘(II) the taxpayer has a substantial nontax graph the phaseout percentage for 2004 shall this subsection shall be increased by an addi- purpose for entering into such transaction be treated as being equal to 100 percent. tional amount equal to the lesser of (i) 3 per- and the transaction is a reasonable means of (9) SPECIAL RULE FOR TAXABLE YEAR WHICH cent of such excess, or (ii) $50,000.’’. accomplishing such purpose. INCLUDES DATE OF ENACTMENT.—In the case of (b) CONFORMING AMENDMENTS.— In applying subclause (II), a purpose of a taxable year which includes the date of the (1) Section 904(b)(3)(D)(ii) is amended to achieving a financial accounting benefit enactment of this Act, the deduction allowed read as follows: shall not be taken into account in deter- under this subsection to any current FSC/ ‘‘(ii) in the case of a corporation, section mining whether a transaction has a substan- ETI beneficiary shall in no event exceed— 1201(a) applies to such taxable year.’’. tial nontax purpose if the origin of such fi- (A) 100 percent of such beneficiary’s base (2) Section 1201(a) is amended by striking nancial accounting benefit is a reduction of period amount for calendar year 2004, re- ‘‘the last 2 sentences of section 11(b)(1)’’ and income tax. duced by inserting ‘‘section 11(b)(5)’’. ‘‘(ii) SPECIAL RULE WHERE TAXPAYER RELIES (B) the FSC/ETI benefit of such beneficiary (3) Section 1561(a) is amended— ON PROFIT POTENTIAL.—A transaction shall with respect to transactions occurring dur- (A) by striking ‘‘the last 2 sentences of sec- not be treated as having economic substance ing the portion of the taxable year ending on tion 11(b)(1)’’ and inserting ‘‘section by reason of having a potential for profit un- the date of the enactment of this Act. 11(b)(5)’’, and less—

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‘‘(I) the present value of the reasonably ex- ‘‘(5) REGULATIONS.—The Secretary shall ‘‘(C) it is shown that the violation is due to pected pre-tax profit from the transaction is prescribe such regulations as may be nec- an unintentional mistake of fact; substantial in relation to the present value essary or appropriate to carry out the pur- ‘‘(D) imposing the penalty would be of the expected net tax benefits that would poses of this subsection. Such regulations against equity and good conscience, and be allowed if the transaction were respected, may include exemptions from the applica- ‘‘(E) rescinding the penalty would promote and tion of this subsection.’’. compliance with the requirements of this ‘‘(II) the reasonably expected pre-tax profit (b) EFFECTIVE DATE.—The amendments title and effective tax administration. from the transaction exceeds a risk-free rate made by this section shall apply to trans- ‘‘(2) DISCRETION.—The exercise of authority of return. actions entered into after the date of the en- under paragraph (1) shall be at the sole dis- ‘‘(C) TREATMENT OF FEES AND FOREIGN actment of this Act. cretion of the Commissioner and may be del- TAXES.—Fees and other transaction expenses SEC. 402. PENALTY FOR FAILING TO DISCLOSE egated only to the head of the Office of Tax and foreign taxes shall be taken into account REPORTABLE TRANSACTION. Shelter Analysis. The Commissioner, in the (a) IN GENERAL.—Part I of subchapter B of as expenses in determining pre-tax profit Commissioner’s sole discretion, may estab- chapter 68 (relating to assessable penalties) under subparagraph (B)(ii). lish a procedure to determine if a penalty is amended by inserting after section 6707 should be referred to the Commissioner or ‘‘(2) SPECIAL RULES FOR TRANSACTIONS WITH the following new section: TAX-INDIFFERENT PARTIES.— the head of such Office for a determination ‘‘SEC. 6707A. PENALTY FOR FAILURE TO INCLUDE under paragraph (1). ‘‘(A) SPECIAL RULES FOR FINANCING TRANS- REPORTABLE TRANSACTION INFOR- O APPEAL ACTIONS.—The form of a transaction which is MATION WITH RETURN OR STATE- ‘‘(3) N .—Notwithstanding any in substance the borrowing of money or the MENT. other provision of law, any determination acquisition of financial capital directly or ‘‘(a) IMPOSITION OF PENALTY.—Any person under this subsection may not be reviewed in indirectly from a tax-indifferent party shall who fails to include on any return or state- any administrative or judicial proceeding. not be respected if the present value of the ment any information with respect to a re- ‘‘(4) RECORDS.—If a penalty is rescinded deductions to be claimed with respect to the portable transaction which is required under under paragraph (1), the Commissioner shall transaction is substantially in excess of the section 6011 to be included with such return place in the file in the Office of the Commis- present value of the anticipated economic re- or statement shall pay a penalty in the sioner the opinion of the Commissioner or turns of the person lending the money or amount determined under subsection (b). the head of the Office of Tax Shelter Anal- providing the financial capital. A public of- ‘‘(b) AMOUNT OF PENALTY.— ysis with respect to the determination, in- fering shall be treated as a borrowing, or an ‘‘(1) IN GENERAL.—Except as provided in cluding— acquisition of financial capital, from a tax- paragraphs (2) and (3), the amount of the ‘‘(A) the facts and circumstances of the indifferent party if it is reasonably expected penalty under subsection (a) shall be $50,000. transaction, that at least 50 percent of the offering will be ‘‘(2) LISTED TRANSACTION.—The amount of ‘‘(B) the reasons for the rescission, and placed with tax-indifferent parties. the penalty under subsection (a) with respect ‘‘(C) the amount of the penalty rescinded. ‘‘(B) ARTIFICIAL INCOME SHIFTING AND BASIS to a listed transaction shall be $100,000. ‘‘(5) REPORT.—The Commissioner shall ADJUSTMENTS.—The form of a transaction ‘‘(3) INCREASE IN PENALTY FOR LARGE ENTI- each year report to the Committee on Ways with a tax-indifferent party shall not be re- TIES AND HIGH NET WORTH INDIVIDUALS.— and Means of the House of Representatives spected if— ‘‘(A) IN GENERAL.—In the case of a failure and the Committee on Finance of the Sen- ‘‘(i) it results in an allocation of income or under subsection (a) by— ate— gain to the tax-indifferent party in excess of ‘‘(i) a large entity, or ‘‘(A) a summary of the total number and such party’s economic income or gain, or ‘‘(ii) a high net worth individual, aggregate amount of penalties imposed, and ‘‘(ii) it results in a basis adjustment or the penalty under paragraph (1) or (2) shall rescinded, under this section, and be twice the amount determined without re- shifting of basis on account of overstating ‘‘(B) a description of each penalty re- gard to this paragraph. the income or gain of the tax-indifferent scinded under this subsection and the rea- ‘‘(B) LARGE ENTITY.—For purposes of sub- party. sons therefor. paragraph (A), the term ‘large entity’ means, ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For with respect to any taxable year, a person ‘‘(e) PENALTY REPORTED TO SEC.—In the purposes of this subsection— (other than a natural person) with gross re- case of a person— ‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.—The ceipts in excess of $10,000,000 for the taxable ‘‘(1) which is required to file periodic re- term ‘economic substance doctrine’ means year in which the reportable transaction oc- ports under section 13 or 15(d) of the Securi- the common law doctrine under which tax curs or the preceding taxable year. Rules ties Exchange Act of 1934 or is required to be benefits under subtitle A with respect to a similar to the rules of paragraph (2) and sub- consolidated with another person for pur- transaction are not allowable if the trans- paragraphs (B), (C), and (D) of paragraph (3) poses of such reports, and action does not have economic substance or of section 448(c) shall apply for purposes of ‘‘(2) which— lacks a business purpose. this subparagraph. ‘‘(A) is required to pay a penalty under this ‘‘(B) TAX-INDIFFERENT PARTY.—The term ‘‘(C) HIGH NET WORTH INDIVIDUAL.—For pur- section with respect to a listed transaction, ‘tax-indifferent party’ means any person or poses of subparagraph (A), the term ‘high net ‘‘(B) is required to pay a penalty under sec- entity not subject to tax imposed by subtitle worth individual’ means, with respect to a tion 6662A with respect to any reportable A. A person shall be treated as a tax-indif- reportable transaction, a natural person transaction at a rate prescribed under sec- ferent party with respect to a transaction if whose net worth exceeds $2,000,000 imme- tion 6662A(c), or the items taken into account with respect to diately before the transaction. ‘‘(C) is required to pay a penalty under sec- the transaction have no substantial impact ‘‘(c) DEFINITIONS.—For purposes of this sec- tion 6662B with respect to any noneconomic on such person’s liability under subtitle A. tion— substance transaction, ‘‘(C) EXCEPTION FOR PERSONAL TRANS- ‘‘(1) REPORTABLE TRANSACTION.—The term ACTIONS OF INDIVIDUALS.—In the case of an ‘reportable transaction’ means any trans- the requirement to pay such penalty shall be individual, this subsection shall apply only action with respect to which information is disclosed in such reports filed by such person to transactions entered into in connection required to be included with a return or for such periods as the Secretary shall speci- with a trade or business or an activity en- statement because, as determined under reg- fy. Failure to make a disclosure in accord- gaged in for the production of income. ulations prescribed under section 6011, such ance with the preceding sentence shall be ‘‘(D) TREATMENT OF LESSORS.—In applying transaction is of a type which the Secretary treated as a failure to which the penalty paragraph (1)(B)(ii) to the lessor of tangible determines as having a potential for tax under subsection (b)(2) applies. property subject to a lease— avoidance or evasion. ‘‘(f) COORDINATION WITH OTHER PEN- ‘‘(i) the expected net tax benefits with re- ‘‘(2) LISTED TRANSACTION.—Except as pro- ALTIES.—The penalty imposed by this section spect to the leased property shall not include vided in regulations, the term ‘listed trans- is in addition to any penalty imposed under the benefits of— action’ means a reportable transaction ‘‘(I) depreciation, which is the same as, or substantially simi- this title.’’. ‘‘(II) any tax credit, or lar to, a transaction specifically identified (b) CONFORMING AMENDMENT.—The table of ‘‘(III) any other deduction as provided in by the Secretary as a tax avoidance trans- sections for part I of subchapter B of chapter guidance by the Secretary, and action for purposes of section 6011. 68 is amended by inserting after the item re- ‘‘(ii) subclause (II) of paragraph (1)(B)(ii) ‘‘(d) AUTHORITY TO RESCIND PENALTY.— lating to section 6707 the following: shall be disregarded in determining whether ‘‘(1) IN GENERAL.—The Commissioner of In- any of such benefits are allowable. ternal Revenue may rescind all or any por- ‘‘Sec. 6707A. Penalty for failure to include re- ‘‘(4) OTHER COMMON LAW DOCTRINES NOT AF- tion of any penalty imposed by this section portable transaction informa- FECTED.—Except as specifically provided in with respect to any violation if— tion with return or state- this subsection, the provisions of this sub- ‘‘(A) the violation is with respect to a re- ment.’’. section shall not be construed as altering or portable transaction other than a listed supplanting any other rule of law, and the transaction, (c) EFFECTIVE DATE.—The amendments requirements of this subsection shall be con- ‘‘(B) the person on whom the penalty is im- made by this section shall apply to returns strued as being in addition to any such other posed has a history of complying with the re- and statements the due date for which is rule of law. quirements of this title, after the date of the enactment of this Act.

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SEC. 403. ACCURACY-RELATED PENALTY FOR ‘‘(e) SPECIAL RULES.— ‘‘(C) the taxpayer reasonably believed that LISTED TRANSACTIONS AND OTHER ‘‘(1) COORDINATION WITH PENALTIES, ETC., ON such treatment was more likely than not the REPORTABLE TRANSACTIONS HAV- OTHER UNDERSTATEMENTS.—In the case of an proper treatment. ING A SIGNIFICANT TAX AVOIDANCE understatement (as defined in section PURPOSE. A taxpayer failing to adequately disclose in 6662(d)(2))— (a) IN GENERAL.—Subchapter A of chapter accordance with section 6011 shall be treated 68 is amended by inserting after section 6662 ‘‘(A) the amount of such understatement as meeting the requirements of subparagraph the following new section: (determined without regard to this para- (A) if the penalty for such failure was re- graph) shall be increased by the aggregate scinded under section 6707A(d). ‘‘SEC. 6662A. IMPOSITION OF ACCURACY-RE- amount of reportable transaction under- LATED PENALTY ON UNDERSTATE- ‘‘(3) RULES RELATING TO REASONABLE BE- MENTS WITH RESPECT TO REPORT- statements and noneconomic substance LIEF.—For purposes of paragraph (2)(C)— transaction understatements for purposes of ABLE TRANSACTIONS. ‘‘(A) IN GENERAL.—A taxpayer shall be ‘‘(a) IMPOSITION OF PENALTY.—If a taxpayer determining whether such understatement is treated as having a reasonable belief with re- has a reportable transaction understatement a substantial understatement under section spect to the tax treatment of an item only if for any taxable year, there shall be added to 6662(d)(1), and such belief— the tax an amount equal to 20 percent of the ‘‘(B) the addition to tax under section ‘‘(i) is based on the facts and law that exist amount of such understatement. 6662(a) shall apply only to the excess of the at the time the return of tax which includes amount of the substantial understatement ‘‘(b) REPORTABLE TRANSACTION UNDER- such tax treatment is filed, and (if any) after the application of subparagraph STATEMENT.—For purposes of this section— ‘‘(ii) relates solely to the taxpayer’s (A) over the aggregate amount of reportable ‘‘(1) IN GENERAL.—The term ‘reportable chances of success on the merits of such transaction understatements and non- transaction understatement’ means the sum treatment and does not take into account economic substance transaction understate- of— the possibility that a return will not be au- ments. ‘‘(A) the product of— dited, such treatment will not be raised on ‘‘(2) COORDINATION WITH OTHER PENALTIES.— ‘‘(i) the amount of the increase (if any) in audit, or such treatment will be resolved ‘‘(A) APPLICATION OF FRAUD PENALTY.—Ref- taxable income which results from a dif- through settlement if it is raised. ference between the proper tax treatment of erences to an underpayment in section 6663 ‘‘(B) CERTAIN OPINIONS MAY NOT BE RELIED an item to which this section applies and the shall be treated as including references to a UPON.— taxpayer’s treatment of such item (as shown reportable transaction understatement and a ‘‘(i) IN GENERAL.—An opinion of a tax advi- on the taxpayer’s return of tax), and noneconomic substance transaction under- sor may not be relied upon to establish the ‘‘(ii) the highest rate of tax imposed by statement. reasonable belief of a taxpayer if— section 1 (section 11 in the case of a taxpayer ‘‘(B) NO DOUBLE PENALTY.—This section ‘‘(I) the tax advisor is described in clause which is a corporation), and shall not apply to any portion of an under- (ii), or ‘‘(B) the amount of the decrease (if any) in statement on which a penalty is imposed ‘‘(II) the opinion is described in clause (iii). the aggregate amount of credits determined under section 6662B or 6663. ‘‘(ii) DISQUALIFIED TAX ADVISORS.—A tax under subtitle A which results from a dif- ‘‘(3) SPECIAL RULE FOR AMENDED RETURNS.— advisor is described in this clause if the tax ference between the taxpayer’s treatment of Except as provided in regulations, in no advisor— an item to which this section applies (as event shall any tax treatment included with ‘‘(I) is a material advisor (within the mean- shown on the taxpayer’s return of tax) and an amendment or supplement to a return of the proper tax treatment of such item. tax be taken into account in determining the ing of section 6111(b)(1)) who participates in amount of any reportable transaction under- the organization, management, promotion, For purposes of subparagraph (A), any reduc- or sale of the transaction or who is related tion of the excess of deductions allowed for statement or noneconomic substance trans- action understatement if the amendment or (within the meaning of section 267(b) or the taxable year over gross income for such 707(b)(1)) to any person who so participates, year, and any reduction in the amount of supplement is filed after the earlier of the date the taxpayer is first contacted by the ‘‘(II) is compensated directly or indirectly capital losses which would (without regard by a material advisor with respect to the to section 1211) be allowed for such year, Secretary regarding the examination of the return or such other date as is specified by transaction, shall be treated as an increase in taxable in- ‘‘(III) has a fee arrangement with respect come. the Secretary. ‘‘(4) NONECONOMIC SUBSTANCE TRANSACTION to the transaction which is contingent on all ‘‘(2) ITEMS TO WHICH SECTION APPLIES.—This or part of the intended tax benefits from the section shall apply to any item which is at- UNDERSTATEMENT.—For purposes of this sub- transaction being sustained, or tributable to— section, the term ‘noneconomic substance ‘‘(IV) as determined under regulations pre- ‘‘(A) any listed transaction, and transaction understatement’ has the mean- scribed by the Secretary, has a disqualifying ‘‘(B) any reportable transaction (other ing given such term by section 6662B(c). financial interest with respect to the trans- than a listed transaction) if a significant ‘‘(5) CROSS REFERENCE.— action. purpose of such transaction is the avoidance ‘‘For reporting of section 6662A(c) penalty ‘‘(iii) DISQUALIFIED OPINIONS.—For purposes or evasion of Federal income tax. to the Securities and Exchange Commission, of clause (i), an opinion is disqualified if the ‘‘(c) HIGHER PENALTY FOR NONDISCLOSED see section 6707A(e).’’. opinion— LISTED AND OTHER AVOIDANCE TRANS- (b) DETERMINATION OF OTHER UNDERSTATE- ‘‘(I) is based on unreasonable factual or ACTIONS.— MENTS.—Subparagraph (A) of section legal assumptions (including assumptions as ‘‘(1) IN GENERAL.—Subsection (a) shall be 6662(d)(2) is amended by adding at the end to future events), applied by substituting ‘30 percent’ for ‘20 the following flush sentence: ‘‘(II) unreasonably relies on representa- percent’ with respect to the portion of any tions, statements, findings, or agreements of reportable transaction understatement with ‘‘The excess under the preceding sentence the taxpayer or any other person, respect to which the requirement of section shall be determined without regard to items ‘‘(III) does not identify and consider all rel- 6664(d)(2)(A) is not met. to which section 6662A applies and without regard to items with respect to which a pen- evant facts, or ‘‘(2) RULES APPLICABLE TO ASSERTION AND alty is imposed by section 6662B.’’. ‘‘(IV) fails to meet any other requirement COMPROMISE OF PENALTY.— as the Secretary may prescribe.’’. ‘‘(A) IN GENERAL.—Only upon the approval (c) REASONABLE CAUSE EXCEPTION.— (2) CONFORMING AMENDMENT.—The heading by the Chief Counsel for the Internal Rev- (1) IN GENERAL.—Section 6664 is amended for subsection (c) of section 6664 is amended enue Service or the Chief Counsel’s delegate by adding at the end the following new sub- by inserting ‘‘FOR UNDERPAYMENTS’’ after at the national office of the Internal Rev- section: ‘‘EXCEPTION’’. enue Service may a penalty to which para- ‘‘(d) REASONABLE CAUSE EXCEPTION FOR RE- graph (1) applies be included in a 1st letter of PORTABLE TRANSACTION UNDERSTATEMENTS.— (d) CONFORMING AMENDMENTS.— proposed deficiency which allows the tax- ‘‘(1) IN GENERAL.—No penalty shall be im- (1) Subparagraph (C) of section 461(i)(3) is payer an opportunity for administrative re- posed under section 6662A with respect to amended by striking ‘‘section view in the Internal Revenue Service Office any portion of a reportable transaction un- 6662(d)(2)(C)(iii)’’ and inserting ‘‘section of Appeals. If such a letter is provided to the derstatement if it is shown that there was a 1274(b)(3)(C)’’. taxpayer, only the Commissioner of Internal reasonable cause for such portion and that (2) Paragraph (3) of section 1274(b) is Revenue may compromise all or any portion the taxpayer acted in good faith with respect amended— of such penalty. to such portion. (A) by striking ‘‘(as defined in section ‘‘(B) APPLICABLE RULES.—The rules of para- ‘‘(2) SPECIAL RULES.—Paragraph (1) shall 6662(d)(2)(C)(iii))’’ in subparagraph (B)(i), and graphs (2), (3), (4), and (5) of section 6707A(d) not apply to any reportable transaction un- (B) by adding at the end the following new shall apply for purposes of subparagraph (A). derstatement unless— subparagraph: ‘‘(d) DEFINITIONS OF REPORTABLE AND LIST- ‘‘(A) the relevant facts affecting the tax ‘‘(C) TAX SHELTER.—For purposes of sub- ED TRANSACTIONS.—For purposes of this sec- treatment of the item are adequately dis- paragraph (B), the term ‘tax shelter’ means— tion, the terms ‘reportable transaction’ and closed in accordance with the regulations ‘‘(i) a partnership or other entity, ‘listed transaction’ have the respective prescribed under section 6011, ‘‘(ii) any investment plan or arrangement, meanings given to such terms by section ‘‘(B) there is or was substantial authority or 6707A(c). for such treatment, and ‘‘(iii) any other plan or arrangement,

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if a significant purpose of such partnership, ‘‘(2) APPLICABLE RULES.—The rules of para- ‘‘(A) any person, entity, plan, or arrangement is the avoid- graphs (2), (3), (4), and (5) of section 6707A(d) ‘‘(B) any director, officer, employee, agent, ance or evasion of Federal income tax.’’. shall apply for purposes of paragraph (1). or representative of the person, or (3) Section 6662(d)(2) is amended by strik- ‘‘(e) COORDINATION WITH OTHER PEN- ‘‘(C) any other person holding a capital or ing subparagraphs (C) and (D). ALTIES.—Except as otherwise provided in this profits interest in the person, and (4) Section 6664(c)(1) is amended by strik- part, the penalty imposed by this section ‘‘(2) in connection with the promotion of ing ‘‘this part’’ and inserting ‘‘section 6662 or shall be in addition to any other penalty im- the direct or indirect participation of the 6663’’. posed by this title. person in any tax shelter (as defined in sec- (5) Subsection (b) of section 7525 is amend- ‘‘(f) CROSS REFERENCES.— tion 1274(b)(3)(C)).’’. ed by striking ‘‘section 6662(d)(2)(C)(iii)’’ and ‘‘(1) For coordination of penalty with un- (b) EFFECTIVE DATE.—The amendment inserting ‘‘section 1274(b)(3)(C)’’. derstatements under section 6662 and other made by this section shall apply to commu- (6)(A) The heading for section 6662 is special rules, see section 6662A(e). nications made on or after the date of the amended to read as follows: ‘‘(2) For reporting of penalty imposed enactment of this Act. ‘‘SEC. 6662. IMPOSITION OF ACCURACY-RELATED under this section to the Securities and Ex- SEC. 407. DISCLOSURE OF REPORTABLE TRANS- PENALTY ON UNDERPAYMENTS.’’. change Commission, see section 6707A(e).’’. ACTIONS. (B) The table of sections for part II of sub- (b) CLERICAL AMENDMENT.—The table of (a) IN GENERAL.—Section 6111 (relating to chapter A of chapter 68 is amended by strik- sections for part II of subchapter A of chap- registration of tax shelters) is amended to ing the item relating to section 6662 and in- ter 68 is amended by inserting after the item read as follows: serting the following new items: relating to section 6662A the following new ‘‘SEC. 6111. DISCLOSURE OF REPORTABLE TRANS- ‘‘Sec. 6662. Imposition of accuracy-related item: ACTIONS. penalty on underpayments. ‘‘Sec. 6662B. Penalty for understatements at- ‘‘(a) IN GENERAL.—Each material advisor ‘‘Sec. 6662A. Imposition of accuracy-related tributable to transactions lack- with respect to any reportable transaction penalty on understatements ing economic substance, etc.’’. shall make a return (in such form as the Sec- retary may prescribe) setting forth— with respect to reportable (c) EFFECTIVE DATE.—The amendments ‘‘(1) information identifying and describing transactions.’’. made by this section shall apply to trans- the transaction, actions entered into after the date of the en- (e) EFFECTIVE DATE.—The amendments ‘‘(2) information describing any potential actment of this Act. made by this section shall apply to taxable tax benefits expected to result from the years ending after the date of the enactment SEC. 405. MODIFICATIONS OF SUBSTANTIAL UN- transaction, and of this Act. DERSTATEMENT PENALTY FOR NON- REPORTABLE TRANSACTIONS. ‘‘(3) such other information as the Sec- SEC. 404. PENALTY FOR UNDERSTATEMENTS AT- retary may prescribe. (a) SUBSTANTIAL UNDERSTATEMENT OF COR- TRIBUTABLE TO TRANSACTIONS Such return shall be filed not later than the LACKING ECONOMIC SUBSTANCE, PORATIONS.—Section 6662(d)(1)(B) (relating to ETC. special rule for corporations) is amended to date specified by the Secretary. (a) IN GENERAL.—Subchapter A of chapter read as follows: ‘‘(b) DEFINITIONS.—For purposes of this sec- 68 is amended by inserting after section ‘‘(B) SPECIAL RULE FOR CORPORATIONS.—In tion— 6662A the following new section: the case of a corporation other than an S ‘‘(1) MATERIAL ADVISOR.— ‘‘(A) IN GENERAL.—The term ‘material ad- ‘‘SEC. 6662B. PENALTY FOR UNDERSTATEMENTS corporation or a personal holding company ATTRIBUTABLE TO TRANSACTIONS (as defined in section 542), there is a substan- visor’ means any person— LACKING ECONOMIC SUBSTANCE, tial understatement of income tax for any ‘‘(i) who provides any material aid, assist- ETC. taxable year if the amount of the understate- ance, or advice with respect to organizing, ‘‘(a) IMPOSITION OF PENALTY.—If a taxpayer ment for the taxable year exceeds the lesser managing, promoting, selling, implementing, has an noneconomic substance transaction of— or carrying out any reportable transaction, understatement for any taxable year, there ‘‘(i) 10 percent of the tax required to be and shall be added to the tax an amount equal to shown on the return for the taxable year (or, ‘‘(ii) who directly or indirectly derives 40 percent of the amount of such understate- if greater, $10,000), or gross income in excess of the threshold ment. ‘‘(ii) $10,000,000.’’. amount for such aid, assistance, or advice. ‘‘(b) REDUCTION OF PENALTY FOR DISCLOSED (b) REDUCTION FOR UNDERSTATEMENT OF ‘‘(B) THRESHOLD AMOUNT.—For purposes of TRANSACTIONS.—Subsection (a) shall be ap- TAXPAYER DUE TO POSITION OF TAXPAYER OR subparagraph (A), the threshold amount is— plied by substituting ‘20 percent’ for ‘40 per- DISCLOSED ITEM.— ‘‘(i) $50,000 in the case of a reportable cent’ with respect to the portion of any non- (1) IN GENERAL.—Section 6662(d)(2)(B)(i) (re- transaction substantially all of the tax bene- economic substance transaction understate- lating to substantial authority) is amended fits from which are provided to natural per- ment with respect to which the relevant to read as follows: sons, and facts affecting the tax treatment of the item ‘‘(i) the tax treatment of any item by the ‘‘(ii) $250,000 in any other case. are adequately disclosed in the return or a taxpayer if the taxpayer had reasonable be- ‘‘(2) REPORTABLE TRANSACTION.—The term statement attached to the return. lief that the tax treatment was more likely ‘reportable transaction’ has the meaning ‘‘(c) NONECONOMIC SUBSTANCE TRANSACTION than not the proper treatment, or’’. given to such term by section 6707A(c). UNDERSTATEMENT.—For purposes of this sec- (2) CONFORMING AMENDMENT.—Section ‘‘(c) REGULATIONS.—The Secretary may tion— 6662(d) is amended by adding at the end the prescribe regulations which provide— ‘‘(1) IN GENERAL.—The term ‘noneconomic following new paragraph: ‘‘(1) that only 1 person shall be required to substance transaction understatement’ ‘‘(3) SECRETARIAL LIST.—For purposes of meet the requirements of subsection (a) in means any amount which would be an under- this subsection, section 6664(d)(2), and sec- cases in which 2 or more persons would oth- statement under section 6662A(b)(1) if section tion 6694(a)(1), the Secretary may prescribe a erwise be required to meet such require- 6662A were applied by taking into account list of positions for which the Secretary be- ments, items attributable to noneconomic sub- lieves there is not substantial authority or ‘‘(2) exemptions from the requirements of stance transactions rather than items to there is no reasonable belief that the tax this section, and which section 6662A would apply without re- treatment is more likely than not the proper ‘‘(3) such rules as may be necessary or ap- gard to this paragraph. tax treatment. Such list (and any revisions propriate to carry out the purposes of this ‘‘(2) NONECONOMIC SUBSTANCE TRANS- thereof) shall be published in the Federal section.’’. ACTION.—The term ‘noneconomic substance Register or the Internal Revenue Bulletin.’’. (b) CONFORMING AMENDMENTS.— transaction’ means any transaction if— (c) EFFECTIVE DATE.—The amendments (1) The item relating to section 6111 in the ‘‘(A) there is a lack of economic substance made by this section shall apply to taxable table of sections for subchapter B of chapter (within the meaning of section 7701(n)(1)) for years beginning after the date of the enact- 61 is amended to read as follows: the transaction giving rise to the claimed ment of this Act. ‘‘Sec. 6111. Disclosure of reportable trans- benefit or the transaction was not respected SEC. 406. TAX SHELTER EXCEPTION TO CON- actions.’’. under section 7701(n)(2), or FIDENTIALITY PRIVILEGES RELAT- ‘‘(B) the transaction fails to meet the re- ING TO TAXPAYER COMMUNICA- (2)(A) So much of section 6112 as precedes quirements of any similar rule of law. TIONS. subsection (c) thereof is amended to read as ‘‘(d) RULES APPLICABLE TO COMPROMISE OF (a) IN GENERAL.—Section 7525(b) (relating follows: PENALTY.— to section not to apply to communications ‘‘SEC. 6112. MATERIAL ADVISORS OF REPORT- ‘‘(1) IN GENERAL.—If the 1st letter of pro- regarding corporate tax shelters) is amended ABLE TRANSACTIONS MUST KEEP posed deficiency which allows the taxpayer to read as follows: LISTS OF ADVISEES. an opportunity for administrative review in ‘‘(b) SECTION NOT TO APPLY TO COMMUNICA- ‘‘(a) IN GENERAL.—Each material advisor the Internal Revenue Service Office of Ap- TIONS REGARDING TAX SHELTERS.—The privi- (as defined in section 6111) with respect to peals has been sent with respect to a penalty lege under subsection (a) shall not apply to any reportable transaction (as defined in sec- to which this section applies, only the Com- any written communication which is— tion 6707A(c)) shall maintain, in such manner missioner of Internal Revenue may com- ‘‘(1) between a federally authorized tax as the Secretary may by regulations pre- promise all or any portion of such penalty. practitioner and— scribe, a list—

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00071 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3806 CONGRESSIONAL RECORD — SENATE April 6, 2004 ‘‘(1) identifying each person with respect to ance, or advice which is provided with re- (1) The heading for section 7408 is amended whom such advisor acted as such a material spect to the listed transaction before the to read as follows: advisor with respect to such transaction, and date the return including the transaction is ‘‘SEC. 7408. ACTIONS TO ENJOIN SPECIFIED CON- ‘‘(2) containing such other information as filed under section 6111. DUCT RELATED TO TAX SHELTERS the Secretary may by regulations require. Subparagraph (B) shall be applied by sub- AND REPORTABLE TRANSACTIONS.’’. This section shall apply without regard to stituting ‘75 percent’ for ‘50 percent’ in the (2) The table of sections for subchapter A whether a material advisor is required to file case of an intentional failure or act de- of chapter 67 is amended by striking the item a return under section 6111 with respect to scribed in subsection (a). relating to section 7408 and inserting the fol- such transaction.’’. lowing new item: ‘‘(c) CERTAIN RULES TO APPLY.—The provi- (B) Section 6112 is amended by redesig- sions of section 6707A(d) shall apply to any ‘‘Sec. 7408. Actions to enjoin specified nating subsection (c) as subsection (b). penalty imposed under this section. conduct related to tax shelters (C) Section 6112(b), as redesignated by sub- ‘‘(d) REPORTABLE AND LISTED TRANS- and reportable transactions.’’. paragraph (B), is amended— ACTIONS.—The terms ‘reportable transaction’ (c) EFFECTIVE DATE.—The amendment (i) by inserting ‘‘written’’ before ‘‘request’’ and ‘listed transaction’ have the respective made by this section shall take effect on the in paragraph (1)(A), and meanings given to such terms by section day after the date of the enactment of this (ii) by striking ‘‘shall prescribe’’ in para- 6707A(c).’’. Act. graph (2) and inserting ‘‘may prescribe’’. (b) CLERICAL AMENDMENT.—The item relat- SEC. 411. UNDERSTATEMENT OF TAXPAYER’S LI- (D) The item relating to section 6112 in the ing to section 6707 in the table of sections for ABILITY BY INCOME TAX RETURN table of sections for subchapter B of chapter part I of subchapter B of chapter 68 is PREPARER. 61 is amended to read as follows: amended by striking ‘‘tax shelters’’ and in- (a) STANDARDS CONFORMED TO TAXPAYER ‘‘Sec. 6112. Material advisors of reportable serting ‘‘reportable transactions’’. STANDARDS.—Section 6694(a) (relating to un- derstatements due to unrealistic positions) transactions must keep lists of (c) EFFECTIVE DATE.—The amendments advisees.’’. made by this section shall apply to returns is amended— (1) by striking ‘‘realistic possibility of (3)(A) The heading for section 6708 is the due date for which is after the date of the enactment of this Act. being sustained on its merits’’ in paragraph amended to read as follows: (1) and inserting ‘‘reasonable belief that the ‘‘SEC. 6708. FAILURE TO MAINTAIN LISTS OF SEC. 409. MODIFICATION OF PENALTY FOR FAIL- tax treatment in such position was more URE TO MAINTAIN LISTS OF INVES- ADVISEES WITH RESPECT TO RE- likely than not the proper treatment’’, PORTABLE TRANSACTIONS.’’. TORS. (2) by striking ‘‘or was frivolous’’ in para- (B) The item relating to section 6708 in the (a) IN GENERAL.—Subsection (a) of section 6708 is amended to read as follows: graph (3) and inserting ‘‘or there was no rea- table of sections for part I of subchapter B of sonable basis for the tax treatment of such chapter 68 is amended to read as follows: ‘‘(a) IMPOSITION OF PENALTY.— ‘‘(1) IN GENERAL.—If any person who is re- position’’, and ‘‘Sec. 6708. Failure to maintain lists of quired to maintain a list under section (3) by striking ‘‘UNREALISTIC’’ in the head- advisees with respect to report- 6112(a) fails to make such list available upon ing and inserting ‘‘IMPROPER’’. (b) AMOUNT OF PENALTY.—Section 6694 is able transactions.’’. written request to the Secretary in accord- amended— (c) REQUIRED DISCLOSURE NOT SUBJECT TO ance with section 6112(b)(1)(A) within 20 busi- (1) by striking ‘‘$250’’ in subsection (a) and CLAIM OF CONFIDENTIALITY.—Subparagraph ness days after the date of the Secretary’s inserting ‘‘$1,000’’, and (A) of section 6112(b)(1), as redesignated by request, such person shall pay a penalty of (2) by striking ‘‘$1,000’’ in subsection (b) subsection (b)(2)(B), is amended by adding at $10,000 for each day of such failure after such and inserting ‘‘$5,000’’. the end the following new flush sentence: 20th day. (c) EFFECTIVE DATE.—The amendments ‘‘For purposes of this section, the identity of ‘‘(2) REASONABLE CAUSE EXCEPTION.—No any person on such list shall not be privi- made by this section shall apply to docu- penalty shall be imposed by paragraph (1) ments prepared after the date of the enact- leged.’’. with respect to the failure on any day if such ment of this Act. (d) EFFECTIVE DATE.— failure is due to reasonable cause.’’. SEC. 412. PENALTY ON FAILURE TO REPORT IN- (1) IN GENERAL.—Except as provided in (b) EFFECTIVE DATE.—The amendment paragraph (2), the amendments made by this TERESTS IN FOREIGN FINANCIAL made by this section shall apply to requests ACCOUNTS. section shall apply to transactions with re- made after the date of the enactment of this (a) IN GENERAL.—Section 5321(a)(5) of title spect to which material aid, assistance, or Act. 31, United States Code, is amended to read as advice referred to in section 6111(b)(1)(A)(i) SEC. 410. MODIFICATION OF ACTIONS TO ENJOIN follows: of the Internal Revenue Code of 1986 (as CERTAIN CONDUCT RELATED TO ‘‘(5) FOREIGN FINANCIAL AGENCY TRANS- added by this section) is provided after the TAX SHELTERS AND REPORTABLE ACTION VIOLATION.— date of the enactment of this Act. TRANSACTIONS. ‘‘(A) PENALTY AUTHORIZED.—The Secretary (2) NO CLAIM OF CONFIDENTIALITY AGAINST (a) IN GENERAL.—Section 7408 (relating to of the Treasury may impose a civil money DISCLOSURE.—The amendment made by sub- action to enjoin promoters of abusive tax penalty on any person who violates, or section (c) shall take effect as if included in shelters, etc.) is amended by redesignating causes any violation of, any provision of sec- the amendments made by section 142 of the subsection (c) as subsection (d) and by strik- tion 5314. Deficit Reduction Act of 1984. ing subsections (a) and (b) and inserting the ‘‘(B) AMOUNT OF PENALTY.— SEC. 408. MODIFICATIONS TO PENALTY FOR FAIL- following new subsections: ‘‘(i) IN GENERAL.—Except as provided in URE TO REGISTER TAX SHELTERS. ‘‘(a) AUTHORITY TO SEEK INJUNCTION.—A subparagraph (C), the amount of any civil (a) IN GENERAL.—Section 6707 (relating to civil action in the name of the United States penalty imposed under subparagraph (A) failure to furnish information regarding tax to enjoin any person from further engaging shall not exceed $5,000. shelters) is amended to read as follows: in specified conduct may be commenced at ‘‘(ii) REASONABLE CAUSE EXCEPTION.—No ‘‘SEC. 6707. FAILURE TO FURNISH INFORMATION the request of the Secretary. Any action penalty shall be imposed under subparagraph REGARDING REPORTABLE TRANS- under this section shall be brought in the (A) with respect to any violation if— ACTIONS. district court of the United States for the ‘‘(a) IN GENERAL.—If a person who is re- ‘‘(I) such violation was due to reasonable district in which such person resides, has his quired to file a return under section 6111(a) cause, and principal place of business, or has engaged in with respect to any reportable transaction— ‘‘(II) the amount of the transaction or the specified conduct. The court may exercise its ‘‘(1) fails to file such return on or before balance in the account at the time of the jurisdiction over such action (as provided in the date prescribed therefor, or transaction was properly reported. section 7402(a)) separate and apart from any ‘‘(2) files false or incomplete information ‘‘(C) WILLFUL VIOLATIONS.—In the case of other action brought by the United States with the Secretary with respect to such any person willfully violating, or willfully against such person. transaction, causing any violation of, any provision of such person shall pay a penalty with respect ‘‘(b) ADJUDICATION AND DECREE.—In any ac- section 5314— to such return in the amount determined tion under subsection (a), if the court finds— ‘‘(i) the maximum penalty under subpara- under subsection (b). ‘‘(1) that the person has engaged in any graph (B)(i) shall be increased to the greater ‘‘(b) AMOUNT OF PENALTY.— specified conduct, and of— ‘‘(1) IN GENERAL.—Except as provided in ‘‘(2) that injunctive relief is appropriate to ‘‘(I) $25,000, or paragraph (2), the penalty imposed under prevent recurrence of such conduct, ‘‘(II) the amount (not exceeding $100,000) subsection (a) with respect to any failure the court may enjoin such person from en- determined under subparagraph (D), and shall be $50,000. gaging in such conduct or in any other activ- ‘‘(ii) subparagraph (B)(ii) shall not apply. ‘‘(2) LISTED TRANSACTIONS.—The penalty ity subject to penalty under this title. ‘‘(D) AMOUNT.—The amount determined imposed under subsection (a) with respect to ‘‘(c) SPECIFIED CONDUCT.—For purposes of under this subparagraph is— any listed transaction shall be an amount this section, the term ‘specified conduct’ ‘‘(i) in the case of a violation involving a equal to the greater of— means any action, or failure to take action, transaction, the amount of the transaction, ‘‘(A) $200,000, or subject to penalty under section 6700, 6701, or ‘‘(B) 50 percent of the gross income derived 6707, or 6708.’’. ‘‘(ii) in the case of a violation involving a by such person with respect to aid, assist- (b) CONFORMING AMENDMENTS.— failure to report the existence of an account

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00072 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3807 or any identifying information required to be tion shall be in addition to any other penalty or other entity in connection with the con- provided with respect to an account, the bal- provided by law.’’. duct giving rise to such penalty, the Sec- ance in the account at the time of the viola- (b) TREATMENT OF FRIVOLOUS REQUESTS retary may impose a monetary penalty on tion.’’. FOR HEARINGS BEFORE LEVY.— such employer, firm, or entity if it knew, or (b) EFFECTIVE DATE.—The amendment (1) FRIVOLOUS REQUESTS DISREGARDED.— reasonably should have known, of such con- made by this section shall apply to viola- Section 6330 (relating to notice and oppor- duct. Such penalty shall not exceed the gross tions occurring after the date of the enact- tunity for hearing before levy) is amended by income derived (or to be derived) from the ment of this Act. adding at the end the following new sub- conduct giving rise to the penalty and may SEC. 413. FRIVOLOUS TAX SUBMISSIONS. section: be in addition to, or in lieu of, any suspen- (a) CIVIL PENALTIES.—Section 6702 is ‘‘(g) FRIVOLOUS REQUESTS FOR HEARING, sion, disbarment, or censure of the rep- amended to read as follows: ETC.—Notwithstanding any other provision resentative.’’. of this section, if the Secretary determines (2) EFFECTIVE DATE.—The amendments ‘‘SEC. 6702. FRIVOLOUS TAX SUBMISSIONS. that any portion of a request for a hearing made by this subsection shall apply to ac- ‘‘(a) CIVIL PENALTY FOR FRIVOLOUS TAX RE- under this section or section 6320 meets the tions taken after the date of the enactment TURNS.—A person shall pay a penalty of requirement of clause (i) or (ii) of section of this Act. $5,000 if— 6702(b)(2)(A), then the Secretary may treat (b) TAX SHELTER OPINIONS, ETC.—Section ‘‘(1) such person files what purports to be a such portion as if it were never submitted 330 of such title 31 is amended by adding at return of a tax imposed by this title but and such portion shall not be subject to any the end the following new subsection: which— further administrative or judicial review.’’. ‘‘(d) Nothing in this section or in any other ‘‘(A) does not contain information on (2) PRECLUSION FROM RAISING FRIVOLOUS provision of law shall be construed to limit which the substantial correctness of the self- ISSUES AT HEARING.—Section 6330(c)(4) is the authority of the Secretary of the Treas- assessment may be judged, or amended— ury to impose standards applicable to the ‘‘(B) contains information that on its face (A) by striking ‘‘(A)’’ and inserting rendering of written advice with respect to indicates that the self-assessment is substan- ‘‘(A)(i)’’; any entity, transaction plan or arrangement, tially incorrect; and (B) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’; or other plan or arrangement, which is of a ‘‘(2) the conduct referred to in paragraph (C) by striking the period at the end of the type which the Secretary determines as hav- (1)— first sentence and inserting ‘‘; or’’; and ing a potential for tax avoidance or eva- ‘‘(A) is based on a position which the Sec- (D) by inserting after subparagraph (A)(ii) sion.’’. retary has identified as frivolous under sub- (as so redesignated) the following: SEC. 415. PENALTY ON PROMOTERS OF TAX section (c), or ‘‘(B) the issue meets the requirement of SHELTERS. ‘‘(B) reflects a desire to delay or impede clause (i) or (ii) of section 6702(b)(2)(A).’’. (a) PENALTY ON PROMOTING ABUSIVE TAX the administration of Federal tax laws. SHELTERS.—Section 6700(a) is amended by (3) STATEMENT OF GROUNDS.—Section ‘‘(b) CIVIL PENALTY FOR SPECIFIED FRIVO- 6330(b)(1) is amended by striking ‘‘under sub- adding at the end the following new sen- LOUS SUBMISSIONS.— section (a)(3)(B)’’ and inserting ‘‘in writing tence: ‘‘Notwithstanding the first sentence, ‘‘(1) IMPOSITION OF PENALTY.—Except as under subsection (a)(3)(B) and states the if an activity with respect to which a pen- provided in paragraph (3), any person who grounds for the requested hearing’’. alty imposed under this subsection involves submits a specified frivolous submission (c) TREATMENT OF FRIVOLOUS REQUESTS a statement described in paragraph (2)(A), shall pay a penalty of $5,000. FOR HEARINGS UPON FILING OF NOTICE OF the amount of the penalty shall be equal to ‘‘(2) SPECIFIED FRIVOLOUS SUBMISSION.—For 50 percent of the gross income derived (or to LIEN.—Section 6320 is amended— purposes of this section— (1) in subsection (b)(1), by striking ‘‘under be derived) from such activity by the person ‘‘(A) SPECIFIED FRIVOLOUS SUBMISSION.— subsection (a)(3)(B)’’ and inserting ‘‘in writ- on which the penalty is imposed.’’. (b) EFFECTIVE DATE.—The amendment The term ‘specified frivolous submission’ ing under subsection (a)(3)(B) and states the made by this section shall apply to activities means a specified submission if any portion grounds for the requested hearing’’, and after the date of the enactment of this Act. of such submission— (2) in subsection (c), by striking ‘‘and (e)’’ ‘‘(i) is based on a position which the Sec- and inserting ‘‘(e), and (g)’’. SEC. 416. STATUTE OF LIMITATIONS FOR TAX- ABLE YEARS FOR WHICH REQUIRED retary has identified as frivolous under sub- (d) TREATMENT OF FRIVOLOUS APPLICATIONS section (c), or LISTED TRANSACTIONS NOT RE- FOR OFFERS-IN-COMPROMISE AND INSTALL- PORTED. ‘‘(ii) reflects a desire to delay or impede MENT AGREEMENTS.—Section 7122 is amended the administration of Federal tax laws. (a) IN GENERAL.—Section 6501(c) (relating by adding at the end the following new sub- to exceptions) is amended by adding at the ‘‘(B) SPECIFIED SUBMISSION.—The term section: end the following new paragraph: ‘specified submission’ means— ‘‘(e) FRIVOLOUS SUBMISSIONS, ETC.—Not- ‘‘(i) a request for a hearing under— ‘‘(10) LISTED TRANSACTIONS.—If a taxpayer withstanding any other provision of this sec- fails to include on any return or statement ‘‘(I) section 6320 (relating to notice and op- tion, if the Secretary determines that any portunity for hearing upon filing of notice of for any taxable year any information with portion of an application for an offer-in-com- respect to a listed transaction (as defined in lien), or promise or installment agreement submitted ‘‘(II) section 6330 (relating to notice and section 6707A(c)(2)) which is required under under this section or section 6159 meets the section 6011 to be included with such return opportunity for hearing before levy), and requirement of clause (i) or (ii) of section ‘‘(ii) an application under— or statement, the time for assessment of any 6702(b)(2)(A), then the Secretary may treat tax imposed by this title with respect to ‘‘(I) section 6159 (relating to agreements such portion as if it were never submitted for payment of tax liability in installments), such transaction shall not expire before the and such portion shall not be subject to any date which is 1 year after the earlier of— ‘‘(II) section 7122 (relating to com- further administrative or judicial review.’’. promises), or ‘‘(A) the date on which the Secretary is (e) CLERICAL AMENDMENT.—The table of furnished the information so required; or ‘‘(III) section 7811 (relating to taxpayer as- sections for part I of subchapter B of chapter sistance orders). ‘‘(B) the date that a material advisor (as 68 is amended by striking the item relating defined in section 6111) meets the require- ‘‘(3) OPPORTUNITY TO WITHDRAW SUBMIS- to section 6702 and inserting the following ments of section 6112 with respect to a re- SION.—If the Secretary provides a person new item: with notice that a submission is a specified quest by the Secretary under section 6112(b) frivolous submission and such person with- ‘‘Sec. 6702. Frivolous tax submissions.’’. relating to such transaction with respect to such taxpayer.’’. draws such submission within 30 days after (f) EFFECTIVE DATE.—The amendments (b) EFFECTIVE DATE.—The amendment such notice, the penalty imposed under para- made by this section shall apply to submis- made by this section shall apply to taxable graph (1) shall not apply with respect to such sions made and issues raised after the date years with respect to which the period for as- submission. on which the Secretary first prescribes a list sessing a deficiency did not expire before the ‘‘(c) LISTING OF FRIVOLOUS POSITIONS.—The under section 6702(c) of the Internal Revenue date of the enactment of this Act. Secretary shall prescribe (and periodically Code of 1986, as amended by subsection (a). SEC. 417. DENIAL OF DEDUCTION FOR INTEREST revise) a list of positions which the Sec- SEC. 414. REGULATION OF INDIVIDUALS PRAC- ON UNDERPAYMENTS ATTRIB- TICING BEFORE THE DEPARTMENT retary has identified as being frivolous for UTABLE TO NONDISCLOSED RE- OF TREASURY. purposes of this subsection. The Secretary PORTABLE AND NONECONOMIC SUB- shall not include in such list any position (a) CENSURE; IMPOSITION OF PENALTY.— STANCE TRANSACTIONS. that the Secretary determines meets the re- (1) IN GENERAL.—Section 330(b) of title 31, (a) IN GENERAL.—Section 163 (relating to quirement of section 6662(d)(2)(B)(ii)(II). United States Code, is amended— deduction for interest) is amended by redes- ‘‘(d) REDUCTION OF PENALTY.—The Sec- (A) by inserting ‘‘, or censure,’’ after ‘‘De- ignating subsection (m) as subsection (n) and retary may reduce the amount of any pen- partment’’, and by inserting after subsection (l) the fol- alty imposed under this section if the Sec- (B) by adding at the end the following new lowing new subsection: retary determines that such reduction would flush sentence: ‘‘(m) INTEREST ON UNPAID TAXES ATTRIB- promote compliance with and administra- ‘‘The Secretary may impose a monetary pen- UTABLE TO NONDISCLOSED REPORTABLE tion of the Federal tax laws. alty on any representative described in the TRANSACTIONS AND NONECONOMIC SUBSTANCE ‘‘(e) PENALTIES IN ADDITION TO OTHER PEN- preceding sentence. If the representative was TRANSACTIONS.—No deduction shall be al- ALTIES.—The penalties imposed by this sec- acting on behalf of an employer or any firm lowed under this chapter for any interest

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00073 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3808 CONGRESSIONAL RECORD — SENATE April 6, 2004 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— (3) FRAUD AND FALSE STATEMENTS.—Section of property to which subparagraph (A) does ‘‘(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 ‘‘$1,000,000’’, and (b) COMPARABLE TREATMENT WHERE LIQ- 6662B(c)).’’. (C) by striking ‘‘3 years’’ and inserting ‘‘5 UIDATION.—Paragraph (1) of section 334(b) (re- (b) EFFECTIVE DATE.—The amendments years’’. lating to liquidation of subsidiary) is amend- made by this section shall apply to trans- (c) EFFECTIVE DATE.—The amendments ed to read as follows: actions in taxable years beginning after the made by this section shall apply to under- ‘‘(1) IN GENERAL.—If property is received by date of the enactment of this Act. payments and overpayments attributable to a corporate distributee in a distribution in a SEC. 418. AUTHORIZATION OF APPROPRIATIONS actions occurring after the date of the enact- complete liquidation to which section 332 ap- FOR TAX LAW ENFORCEMENT. ment of this Act. plies (or in a transfer described in section There is authorized to be appropriated Subtitle C—Enron-Related Tax Shelter 337(b)(1)), the basis of such property in the $300,000,000 for each fiscal year beginning Provisions hands of such distributee shall be the same after September 30, 2003, for the purpose of SEC. 431. LIMITATION ON TRANSFER OR IMPOR- as it would be in the hands of the transferor; carrying out tax law enforcement to combat TATION OF BUILT-IN LOSSES. except that the basis of such property in the tax avoidance transactions and other tax (a) IN GENERAL.—Section 362 (relating to hands of such distributee shall be the fair shelters, including the use of offshore finan- basis to corporations) is amended by adding market value of the property at the time of cial accounts to conceal taxable income. at the end the following new subsection: the distribution— Subtitle B—Other Corporate Governance ‘‘(e) LIMITATIONS ON BUILT-IN LOSSES.— ‘‘(A) in any case in which gain or loss is Provisions ‘‘(1) LIMITATION ON IMPORTATION OF BUILT-IN recognized by the liquidating corporation SEC. 421. AFFIRMATION OF CONSOLIDATED RE- LOSSES.— with respect to such property, or TURN REGULATION AUTHORITY. ‘‘(A) IN GENERAL.—If in any transaction de- ‘‘(B) in any case in which the liquidating (a) IN GENERAL.—Section 1502 (relating to scribed in subsection (a) or (b) there would corporation is a foreign corporation, the cor- consolidated return regulations) is amended (but for this subsection) be an importation of porate distributee is a domestic corporation, by adding at the end the following new sen- a net built-in loss, the basis of each property and the corporate distributee’s aggregate ad- tence: ‘‘In prescribing such regulations, the described in subparagraph (B) which is ac- justed bases of property described in section Secretary may prescribe rules applicable to quired in such transaction shall (notwith- 362(e)(1)(B) which is distributed in such liq- corporations filing consolidated returns standing subsections (a) and (b)) be its fair uidation would (but for this subparagraph) under section 1501 that are different from market value immediately after such trans- exceed the fair market value of such prop- other provisions of this title that would action. erty immediately after such liquidation.’’. apply if such corporations filed separate re- ‘‘(B) PROPERTY DESCRIBED.—For purposes (c) EFFECTIVE DATE.—The amendments turns.’’. of subparagraph (A), property is described in made by this section shall apply to trans- (b) RESULT NOT OVERTURNED.—Notwith- this subparagraph if— actions after February 13, 2003. standing subsection (a), the Internal Rev- ‘‘(i) gain or loss with respect to such prop- SEC. 432. NO REDUCTION OF BASIS UNDER SEC- enue Code of 1986 shall be construed by treat- erty is not subject to tax under this subtitle TION 734 IN STOCK HELD BY PART- ing Treasury regulation § 1.1502–20(c)(1)(iii) in the hands of the transferor immediately NERSHIP IN CORPORATE PARTNER. (as in effect on January 1, 2001) as being in- before the transfer, and (a) IN GENERAL.—Section 755 is amended by applicable to the type of factual situation in ‘‘(ii) gain or loss with respect to such prop- adding at the end the following new sub- 255 F.3d 1357 (Fed. Cir. 2001). erty is subject to such tax in the hands of section: (c) EFFECTIVE DATE.—The provisions of the transferee immediately after such trans- ‘‘(c) NO ALLOCATION OF BASIS DECREASE TO this section shall apply to taxable years be- fer. STOCK OF CORPORATE PARTNER.—In making ginning before, on, or after the date of the In any case in which the transferor is a part- an allocation under subsection (a) of any de- enactment of this Act. nership, the preceding sentence shall be ap- crease in the adjusted basis of partnership SEC. 422. INCREASE IN CRIMINAL MONETARY plied by treating each partner in such part- property under section 734(b)— PENALTY LIMITATION FOR THE UN- nership as holding such partner’s propor- ‘‘(1) no allocation may be made to stock in DERPAYMENT OR OVERPAYMENT OF tionate share of the property of such part- a corporation (or any person which is related TAX DUE TO FRAUD. nership. (within the meaning of section 267(b) or (a) IN GENERAL.—Section 7206 (relating to ‘‘(C) IMPORTATION OF NET BUILT-IN LOSS.— 707(b)(1)) to such corporation) which is a fraud and false statements) is amended— For purposes of subparagraph (A), there is an partner in the partnership, and (1) by striking ‘‘Any person who—’’ and in- importation of a net built-in loss in a trans- ‘‘(2) any amount not allocable to stock by serting ‘‘(a) IN GENERAL.—Any person who— action if the transferee’s aggregate adjusted reason of paragraph (1) shall be allocated ’’, and bases of property described in subparagraph under subsection (a) to other partnership (2) by adding at the end the following new (B) which is transferred in such transaction property in such manner as the Secretary subsection: may prescribe. ‘‘(b) INCREASE IN MONETARY LIMITATION FOR would (but for this paragraph) exceed the UNDERPAYMENT OR OVERPAYMENT OF TAX DUE fair market value of such property imme- Gain shall be recognized to the partnership TO FRAUD.—If any portion of any under- diately after such transaction. to the extent that the amount required to be payment (as defined in section 6664(a)) or ‘‘(2) LIMITATION ON TRANSFER OF BUILT-IN allocated under paragraph (2) to other part- overpayment (as defined in section 6401(a)) of LOSSES IN SECTION 351 TRANSACTIONS.— nership property exceeds the aggregate ad- tax required to be shown on a return is at- ‘‘(A) IN GENERAL.—If— justed basis of such other property imme- tributable to fraudulent action described in ‘‘(i) property is transferred by a transferor diately before the allocation required by subsection (a), the applicable dollar amount in any transaction which is described in sub- paragraph (2).’’. under subsection (a) shall in no event be less section (a) and which is not described in (b) EFFECTIVE DATE.—The amendment than an amount equal to such portion. A rule paragraph (1) of this subsection, and made by this section shall apply to distribu- similar to the rule under section 6663(b) shall ‘‘(ii) the transferee’s aggregate adjusted tions after February 13, 2003. apply for purposes of determining the por- bases of such property so transferred would SEC. 433. REPEAL OF SPECIAL RULES FOR tion so attributable.’’. (but for this paragraph) exceed the fair mar- FASITS. (b) INCREASE IN PENALTIES.— ket value of such property immediately after (a) IN GENERAL.—Part V of subchapter M of (1) ATTEMPT TO EVADE OR DEFEAT TAX.— such transaction, chapter 1 (relating to financial asset Section 7201 is amended— then, notwithstanding subsection (a), the securitization investment trusts) is hereby (A) by striking ‘‘$100,000’’ and inserting transferee’s aggregate adjusted bases of the repealed. ‘‘$250,000’’, property so transferred shall not exceed the (b) CONFORMING AMENDMENTS.— (B) by striking ‘‘$500,000’’ and inserting fair market value of such property imme- (1) Paragraph (6) of section 56(g) is amend- ‘‘$1,000,000’’, and diately after such transaction. ed by striking ‘‘REMIC, or FASIT’’ and in- (C) by striking ‘‘5 years’’ and inserting ‘‘10 ‘‘(B) ALLOCATION OF BASIS REDUCTION.—The serting ‘‘or REMIC’’. years’’. aggregate reduction in basis by reason of (2) Clause (ii) of section 382(l)(4)(B) is (2) WILLFUL FAILURE TO FILE RETURN, SUP- subparagraph (A) shall be allocated among amended by striking ‘‘a REMIC to which PLY INFORMATION, OR PAY TAX.—Section 7203 the property so transferred in proportion to part IV of subchapter M applies, or a FASIT is amended— their respective built-in losses immediately to which part V of subchapter M applies,’’ (A) in the first sentence— before the transaction. and inserting ‘‘or a REMIC to which part IV (i) by striking ‘‘misdemeanor’’ and insert- ‘‘(C) EXCEPTION FOR TRANSFERS WITHIN AF- of subchapter M applies,’’. ing ‘‘felony’’, and FILIATED GROUP.—Subparagraph (A) shall not (3) Paragraph (1) of section 582(c) is amend- (ii) by striking ‘‘1 year’’ and inserting ‘‘10 apply to any transaction if the transferor ed by striking ‘‘, and any regular interest in years’’, and owns stock in the transferee meeting the re- a FASIT,’’.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00074 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3809 (4) Subparagraph (E) of section 856(c)(5) is (B) by striking ‘‘or FASIT’’ each place it ‘‘(2) the principal purpose for which such amended by striking the last sentence. appears. acquisition was made is evasion or avoidance (5)(A) Section 860G(a)(1) is amended by (11) Subparagraph (A) of section 7701(i)(2) is of Federal income tax, adding at the end the following new sen- amended by striking ‘‘or a FASIT’’. then the Secretary may disallow such deduc- tence: ‘‘An interest shall not fail to qualify (12) The table of parts for subchapter M of tion, credit, or other allowance. For purposes as a regular interest solely because the spec- chapter 1 is amended by striking the item re- of paragraph (1)(A), control means the own- ified principal amount of the regular interest lating to part V. ership of stock possessing at least 50 percent (or the amount of interest accrued on the (c) EFFECTIVE DATE.— of the total combined voting power of all regular interest) can be reduced as a result (1) IN GENERAL.—Except as provided in classes of stock entitled to vote or at least 50 of the nonoccurrence of 1 or more contingent paragraph (2), the amendments made by this percent of the total value of all shares of all payments with respect to any reverse mort- section shall take effect on February 14, 2003. classes of stock of the corporation.’’. gage loan held by the REMIC if, on the start- (2) EXCEPTION FOR EXISTING FASITS.—Para- (b) EFFECTIVE DATE.—The amendment up day for the REMIC, the sponsor reason- graph (1) shall not apply to any FASIT in ex- made by this section shall apply to stock and ably believes that all principal and interest istence on the date of the enactment of this property acquired after February 13, 2003. due under the regular interest will be paid at Act to the extent that regular interests SEC. 436. MODIFICATION OF INTERACTION BE- or prior to the liquidation of the REMIC.’’. issued by the FASIT before such date con- TWEEN SUBPART F AND PASSIVE (B) The last sentence of section 860G(a)(3) tinue to remain outstanding in accordance FOREIGN INVESTMENT COMPANY is amended by inserting ‘‘, and any reverse with the original terms of issuance. RULES. mortgage loan (and each balance increase on SEC. 434. EXPANDED DISALLOWANCE OF DEDUC- (a) LIMITATION ON EXCEPTION FROM PFIC such loan meeting the requirements of sub- TION FOR INTEREST ON CONVERT- RULES FOR UNITED STATES SHAREHOLDERS OF paragraph (A)(iii)) shall be treated as an ob- IBLE DEBT. CONTROLLED FOREIGN CORPORATIONS.—Para- ligation secured by an interest in real prop- (a) IN GENERAL.—Paragraph (2) of section graph (2) of section 1297(e) (relating to pas- erty’’ before the period at the end. 163(l) is amended by inserting ‘‘or equity sive foreign investment company) is amend- (6) Paragraph (3) of section 860G(a) is held by the issuer (or any related party) in ed by adding at the end the following flush amended by adding ‘‘and’’ at the end of sub- any other person’’ after ‘‘or a related party’’. sentence: paragraph (B), by striking ‘‘, and’’ at the end (b) CAPITALIZATION ALLOWED WITH RESPECT ‘‘Such term shall not include any period if of subparagraph (C) and inserting a period, TO EQUITY OF PERSONS OTHER THAN ISSUER the earning of subpart F income by such cor- and by striking subparagraph (D). AND RELATED PARTIES.—Section 163(l) is poration during such period would result in (7) Section 860G(a)(3), as amended by para- amended by redesignating paragraphs (4) and only a remote likelihood of an inclusion in graph (6), is amended by adding at the end (5) as paragraphs (5) and (6) and by inserting gross income under section 951(a)(1)(A)(i).’’. the following new sentence: ‘‘For purposes of after paragraph (3) the following new para- (b) EFFECTIVE DATE.—The amendment subparagraph (A), if more than 50 percent of graph: made by this section shall apply to taxable the obligations transferred to, or purchased ‘‘(4) CAPITALIZATION ALLOWED WITH RESPECT years of controlled foreign corporations be- by, the REMIC are originated by the United TO EQUITY OF PERSONS OTHER THAN ISSUER ginning after February 13, 2003, and to tax- States or any State (or any political subdivi- AND RELATED PARTIES.—If the disqualified able years of United States shareholders sion, agency, or instrumentality of the debt instrument of a corporation is payable with or within which such taxable years of United States or any State) and are prin- in equity held by the issuer (or any related controlled foreign corporations end. cipally secured by an interest in real prop- party) in any other person (other than a re- erty, then each obligation transferred to, or Subtitle D—Provisions to Discourage lated party), the basis of such equity shall be purchased by, the REMIC shall be treated as Expatriation increased by the amount not allowed as a de- secured by an interest in real property.’’. SEC. 441. TAX TREATMENT OF INVERTED COR- duction by reason of paragraph (1) with re- (8)(A) Section 860G(a)(3)(A) is amended by PORATE ENTITIES. striking ‘‘or’’ at the end of clause (i), by in- spect to the instrument.’’. (a) IN GENERAL.—Subchapter C of chapter serting ‘‘or’’ at the end of clause (ii), and by (c) EXCEPTION FOR CERTAIN INSTRUMENTS 80 (relating to provisions affecting more than inserting after clause (ii) the following new ISSUED BY DEALERS IN SECURITIES.—Section one subtitle) is amended by adding at the clause: 163(l), as amended by subsection (b), is end the following new section: ‘‘(iii) represents an increase in the prin- amended by redesignating paragraphs (5) and ‘‘SEC. 7874. RULES RELATING TO INVERTED COR- cipal amount under the original terms of an (6) as paragraphs (6) and (7) and by inserting PORATE ENTITIES. obligation described in clause (i) or (ii) if after paragraph (4) the following new para- ‘‘(a) INVERTED CORPORATIONS TREATED AS such increase— graph: DOMESTIC CORPORATIONS.— ‘‘(I) is attributable to an advance made to ‘‘(5) EXCEPTION FOR CERTAIN INSTRUMENTS ‘‘(1) IN GENERAL.—If a foreign incorporated the obligor pursuant to the original terms of ISSUED BY DEALERS IN SECURITIES.—For pur- entity is treated as an inverted domestic cor- the obligation, poses of this subsection, the term ‘disquali- poration, then, notwithstanding section ‘‘(II) occurs after the startup day, and fied debt instrument’ does not include in- 7701(a)(4), such entity shall be treated for ‘‘(III) is purchased by the REMIC pursuant debtedness issued by a dealer in securities purposes of this title as a domestic corpora- to a fixed price contract in effect on the (or a related party) which is payable in, or tion. startup day.’’. by reference to, equity (other than equity of ‘‘(2) INVERTED DOMESTIC CORPORATION.—For (B) Section 860G(a)(7)(B) is amended to the issuer or a related party) held by such purposes of this section, a foreign incor- read as follows: dealer in its capacity as a dealer in securi- porated entity shall be treated as an in- ‘‘(B) QUALIFIED RESERVE FUND.—For pur- ties. For purposes of this paragraph, the verted domestic corporation if, pursuant to a poses of subparagraph (A), the term ‘quali- term ‘dealer in securities’ has the meaning plan (or a series of related transactions)— fied reserve fund’ means any reasonably re- given such term by section 475.’’. ‘‘(A) the entity completes after March 20, quired reserve to— (c) CONFORMING AMENDMENTS.—Paragraph 2002, the direct or indirect acquisition of sub- ‘‘(i) provide for full payment of expenses of (3) of section 163(l) is amended— stantially all of the properties held directly the REMIC or amounts due on regular inter- (1) by striking ‘‘or a related party’’ in the or indirectly by a domestic corporation or ests in the event of defaults on qualified material preceding subparagraph (A) and in- substantially all of the properties consti- mortgages or lower than expected returns on serting ‘‘or any other person’’, and tuting a trade or business of a domestic part- cash flow investments, or (2) by striking ‘‘or interest’’ each place it nership, ‘‘(ii) provide a source of funds for the pur- appears. ‘‘(B) after the acquisition at least 80 per- chase of obligations described in clause (ii) (d) EFFECTIVE DATE.—The amendments cent of the stock (by vote or value) of the en- or (iii) of paragraph (3)(A). made by this section shall apply to debt in- tity is held— The aggregate fair market value of the as- struments issued after February 13, 2003. ‘‘(i) in the case of an acquisition with re- sets held in any such reserve shall not exceed SEC. 435. EXPANDED AUTHORITY TO DISALLOW spect to a domestic corporation, by former 50 percent of the aggregate fair market value TAX BENEFITS UNDER SECTION 269. shareholders of the domestic corporation by of all of the assets of the REMIC on the (a) IN GENERAL.—Subsection (a) of section reason of holding stock in the domestic cor- startup day, and the amount of any such re- 269 (relating to acquisitions made to evade or poration, or serve shall be promptly and appropriately re- avoid income tax) is amended to read as fol- ‘‘(ii) in the case of an acquisition with re- duced to the extent the amount held in such lows: spect to a domestic partnership, by former reserve is no longer reasonably required for ‘‘(a) IN GENERAL.—If— partners of the domestic partnership by rea- purposes specified in clause (i) or (ii) of para- ‘‘(1)(A) any person or persons acquire, di- son of holding a capital or profits interest in graph (3)(A).’’. rectly or indirectly, control of a corporation, the domestic partnership, and (9) Subparagraph (C) of section 1202(e)(4) is or ‘‘(C) the expanded affiliated group which amended by striking ‘‘REMIC, or FASIT’’ ‘‘(B) any corporation acquires, directly or after the acquisition includes the entity does and inserting ‘‘or REMIC’’. indirectly, property of another corporation not have substantial business activities in (10) Clause (xi) of section 7701(a)(19)(C) is and the basis of such property, in the hands the foreign country in which or under the amended— of the acquiring corporation, is determined law of which the entity is created or orga- (A) by striking ‘‘and any regular interest by reference to the basis in the hands of the nized when compared to the total business in a FASIT,’’, and transferor corporation, and activities of such expanded affiliated group.

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Except as provided in regulations, an acqui- ‘‘(3) SPECIAL RULES FOR PARTNERSHIPS.—In ‘‘(2) MODIFICATIONS OF LIMITATION ON INTER- sition of properties of a domestic corporation the case of an acquired entity which is a EST DEDUCTION.—In the case of an acquired shall not be treated as described in subpara- partnership— entity to which subsection (b) applies, sec- graph (A) if none of the corporation’s stock ‘‘(A) the limitations of this subsection tion 163(j) shall be applied— was readily tradeable on an established secu- shall apply at the partner rather than the ‘‘(A) without regard to paragraph (2)(A)(ii) rities market at any time during the 4-year partnership level, thereof, and period ending on the date of the acquisition. ‘‘(B) the inversion gain of any partner for ‘‘(B) by substituting ‘25 percent’ for ‘50 per- any taxable year shall be equal to the sum cent’ each place it appears in paragraph ‘‘(b) PRESERVATION OF DOMESTIC TAX BASE of— (2)(B) thereof. IN CERTAIN INVERSION TRANSACTIONS TO ‘‘(i) the partner’s distributive share of in- WHICH SUBSECTION (a) DOES NOT APPLY.— ‘‘(e) OTHER DEFINITIONS AND SPECIAL version gain of the partnership for such tax- ‘‘(1) IN GENERAL.—If a foreign incorporated RULES.—For purposes of this section— entity would be treated as an inverted do- able year, plus ‘‘(1) RULES FOR APPLICATION OF SUBSECTION mestic corporation with respect to an ac- ‘‘(ii) income or gain required to be recog- (a)(2).—In applying subsection (a)(2) for pur- quired entity if either— nized for the taxable year by the partner poses of subsections (a) and (b), the following ‘‘(A) subsection (a)(2)(A) were applied by under section 367(a), 741, or 1001, or under rules shall apply: substituting ‘after December 31, 1996, and on any other provision of chapter 1, by reason of ‘‘(A) CERTAIN STOCK DISREGARDED.—There or before March 20, 2002’ for ‘after March 20, the transfer during the applicable period of shall not be taken into account in deter- 2002’ and subsection (a)(2)(B) were applied by any partnership interest of the partner in mining ownership for purposes of subsection substituting ‘more than 50 percent’ for ‘at such partnership to the foreign incorporated (a)(2)(B)— least 80 percent’, or entity, and ‘‘(i) stock held by members of the expanded ‘‘(B) subsection (a)(2)(B) were applied by ‘‘(C) the highest rate of tax specified in the affiliated group which includes the foreign substituting ‘more than 50 percent’ for ‘at rate schedule applicable to the partner under incorporated entity, or least 80 percent’, chapter 1 shall be substituted for the rate of ‘‘(ii) stock of such entity which is sold in tax under paragraph (2)(B). then the rules of subsection (c) shall apply to a public offering or private placement re- ‘‘(4) INVERSION GAIN.—For purposes of this lated to the acquisition described in sub- any inversion gain of the acquired entity section, the term ‘inversion gain’ means any during the applicable period and the rules of section (a)(2)(A). income or gain required to be recognized ‘‘(B) PLAN DEEMED IN CERTAIN CASES.—If a subsection (d) shall apply to any related under section 304, 311(b), 367, 1001, or 1248, or party transaction of the acquired entity dur- foreign incorporated entity acquires directly under any other provision of chapter 1, by or indirectly substantially all of the prop- ing the applicable period. This subsection reason of the transfer during the applicable shall not apply for any taxable year if sub- erties of a domestic corporation or partner- period of stock or other properties by an ac- ship during the 4-year period beginning on section (a) applies to such foreign incor- quired entity— porated entity for such taxable year. the date which is 2 years before the owner- ‘‘(A) as part of the acquisition described in ship requirements of subsection (a)(2)(B) are ‘‘(2) ACQUIRED ENTITY.—For purposes of subsection (a)(2)(A) to which subsection (b) this section— met with respect to such domestic corpora- applies, or tion or partnership, such actions shall be ‘‘(A) IN GENERAL.—The term ‘acquired enti- ‘‘(B) after such acquisition to a foreign re- treated as pursuant to a plan. ty’ means the domestic corporation or part- lated person. nership substantially all of the properties of ‘‘(C) CERTAIN TRANSFERS DISREGARDED.— which are directly or indirectly acquired in The Secretary may provide that income or The transfer of properties or liabilities (in- an acquisition described in subsection gain from the sale of inventories or other cluding by contribution or distribution) shall (a)(2)(A) to which this subsection applies. transactions in the ordinary course of a be disregarded if such transfers are part of a trade or business shall not be treated as in- plan a principal purpose of which is to avoid ‘‘(B) AGGREGATION RULES.—Any domestic person bearing a relationship described in version gain under subparagraph (B) to the the purposes of this section. section 267(b) or 707(b) to an acquired entity extent the Secretary determines such treat- ‘‘(D) SPECIAL RULE FOR RELATED PARTNER- shall be treated as an acquired entity with ment would not be inconsistent with the pur- SHIPS.—For purposes of applying subsection respect to the acquisition described in sub- poses of this section. (a)(2) to the acquisition of a domestic part- paragraph (A). ‘‘(5) COORDINATION WITH SECTION 172 AND nership, except as provided in regulations, MINIMUM TAX.—Rules similar to the rules of all partnerships which are under common ‘‘(3) APPLICABLE PERIOD.—For purposes of this section— paragraphs (3) and (4) of section 860E(a) shall control (within the meaning of section 482) apply for purposes of this section. shall be treated as 1 partnership. ‘‘(A) IN GENERAL.—The term ‘applicable pe- riod’ means the period— ‘‘(6) STATUTE OF LIMITATIONS.— ‘‘(E) TREATMENT OF CERTAIN RIGHTS.—The ‘‘(i) beginning on the first date properties ‘‘(A) IN GENERAL.—The statutory period for Secretary shall prescribe such regulations as are acquired as part of the acquisition de- the assessment of any deficiency attrib- may be necessary— scribed in subsection (a)(2)(A) to which this utable to the inversion gain of any taxpayer ‘‘(i) to treat warrants, options, contracts subsection applies, and for any pre-inversion year shall not expire to acquire stock, convertible debt instru- ‘‘(ii) ending on the date which is 10 years before the expiration of 3 years from the date ments, and other similar interests as stock, after the last date properties are acquired as the Secretary is notified by the taxpayer (in and part of such acquisition. such manner as the Secretary may prescribe) ‘‘(ii) to treat stock as not stock. of the acquisition described in subsection ‘‘(2) EXPANDED AFFILIATED GROUP.—The ‘‘(B) SPECIAL RULE FOR INVERSIONS OCCUR- (a)(2)(A) to which such gain relates and such term ‘expanded affiliated group’ means an RING BEFORE MARCH 21, 2002.—In the case of any acquired entity to which paragraph deficiency may be assessed before the expira- affiliated group as defined in section 1504(a) (1)(A) applies, the applicable period shall be tion of such 3-year period notwithstanding but without regard to section 1504(b)(3), ex- the 10-year period beginning on January 1, the provisions of any other law or rule of law cept that section 1504(a) shall be applied by 2003. which would otherwise prevent such assess- substituting ‘more than 50 percent’ for ‘at ment. least 80 percent’ each place it appears. ‘‘(c) TAX ON INVERSION GAINS MAY NOT BE ‘‘(B) PRE-INVERSION YEAR.—For purposes of ‘‘(3) FOREIGN INCORPORATED ENTITY.—The OFFSET.—If subsection (b) applies— subparagraph (A), the term ‘pre-inversion term ‘foreign incorporated entity’ means any ‘‘(1) IN GENERAL.—The taxable income of an year’ means any taxable year if— entity which is, or but for subsection (a)(1) acquired entity (or any expanded affiliated ‘‘(i) any portion of the applicable period is would be, treated as a foreign corporation for group which includes such entity) for any included in such taxable year, and purposes of this title. taxable year which includes any portion of ‘‘(ii) such year ends before the taxable year ‘‘(4) FOREIGN RELATED PERSON.—The term the applicable period shall in no event be in which the acquisition described in sub- ‘foreign related person’ means, with respect less than the inversion gain of the entity for section (a)(2)(A) is completed. to any acquired entity, a foreign person the taxable year. ‘‘(d) SPECIAL RULES APPLICABLE TO AC- which— ‘‘(2) CREDITS NOT ALLOWED AGAINST TAX ON QUIRED ENTITIES TO WHICH SUBSECTION (b) ‘‘(A) bears a relationship to such entity de- INVERSION GAIN.—Credits shall be allowed APPLIES.— scribed in section 267(b) or 707(b), or against the tax imposed by this chapter on ‘‘(1) INCREASES IN ACCURACY-RELATED PEN- ‘‘(B) is under the same common control an acquired entity for any taxable year de- ALTIES.—In the case of any underpayment of (within the meaning of section 482) as such scribed in paragraph (1) only to the extent tax of an acquired entity to which subsection entity. such tax exceeds the product of— (b) applies— ‘‘(5) SUBSEQUENT ACQUISITIONS BY UNRE- ‘‘(A) the amount of the inversion gain for ‘‘(A) section 6662(a) shall be applied with LATED DOMESTIC CORPORATIONS.— the taxable year, and respect to such underpayment by sub- ‘‘(A) IN GENERAL.—Subject to such condi- ‘‘(B) the highest rate of tax specified in stituting ‘30 percent’ for ‘20 percent’, and tions, limitations, and exceptions as the Sec- section 11(b)(1). ‘‘(B) if such underpayment is attributable retary may prescribe, if, after an acquisition For purposes of determining the credit al- to one or more gross valuation understate- described in subsection (a)(2)(A) to which lowed by section 901 inversion gain shall be ments, the increase in the rate of penalty subsection (b) applies, a domestic corpora- treated as from sources within the United under section 6662(h) shall be to 50 percent tion stock of which is traded on an estab- States. rather than 40 percent. lished securities market acquires directly or

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00076 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3811 indirectly any properties of one or more ac- covered expatriate to whom this section ap- posed of in a transaction in which gain is not quired entities in a transaction with respect plies shall be treated as sold on the day be- recognized in whole or in part, until such to which the requirements of subparagraph fore the expatriation date for its fair market other date as the Secretary may prescribe). (B) are met, this section shall cease to apply value. ‘‘(2) DETERMINATION OF TAX WITH RESPECT to any such acquired entity with respect to ‘‘(2) RECOGNITION OF GAIN OR LOSS.—In the TO PROPERTY.—For purposes of paragraph (1), which such requirements are met. case of any sale under paragraph (1)— the additional tax attributable to any prop- ‘‘(B) REQUIREMENTS.—The requirements of ‘‘(A) notwithstanding any other provision erty is an amount which bears the same the subparagraph are met with respect to a of this title, any gain arising from such sale ratio to the additional tax imposed by this transaction involving any acquisition de- shall be taken into account for the taxable chapter for the taxable year solely by reason scribed in subparagraph (A) if— year of the sale, and of subsection (a) as the gain taken into ac- ‘‘(i) before such transaction the domestic ‘‘(B) any loss arising from such sale shall count under subsection (a) with respect to corporation did not have a relationship de- be taken into account for the taxable year of such property bears to the total gain taken scribed in section 267(b) or 707(b), and was the sale to the extent otherwise provided by into account under subsection (a) with re- not under common control (within the mean- this title, except that section 1091 shall not spect to all property to which subsection (a) ing of section 482), with the acquired entity, apply to any such loss. applies. ERMINATION OF POSTPONEMENT.—No or any member of an expanded affiliated Proper adjustment shall be made in the ‘‘(3) T tax may be postponed under this subsection group including such entity, and amount of any gain or loss subsequently re- later than the due date for the return of tax ‘‘(ii) after such transaction, such acquired alized for gain or loss taken into account imposed by this chapter for the taxable year entity— under the preceding sentence. which includes the date of death of the expa- ‘‘(I) is a member of the same expanded af- ‘‘(3) EXCLUSION FOR CERTAIN GAIN.— triate (or, if earlier, the time that the secu- filiated group which includes the domestic ‘‘(A) IN GENERAL.—The amount which, but rity provided with respect to the property corporation or has such a relationship or is for this paragraph, would be includible in the fails to meet the requirements of paragraph under such common control with any mem- gross income of any individual by reason of (4), unless the taxpayer corrects such failure ber of such group, and this section shall be reduced (but not below within the time specified by the Secretary). ‘‘(II) is not a member of, and does not have zero) by $600,000. For purposes of this para- ‘‘(4) SECURITY.— such a relationship and is not under such graph, allocable expatriation gain taken into ‘‘(A) IN GENERAL.—No election may be common control with any member of, the ex- account under subsection (f)(2) shall be panded affiliated group which before such ac- made under paragraph (1) with respect to treated in the same manner as an amount re- any property unless adequate security is pro- quisition included such entity. quired to be includible in gross income. ‘‘(f) REGULATIONS.—The Secretary shall vided to the Secretary with respect to such ‘‘(B) COST-OF-LIVING ADJUSTMENT.— property. provide such regulations as are necessary to ‘‘(i) IN GENERAL.—In the case of an expa- carry out this section, including regulations ‘‘(B) ADEQUATE SECURITY.—For purposes of triation date occurring in any calendar year subparagraph (A), security with respect to providing for such adjustments to the appli- after 2004, the $600,000 amount under sub- cation of this section as are necessary to pre- any property shall be treated as adequate se- paragraph (A) shall be increased by an curity if— vent the avoidance of the purposes of this amount equal to— section, including the avoidance of such pur- ‘‘(i) it is a bond in an amount equal to the ‘‘(I) such dollar amount, multiplied by deferred tax amount under paragraph (2) for poses through— ‘‘(II) the cost-of-living adjustment deter- ‘‘(1) the use of related persons, pass-thru or the property, or mined under section 1(f)(3) for such calendar ‘‘(ii) the taxpayer otherwise establishes to other noncorporate entities, or other inter- year, determined by substituting ‘calendar mediaries, or the satisfaction of the Secretary that the se- year 2003’ for ‘calendar year 1992’ in subpara- curity is adequate. ‘‘(2) transactions designed to have persons graph (B) thereof. cease to be (or not become) members of ex- ‘‘(5) WAIVER OF CERTAIN RIGHTS.—No elec- ‘‘(ii) ROUNDING RULES.—If any amount after tion may be made under paragraph (1) unless panded affiliated groups or related persons.’’. adjustment under clause (i) is not a multiple (b) INFORMATION REPORTING.—The Sec- the taxpayer consents to the waiver of any of $1,000, such amount shall be rounded to retary of the Treasury shall exercise the Sec- right under any treaty of the United States the next lower multiple of $1,000. retary’s authority under the Internal Rev- which would preclude assessment or collec- ‘‘(4) ELECTION TO CONTINUE TO BE TAXED AS enue Code of 1986 to require entities involved tion of any tax imposed by reason of this sec- UNITED STATES CITIZEN.— in transactions to which section 7874 of such tion. ‘‘(A) IN GENERAL.—If a covered expatriate Code (as added by subsection (a)) applies to ‘‘(6) ELECTIONS.—An election under para- elects the application of this paragraph— report to the Secretary, shareholders, part- graph (1) shall only apply to property de- ‘‘(i) this section (other than this paragraph ners, and such other persons as the Secretary scribed in the election and, once made, is ir- and subsection (i)) shall not apply to the ex- may prescribe such information as is nec- revocable. An election may be made under patriate, but essary to ensure the proper tax treatment of paragraph (1) with respect to an interest in a ‘‘(ii) in the case of property to which this such transactions. trust with respect to which gain is required section would apply but for such election, (c) CONFORMING AMENDMENT.—The table of to be recognized under subsection (f)(1). the expatriate shall be subject to tax under sections for subchapter C of chapter 80 is ‘‘(7) INTEREST.—For purposes of section this title in the same manner as if the indi- amended by adding at the end the following 6601— vidual were a United States citizen. new item: ‘‘(A) the last date for the payment of tax ‘‘(B) REQUIREMENTS.—Subparagraph (A) shall be determined without regard to the ‘‘Sec. 7874. Rules relating to inverted cor- shall not apply to an individual unless the election under this subsection, and porate entities.’’. individual— ‘‘(B) section 6621(a)(2) shall be applied by (d) TRANSITION RULE FOR CERTAIN REGU- ‘‘(i) provides security for payment of tax in substituting ‘5 percentage points’ for ‘3 per- LATED INVESTMENT COMPANIES AND UNIT IN- such form and manner, and in such amount, centage points’ in subparagraph (B) thereof. VESTMENT TRUSTS.—Notwithstanding section as the Secretary may require, ‘‘(c) COVERED EXPATRIATE.—For purposes 7874 of the Internal Revenue Code of 1986 (as ‘‘(ii) consents to the waiver of any right of of this section— added by subsection (a)), a regulated invest- the individual under any treaty of the ‘‘(1) IN GENERAL.—Except as provided in ment company, or other pooled fund or trust United States which would preclude assess- paragraph (2), the term ‘covered expatriate’ specified by the Secretary of the Treasury, ment or collection of any tax which may be means an expatriate. may elect to recognize gain by reason of sec- imposed by reason of this paragraph, and ‘‘(2) EXCEPTIONS.—An individual shall not tion 367(a) of such Code with respect to a ‘‘(iii) complies with such other require- be treated as a covered expatriate if— transaction under which a foreign incor- ments as the Secretary may prescribe. ‘‘(A) the individual— porated entity is treated as an inverted do- ‘‘(C) ELECTION.—An election under sub- ‘‘(i) became at birth a citizen of the United mestic corporation under section 7874(a) of paragraph (A) shall apply to all property to States and a citizen of another country and, such Code by reason of an acquisition com- which this section would apply but for the as of the expatriation date, continues to be a pleted after March 20, 2002, and before Janu- election and, once made, shall be irrev- citizen of, and is taxed as a resident of, such ary 1, 2004. ocable. Such election shall also apply to other country, and SEC. 442. IMPOSITION OF MARK-TO-MARKET TAX property the basis of which is determined in ‘‘(ii) has not been a resident of the United ON INDIVIDUALS WHO EXPATRIATE. whole or in part by reference to the property States (as defined in section 7701(b)(1)(A)(ii)) (a) IN GENERAL.—Subpart A of part II of with respect to which the election was made. during the 5 taxable years ending with the subchapter N of chapter 1 is amended by in- ‘‘(b) ELECTION TO DEFER TAX.— taxable year during which the expatriation serting after section 877 the following new ‘‘(1) IN GENERAL.—If the taxpayer elects the date occurs, or section: application of this subsection with respect to ‘‘(B)(i) the individual’s relinquishment of ‘‘SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIA- any property treated as sold by reason of United States citizenship occurs before such TION. subsection (a), the payment of the additional individual attains age 181⁄2, and ‘‘(a) GENERAL RULES.—For purposes of this tax attributable to such property shall be ‘‘(ii) the individual has been a resident of subtitle— postponed until the due date of the return the United States (as so defined) for not ‘‘(1) MARK TO MARKET.—Except as provided for the taxable year in which such property more than 5 taxable years before the date of in subsections (d) and (f), all property of a is disposed of (or, in the case of property dis- relinquishment.

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‘‘(d) EXEMPT PROPERTY; SPECIAL RULES FOR ‘‘(A) the date the individual renounces the allocable expatriation gain with respect PENSION PLANS.— such individual’s United States nationality to the trust interest if such gain had been in- ‘‘(1) EXEMPT PROPERTY.—This section shall before a diplomatic or consular officer of the cluded in gross income under subsection (a). not apply to the following: United States pursuant to paragraph (5) of ‘‘(ii) INCREASE FOR INTEREST.—The balance ‘‘(A) UNITED STATES REAL PROPERTY INTER- section 349(a) of the Immigration and Na- in the deferred tax account shall be in- ESTS.—Any United States real property in- tionality Act (8 U.S.C. 1481(a)(5)), creased by the amount of interest deter- terest (as defined in section 897(c)(1)), other ‘‘(B) the date the individual furnishes to mined (on the balance in the account at the than stock of a United States real property the United States Department of State a time the interest accrues), for periods after holding corporation which does not, on the signed statement of voluntary relinquish- the 90th day after the expatriation date, by day before the expatriation date, meet the ment of United States nationality con- using the rates and method applicable under requirements of section 897(c)(2). firming the performance of an act of expa- section 6621 for underpayments of tax for ‘‘(B) SPECIFIED PROPERTY.—Any property triation specified in paragraph (1), (2), (3), or such periods, except that section 6621(a)(2) or interest in property not described in sub- (4) of section 349(a) of the Immigration and shall be applied by substituting ‘5 percentage paragraph (A) which the Secretary specifies Nationality Act (8 U.S.C. 1481(a)(1)–(4)), points’ for ‘3 percentage points’ in subpara- in regulations. ‘‘(C) the date the United States Depart- graph (B) thereof. ‘‘(2) SPECIAL RULES FOR CERTAIN RETIRE- ment of State issues to the individual a cer- ‘‘(iii) DECREASE FOR TAXES PREVIOUSLY MENT PLANS.— tificate of loss of nationality, or PAID.—The balance in the tax deferred ac- ‘‘(A) IN GENERAL.—If a covered expatriate ‘‘(D) the date a court of the United States count shall be reduced— holds on the day before the expatriation date cancels a naturalized citizen’s certificate of ‘‘(I) by the amount of taxes imposed by any interest in a retirement plan to which naturalization. subparagraph (A) on any distribution to the this paragraph applies— Subparagraph (A) or (B) shall not apply to person holding the trust interest, and ‘‘(i) such interest shall not be treated as any individual unless the renunciation or ‘‘(II) in the case of a person holding a non- sold for purposes of subsection (a)(1), but voluntary relinquishment is subsequently vested interest, to the extent provided in ‘‘(ii) an amount equal to the present value approved by the issuance to the individual of regulations, by the amount of taxes imposed of the expatriate’s nonforfeitable accrued a certificate of loss of nationality by the by subparagraph (A) on distributions from benefit shall be treated as having been re- United States Department of State. the trust with respect to nonvested interests ceived by such individual on such date as a ‘‘(4) LONG-TERM RESIDENT.—The term ‘long- not held by such person. distribution under the plan. term resident’ has the meaning given to such ‘‘(D) ALLOCABLE EXPATRIATION GAIN.—For ‘‘(B) TREATMENT OF SUBSEQUENT DISTRIBU- term by section 877(e)(2). purposes of this paragraph, the allocable ex- TIONS.—In the case of any distribution on or ‘‘(f) SPECIAL RULES APPLICABLE TO BENE- patriation gain with respect to any bene- after the expatriation date to or on behalf of FICIARIES’ INTERESTS IN TRUST.— ficiary’s interest in a trust is the amount of the covered expatriate from a plan from ‘‘(1) IN GENERAL.—Except as provided in gain which would be allocable to such bene- which the expatriate was treated as receiv- paragraph (2), if an individual is determined ficiary’s vested and nonvested interests in ing a distribution under subparagraph (A), under paragraph (3) to hold an interest in a the trust if the beneficiary held directly all the amount otherwise includible in gross in- trust on the day before the expatriation assets allocable to such interests. come by reason of the subsequent distribu- date— ‘‘(E) TAX DEDUCTED AND WITHHELD.— tion shall be reduced by the excess of the ‘‘(A) the individual shall not be treated as ‘‘(i) IN GENERAL.—The tax imposed by sub- amount includible in gross income under having sold such interest, paragraph (A)(ii) shall be deducted and with- subparagraph (A) over any portion of such ‘‘(B) such interest shall be treated as a sep- held by the trustees from the distribution to amount to which this subparagraph pre- arate share in the trust, and which it relates. viously applied. ‘‘(C)(i) such separate share shall be treated ‘‘(ii) EXCEPTION WHERE FAILURE TO WAIVE ‘‘(C) TREATMENT OF SUBSEQUENT DISTRIBU- as a separate trust consisting of the assets TREATY RIGHTS.—If an amount may not be TIONS BY PLAN.—For purposes of this title, a allocable to such share, deducted and withheld under clause (i) by retirement plan to which this paragraph ap- ‘‘(ii) the separate trust shall be treated as reason of the distributee failing to waive any plies, and any person acting on the plan’s be- having sold its assets on the day before the treaty right with respect to such distribu- half, shall treat any subsequent distribution expatriation date for their fair market value tion— described in subparagraph (B) in the same and as having distributed all of its assets to ‘‘(I) the tax imposed by subparagraph manner as such distribution would be treat- the individual as of such time, and (A)(ii) shall be imposed on the trust and each ed without regard to this paragraph. ‘‘(iii) the individual shall be treated as trustee shall be personally liable for the ‘‘(D) APPLICABLE PLANS.—This paragraph having recontributed the assets to the sepa- amount of such tax, and shall apply to— rate trust. ‘‘(II) any other beneficiary of the trust ‘‘(i) any qualified retirement plan (as de- Subsection (a)(2) shall apply to any income, shall be entitled to recover from the dis- fined in section 4974(c)), gain, or loss of the individual arising from a tributee the amount of such tax imposed on ‘‘(ii) an eligible deferred compensation distribution described in subparagraph the other beneficiary. plan (as defined in section 457(b)) of an eligi- (C)(ii). In determining the amount of such ‘‘(F) DISPOSITION.—If a trust ceases to be a ble employer described in section distribution, proper adjustments shall be qualified trust at any time, a covered expa- 457(e)(1)(A), and made for liabilities of the trust allocable to triate disposes of an interest in a qualified ‘‘(iii) to the extent provided in regulations, an individual’s share in the trust. trust, or a covered expatriate holding an in- any foreign pension plan or similar retire- ‘‘(2) SPECIAL RULES FOR INTERESTS IN QUALI- terest in a qualified trust dies, then, in lieu ment arrangements or programs. FIED TRUSTS.— of the tax imposed by subparagraph (A)(ii), ‘‘(e) DEFINITIONS.—For purposes of this sec- ‘‘(A) IN GENERAL.—If the trust interest de- there is hereby imposed a tax equal to the tion— scribed in paragraph (1) is an interest in a lesser of— ‘‘(1) EXPATRIATE.—The term ‘expatriate’ qualified trust— ‘‘(i) the tax determined under paragraph (1) means— ‘‘(i) paragraph (1) and subsection (a) shall as if the day before the expatriation date ‘‘(A) any United States citizen who relin- not apply, and were the date of such cessation, disposition, quishes citizenship, and ‘‘(ii) in addition to any other tax imposed or death, whichever is applicable, or ‘‘(B) any long-term resident of the United by this title, there is hereby imposed on each ‘‘(ii) the balance in the tax deferred ac- States who— distribution with respect to such interest a count immediately before such date. ‘‘(i) ceases to be a lawful permanent resi- tax in the amount determined under sub- Such tax shall be imposed on the trust and dent of the United States (within the mean- paragraph (B). each trustee shall be personally liable for the ing of section 7701(b)(6)), or ‘‘(B) AMOUNT OF TAX.—The amount of tax amount of such tax and any other bene- ‘‘(ii) commences to be treated as a resident under subparagraph (A)(ii) shall be equal to ficiary of the trust shall be entitled to re- of a foreign country under the provisions of the lesser of— cover from the covered expatriate or the es- a tax treaty between the United States and ‘‘(i) the highest rate of tax imposed by sec- tate the amount of such tax imposed on the the foreign country and who does not waive tion 1(e) for the taxable year which includes other beneficiary. the benefits of such treaty applicable to resi- the day before the expatriation date, multi- ‘‘(G) DEFINITIONS AND SPECIAL RULES.—For dents of the foreign country. plied by the amount of the distribution, or purposes of this paragraph— ‘‘(2) EXPATRIATION DATE.—The term ‘expa- ‘‘(ii) the balance in the deferred tax ac- ‘‘(i) QUALIFIED TRUST.—The term ‘qualified triation date’ means— count immediately before the distribution trust’ means a trust which is described in ‘‘(A) the date an individual relinquishes determined without regard to any increases section 7701(a)(30)(E). United States citizenship, or under subparagraph (C)(ii) after the 30th day ‘‘(ii) VESTED INTEREST.—The term ‘vested ‘‘(B) in the case of a long-term resident of preceding the distribution. interest’ means any interest which, as of the the United States, the date of the event de- ‘‘(C) DEFERRED TAX ACCOUNT.—For purposes day before the expatriation date, is vested in scribed in clause (i) or (ii) of paragraph of subparagraph (B)(ii)— the beneficiary. (1)(B). ‘‘(i) OPENING BALANCE.—The opening bal- ‘‘(iii) NONVESTED INTEREST.—The term ‘‘(3) RELINQUISHMENT OF CITIZENSHIP.—A ance in a deferred tax account with respect ‘nonvested interest’ means, with respect to citizen shall be treated as relinquishing to any trust interest is an amount equal to any beneficiary, any interest in a trust United States citizenship on the earliest of— the tax which would have been imposed on which is not a vested interest. Such interest

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shall be determined by assuming the max- tional amount, addition to tax, assessable (1) IN GENERAL.—Section 212(a)(10)(E) of the imum exercise of discretion in favor of the penalty, and costs attributable to the de- Immigration and Nationality Act (8 U.S.C. beneficiary and the occurrence of all contin- ferred amount) shall be a lien in favor of the 1182(a)(10)(E)) is amended to read as follows: gencies in favor of the beneficiary. United States on all property of the expa- ‘‘(E) FORMER CITIZENS NOT IN COMPLIANCE ‘‘(iv) ADJUSTMENTS.—The Secretary may triate located in the United States (without WITH EXPATRIATION REVENUE PROVISIONS.— provide for such adjustments to the bases of regard to whether this section applies to the Any alien who is a former citizen of the assets in a trust or a deferred tax account, property). United States who relinquishes United and the timing of such adjustments, in order ‘‘(B) DEFERRED AMOUNT.—For purposes of States citizenship (within the meaning of to ensure that gain is taxed only once. this subsection, the deferred amount is the section 877A(e)(3) of the Internal Revenue ‘‘(v) COORDINATION WITH RETIREMENT PLAN amount of the increase in the covered expa- Code of 1986) and who is not in compliance RULES.—This subsection shall not apply to triate’s income tax which, but for the elec- with section 877A of such Code (relating to an interest in a trust which is part of a re- tion under subsection (a)(4) or (b), would expatriation).’’. tirement plan to which subsection (d)(2) ap- have occurred by reason of this section for (2) AVAILABILITY OF INFORMATION.— plies. the taxable year including the expatriation (A) IN GENERAL.—Section 6103(l) (relating ‘‘(3) DETERMINATION OF BENEFICIARIES’ IN- date. to disclosure of returns and return informa- TEREST IN TRUST.— ‘‘(2) PERIOD OF LIEN.—The lien imposed by tion for purposes other than tax administra- ‘‘(A) DETERMINATIONS UNDER PARAGRAPH this subsection shall arise on the expatria- tion) is amended by adding at the end the (1).—For purposes of paragraph (1), a bene- tion date and continue until— following new paragraph: ficiary’s interest in a trust shall be based ‘‘(A) the liability for tax by reason of this ‘‘(19) DISCLOSURE TO DENY VISA OR ADMIS- upon all relevant facts and circumstances, section is satisfied or has become unenforce- SION TO CERTAIN EXPATRIATES.—Upon written including the terms of the trust instrument able by reason of lapse of time, or request of the Attorney General or the At- and any letter of wishes or similar docu- ‘‘(B) it is established to the satisfaction of torney General’s delegate, the Secretary ment, historical patterns of trust distribu- the Secretary that no further tax liability shall disclose whether an individual is in tions, and the existence of and functions per- may arise by reason of this section. compliance with section 877A (and if not in formed by a trust protector or any similar ‘‘(3) CERTAIN RULES APPLY.—The rules set adviser. forth in paragraphs (1), (3), and (4) of section compliance, any items of noncompliance) to ‘‘(B) OTHER DETERMINATIONS.—For purposes 6324A(d) shall apply with respect to the lien officers and employees of the Federal agency of this section— imposed by this subsection as if it were a responsible for administering section ‘‘(i) CONSTRUCTIVE OWNERSHIP.—If a bene- lien imposed by section 6324A. 212(a)(10)(E) of the Immigration and Nation- ficiary of a trust is a corporation, partner- ality Act solely for the purpose of, and to the ‘‘(j) REGULATIONS.—The Secretary shall ship, trust, or estate, the shareholders, part- extent necessary in, administering such sec- prescribe such regulations as may be nec- ners, or beneficiaries shall be deemed to be tion 212(a)(10)(E).’’. essary or appropriate to carry out the pur- the trust beneficiaries for purposes of this (B) SAFEGUARDS.— poses of this section.’’. section. (i) TECHNICAL AMENDMENTS.—Paragraph (4) ‘‘(ii) TAXPAYER RETURN POSITION.—A tax- (b) INCLUSION IN INCOME OF GIFTS AND BE- of section 6103(p) of the Internal Revenue payer shall clearly indicate on its income QUESTS RECEIVED BY UNITED STATES CITIZENS Code of 1986, as amended by section tax return— AND RESIDENTS FROM EXPATRIATES.—Section 202(b)(2)(B) of the Trade Act of 2002 (Public ‘‘(I) the methodology used to determine 102 (relating to gifts, etc. not included in Law 107–210; 116 Stat. 961), is amended by that taxpayer’s trust interest under this sec- gross income) is amended by adding at the striking ‘‘or (17)’’ after ‘‘any other person de- end the following new subsection: tion, and scribed in subsection (l)(16)’’ each place it ‘‘(II) if the taxpayer knows (or has reason ‘‘(d) GIFTS AND INHERITANCES FROM COV- appears and inserting ‘‘or (18)’’. to know) that any other beneficiary of such ERED EXPATRIATES.— (ii) CONFORMING AMENDMENTS.—Section trust is using a different methodology to de- ‘‘(1) IN GENERAL.—Subsection (a) shall not 6103(p)(4) (relating to safeguards), as amend- termine such beneficiary’s trust interest exclude from gross income the value of any ed by clause (i), is amended by striking ‘‘or under this section. property acquired by gift, bequest, devise, or (18)’’ after ‘‘any other person described in ‘‘(g) TERMINATION OF DEFERRALS, ETC.—In inheritance from a covered expatriate after the case of any covered expatriate, notwith- subsection (l)(16)’’ each place it appears and the expatriation date. For purposes of this inserting ‘‘(18), or (19)’’. standing any other provision of this title— subsection, any term used in this subsection (3) EFFECTIVE DATES.— ‘‘(1) any period during which recognition of which is also used in section 877A shall have (A) IN GENERAL.—Except as provided in income or gain is deferred shall terminate on the same meaning as when used in section subparagraph (B), the amendments made by the day before the expatriation date, and 877A. this subsection shall apply to individuals ‘‘(2) any extension of time for payment of ‘‘(2) EXCEPTIONS FOR TRANSFERS OTHERWISE who relinquish United States citizenship on tax shall cease to apply on the day before the SUBJECT TO ESTATE OR GIFT TAX.—Paragraph or after the date of the enactment of this expatriation date and the unpaid portion of (1) shall not apply to any property if either— Act. such tax shall be due and payable at the time ‘‘(A) the gift, bequest, devise, or inherit- (B) TECHNICAL AMENDMENTS.—The amend- and in the manner prescribed by the Sec- ance is— ments made by paragraph (2)(B)(i) shall take retary. ‘‘(i) shown on a timely filed return of tax effect as if included in the amendments made ‘‘(h) IMPOSITION OF TENTATIVE TAX.— imposed by chapter 12 as a taxable gift by by section 202(b)(2)(B) of the Trade Act of ‘‘(1) IN GENERAL.—If an individual is re- the covered expatriate, or quired to include any amount in gross in- ‘‘(ii) included in the gross estate of the 2002 (Public Law 107–210; 116 Stat. 961). come under subsection (a) for any taxable covered expatriate for purposes of chapter 11 (e) CONFORMING AMENDMENTS.— year, there is hereby imposed, immediately and shown on a timely filed return of tax im- (1) Section 877 is amended by adding at the before the expatriation date, a tax in an posed by chapter 11 of the estate of the cov- end the following new subsection: amount equal to the amount of tax which ered expatriate, or ‘‘(g) APPLICATION.—This section shall not would be imposed if the taxable year were a ‘‘(B) no such return was timely filed but no apply to an expatriate (as defined in section short taxable year ending on the expatria- such return would have been required to be tion date. filed even if the covered expatriate were a 877A(e)) whose expatriation date (as so de- ‘‘(2) DUE DATE.—The due date for any tax citizen or long-term resident of the United fined) occurs on or after January 1, 2004.’’. imposed by paragraph (1) shall be the 90th States.’’. (2) Section 2107 is amended by adding at day after the expatriation date. the end the following new subsection: (c) DEFINITION OF TERMINATION OF UNITED ‘‘(3) TREATMENT OF TAX.—Any tax paid ‘‘(f) APPLICATION.—This section shall not under paragraph (1) shall be treated as a pay- STATES CITIZENSHIP.—Section 7701(a) is ment of the tax imposed by this chapter for amended by adding at the end the following apply to any expatriate subject to section the taxable year to which subsection (a) ap- new paragraph: 877A.’’. plies. ‘‘(48) TERMINATION OF UNITED STATES CITI- (3) Section 2501(a)(3) is amended by adding ZENSHIP.— ‘‘(4) DEFERRAL OF TAX.—The provisions of at the end the following new subparagraph: subsection (b) shall apply to the tax imposed ‘‘(A) IN GENERAL.—An individual shall not ‘‘(F) APPLICATION.—This paragraph shall by this subsection to the extent attributable cease to be treated as a United States citizen not apply to any expatriate subject to sec- to gain includible in gross income by reason before the date on which the individual’s tion 877A.’’. of this section. citizenship is treated as relinquished under (4)(A) Paragraph (1) of section 6039G(d) is ‘‘(i) SPECIAL LIENS FOR DEFERRED TAX section 877A(e)(3). amended by inserting ‘‘or 877A’’ after ‘‘sec- AMOUNTS.— ‘‘(B) DUAL CITIZENS.—Under regulations tion 877’’. ‘‘(1) IMPOSITION OF LIEN.— prescribed by the Secretary, subparagraph (B) The second sentence of section 6039G(e) ‘‘(A) IN GENERAL.—If a covered expatriate (A) shall not apply to an individual who be- is amended by inserting ‘‘or who relinquishes makes an election under subsection (a)(4) or came at birth a citizen of the United States United States citizenship (within the mean- (b) which results in the deferral of any tax and a citizen of another country.’’. ing of section 877A(e)(3))’’ after ‘‘877(a))’’. imposed by reason of subsection (a), the de- (d) INELIGIBILITY FOR VISA OR ADMISSION TO (C) Section 6039G(f) is amended by insert- ferred amount (including any interest, addi- UNITED STATES.— ing ‘‘or 877A(e)(2)(B)’’ after ‘‘877(e)(1)’’.

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(f) CLERICAL AMENDMENT.—The table of ‘‘(1) any stock option which is exercised on other than a restriction which by its terms sections for subpart A of part II of sub- the inversion date or during the 6-month pe- will never lapse. chapter N of chapter 1 is amended by insert- riod before such date and to the stock ac- ‘‘(4) PROPERTY TRANSFERS.—Any transfer of ing after the item relating to section 877 the quired in such exercise, if income is recog- property shall be treated as a payment and following new item: 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 posed by subtitle A. subsection, the amendments made by this 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 DATE.— day after the date of the enactment of this respect to any covered employee shall be re- ‘‘(A) INVERTED CORPORATION.—The term Act. duced (but not below zero) by the amount of ‘inverted corporation’ means any corpora- SEC. 443. EXCISE TAX ON STOCK COMPENSATION any payment (with respect to such em- tion to which subsection (a) or (b) of section OF INSIDERS IN INVERTED COR- 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 ‘‘(ii) without regard to subsection (b)(1)(A). ‘‘CHAPTER 48—STOCK COMPENSATION OF (as defined in such section) which includes Such term includes any predecessor or suc- INSIDERS IN INVERTED CORPORATIONS such corporation.’’. cessor of such a corporation. ‘‘Sec. 5000A. Stock compensation of insiders (c) CONFORMING AMENDMENTS.— in inverted corporations enti- ‘‘(B) INVERSION DATE.—The term ‘inversion date’ means, with respect to a corporation, (1) The last sentence of section 3121(v)(2)(A) ties. is amended by inserting before the period ‘‘or ‘‘SEC. 5000A. STOCK COMPENSATION OF INSIDERS the date on which the corporation first be- comes an inverted corporation. to any specified stock compensation (as de- IN INVERTED CORPORATIONS. fined in section 5000A) on which tax is im- ‘‘(3) SPECIFIED STOCK COMPENSATION.— ‘‘(a) IMPOSITION OF TAX.—In the case of an posed by section 5000A’’. ‘‘(A) IN GENERAL.—The term ‘specified individual who is a disqualified individual (2) The table of chapters for subtitle D is with respect to any inverted corporation, stock compensation’ means payment (or right to payment) granted by the inverted amended by adding at the end the following there is hereby imposed on such person a tax new item: equal to 20 percent of the value (determined corporation (or by any member of the ex- under subsection (b)) of the specified stock panded affiliated group which includes such ‘‘Chapter 48. Stock compensation of insiders compensation held (directly or indirectly) by corporation) to any person in connection in inverted corporations.’’. with the performance of services by a dis- or for the benefit of such individual or a (d) EFFECTIVE DATE.—The amendments qualified individual for such corporation or member of such individual’s family (as de- made by this section shall take effect on member if the value of such payment or fined in section 267) at any time during the July 11, 2002; except that periods before such right is based on (or determined by reference 12-month period beginning on the date which date shall not be taken into account in ap- to) the value (or change in value) of stock in is 6 months before the inversion date. plying the periods in subsections (a) and such corporation (or any such member). ‘‘(b) VALUE.—For purposes of subsection (e)(1) of section 5000A of the Internal Rev- ‘‘(B) EXCEPTIONS.—Such term shall not in- (a)— enue Code of 1986, as added by this section. ‘‘(1) IN GENERAL.—The value of specified clude— stock compensation shall be— ‘‘(i) any option to which part II of sub- SEC. 444. REINSURANCE OF UNITED STATES RISKS IN FOREIGN JURISDICTIONS. ‘‘(A) in the case of a stock option (or other chapter D of chapter 1 applies, or (a) IN GENERAL.—Section 845(a) (relating to similar right) or any stock appreciation ‘‘(ii) any payment or right to payment allocation in case of reinsurance agreement right, the fair value of such option or right, from a plan referred to in section 280G(b)(6). involving tax avoidance or evasion) is and ‘‘(4) EXPANDED AFFILIATED GROUP.—The amended by striking ‘‘source and character’’ ‘‘(B) in any other case, the fair market term ‘expanded affiliated group’ means an and inserting ‘‘amount, source, or char- value of such compensation. affiliated group (as defined in section 1504(a) acter’’. ‘‘(2) DATE FOR DETERMINING VALUE.—The without regard to section 1504(b)(3)); except (b) EFFECTIVE DATE.—The amendments determination of value shall be made— that section 1504(a) shall be applied by sub- made by this section shall apply to any risk ‘‘(A) in the case of specified stock com- stituting ‘more than 50 percent’ for ‘at least reinsured after April 11, 2002. pensation held on the inversion date, on such 80 percent’ each place it appears. date, ‘‘(f) SPECIAL RULES.—For purposes of this SEC. 445. REPORTING OF TAXABLE MERGERS ‘‘(B) in the case of such compensation section— AND ACQUISITIONS. which is canceled during the 6 months before ‘‘(1) CANCELLATION OF RESTRICTION.—The (a) IN GENERAL.—Subpart B of part III of the inversion date, on the day before such cancellation of a restriction which by its subchapter A of chapter 61 is amended by in- cancellation, and terms will never lapse shall be treated as a serting after section 6043 the following new ‘‘(C) in the case of such compensation grant. section: which is granted after the inversion date, on ‘‘(2) PAYMENT OR REIMBURSEMENT OF TAX BY ‘‘SEC. 6043A. TAXABLE MERGERS AND ACQUISI- the date such compensation is granted. CORPORATION TREATED AS SPECIFIED STOCK TIONS. ‘‘(c) TAX TO APPLY ONLY IF SHAREHOLDER COMPENSATION.—Any payment of the tax im- ‘‘(a) IN GENERAL.—The acquiring corpora- GAIN RECOGNIZED.—Subsection (a) shall posed by this section directly or indirectly tion in any taxable acquisition shall make a apply to any disqualified individual with re- by the inverted corporation or by any mem- return (according to the forms or regulations spect to an inverted corporation only if gain ber of the expanded affiliated group which prescribed by the Secretary) setting forth— (if any) on any stock in such corporation is includes such corporation— ‘‘(1) a description of the acquisition, recognized in whole or part by any share- ‘‘(A) shall be treated as specified stock ‘‘(2) the name and address of each share- holder by reason of the acquisition referred compensation, and holder of the acquired corporation who is re- to in section 7874(a)(2)(A) (determined by ‘‘(B) shall not be allowed as a deduction quired to recognize gain (if any) as a result substituting ‘July 10, 2002’ for ‘March 20, under any provision of chapter 1. of the acquisition, 2002’) with respect to such corporation. ‘‘(3) CERTAIN RESTRICTIONS IGNORED.— ‘‘(3) the amount of money and the fair mar- ‘‘(d) EXCEPTION WHERE GAIN RECOGNIZED ON Whether there is specified stock compensa- ket value of other property transferred to COMPENSATION.—Subsection (a) shall not tion, and the value thereof, shall be deter- each such shareholder as part of such acqui- apply to— mined without regard to any restriction sition, and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00080 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3815 ‘‘(4) such other information as the Sec- defined by section 2(p) of such Act) owns di- before the taxable year in which paid only to retary may prescribe. rectly or indirectly more than 80 percent by the extent such original issue discount is in- To the extent provided by the Secretary, the vote or value of the stock of such corpora- cluded during such prior taxable year in the requirements of this section applicable to tion;’’. gross income of a United States person who the acquiring corporation shall be applicable (b) EFFECTIVE DATE.—The amendment owns (within the meaning of section 958(a)) to the acquired corporation and not to the made by this section shall take effect on the stock in such corporation. acquiring corporation. date of the enactment of this Act. ‘‘(ii) SECRETARIAL AUTHORITY.—The Sec- ‘‘(b) NOMINEE REPORTING.—Any person who SEC. 452. PROHIBITION ON NONRECOGNITION OF retary may by regulation exempt trans- holds stock as a nominee for another person GAIN THROUGH COMPLETE LIQ- actions from the application of clause (i), in- shall furnish in the manner prescribed by the UIDATION OF HOLDING COMPANY. cluding any transaction which is entered Secretary to such other person the informa- (a) IN GENERAL.—Section 332 is amended by into by a payor in the ordinary course of a tion provided by the corporation under sub- adding at the end the following new sub- trade or business in which the payor is pre- section (d). section: dominantly engaged.’’. ‘‘(c) TAXABLE ACQUISITION.—For purposes ‘‘(d) RECOGNITION OF GAIN ON LIQUIDATION (b) INTEREST AND OTHER DEDUCTIBLE of this section, the term ‘taxable acquisition’ OF CERTAIN HOLDING COMPANIES.— AMOUNTS.—Section 267(a)(3) is amended— means any acquisition by a corporation of ‘‘(1) IN GENERAL.—In the case of any dis- (1) by striking ‘‘The Secretary’’ and insert- stock in or property of another corporation tribution to a foreign corporation in com- ing: if any shareholder of the acquired corpora- plete liquidation of an applicable holding ‘‘(A) IN GENERAL.—The Secretary’’, and tion is required to recognize gain (if any) as company— (2) by adding at the end the following new a result of such acquisition. ‘‘(A) subsection (a) and section 331 shall subparagraph: ‘‘(d) STATEMENTS TO BE FURNISHED TO not apply to such distribution, and ‘‘(B) SPECIAL RULE FOR CERTAIN FOREIGN SHAREHOLDERS.—Every person required to ‘‘(B) such distribution shall be treated as a ENTITIES.— make a return under subsection (a) shall fur- distribution to which section 301 applies. ‘‘(i) IN GENERAL.—Notwithstanding sub- nish to each shareholder whose name is re- ‘‘(2) APPLICABLE HOLDING COMPANY.—For paragraph (A), in the case of any amount quired to be set forth in such return a writ- purposes of this subsection— payable to a foreign personal holding com- ten statement showing— ‘‘(A) IN GENERAL.—The term ‘applicable pany (as defined in section 552), a controlled ‘‘(1) the name, address, and phone number holding company’ means any domestic cor- foreign corporation (as defined in section of the information contact of the person re- poration— 957), or a passive foreign investment com- quired to make such return, ‘‘(i) which is a common parent of an affili- pany (as defined in section 1297), a deduction ‘‘(2) the information required to be shown ated group, shall be allowable to the payor with respect on such return with respect to such share- ‘‘(ii) stock of which is directly owned by to such amount for any taxable year before holder, and the distributee foreign corporation, the taxable year in which paid only to the ‘‘(3) such other information as the Sec- ‘‘(iii) substantially all of the assets of extent such amount is included during such retary may prescribe. which consist of stock in other members of prior taxable year in the gross income of a The written statement required under the such affiliated group, and United States person who owns (within the preceding sentence shall be furnished to the ‘‘(iv) which has not been in existence at all meaning of section 958(a)) stock in such cor- shareholder on or before January 31 of the times during the 5 years immediately pre- poration. year following the calendar year during ceding the date of the liquidation. ‘‘(ii) SECRETARIAL AUTHORITY.—The Sec- which the taxable acquisition occurred.’’. ‘‘(B) AFFILIATED GROUP.—For purposes of retary may by regulation exempt trans- (b) ASSESSABLE PENALTIES.— this subsection, the term ‘affiliated group’ actions from the application of clause (i), in- (1) Subparagraph (B) of section 6724(d)(1) has the meaning given such term by section cluding any transaction which is entered (relating to definitions) is amended by redes- 1504(a) (without regard to paragraphs (2) and into by a payor in the ordinary course of a ignating clauses (ii) through (xvii) as clauses (4) of section 1504(b)). trade or business in which the payor is pre- (iii) through (xviii), respectively, and by in- ‘‘(3) COORDINATION WITH SUBPART F.—If the dominantly engaged and in which the pay- serting after clause (i) the following new distributee of a distribution described in ment of the accrued amounts occurs within clause: paragraph (1) is a controlled foreign corpora- 81⁄2 months after accrual or within such other ‘‘(ii) section 6043A(a) (relating to returns tion (as defined in section 957), then notwith- period as the Secretary may prescribe.’’. relating to taxable mergers and acquisi- standing paragraph (1) or subsection (a), (c) EFFECTIVE DATE.—The amendments tions),’’. such distribution shall be treated as a dis- made by this section shall apply to payments (2) Paragraph (2) of section 6724(d) is tribution to which section 331 applies. accrued on or after the date of the enact- amended by redesignating subparagraphs (F) ‘‘(4) REGULATIONS.—The Secretary shall ment of this Act. through (AA) as subparagraphs (G) through provide such regulations as appropriate to SEC. 454. EFFECTIVELY CONNECTED INCOME TO (BB), respectively, and by inserting after prevent the abuse of this subsection, includ- INCLUDE CERTAIN FOREIGN subparagraph (E) the following new subpara- ing regulations which provide, for the pur- SOURCE INCOME. graph: poses of clause (iv) of paragraph (2)(A), that (a) IN GENERAL.—Section 864(c)(4)(B) (relat- ‘‘(F) subsections (b) and (d) of section 6043A a corporation is not in existence for any pe- ing to treatment of income from sources (relating to returns relating to taxable merg- riod unless it is engaged in the active con- without the United States as effectively con- ers and acquisitions).’’. duct of a trade or business or owns a signifi- nected income) is amended by adding at the (c) CLERICAL AMENDMENT.—The table of cant ownership interest in another corpora- end the following new flush sentence: sections for subpart B of part III of sub- tion so engaged.’’. ‘‘Any income or gain which is equivalent to chapter A of chapter 61 is amended by insert- (b) EFFECTIVE DATE.—The amendment any item of income or gain described in ing after the item relating to section 6043 the made by this section shall apply to distribu- clause (i), (ii), or (iii) shall be treated in the following new item: tions in complete liquidation occurring on or same manner as such item for purposes of ‘‘Sec. 6043A. Returns relating to taxable after the date of the enactment of this Act. this subparagraph.’’. mergers and acquisitions.’’. SEC. 453. PREVENTION OF MISMATCHING OF IN- (b) EFFECTIVE DATE.—The amendment TEREST AND ORIGINAL ISSUE DIS- made by this section shall apply to taxable (d) EFFECTIVE DATE.—The amendments COUNT DEDUCTIONS AND INCOME years beginning after the date of the enact- made by this section shall apply to acquisi- INCLUSIONS IN TRANSACTIONS ment of this Act. tions after the date of the enactment of this WITH RELATED FOREIGN PERSONS. SEC. 455. RECAPTURE OF OVERALL FOREIGN Act. (a) ORIGINAL ISSUE DISCOUNT.—Section LOSSES ON SALE OF CONTROLLED Subtitle E—International Tax 163(e)(3) (relating to special rule for original FOREIGN CORPORATION. SEC. 451. CLARIFICATION OF BANKING BUSINESS issue discount on obligation held by related (a) IN GENERAL.—Section 904(f)(3) (relating FOR PURPOSES OF DETERMINING foreign person) is amended by redesignating to dispositions) is amending by adding at the INVESTMENT OF EARNINGS IN subparagraph (B) as subparagraph (C) and by end the following new subparagraph: UNITED STATES PROPERTY. inserting after subparagraph (A) the fol- ‘‘(D) APPLICATION TO DISPOSITIONS OF STOCK (a) IN GENERAL.—Subparagraph (A) of sec- lowing new subparagraph: IN CONTROLLED FOREIGN CORPORATIONS.—In tion 956(c)(2) is amended to read as follows: ‘‘(B) SPECIAL RULE FOR CERTAIN FOREIGN the case of any disposition by a taxpayer of ‘‘(A) obligations of the United States, ENTITIES.— any share of stock in a controlled foreign money, or deposits with— ‘‘(i) IN GENERAL.—In the case of any debt corporation (as defined in section 957), this ‘‘(i) any bank (as defined by section 2(c) of instrument having original issue discount paragraph shall apply to such disposition in the Bank Holding Company Act of 1956 (12 which is held by a related foreign person the same manner as if it were a disposition U.S.C. 1841(c)), without regard to subpara- which is a foreign personal holding company of property described in subparagraph (A), graphs (C) and (G) of paragraph (2) of such (as defined in section 552), a controlled for- except that the exception contained in sub- section), or eign corporation (as defined in section 957), paragraph (C)(i) shall not apply.’’. ‘‘(ii) any corporation not described in or a passive foreign investment company (as (b) EFFECTIVE DATE.—The amendment clause (i) with respect to which a bank hold- defined in section 1297), a deduction shall be made by this section shall apply to disposi- ing company (as defined by section 2(a) of allowable to the issuer with respect to such tions after the date of the enactment of this such Act) or financial holding company (as original issue discount for any taxable year Act.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00081 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3816 CONGRESSIONAL RECORD — SENATE April 6, 2004 SEC. 456. MINIMUM HOLDING PERIOD FOR FOR- Subtitle F—Other Revenue Provisions money equal to the fair market value of the EIGN TAX CREDIT ON WITHHOLDING PART I—FINANCIAL INSTRUMENTS stock or interest. In the case of any partner- TAXES ON INCOME OTHER THAN ship, any discharge of indebtedness income DIVIDENDS. SEC. 461. TREATMENT OF STRIPPED INTERESTS IN BOND AND PREFERRED STOCK recognized under this paragraph shall be in- (a) IN GENERAL.—Section 901 is amended by FUNDS, ETC. cluded in the distributive shares of taxpayers redesignating subsection (l) as subsection (a) IN GENERAL.—Section 1286 (relating to which were the partners in the partnership (m) and by inserting after subsection (k) the tax treatment of stripped bonds) is amended immediately before such discharge.’’. (b) EFFECTIVE DATE.—The amendment following new subsection: by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the made by this section shall apply with respect ‘‘(l) MINIMUM HOLDING PERIOD FOR WITH- following new subsection: to cancellations of indebtedness occurring on HOLDING TAXES ON GAIN AND INCOME OTHER ‘‘(f) TREATMENT OF STRIPPED INTERESTS IN or after the date of the enactment of this THAN DIVIDENDS ETC.— BOND AND PREFERRED STOCK FUNDS, ETC.—In Act. ‘‘(1) IN GENERAL.—In no event shall a credit the case of an account or entity substan- SEC. 464. MODIFICATION OF STRADDLE RULES. be allowed under subsection (a) for any with- tially all of the assets of which consist of (a) RULES RELATING TO IDENTIFIED STRAD- holding tax (as defined in subsection (k)) on bonds, preferred stock, or a combination DLES.— any item of income or gain with respect to thereof, the Secretary may by regulations (1) IN GENERAL.—Subparagraph (A) of sec- any property if— provide that rules similar to the rules of this tion 1092(a)(2) (relating to special rule for ‘‘(A) such property is held by the recipient section and 305(e), as appropriate, shall apply identified straddles) is amended to read as of the item for 15 days or less during the 30- to interests in such account or entity to follows: day period beginning on the date which is 15 which (but for this subsection) this section ‘‘(A) IN GENERAL.—In the case of any strad- days before the date on which the right to or section 305(e), as the case may be, would dle which is an identified straddle— receive payment of such item arises, or not apply.’’. ‘‘(i) paragraph (1) shall not apply with re- ‘‘(B) to the extent that the recipient of the (b) CROSS REFERENCE.—Subsection (e) of spect to identified positions comprising the item is under an obligation (whether pursu- section 305 is amended by adding at the end identified straddle, ‘‘(ii) if there is any loss with respect to any ant to a short sale or otherwise) to make re- the following new paragraph: identified position of the identified straddle, lated payments with respect to positions in ‘‘(7) CROSS REFERENCE.— the basis of each of the identified offsetting substantially similar or related property. ‘‘For treatment of stripped interests in cer- positions in the identified straddle shall be This paragraph shall not apply to any divi- tain accounts or entities holding preferred stock, see section 1286(f).’’. increased by an amount which bears the dend to which subsection (k) applies. same ratio to the loss as the unrecognized (c) EFFECTIVE DATE.—The amendments ‘‘(2) EXCEPTION FOR TAXES PAID BY DEAL- gain with respect to such offsetting position made by this section shall apply to pur- ERS.— bears to the aggregate unrecognized gain chases and dispositions after the date of the ‘‘(A) IN GENERAL.—Paragraph (1) shall not with respect to all such offsetting positions, enactment of this Act. apply to any qualified tax with respect to and any property held in the active conduct in a SEC. 462. APPLICATION OF EARNINGS STRIPPING ‘‘(iii) any loss described in clause (ii) shall foreign country of a business as a dealer in RULES TO PARTNERSHIPS AND S CORPORATIONS. not otherwise be taken into account for pur- such property. poses of this title.’’. (a) IN GENERAL.—Section 168(j) (relating to ‘‘(B) QUALIFIED TAX.—For purposes of sub- limitation on deduction for interest on cer- (2) IDENTIFIED STRADDLE.—Section paragraph (A), the term ‘qualified tax’ means tain indebtedness) is amended by redesig- 1092(a)(2)(B) (defining identified straddle) is a tax paid to a foreign country (other than nating paragraph (8) as paragraph (9) and by amended— the foreign country referred to in subpara- inserting after paragraph (7) the following (A) by striking clause (ii) and inserting the graph (A)) if— new paragraph: following: ‘‘(i) the item to which such tax is attrib- ‘‘(ii) to the extent provided by regulations, ‘‘(8) APPLICATION TO PARTNERSHIPS AND S utable is subject to taxation on a net basis the value of each position of which (in the CORPORATIONS.— hands of the taxpayer immediately before by the country referred to in subparagraph ‘‘(A) IN GENERAL.—This subsection shall (A), and apply to partnerships and S corporations in the creation of the straddle) is not less than ‘‘(ii) such country allows a credit against the same manner as it applies to C corpora- the basis of such position in the hands of the its net basis tax for the full amount of the tions. taxpayer at the time the straddle is created, and’’, and tax paid to such other foreign country. ‘‘(B) ALLOCATIONS TO CERTAIN CORPORATE (B) by adding at the end the following new ‘‘(C) DEALER.—For purposes of subpara- PARTNERS.—If a C corporation is a partner in graph (A), the term ‘dealer’ means— a partnership— flush sentence: ‘‘(i) with respect to a security, any person ‘‘(i) the corporation’s allocable share of in- ‘‘The Secretary shall prescribe regulations to whom paragraphs (1) and (2) of subsection debtedness and interest income of the part- which specify the proper methods for clearly (k) would not apply by reason of paragraph nership shall be taken into account in apply- identifying a straddle as an identified strad- (4) thereof if such security were stock, and ing this subsection to the corporation, and dle (and the positions comprising such strad- ‘‘(ii) with respect to any other property, ‘‘(ii) if a deduction is not disallowed under dle), which specify the rules for the applica- any person with respect to whom such prop- this subsection with respect to any interest tion of this section for a taxpayer which fails erty is described in section 1221(a)(1). expense of the partnership, this subsection to properly identify the positions of an iden- ‘‘(D) REGULATIONS.—The Secretary may shall be applied separately in determining tified straddle, and which specify the order- prescribe such regulations as may be appro- whether a deduction is allowable to the cor- ing rules in cases where a taxpayer disposes priate to carry out this paragraph, including poration with respect to the corporation’s al- of less than an entire position which is part regulations to prevent the abuse of the ex- locable share of such interest expense.’’. of an identified straddle.’’. ception provided by this paragraph and to (b) EFFECTIVE DATE.—The amendments (3) UNRECOGNIZED GAIN.—Section 1092(a)(3) treat other taxes as qualified taxes. made by this section shall apply to taxable (defining unrecognized gain) is amended by ‘‘(3) EXCEPTIONS.—The Secretary may by years beginning after the date of the enact- redesignating subparagraph (B) as subpara- regulation provide that paragraph (1) shall ment of this Act. graph (C) and by inserting after subpara- not apply to property where the Secretary SEC. 463. RECOGNITION OF CANCELLATION OF graph (A) the following new subparagraph: determines that the application of paragraph INDEBTEDNESS INCOME REALIZED ‘‘(B) SPECIAL RULE FOR IDENTIFIED STRAD- (1) to such property is not necessary to carry ON SATISFACTION OF DEBT WITH DLES.—For purposes of paragraph (2)(A)(ii), PARTNERSHIP INTEREST. out the purposes of this subsection. the unrecognized gain with respect to any (a) IN GENERAL.—Paragraph (8) of section identified offsetting position shall be the ex- ‘‘(4) CERTAIN RULES TO APPLY.—Rules simi- 108(e) (relating to general rules for discharge cess of the fair market value of the position lar to the rules of paragraphs (5), (6), and (7) of indebtedness (including discharges not in at the time of the determination over the of subsection (k) shall apply for purposes of title 11 cases or insolvency)) is amended to fair market value of the position at the time this subsection. read as follows: the taxpayer identified the position as a po- ‘‘(5) DETERMINATION OF HOLDING PERIOD.— ‘‘(8) INDEBTEDNESS SATISFIED BY CORPORATE sition in an identified straddle.’’. Holding periods shall be determined for pur- STOCK OR PARTNERSHIP INTEREST.—For pur- (4) CONFORMING AMENDMENT.—Section poses of this subsection without regard to poses of determining income of a debtor from 1092(c)(2) is amended by striking subpara- section 1235 or any similar rule.’’. discharge of indebtedness, if— graph (B) and by redesignating subparagraph (b) CONFORMING AMENDMENT.—The heading ‘‘(A) a debtor corporation transfers stock, (C) as subparagraph (B). of subsection (k) of section 901 is amended by or (b) PHYSICALLY SETTLED POSITIONS.—Sec- inserting ‘‘ON DIVIDENDS’’ after ‘‘TAXES’’. ‘‘(B) a debtor partnership transfers a cap- tion 1092(d) (relating to definitions and spe- ital or profits interest in such partnership, cial rules) is amended by adding at the end (c) EFFECTIVE DATE.—The amendments to a creditor in satisfaction of its recourse or the following new paragraph: made by this section shall apply to amounts nonrecourse indebtedness, such corporation ‘‘(8) SPECIAL RULES FOR PHYSICALLY SET- paid or accrued more than 30 days after the or partnership shall be treated as having sat- TLED POSITIONS.—For purposes of subsection date of the enactment of this Act. isfied the indebtedness with an amount of (a), if a taxpayer settles a position which is

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part of a straddle by delivering property to (c) EFFECTIVE DATE.—The amendments (c) ADJUSTMENT TO BASIS OF PARTNERSHIP which the position relates (and such posi- made by this section shall apply to transfers PROPERTY.—Section 743 is amended— tion, if terminated, would result in a realiza- of money or other property, or liabilities as- (1) by striking ‘‘with respect to which the tion of a loss), then such taxpayer shall be sumed, in connection with a reorganization election provided in section 754 is in effect’’ treated as if such taxpayer— occurring on or after the date of the enact- in the matter preceding paragraph (1) of sub- ‘‘(A) terminated the position for its fair ment of this Act. section (b), market value immediately before the settle- SEC. 467. CLARIFICATION OF DEFINITION OF (2) by striking subsection (a) and by redes- ment, and NONQUALIFIED PREFERRED STOCK. ignating subsections (b) and (c) as sub- ‘‘(B) sold the property so delivered by the (a) IN GENERAL.—Section 351(g)(3)(A) is sections (a) and (b), respectively, taxpayer at its fair market value.’’. amended by adding at the end the following: (3) by adding at the end the following new (c) REPEAL OF STOCK EXCEPTION.— ‘‘Stock shall not be treated as participating subsection: in corporate growth to any significant ex- (1) IN GENERAL.—Paragraph (3) of section ‘‘(c) ELECTION TO ADJUST BASIS FOR TRANS- tent unless there is a real and meaningful 1092(d) (relating to definitions and special FERS UPON DEATH OF PARTNER.—Subsection likelihood of the shareholder actually par- rules) is amended to read as follows: (a) shall not apply and no adjustments shall ticipating in the earnings and growth of the ‘‘(3) SPECIAL RULES FOR STOCK.—For pur- be made in the case of any transfer of an in- corporation.’’. poses of paragraph (1)— terest in a partnership upon the death of a (b) EFFECTIVE DATE.—The amendment ‘‘(A) IN GENERAL.—The term ‘personal partner unless an election to do so is made property’ includes— made by this section shall apply to trans- actions after May 14, 2003. by the partnership. Such an election shall ‘‘(i) any stock which is a part of a straddle apply with respect to all such transfers of in- at least 1 of the offsetting positions of which SEC. 468. MODIFICATION OF DEFINITION OF CON- TROLLED GROUP OF CORPORA- terests in the partnership. Any election is a position with respect to such stock or TIONS. under section 754 in effect on the date of the substantially similar or related property, or (a) IN GENERAL.—Section 1563(a)(2) (relat- enactment of this subsection shall constitute ‘‘(ii) any stock of a corporation formed or ing to brother-sister controlled group) is an election made under this subsection. Such availed of to take positions in personal prop- amended by striking ‘‘possessing—’’ and all election may be revoked by the partnership, erty which offset positions taken by any that follows through ‘‘(B)’’ and inserting subject to such limitations as may be pro- shareholder. ‘‘possessing’’. vided by regulations prescribed by the Sec- ‘‘(B) RULE FOR APPLICATION.—For purposes (b) APPLICATION OF EXISTING RULES TO retary.’’, and of determining whether subsection (e) ap- OTHER CODE PROVISIONS.—Section 1563(f) (re- (4) by striking ‘‘OPTIONAL’’ in the head- plies to any transaction with respect to lating to other definitions and rules) is ing. stock described in subparagraph (A)(ii), all amended by adding at the end the following (d) CONFORMING AMENDMENTS.— includible corporations of an affiliated group new paragraph: (1) Subsection (d) of section 732 is repealed. (within the meaning of section 1504(a)) shall ‘‘(5) BROTHER-SISTER CONTROLLED GROUP (2) Section 755(a) is amended— be treated as 1 taxpayer.’’. DEFINITION FOR PROVISIONS OTHER THAN THIS (A) by striking ‘‘section 734(b) (relating to (2) CONFORMING AMENDMENT.—Section PART.— the optional adjustment’’ and inserting ‘‘sec- 1258(d)(1) is amended by striking ‘‘; except ‘‘(A) IN GENERAL.—Except as specifically tion 734(a) (relating to the adjustment’’, and that the term ‘personal property’ shall in- provided in an applicable provision, sub- (B) by striking ‘‘section 743(b) (relating to clude stock’’. section (a)(2) shall be applied to an applica- the optional adjustment’’ and inserting ‘‘sec- (d) REPEAL OF QUALIFIED COVERED CALL ble provision as if it read as follows: tion 743(a) (relating to the adjustment’’. EXCEPTION.—Section 1092(c)(4) is amended by ‘(2) BROTHER-SISTER CONTROLLED GROUP.— (3) Section 755(c), as added by this Act, is adding at the end the following new subpara- Two or more corporations if 5 or fewer per- amended by striking ‘‘section 734(b)’’ and in- graph: sons who are individuals, estates, or trusts serting ‘‘section 734(a)’’. ‘‘(I) TERMINATION.—This paragraph shall own (within the meaning of subsection (d)(2) (4) Section 761(e)(2) is amended by striking not apply to any position established on or stock possessing— ‘‘optional’’. after the date of the enactment of this sub- ‘(A) at least 80 percent of the total com- (5) Section 774(a) is amended by striking paragraph.’’. bined voting power of all classes of stock en- ‘‘743(b)’’ both places it appears and inserting (e) EFFECTIVE DATE.—The amendments titled to vote, or at least 80 percent of the made by this section shall apply to positions ‘‘743(a)’’. total value of shares of all classes of stock, (6) The item relating to section 734 in the established on or after the date of the enact- of each corporation, and ment of this Act. table of sections for subpart B of part II of ‘(B) more than 50 percent of the total com- subchapter K of chapter 1 is amended by SEC. 465. DENIAL OF INSTALLMENT SALE TREAT- bined voting power of all classes of stock en- MENT FOR ALL READILY striking ‘‘Optional’’. titled to vote or more than 50 percent of the (7) The item relating to section 743 in the TRADEABLE DEBT. total value of shares of all classes of stock of (a) IN GENERAL.—Section 453(f)(4)(B) (relat- table of sections for subpart C of part II of each corporation, taking into account the ing to purchaser evidences of indebtedness subchapter K of chapter 1 is amended by stock ownership of each such person only to payable on demand or readily tradeable) is striking ‘‘Optional’’. the extent such stock ownership is identical amended by striking ‘‘is issued by a corpora- (e) EFFECTIVE DATES.— with respect to each such corporation.’ tion or a government or political subdivision (1) IN GENERAL.—Except as provided in ‘‘(B) APPLICABLE PROVISION.—For purposes thereof and’’. paragraph (2), the amendments made by this of this paragraph, an applicable provision is (b) EFFECTIVE DATE.—The amendment section shall apply to transfers and distribu- any provision of law (other than this part) made by this section shall apply to sales oc- tions made after the date of the enactment which incorporates the definition of con- curring on or after the date of the enactment of this Act. trolled group of corporations under sub- of this Act. (2) REPEAL OF SECTION 732(d).—The amend- section (a).’’. ments made by subsections (b)(2) and (d)(1) PART II—CORPORATIONS AND (c) EFFECTIVE DATE.—The amendments PARTNERSHIPS made by this section shall apply to taxable shall apply to— SEC. 466. MODIFICATION OF TREATMENT OF years beginning after the date of the enact- (A) except as provided in subparagraph (B), TRANSFERS TO CREDITORS IN DIVI- ment of this Act. transfers made after the date of the enact- SIVE REORGANIZATIONS. ment of this Act, and SEC. 469. MANDATORY BASIS ADJUSTMENTS IN (a) IN GENERAL.—Section 361(b)(3) (relating CONNECTION WITH PARTNERSHIP (B) in the case of any transfer made on or to treatment of transfers to creditors) is DISTRIBUTIONS AND TRANSFERS OF before such date to which section 732(d) ap- amended by adding at the end the following PARTNERSHIP INTERESTS. plies, distributions made after the date new sentence: ‘‘In the case of a reorganiza- (a) IN GENERAL.—Section 754 is repealed. which is 2 years after such date of enact- tion described in section 368(a)(1)(D) with re- (b) ADJUSTMENT TO BASIS OF UNDISTRIB- ment. spect to which stock or securities of the cor- UTED PARTNERSHIP PROPERTY.—Section 734 is PART III—DEPRECIATION AND poration to which the assets are transferred amended— AMORTIZATION are distributed in a transaction which quali- (1) by striking ‘‘, with respect to which the fies under section 355, this paragraph shall election provided in section 754 is in effect,’’ SEC. 471. EXTENSION OF AMORTIZATION OF IN- apply only to the extent that the sum of the in the matter preceding paragraph (1) of sub- TANGIBLES TO SPORTS FRAN- money and the fair market value of other section (b), CHISES. property transferred to such creditors does (2) by striking ‘‘(as adjusted by section (a) IN GENERAL.—Section 197(e) (relating to not exceed the adjusted bases of such assets 732(d))’’ both places it appears in subsection exceptions to definition of section 197 intan- transferred.’’. (b), gible) is amended by striking paragraph (6) (b) LIABILITIES IN EXCESS OF BASIS.—Sec- (3) by striking the last sentence of sub- and by redesignating paragraphs (7) and (8) tion 357(c)(1)(B) is amended by inserting section (b), as paragraphs (6) and (7), respectively. ‘‘with respect to which stock or securities of (4) by striking subsection (a) and by redes- (b) CONFORMING AMENDMENTS.— the corporation to which the assets are ignating subsections (b) and (c) as sub- (1)(A) Section 1056 (relating to basis limi- transferred are distributed in a transaction sections (a) and (b), respectively, and tation for player contracts transferred in which qualifies under section 355’’ after ‘‘sec- (5) by striking ‘‘OPTIONAL’’ in the head- connection with the sale of a franchise) is re- tion 368(a)(1)(D)’’. ing. pealed.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00083 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3818 CONGRESSIONAL RECORD — SENATE April 6, 2004 (B) The table of sections for part IV of sub- section protruding more than 30 inches riod to which paragraph (1)(B) applies, any chapter O of chapter 1 is amended by strik- ahead of the leading edge of the wind- deferred expenses attributable to the part- ing the item relating to section 1056. shield.’’. nership which were not allowed as a deduc- (2) Section 1245(a) (relating to gain from (c) EFFECTIVE DATE.—The amendments tion by reason of this section may be de- disposition of certain depreciable property) made by this section shall apply to property ducted to the extent allowable under section is amended by striking paragraph (4). placed in service after the date of the enact- 165.’’. (3) Section 1253 (relating to transfers of ment of this Act. (2) CONFORMING AMENDMENT.—Subsection franchises, trademarks, and trade names) is SEC. 474. CONSISTENT AMORTIZATION OF PERI- (b) of section 709 is amended by striking amended by striking subsection (e). ODS FOR INTANGIBLES. ‘‘AMORTIZATION’’ and inserting ‘‘DEDUCTION’’ (c) EFFECTIVE DATES.— (a) START-UP EXPENDITURES.— in the heading. (1) IN GENERAL.—Except as provided in (1) ALLOWANCE OF DEDUCTION.—Paragraph (d) EFFECTIVE DATE.—The amendments paragraph (2), the amendments made by this (1) of section 195(b) (relating to start-up ex- made by this section shall apply to amounts section shall apply to property acquired penditures) is amended to read as follows: paid or incurred after the date of the enact- after the date of the enactment of this Act. ‘‘(1) ALLOWANCE OF DEDUCTION.—If a tax- ment of this Act. (2) SECTION 1245.—The amendment made by payer elects the application of this sub- SEC. 475. REFORM OF TAX TREATMENT OF LEAS- subsection (b)(2) shall apply to franchises ac- section with respect to any start-up expendi- ING OPERATIONS. quired after the date of the enactment of tures— (a) CLARIFICATION OF RECOVERY PERIOD FOR this Act. ‘‘(A) the taxpayer shall be allowed a deduc- TAX-EXEMPT USE PROPERTY SUBJECT TO SEC. 472. CLASS LIVES FOR UTILITY GRADING tion for the taxable year in which the active LEASE.—Subparagraph (A) of section 168(g)(3) COSTS. trade or business begins in an amount equal (relating to special rules for determining (a) GAS UTILITY PROPERTY.—Section to the lesser of— class life) is amended by inserting ‘‘(notwith- 168(e)(3)(E) (defining 15-year property) is ‘‘(i) the amount of start-up expenditures standing any other subparagraph of this amended by striking ‘‘and’’ at the end of with respect to the active trade or business, paragraph)’’ after ‘‘shall’’. (b) LIMITATION ON DEPRECIATION PERIOD clause (ii), by striking the period at the end or FOR SOFTWARE LEASED TO TAX-EXEMPT ENTI- of clause (iii) and inserting ‘‘, and’’, and by ‘‘(ii) $5,000, reduced (but not below zero) by TY.—Paragraph (1) of section 167(f) is amend- adding at the end the following new clause: the amount by which such start-up expendi- tures exceed $50,000, and ed by adding at the end the following new ‘‘(iv) initial clearing and grading land im- subparagraph: provements with respect to gas utility prop- ‘‘(B) the remainder of such start-up ex- ‘‘(C) TAX-EXEMPT USE PROPERTY SUBJECT TO erty.’’. penditures shall be allowed as a deduction LEASE.—In the case of computer software (b) ELECTRIC UTILITY PROPERTY.—Section ratably over the 180-month period beginning which would be tax-exempt use property as 168(e)(3) is amended by adding at the end the with the month in which the active trade or defined in subsection (h) of section 168 if following new subparagraph: business begins.’’. such section applied to computer software, ‘‘(F) 20-YEAR PROPERTY.—The term ‘20-year (2) CONFORMING AMENDMENT.—Subsection the useful life under subparagraph (A) shall property’ means initial clearing and grading (b) of section 195 is amended by striking not be less than 125 percent of the lease term land improvements with respect to any elec- ‘‘AMORTIZE’’ and inserting ‘‘DEDUCT’’ in the heading. (within the meaning of section 168(i)(3)).’’ tric utility transmission and distribution (c) LEASE TERM TO INCLUDE RELATED SERV- plant.’’. (b) ORGANIZATIONAL EXPENDITURES.—Sub- section (a) of section 248 (relating to organi- ICE CONTRACTS.—Subparagraph (A) of section (c) CONFORMING AMENDMENTS.—The table 168(i)(3) (relating to lease term) is amended contained in section 168(g)(3)(B) is amend- zational expenditures) is amended to read as follows: by striking ‘‘and’’ at the end of clause (i), by ed— redesignating clause (ii) as clause (iii), and (1) by inserting ‘‘or (E)(iv)’’ after ‘‘(E)(iii)’’, ‘‘(a) ELECTION TO DEDUCT.—If a corporation elects the application of this subsection (in by inserting after clause (i) the following and accordance with regulations prescribed by new clause: (2) by adding at the end the following new the Secretary) with respect to any organiza- ‘‘(ii) the term of a lease shall include the item: tional expenditures— term of any service contract or similar ar- ‘‘(F) ...... 25’’. ‘‘(1) the corporation shall be allowed a de- rangement (whether or not treated as a lease (d) EFFECTIVE DATE.—The amendments duction for the taxable year in which the under section 7701(e))— made by this section shall apply to property corporation begins business in an amount ‘‘(I) which is part of the same transaction placed in service after the date of the enact- equal to the lesser of— (or series of related transactions) which in- ment of this Act. ‘‘(A) the amount of organizational expendi- cludes the lease, and SEC. 473. EXPANSION OF LIMITATION ON DEPRE- tures with respect to the taxpayer, or ‘‘(II) which is with respect to the property CIATION OF CERTAIN PASSENGER ‘‘(B) $5,000, reduced (but not below zero) by subject to the lease or substantially similar AUTOMOBILES. the amount by which such organizational ex- property, and’’. (a) IN GENERAL.—Section 179(b) (relating to penditures exceed $50,000, and (d) EFFECTIVE DATE.—The amendments limitations) is amended by adding at the end ‘‘(2) the remainder of such organizational made by this section shall apply to leases en- the following new paragraph: expenditures shall be allowed as a deduction tered into after December 31, 2003. ‘‘(6) LIMITATION ON COST TAKEN INTO AC- ratably over the 180-month period beginning SEC. 476. LIMITATION ON DEDUCTIONS ALLO- COUNT FOR CERTAIN PASSENGER VEHICLES.— with the month in which the corporation be- CABLE TO PROPERTY USED BY GOV- ERNMENTS OR OTHER TAX-EXEMPT ‘‘(A) IN GENERAL.—The cost of any sport gins business.’’. ENTITIES. utility vehicle for any taxable year which (c) TREATMENT OF ORGANIZATIONAL AND (a) IN GENERAL.—Subpart C of part II of SYNDICATION FEES OR PARTNERSHIPS.— may be taken into account under this sec- subchapter E of chapter 1 (relating to tax- tion shall not exceed $25,000. (1) IN GENERAL.—Section 709(b) (relating to able year for which deductions taken) is ‘‘(B) SPORT UTILITY VEHICLE.—For purposes amortization of organization fees) is amend- amended by adding at the end the following of subparagraph (A)— ed by redesignating paragraph (2) as para- new section: ‘‘(i) IN GENERAL.—The term ‘sport utility graph (3) and by amending paragraph (1) to ‘‘SEC. 470. LIMITATIONS ON LOSSES FROM TAX- vehicle’ means any 4-wheeled vehicle read as follows: EXEMPT USE PROPERTY. which— ‘‘(1) ALLOWANCE OF DEDUCTION.—If a tax- ‘‘(a) LIMITATION ON LOSSES.—Except as oth- ‘‘(I) is manufactured primarily for use on payer elects the application of this sub- erwise provided in this section, a tax-exempt public streets, roads, and highways, section (in accordance with regulations pre- use loss for any taxable year shall not be al- ‘‘(II) is not subject to section 280F, and scribed by the Secretary) with respect to any lowed. ‘‘(III) is rated at not more than 14,000 organizational expenses— ‘‘(b) DISALLOWED LOSS CARRIED TO NEXT pounds gross vehicle weight. ‘‘(A) the taxpayer shall be allowed a deduc- YEAR.—Any tax-exempt use loss with respect ‘‘(ii) CERTAIN VEHICLES EXCLUDED.—Such tion for the taxable year in which the part- to any tax-exempt use property which is dis- term does not include any vehicle which— nership begins business in an amount equal allowed under subsection (a) for any taxable ‘‘(I) does not have the primary load car- to the lesser of— year shall be treated as a deduction with re- rying device or container attached, ‘‘(i) the amount of organizational expenses spect to such property in the next taxable ‘‘(II) has a seating capacity of more than 12 with respect to the partnership, or year. individuals, ‘‘(ii) $5,000, reduced (but not below zero) by ‘‘(c) DEFINITIONS.—For purposes of this sec- ‘‘(III) is designed for more than 9 individ- the amount by which such organizational ex- tion— uals in seating rearward of the driver’s seat, penses exceed $50,000, and ‘‘(1) TAX-EXEMPT USE LOSS.—The term ‘tax- ‘‘(IV) is equipped with an open cargo area, ‘‘(B) the remainder of such organizational exempt use loss’ means, with respect to any or a covered box not readily accessible from expenses shall be allowed as a deduction rat- taxable year, the amount (if any) by which— the passenger compartment, of at least 72.0 ably over the 180-month period beginning ‘‘(A) the sum of— inches in interior length, or with the month in which the partnership be- ‘‘(i) the aggregate deductions (other than ‘‘(V) has an integral enclosure, fully en- gins business. interest) directly allocable to a tax-exempt closing the driver compartment and load ‘‘(2) DISPOSITIONS BEFORE CLOSE OF AMORTI- use property, plus carrying device, does not have seating rear- ZATION PERIOD.—In any case in which a part- ‘‘(ii) the aggregate deductions for interest ward of the driver’s seat, and has no body nership is liquidated before the end of the pe- properly allocable to such property, exceed

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‘‘(B) the aggregate income from such prop- ‘‘(4) LESSEE MAY NOT BEAR MORE THAN MINI- (b) CONFORMING AMENDMENT.—The table of erty. MAL RISK OF LOSS.— sections for subpart C of part II of sub- ‘‘(2) TAX-EXEMPT USE PROPERTY.—The term ‘‘(A) IN GENERAL.—A lease of property chapter E of chapter 1 is amended by adding ‘tax-exempt use property’ has the meaning meets the requirements of this paragraph if at the end the following new item: given to such term by section 168(h) (without there is no arrangement under which more ‘‘Sec. 470. Limitations on losses from tax-ex- regard to paragraph (1)(C) or (3)(C) thereof than a minimal risk of loss (as determined empt use property.’’ and determined as if property described in under regulations) in the value of the prop- section 167(f)(1)(B) were tangible property). erty is borne by the lessee. (c) EFFECTIVE DATE.—The amendments ‘‘(d) EXCEPTION FOR CERTAIN LEASES.—This ‘‘(B) CERTAIN ARRANGEMENTS FAIL REQUIRE- made by this section shall apply to leases en- section shall not apply to any lease of prop- MENT.—In no event will the requirements of tered into after December 31, 2003. erty which meets the requirements of all of this paragraph be met if there is any ar- PART IV—ADMINISTRATIVE PROVISIONS the following paragraphs: rangement under which the lessee bears— SEC. 481. CLARIFICATION OF RULES FOR PAY- ‘‘(1) PROPERTY NOT FINANCED WITH TAX-EX- ‘‘(i) any portion of the loss that would MENT OF ESTIMATED TAX FOR CER- EMPT BONDS.—A lease of property meets the occur if the fair market value of the leased TAIN DEEMED ASSET SALES. requirements of this paragraph if no part of property at the time the lease is terminated (a) IN GENERAL.—Paragraph (13) of section the property was financed (directly or indi- were 25 percent less than its projected fair 338(h) (relating to tax on deemed sale not rectly) from the proceeds of an obligation market value at the end of the lease term, or taken into account for estimated tax pur- the interest on which is exempt from tax ‘‘(ii) more than 50 percent of the loss that poses) is amended by adding at the end the under section 103(a) and which (or any re- would occur if the fair market value of the following: ‘‘The preceding sentence shall not funding bond of which) is outstanding when leased property at the time the lease is ter- apply with respect to a qualified stock pur- the lease is entered into. The Secretary may minated were zero. chase for which an election is made under by regulations provide for a de minimis ex- ‘‘(5) REGULATORY REQUIREMENTS.—A lease paragraph (10).’’. ception from this paragraph. of property meets the requirements of this (b) EFFECTIVE DATE.—The amendment ‘‘(2) AVAILABILITY OF FUNDS.— paragraph if such lease of property meets made by subsection (a) shall apply to trans- ‘‘(A) IN GENERAL.—A lease of property such requirements as the Secretary may pre- actions occurring after the date of the enact- meets the requirements of this paragraph if scribe by regulations. ment of this Act. (at any time during the lease term) not more ‘‘(e) SPECIAL RULES.— SEC. 482. EXTENSION OF IRS USER FEES. than an allowable amount of funds are— ‘‘(1) TREATMENT OF FORMER TAX-EXEMPT ‘‘(i) subject to any arrangement referred to USE PROPERTY.— (a) IN GENERAL.—Section 7528(c) (relating in subparagraph (B), or ‘‘(A) IN GENERAL.—In the case of any to termination) is amended by striking ‘‘De- ‘‘(ii) otherwise reasonably expected to re- former tax-exempt use property— cember 31, 2004’’ and inserting ‘‘September main available, ‘‘(i) any deduction allowable under sub- 30, 2013’’. to or for the benefit of the lessor or any lend- section (b) with respect to such property for (b) EFFECTIVE DATE.—The amendment er, or to or for the benefit of the lessee to any taxable year shall be allowed only to the made by this section shall apply to requests satisfy the lessee’s obligations or options extent of any net income (without regard to after the date of the enactment of this Act. under the lease. such deduction) from such property for such SEC. 483. DOUBLING OF CERTAIN PENALTIES, ‘‘(B) ARRANGEMENTS.—The arrangements taxable year, and FINES, AND INTEREST ON UNDER- referred to in this subparagraph are— ‘‘(ii) any portion of such unused deduction PAYMENTS RELATED TO CERTAIN ‘‘(i) a defeasance arrangement, a loan by remaining after application of clause (i) OFFSHORE FINANCIAL ARRANGE- MENT. the lessee to the lessor or any lender, a de- shall be treated as allowable under sub- posit arrangement, a letter of credit section (b) with respect to such property in (a) GENERAL RULE.—If— collateralized with cash or cash equivalents, the next taxable year. (1) a taxpayer eligible to participate in— a payment undertaking agreement, a lease ‘‘(B) FORMER TAX-EXEMPT USE PROPERTY.— (A) the Department of the Treasury’s Off- prepayment, a sinking fund arrangement, or For purposes of this subsection, the term shore Voluntary Compliance Initiative, or any similar arrangement (whether or not ‘former tax-exempt use property’ means any (B) the Department of the Treasury’s vol- such arrangement provides credit support), property which— untary disclosure initiative which applies to and ‘‘(i) is not tax-exempt use property for the the taxpayer by reason of the taxpayer’s ‘‘(ii) any other arrangement identified by taxable year, but underreporting of United States income tax the Secretary in regulations. ‘‘(ii) was tax-exempt use property for any liability through financial arrangements which rely on the use of offshore arrange- ‘‘(C) ALLOWABLE AMOUNT.— prior taxable year. ments which were the subject of the initia- ‘‘(i) IN GENERAL.—Except as otherwise pro- ‘‘(2) DISPOSITION OF ENTIRE INTEREST IN vided in this subparagraph, the term ‘allow- PROPERTY.—If during the taxable year a tax- tive described in subparagraph (A), and able amount’ means an amount equal to 20 payer disposes of the taxpayer’s entire inter- (2) any interest or applicable penalty is im- percent of the lessor’s adjusted basis in the est in tax-exempt use property (or former posed with respect to any arrangement to property at the time the lease is entered tax-exempt use property), rules similar to which any initiative described in paragraph into. the rules of section 469(g) shall apply for pur- (1) applied or to any underpayment of Fed- eral income tax attributable to items arising ‘‘(ii) HIGHER AMOUNT PERMITTED IN CERTAIN poses of this section. in connection with any arrangement de- CASES.—To the extent provided in regula- ‘‘(3) COORDINATION WITH SECTION 469.—This tions, a higher percentage shall be permitted section shall be applied before the applica- scribed in paragraph (1), under clause (i) where necessary because of tion of section 469. then, notwithstanding any other provision of the credit-worthiness of the lessee. In no ‘‘(f) OTHER DEFINITIONS.—For purposes of law, the amount of such interest or penalty event may such regulations permit a per- this section— shall be equal to twice that determined with- centage of more than 50 percent. ‘‘(1) RELATED PARTIES.—The terms ‘lessor’, out regard to this section. ‘‘(iii) OPTION TO PURCHASE.—If under the ‘lessee’, and ‘lender’ include any related (b) DEFINITIONS AND RULES.—For purposes lease the lessee has the option to purchase party (within the meaning of section of this section— the property for other than the fair market 197(f)(9)(C)(i)). (1) APPLICABLE PENALTY.—The term ‘‘appli- value of the property (determined at the ‘‘(2) LEASE TERM.—The term ‘lease term’ cable penalty’’ means any penalty, addition time of exercise), the allowable amount at has the meaning given to such term by sec- to tax, or fine imposed under chapter 68 of the time such option may be exercised may tion 168(i)(3). the Internal Revenue Code of 1986. not exceed 50 percent of the price at which ‘‘(3) LENDER.—The term ‘lender’ means, (2) VOLUNTARY OFFSHORE COMPLIANCE INI- such option may be exercised. with respect to any lease, a person that TIATIVE.—The term ‘‘Voluntary Offshore ‘‘(3) LESSOR MUST MAKE SUBSTANTIAL EQ- makes a loan to the lessor which is secured Compliance Initiative’’ means the program UITY INVESTMENT.—A lease of property meets (or economically similar to being secured) by established by the Department of the Treas- the requirements of this paragraph if— the lease or the leased property. ury in January of 2003 under which any tax- ‘‘(A) the lessor— ‘‘(4) LOAN.—The term ‘loan’ includes any payer was eligible to voluntarily disclose ‘‘(i) has at the time the lease is entered similar arrangement. previously undisclosed income on assets into an unconditional at-risk equity invest- ‘‘(g) REGULATIONS.—The Secretary shall placed in offshore accounts and accessed ment (as determined by the Secretary) in the prescribe such regulations as may be nec- through credit card and other financial ar- property of at least 20 percent of the lessor’s essary or appropriate to carry out the provi- rangements. adjusted basis in the property as of that sions of this section, including regulation (3) PARTICIPATION.—A taxpayer shall be time, and which— treated as having participated in the Vol- ‘‘(ii) maintains such investment through- ‘‘(1) allow in appropriate cases the aggrega- untary Offshore Compliance Initiative if the out the term of the lease, and tion of property subject to the same lease, taxpayer submitted the request in a timely ‘‘(B) the fair market value of the property and manner and all information requested by the at the end of the lease term is reasonably ex- ‘‘(2) provide for the determination of the Secretary of the Treasury or his delegate pected to be equal to at least 20 percent of allocation of interest expense for purposes of within a reasonable period of time following such basis. this section.’’ the request.

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(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, SEC. 484. PARTIAL PAYMENT OF TAX LIABILITY TER.—In the case of a taxpayer who has been ‘‘(2) prohibits each person providing such IN INSTALLMENT AGREEMENTS. issued a 30-day letter, the maximum amount services under such contract from commit- (a) IN GENERAL.— of tax under subparagraph (A) shall not be ting any act or omission which employees of (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, (B) by inserting ‘‘full or partial’’ after ‘‘fa- able item’ means any item of income, gain, ‘‘(B) providing quality assurance services, cilitate’’. loss, deduction, or credit if the taxpayer— and (2) Section 6159(c) (relating to Secretary ‘‘(i) has a reasonable basis for its treat- ‘‘(C) composing debt collection notices, required to enter into installment agree- ment of such item, and and ments in certain cases) is amended in the ‘‘(ii) reasonably believes that the Sec- ‘‘(4) permits subcontractors to perform matter preceding paragraph (1) by inserting retary also has a reasonable basis for dis- other services only with the approval of the ‘‘full’’ before ‘‘payment’’. allowing the taxpayer’s treatment of such Secretary. (b) REQUIREMENT TO REVIEW PARTIAL PAY- item. ‘‘(c) FEES.—The Secretary may retain and MENT AGREEMENTS EVERY TWO YEARS.—Sec- ‘‘(B) 30-DAY LETTER.—The term ‘30-day let- use an amount not in excess of 25 percent of tion 6159, as amended by this Act, is amend- ter’ means the first letter of proposed defi- the amount collected under any qualified tax ed by redesignating subsections (d), (e), and ciency which allows the taxpayer an oppor- collection contract for the costs of services (f) as subsections (e), (f), and (g), respec- tunity for administrative review in the In- performed under such contract. The Sec- tively, and inserting after subsection (c) the ternal Revenue Service Office of Appeals. retary shall keep adequate records regarding following new subsection: ‘‘(4) RATE OF INTEREST.—The rate of inter- amounts so retained and used. The amount ‘‘(d) SECRETARY REQUIRED TO REVIEW IN- est allowable under this subsection shall be credited as paid by any taxpayer shall be de- STALLMENT AGREEMENTS FOR PARTIAL COL- the Federal short-term rate determined termined without regard to this subsection. LECTION EVERY TWO YEARS.—In the case of under section 6621(b), compounded daily. ‘‘(d) NO FEDERAL LIABILITY.—The United an agreement entered into by the Secretary ‘‘(e) USE OF DEPOSITS.— States shall not be liable for any act or under subsection (a) for partial collection of ‘‘(1) PAYMENT OF TAX.—Except as otherwise omission of any person performing services a tax liability, the Secretary shall review provided by the taxpayer, deposits shall be under a qualified tax collection contract. the agreement at least once every 2 years.’’. treated as used for the payment of tax in the ‘‘(e) APPLICATION OF FAIR DEBT COLLECTION (c) EFFECTIVE DATE.—The amendments order deposited. PRACTICES ACT.—The provisions of the Fair made by this section shall apply to agree- ‘‘(2) RETURNS OF DEPOSITS.—Deposits shall Debt Collection Practices Act (15 U.S.C. 1692 ments entered into on or after the date of be treated as returned to the taxpayer on a et seq.) shall apply to any qualified tax col- the enactment of this Act. last-in, first-out basis.’’. lection contract, except to the extent super- SEC. 485. EXTENSION OF CUSTOMS USER FEES. (b) CLERICAL AMENDMENT.—The table of seded by section 6304, section 7602(c), or by Section 13031(j)(3) of the Consolidated Om- sections for subchapter A of chapter 67 is any other provision of this title. nibus Budget Reconciliation Act of 1985 (19 amended by adding at the end the following ‘‘(f) CROSS REFERENCES.— U.S.C. 58c(j)(3)) is amended by striking new item: ‘‘(1) For damages for certain unauthorized ‘‘March 31, 2004’’ and inserting ‘‘September ‘‘Sec. 6603. Deposits made to suspend running collection actions by persons performing 30, 2013’’. of interest on potential under- services under a qualified tax collection con- SEC. 486. DEPOSITS MADE TO SUSPEND RUNNING payments, etc.’’. tract, see section 7433A. OF INTEREST ON POTENTIAL UN- ‘‘(2) For application of Taxpayer Assist- DERPAYMENTS. (c) EFFECTIVE DATE.— ance Orders to persons performing services (a) IN GENERAL.—Subchapter A of chapter (1) IN GENERAL.—The amendments made by under a qualified tax collection contract, see 67 (relating to interest on underpayments) is this section shall apply to deposits made section 7811(a)(4).’’. amended by adding at the end the following after the date of the enactment of this Act. (2) CONFORMING AMENDMENTS.— new section: (2) COORDINATION WITH DEPOSITS MADE (A) Section 7809(a) is amended by inserting ‘‘SEC. 6603. DEPOSITS MADE TO SUSPEND RUN- UNDER REVENUE PROCEDURE 84–58.—In the case ‘‘6306,’’ before ‘‘7651’’. NING OF INTEREST ON POTENTIAL of an amount held by the Secretary of the (B) The table of sections for subchapter A UNDERPAYMENTS, ETC. Treasury or his delegate on the date of the of chapter 64 is amended by adding at the ‘‘(a) AUTHORITY TO MAKE DEPOSITS OTHER enactment of this Act as a deposit in the na- end the following new item: THAN AS PAYMENT OF TAX.—A taxpayer may ture of a cash bond deposit pursuant to Rev- make a cash deposit with the Secretary enue Procedure 84–58, the date that the tax- ‘‘Sec. 6306. Qualified Tax Collection Con- which may be used by the Secretary to pay payer identifies such amount as a deposit tracts.’’. any tax imposed under subtitle A or B or made pursuant to section 6603 of the Internal (b) CIVIL DAMAGES FOR CERTAIN UNAUTHOR- chapter 41, 42, 43, or 44 which has not been Revenue Code (as added by this Act) shall be IZED COLLECTION ACTIONS BY PERSONS PER- assessed at the time of the deposit. Such a treated as the date such amount is deposited FORMING SERVICES UNDER QUALIFIED TAX deposit shall be made in such manner as the for purposes of such section 6603. COLLECTION CONTRACTS.— Secretary shall prescribe. SEC. 487. QUALIFIED TAX COLLECTION CON- (1) IN GENERAL.—Subchapter B of chapter ‘‘(b) NO INTEREST IMPOSED.—To the extent TRACTS. 76 (relating to proceedings by taxpayers and that such deposit is used by the Secretary to (a) CONTRACT REQUIREMENTS.— third parties) is amended by inserting after pay tax, for purposes of section 6601 (relating (1) IN GENERAL.—Subchapter A of chapter section 7433 the following new section: to interest on underpayments), the tax shall 64 (relating to collection) is amended by add- ‘‘SEC. 7433A. CIVIL DAMAGES FOR CERTAIN UN- be treated as paid when the deposit is made. ing at the end the following new section: AUTHORIZED COLLECTION ACTIONS ‘‘(c) RETURN OF DEPOSIT.—Except in a case ‘‘SEC. 6306. QUALIFIED TAX COLLECTION CON- BY PERSONS PERFORMING SERV- where the Secretary determines that collec- TRACTS. ICES UNDER QUALIFIED TAX COL- tion of tax is in jeopardy, the Secretary shall ‘‘(a) IN GENERAL.—Nothing in any provi- LECTION CONTRACTS. return to the taxpayer any amount of the de- sion of law shall be construed to prevent the ‘‘(a) IN GENERAL.—Subject to the modifica- posit (to the extent not used for a payment Secretary from entering into a qualified tax tions provided by subsection (b), section 7433 of tax) which the taxpayer requests in writ- collection contract. shall apply to the acts and omissions of any ing. ‘‘(b) QUALIFIED TAX COLLECTION CON- person performing services under a qualified ‘‘(d) PAYMENT OF INTEREST.— TRACT.—For purposes of this section, the tax collection contract (as defined in section ‘‘(1) IN GENERAL.—For purposes of section term ‘qualified tax collection contract’ 6306(b)) to the same extent and in the same 6611 (relating to interest on overpayments), a means any contract which— manner as if such person were an employee deposit which is returned to a taxpayer shall ‘‘(1) is for the services of any person (other of the Internal Revenue Service. be treated as a payment of tax for any period than an officer or employee of the Treasury ‘‘(b) MODIFICATIONS.—For purposes of sub- to the extent (and only to the extent) attrib- Department)— section (a)— utable to a disputable tax for such period. ‘‘(A) to locate and contact any taxpayer ‘‘(1) Any civil action brought under section Under regulations prescribed by the Sec- specified by the Secretary, 7433 by reason of this section shall be retary, rules similar to the rules of section ‘‘(B) to request full payment from such brought against the person who entered into 6611(b)(2) shall apply. taxpayer of an amount of Federal tax speci- the qualified tax collection contract with

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(a) IN GENERAL.—Section 121(d) (relating to and shall be includible in gross income of the ‘‘(3) Such civil action shall not be an exclu- special rules for exclusion of gain from sale taxpayer for the taxable year in which the sive remedy with respect to such person. of principal residence) is amended by adding payment is received by the taxpayer, and ‘‘(4) Subsections (c), (d)(1), and (e) of sec- at the end the following new paragraph: ‘‘(ii) subsection (f)(3) and section 1011(b) tion 7433 shall not apply.’’. ‘‘(10) PROPERTY ACQUIRED IN LIKE-KIND EX- shall not apply to the transfer of the prop- CHANGE.—If a taxpayer acquired property in (2) CLERICAL AMENDMENT.—The table of erty from the taxpayer to the donee. an exchange to which section 1031 applied, sections for subchapter B of chapter 76 is ‘‘(C) QUALIFIED INTEREST.—For purposes of amended by inserting after the item relating subsection (a) shall not apply to the sale or this paragraph— exchange of such property if it occurs during to section 7433 the following new item: ‘‘(i) IN GENERAL.—The term ‘qualified in- the 5-year period beginning with the date of terest’ means, with respect to any taxpayer, ‘‘Sec. 7433A. Civil damages for certain unau- the acquisition of such property.’’. a right to receive from the donee a percent- (b) EFFECTIVE DATE.—The amendment thorized collection actions by age (not greater than 50 percent) of any roy- made by this section shall apply to sales or persons performing services alty payment received by the donee with re- exchanges after the date of the enactment of under a qualified tax collection spect to property described in paragraph this Act. contract.’’. (1)(B)(iii) (other than copyrights which are SEC. 493. CLARIFICATION OF EXEMPTION FROM described in section 1221(a)(3) or 1231(b)(1)(C)) (c) APPLICATION OF TAXPAYER ASSISTANCE TAX FOR SMALL PROPERTY AND contributed by the taxpayer to the donee. ORDERS TO PERSONS PERFORMING SERVICES CASUALTY INSURANCE COMPANIES. ‘‘(ii) SECRETARIAL AUTHORITY.— UNDER A QUALIFIED TAX COLLECTION CON- (a) IN GENERAL.—Section 501(c)(15)(A) is ‘‘(I) IN GENERAL.—Except as provided in TRACT.—Section 7811 (relating to taxpayer amended to read as follows: subclause (II), the Secretary may by regula- assistance orders) is amended by adding at ‘‘(A) Insurance companies (as defined in tion or other administrative guidance treat the end the following new subsection: section 816(a)) other than life (including as a qualified interest the right to receive interinsurers and reciprocal underwriters) ‘‘(g) APPLICATION TO PERSONS PERFORMING other payments from the donee, but only if if— SERVICES UNDER A QUALIFIED TAX COLLEC- the donee does not possess a right to receive ‘‘(i) the gross receipts for the taxable year TION CONTRACT.—Any order issued or action any payment (whether royalties or other- do not exceed $600,000, and taken by the National Taxpayer Advocate wise) from a third party with respect to the ‘‘(ii) more than 50 percent of such gross re- pursuant to this section shall apply to per- contributed property. ceipts consist of premiums.’’. sons performing services under a qualified ‘‘(II) EXCEPTIONS.—The Secretary may not (b) CONTROLLED GROUP RULE.—Section tax collection contract (as defined in section treat as a qualified interest the right to re- 6306(b)) to the same extent and in the same 501(c)(15)(C) is amended by inserting ‘‘, ex- cept that in applying section 1563 for pur- ceive any payment which provides a benefit manner as such order or action applies to the to the donor which is greater than the ben- Secretary.’’. poses of section 831(b)(2)(B)(ii), subpara- graphs (B) and (C) of section 1563(b)(2) shall efit retained by the donee or the right to re- (d) INELIGIBILITY OF INDIVIDUALS WHO COM- be disregarded’’ before the period at the end. ceive any portion of the proceeds from the MIT MISCONDUCT TO PERFORM UNDER CON- sale of the property contributed. (c) CONFORMING AMENDMENT.—Clause (i) of TRACT.—Section 1203 of the Internal Revenue section 831(b)(2)(A) is amended by striking ‘‘(iii) LIMITATION.—An interest shall be Service Restructuring Act of 1998 (relating ‘‘exceed $350,000 but’’. treated as a qualified interest under this sub- to termination of employment for mis- (d) EFFECTIVE DATE.—The amendments paragraph only if the taxpayer has no right conduct) is amended by adding at the end the made by this section shall apply to taxable to receive any payment described in clause following new subsection: years beginning after December 31, 2003. (i) or (ii)(I) after the earlier of the date on which the legal life of the contributed prop- ‘‘(e) INDIVIDUALS PERFORMING SERVICES SEC. 494. DEFINITION OF INSURANCE COMPANY UNDER A QUALIFIED TAX COLLECTION CON- FOR SECTION 831. erty expires or the date which is 20 years after the date of the contribution.’’. TRACT.—An individual shall cease to be per- (a) IN GENERAL.—Section 831 is amended by mitted to perform any services under any redesignating subsection (c) as subsection (d) (c) REPORTING REQUIREMENTS.— qualified tax collection contract (as defined and by inserting after subsection (b) the fol- (1) IN GENERAL.—Section 6050L(a) (relating in section 6306(b) of the Internal Revenue lowing new subsection: to returns regarding certain dispositions of Code of 1986) if there is a final determination ‘‘(c) INSURANCE COMPANY DEFINED.—For donated property) is amended— by the Secretary of the Treasury under such purposes of this section, the term ‘insurance (A) by striking ‘‘If’’ and inserting: contract that such individual committed any company’ has the meaning given to such ‘‘(1) DISPOSITIONS OF DONATED PROPERTY.— act or omission described under subsection term by section 816(a)).’’. If’’, (b) in connection with the performance of (b) EFFECTIVE DATE.—The amendment (B) by redesignating paragraphs (1) such services.’’. made by this section shall apply to taxable through (5) as subparagraphs (A) through (E), (e) EFFECTIVE DATE.—The amendments years beginning after December 31, 2003. respectively, and made to this section shall take effect on the SEC. 495. LIMITATIONS ON DEDUCTION FOR (C) by adding at the end the following new date of the enactment of this Act. CHARITABLE CONTRIBUTIONS OF paragraph: PATENTS AND SIMILAR PROPERTY. ‘‘(2) PAYMENTS OF QUALIFIED INTERESTS.— PART V—MISCELLANEOUS PROVISIONS (a) DEDUCTION ALLOWED ONLY TO THE EX- Each donee of property described in section SEC. 491. ADDITION OF VACCINES AGAINST HEPA- TENT OF BASIS.—Section 170(e)(1)(B) (relating 170(e)(1)(B)(iii) which makes a payment to a TITIS A TO LIST OF TAXABLE VAC- to certain contributions of ordinary income donor pursuant to a qualified interest (as de- CINES. and capital gain property) is amended by fined in section 170(e)(7)) during any calendar striking ‘‘or’’ at the end of clause (i), by add- year shall make a return (in accordance with (a) IN GENERAL.—Section 4132(a)(1) (defin- ing ‘‘or’’ at the end of clause (ii), and by in- forms and regulations prescribed by the Sec- ing taxable vaccine) is amended by redesig- serting after clause (ii) the following new retary) showing— nating subparagraphs (I), (J), (K), and (L) as clause: ‘‘(A) the name, address, and TIN of the subparagraphs (J), (K), (L), and (M), respec- ‘‘(iii) of any patent, copyright, trademark, payor and the payee with respect to such a tively, and by inserting after subparagraph trade name, trade secret, know-how, soft- payment, (H) the following new subparagraph: ware, or similar property, or applications or ‘‘(B) a description, and date of contribu- ‘‘(I) Any vaccine against hepatitis A.’’. registrations of such property,’’. tion, of the property to which the qualified (b) CONFORMING AMENDMENT.—Section (b) TREATMENT OF CONTRIBUTIONS WHERE interest relates, 9510(c)(1)(A) is amended by striking ‘‘October DONOR RECEIVES INTEREST.—Section 170(e) is ‘‘(C) the dates and amounts of any royalty 18, 2000’’ and inserting ‘‘May 8, 2003’’. amended by adding at the end the following payments received by the donee with respect (c) EFFECTIVE DATE.— new paragraph: to such property, (1) SALES, ETC.—The amendments made by ‘‘(7) SPECIAL RULES FOR CONTRIBUTIONS OF ‘‘(D) the date and the amount of the pay- this section shall apply to sales and uses on PATENTS AND SIMILAR PROPERTY WHERE DONOR ment pursuant to the qualified interest, and or after the first day of the first month RECEIVES INTEREST.— ‘‘(E) a description of the terms of the which begins more than 4 weeks after the ‘‘(A) DISALLOWANCE OF DEDUCTION.—No de- qualified interest.’’. date of the enactment of this Act. duction shall be allowed under this section (2) CONFORMING AMENDMENTS.— (2) DELIVERIES.—For purposes of paragraph with respect to a contribution of property (A) The heading for section 6050L is amend- (1) and section 4131 of the Internal Revenue described in paragraph (1)(B)(iii) if the tax- ed by striking ‘‘CERTAIN DISPOSITIONS Code of 1986, in the case of sales on or before payer after the contribution has any interest OF’’. the effective date described in such para- in the property other than a qualified inter- (B) The item relating to section 6050L in graph for which delivery is made after such est. the table of sections for subpart B of part III date, the delivery date shall be considered ‘‘(B) CONTRIBUTIONS WITH QUALIFIED INTER- of subchapter A of chapter 61 is amended by the sale date. EST.—If a taxpayer after a contribution of striking ‘‘certain dispositions of’’.

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(d) ANTI-ABUSE RULES.—The Secretary of services are not available, the appropriate (i) by inserting ‘‘or services’’ after ‘‘value- the Treasury may prescribe such regulations customs border patrol officer may assign suf- added production processes’’; or other administrative guidance as may be ficient customs employees (if available) to (ii) by striking ‘‘or finishing’’ and inserting necessary or appropriate to prevent the perform any such services, which could law- ‘‘, finishing, or testing’’; avoidance of the purposes of section fully be performed during regular hours of (iii) by inserting ‘‘or services’’ after ‘‘for 170(e)(1)(B)(iii) of the Internal Revenue Code operation, and any overtime fees incurred in articles’’; and of 1986 (as added by subsection (a)), including connection with such service shall be paid by (iv) by inserting ‘‘(or subdivision)’’ after preventing— the air carrier.’’. ‘‘such other firm’’; and (1) the circumvention of the reduction of (C) in paragraph (4)— the charitable deduction by embedding or SA 3029. Mr. COLEMAN submitted an (i) by striking ‘‘for articles’’ and inserting bundling the patent or similar property as amendment intended to be proposed by ‘‘, or services, used in the production of arti- part of a charitable contribution of property him to the bill S. 1637, to amend the In- cles or in the provision of services’’; and that includes the patent or similar property, ternal Revenue Code of 1986 to comply (ii) by inserting ‘‘(or subdivision)’’ after (2) the manipulation of the basis of the with the World Trade Organization rul- ‘‘such other firm’’; and property to increase the amount of the char- (4) by adding at the end the following new itable deduction through the use of related ings on the FSC/ETI benefit in a man- subsection: persons, pass-thru entities, or other inter- ner that preserves jobs and production activities in the United States, to re- ‘‘(d) BASIS FOR SECRETARY’S DETERMINA- mediaries, or through the use of any provi- TIONS.— form and simplify the international sion of law or regulation (including the con- ‘‘(1) INCREASED IMPORTS.—For purposes of solidated return regulations), and taxation rules of the United States, subsection (a)(2)(A)(ii), the Secretary may (3) a donor from changing the form of the and for other purposes; which was or- determine that increased imports of like or patent or similar property to property of a dered to lie on the table; as follows: directly competitive articles or services form for which different deduction rules At the end of the bill, add the following: exist if the workers’ firm or subdivision or would apply. customers of the workers’ firm or subdivi- (e) EFFECTIVE DATE.—The amendments TITLE V—TRADE ADJUSTMENT ASSISTANCE sion accounting for not less than 20 percent made by this section shall apply to contribu- of the sales of the workers’ firm or subdivi- tions made after October 1, 2003. Subtitle A—Service Workers sion certify to the Secretary that they are SEC. 496. REPEAL OF 10-PERCENT REHABILITA- SEC. 511. SHORT TITLE. obtaining such articles or services from a TION TAX CREDIT. This subtitle may be cited as the ‘‘Trade foreign country. Section 47 is amended by adding at the end Adjustment Assistance Equity For Service ‘‘(2) OBTAINING SERVICES ABROAD.—For pur- the following new subsection: Workers Act of 2004’’. poses of subsection (a)(2)(B)(ii), the Sec- ‘‘(e) TERMINATION.—This section shall not SEC. 512. EXTENSION OF TRADE ADJUSTMENT AS- retary may determine that the workers’ apply to expenditures described in sub- SISTANCE TO SERVICES SECTOR. firm, subdivision, or public agency has ob- section (a)(1) incurred in taxable years be- (a) ADJUSTMENT ASSISTANCE FOR WORK- tained or is likely to obtain like or directly ginning after December 31, 2003.’’. ERS.—Section 221(a)(1)(A) of the Trade Act of competitive services from a firm in a foreign SEC. 497. INCREASE IN AGE OF MINOR CHILDREN 1974 (19 U.S.C. 2271(a)(1)(A)) is amended by country based on a certification thereof from WHOSE UNEARNED INCOME IS striking ‘‘firm)’’ and inserting ‘‘firm, and the workers’ firm, subdivision, or public TAXED AS IF PARENT’S INCOME. workers in a service sector firm or subdivi- agency. (a) IN GENERAL.—Section 1(g)(2)(A) (relat- sion of a service sector firm or public agen- ‘‘(3) AUTHORITY OF THE SECRETARY.—The ing to child to whom subsection applies) is cy)’’. Secretary may obtain the certifications amended by striking ‘‘age 14’’ and inserting (b) GROUP ELIGIBILITY REQUIREMENTS.— under paragraphs (1) and (2) through ques- ‘‘age 18’’. Section 222 of the Trade Act of 1974 (19 U.S.C. tionnaires or in such other manner as the (b) EFFECTIVE DATE.—The amendment 2272) is amended— Secretary determines is appropriate.’’. made by this section shall apply to taxable (1) in subsection (a)— (c) TRAINING.—Section 236(a)(2)(A) of the years beginning after December 31, 2003. (A) in the matter preceding paragraph (1), Trade Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is by striking ‘‘agricultural firm)’’ and insert- amended by striking ‘‘$220,000,000’’ and in- SA 3028. Mr. COLEMAN submitted an ing ‘‘agricultural firm, and workers in a serting ‘‘$440,000,000’’. amendment intended to be proposed to service sector firm or subdivision of a service amendment SA 3011 proposed by Mr. sector firm or public agency)’’; (d) DEFINITIONS.—Section 247 of the Trade FRIST to the bill S. 1637, to amend the (B) in paragraph (1), by inserting ‘‘or pub- Act of 1974 (19 U.S.C. 2319) is amended— Internal Revenue Code of 1986 to com- lic agency’’ after ‘‘of the firm’’; and (1) in paragraph (1)— ply with the World Trade Organization (C) in paragraph (2)— (A) by inserting ‘‘or public agency’’ after ‘‘of a firm’’; and rulings on the FSC/ETI benefit in a (i) in subparagraph (A)(ii), by striking ‘‘like or directly competitive with articles (B) by inserting ‘‘or public agency’’ after manner that preserves jobs and produc- produced’’ and inserting ‘‘or services like or ‘‘or subdivision’’; tion activities in the United States, to directly competitive with articles produced (2) in paragraph (2)(B), by inserting ‘‘or reform and simplify the international or services provided’’; and public agency’’ after ‘‘the firm’’; taxation rules of the United States, (ii) by striking subparagraph (B) and in- (3) by redesignating paragraphs (8) through and for other purposes; which was or- serting the following: (17) as paragraphs (9) through (18), respec- dered to lie on the table; as follows: ‘‘(B)(i) there has been a shift, by such tively; and workers’ firm, subdivision, or public agency (4) by inserting after paragraph (6) the fol- At the end of the instructions add the fol- lowing: lowing: to a foreign country, of production of arti- cles, or in provision of services, like or di- ‘‘(7) The term ‘public agency’ means a de- TITLE IX—NON-REVENUE PROVISIONS rectly competitive with articles which are partment or agency of a State or local gov- SEC. 901. CUSTOMS SERVICES. produced, or services which are provided, by ernment or of the Federal Government. Section 13031(e)(1) of the Consolidated Om- such firm, subdivision, or public agency; or ‘‘(8) The term ‘service sector firm’ means nibus Budget Reconciliation Act of 1985 (19 ‘‘(ii) such workers’ firm, subdivision, or an entity engaged in the business of pro- U.S.C. 58c(e)(1)) is amended— public agency has obtained or is likely to ob- viding services.’’. (1) by striking ‘‘(1) Notwithstanding sec- tain such services from a foreign country.’’; (e) TECHNICAL AMENDMENT.—Section 245(a) tion 451 of the Tariff Act of 1930 (19 U.S.C. (2) in subsection (b)— of the Trade Act of 1974 (19 U.S.C. 2317(a)) is 1451) or any other provision of law (other (A) in the matter preceding paragraph (1), amended by striking ‘‘, other than sub- than paragraph (2)),’’ and inserting: by striking ‘‘agricultural firm)’’ and insert- chapter D’’. ‘‘(1) IN GENERAL.— ing ‘‘agricultural firm, and workers in a ‘‘(A) SCHEDULED FLIGHTS.—Notwith- service sector firm or subdivision of a service SEC. 513. TRADE ADJUSTMENT ASSISTANCE FOR standing section 451 of the Tariff Act of 1930 sector firm or public agency)’’; FIRMS AND INDUSTRIES. (19 U.S.C. 1451) or any other provision of law (B) in paragraph (2), by inserting ‘‘or serv- (a) FIRMS.— (other than subparagraph (B) and paragraph ice’’ after ‘‘related to the article’’; and (1) ASSISTANCE.—Section 251 of the Trade (2)),’’; and (C) in paragraph (3)(A), by inserting ‘‘or Act of 1974 (19 U.S.C. 2341) is amended— (2) by adding at the end the following: services’’ after ‘‘component parts’’; (A) in subsection (a), by inserting ‘‘or serv- ‘‘(B) CHARTER FLIGHTS.—If an air carrier (3) in subsection (c)— ice sector firm’’ after ‘‘(including any agri- (as defined in section 40102(2) of title 49, (A) in paragraph (2), by adding at the end cultural firm’’; United States Code) specifically requests the following: (B) in subsection (c)(1)— that customs border patrol services for pas- ‘‘(C) Taconite pellets produced in the (i) in the matter preceding subparagraph sengers and their baggage be provided for a United States shall be considered to be an (A), by inserting ‘‘or service sector firm’’ charter flight arriving after normal oper- article that is like or directly competitive after ‘‘any agricultural firm’’; ating hours at a customs border patrol serv- with imports of semifinished steel slab.’’. (ii) in subparagraph (B)(ii), by inserting iced airport and overtime funds for those (B) in paragraph (3)— ‘‘or service’’ after ‘‘of an article’’; and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00088 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3823 (iii) in subparagraph (C), by striking ‘‘arti- for the alternative trade adjustment assist- ‘‘SEC. 250. DATA COLLECTION; EVALUATIONS; RE- cles like or directly competitive with arti- ance program may elect to receive benefits PORTS. cles which are produced’’ and inserting ‘‘arti- under the alternative trade adjustment as- ‘‘(a) DATA COLLECTION.—The Secretary cles or services like or directly competitive sistance program if the worker— shall, pursuant to regulations prescribed by with articles or services which are produced ‘‘(A) is covered by a certification under the Secretary, collect any data necessary to or provided’’; and subchapter A of this chapter; meet the requirements of this chapter. (C) by adding at the end the following: ‘‘(B) obtains reemployment not more than ‘‘(b) PERFORMANCE EVALUATIONS.—The Sec- ‘‘(e) BASIS FOR SECRETARY DETERMINA- 26 weeks after the date of separation from retary shall establish an effective perform- ance measuring system to evaluate the fol- TION.— the adversely affected employment; lowing: ‘‘(1) INCREASED IMPORTS.—For purposes of ‘‘(C) is at least 40 years of age; ‘‘(1) PROGRAM PERFORMANCE.—A compari- subsection (c)(1)(C), the Secretary may de- ‘‘(D) earns not more than $50,000 a year in son of the trade adjustment assistance pro- termine that increases of imports of like or wages from reemployment; gram before and after the effective date of directly competitive articles or services ‘‘(E) is employed on a full-time basis as de- the Trade Adjustment Assistance Reform exist if customers accounting for not less fined by State law in the State in which the Act of 2002 with respect to— than 20 percent of the sales of the workers’ worker is employed; and ‘‘(A) the number of workers certified and firm certify to the Secretary that they are ‘‘(F) does not return to the employment the number of workers actually partici- obtaining such articles or services from a from which the worker was separated.’’. pating in the trade adjustment assistance foreign country. (b) CONFORMING AMENDMENTS.—(1) Sub- ‘‘(2) AUTHORITY OF THE SECRETARY.—The paragraphs (A) and (B) of section 246(a)(2) of program; Secretary may obtain the certifications the Trade Act of 1974 (19 U.S.C. 2318(a)(2) (A) ‘‘(B) the time for processing petitions; under paragraph (1) through questionnaires and (B)) are amended by striking ‘‘paragraph ‘‘(C) the number of training waivers grant- or in such other manner as the Secretary de- (3)(B)’’ and inserting ‘‘paragraph (3)’’ each ed; termines is appropriate. The Secretary may place it appears. ‘‘(D) the coordination of programs under exercise the authority under section 249 in (2) Section 246(b)(2) of such Act is amended this chapter with programs under the Work- carrying out this subsection.’’. by striking ‘‘subsection (a)(3)(B)’’ and insert- force Investment Act of 1998 (29 U.S.C. 2801 et (2) AUTHORIZATION OF APPROPRIATIONS.— ing ‘‘subsection (a)(3)’’. seq.); Section 256(b) of the Trade Act of 1974 (19 SEC. 516. CLARIFICATION OF MARKETING YEAR. ‘‘(E) the effectiveness of individual train- U.S.C. 2346(b)) is amended by striking Section 291(5) of the Trade Act of 1974 (19 ing providers in providing appropriate infor- ‘‘$16,000,000’’ and inserting ‘‘$32,000,000’’. U.S.C. 2401(5)) is amended by inserting before mation and training; (3) DEFINITION.—Section 261 of the Trade the end period the following: ‘‘, or in the case ‘‘(F) the extent to which States have de- Act of 1974 (19 U.S.C. 2351) is amended— of an agricultural commodity that has no signed and implemented health care cov- (A) by striking ‘‘For purposes of’’ and in- marketing year, in a 12-month period for erage options under title II of the Trade Act serting ‘‘(a) FIRM.—For purposes of’’; and which the petitioner provides written jus- of 2002, including any difficulties States have (B) by adding at the end the following: tification’’. encountered in carrying out the provisions of ‘‘(b) SERVICE SECTOR FIRM.—For purposes SEC. 517. EFFECTIVE DATE. title II; ‘‘(G) how Federal, State, and local officials of this chapter, the term ‘service sector firm’ (a) IN GENERAL.—Except as provided in means a firm engaged in the business of pro- subsections (b) and (c), the amendments are implementing the trade adjustment as- viding services.’’. made by this subtitle shall take effect on Oc- sistance program to ensure that all eligible (b) INDUSTRIES.—Section 265(a) of the tober 1, 2004. individuals receive benefits, including pro- Trade Act of 1974 (19 U.S.C. 2355(a)) is amend- (b) SPECIAL RULE FOR CERTAIN SERVICE viding outreach, rapid response, and other ed by inserting ‘‘or service’’ after ‘‘new prod- WORKERS.—A group of workers in a service activities; and uct’’. sector firm, or subdivision of a service sector ‘‘(H) any other data necessary to evaluate SEC. 514. MONITORING AND REPORTING. firm, or public agency (as defined in section how individual States are implementing the Section 282 of the Trade Act of 1974 (19 247 (7) and (8) of the Trade Act of 1974, as requirements of this chapter. U.S.C. 2393) is amended— added by section 512(d) of this Act) who— ‘‘(2) PROGRAM PARTICIPATION .—The effec- (1) in the first sentence— (1) would have been certified eligible to tiveness of the program relating to— (A) by striking ‘‘The Secretary’’ and in- apply for adjustment assistance under chap- ‘‘(A) the number of workers receiving bene- serting ‘‘(a) MONITORING PROGRAMS.—The ter 2 of title II of the Trade Act of 1974 if the fits and the type of benefits being received Secretary’’; amendments made by this Act had been in both before and after the effective date of (B) by inserting ‘‘and services’’ after ‘‘im- effect on November 4, 2002, and the Trade Adjustment Assistance Reform ports of articles’’; (2) file a petition pursuant to section 221 of Act of 2002; (C) by inserting ‘‘and domestic provision of such Act within 6 months after the date of ‘‘(B) the number of workers enrolled in, services’’ after ‘‘domestic production’’; enactment of this Act, and the duration of, training by major types (D) by inserting ‘‘or providing services’’ shall be eligible for certification under sec- of training both before and after the effec- after ‘‘producing articles’’; and tion 223 of the Trade Act of 1974 if the work- tive date of the Trade Adjustment Assist- (E) by inserting ‘‘, or provision of serv- ers’ last total or partial separation from the ance Reform Act of 2002; ices,’’ after ‘‘changes in production’’; and firm or subdivision of the firm or public ‘‘(C) earnings history of workers that re- (2) by adding at the end the following: agency occurred on or after November 4, 2002 flects wages before separation and wages in ‘‘(b) COLLECTION OF DATA AND REPORTS ON and before October 1, 2004. any job obtained after receiving benefits SERVICES SECTOR.— (c) SPECIAL RULE FOR TACONITE.—A group under this Act; ‘‘(1) SECRETARY OF LABOR.—Not later than of workers in a firm, or subdivision of a firm, ‘‘(D) reemployment rates and sectors in 3 months after the date of the enactment of engaged in the production of taconite pellets which dislocated workers have been em- the Trade Adjustment Assistance Equity For who— ployed; Service Workers Act of 2004, the Secretary of (1) would have been certified eligible to ‘‘(E) the cause of dislocation identified in Labor shall implement a system to collect apply for adjustment assistance under chap- each petition that resulted in a certification data on adversely affected service workers ter 2 of title II of the Trade Act of 1974 if the under this chapter; and that includes the number of workers by amendments made by this Act had been in ‘‘(F) the number of petitions filed and State, industry, and cause of dislocation of effect on November 4, 2002, and workers certified in each congressional dis- each worker. (2) file a petition pursuant to section 221 of trict of the United States. ‘‘(2) SECRETARY OF COMMERCE.—Not later such Act within 6 months after the date of ‘‘(c) STATE PARTICIPATION.—The Secretary than 6 months after such date of enactment, shall ensure, to the extent practicable, enactment of this Act, the Secretary of Commerce shall, in con- through oversight and effective internal con- sultation with the Secretary of Labor, con- shall be eligible for certification under sec- trol measures the following: duct a study and report to the Congress on tion 223 of the Trade Act of 1974 if the work- ‘‘(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). relocation of United States firms to foreign 1, 2004. ‘‘(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.—

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

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outmigration is causing economic injury in ‘‘(10) A description of how the plan will ‘‘(3) ASSISTANCE FOR COMMUNITIES.—Tech- the community; and adapt to changing markets and business cy- nical assistance and other payments may not ‘‘(E) the unique problems and needs of the cles. be provided under chapter 4 after September community. ‘‘(11) A description and justification for the 30, 2008.’’. ‘‘(c) DEFINITION AND SPECIAL RULES.— cost and timing of the total funds required (b) TABLE OF CONTENTS.—The table of con- ‘‘(1) EVENT DESCRIBED.—An event described by the community for economic assistance. tents for title II of the Trade Act of 1974 is in this paragraph means one of the following: ‘‘(12) A graduation strategy through which amended by striking the items relating to ‘‘(A) A notification described in paragraph the eligible community demonstrates that chapter 4 of title II and inserting after the (2). the community will terminate the need for items relating to chapter 3 the following new ‘‘(B) A certification of a firm under section Federal assistance. items: ‘‘(c) GRANTS TO DEVELOP STRATEGIC 251. ‘‘CHAPTER 4—TRADE ADJUSTMENT ASSISTANCE PLANS.—The Secretary, upon receipt of an ‘‘(C) A finding under the Antidumping Act FOR COMMUNITIES of 1921, or an antidumping or countervailing application from an eligible community, may award a grant to that community to be ‘‘Sec. 271. Definitions. duty order issued under title VII of the Tar- ‘‘Sec. 272. Community Trade Adjustment used to develop the strategic plan. iff Act of 1930. Assistance Program. ‘‘(d) SUBMISSION OF PLAN.—A strategic plan ‘‘(D) A determination by the Secretary ‘‘Sec. 273. Certification and notification. developed under subsection (a) shall be sub- that a significant number of fishermen in a ‘‘Sec. 274. Strategic plans. community have been negatively impacted mitted to the Secretary for evaluation and ‘‘Sec. 275. Grants for economic develop- by trade. approval. ment. ‘‘(2) NOTIFICATION.—The Secretary of ‘‘SEC. 275. GRANTS FOR ECONOMIC DEVELOP- ‘‘Sec. 276. General provisions.’’. Labor, immediately upon making a deter- MENT. (c) JUDICIAL REVIEW.—Section 284(a) of the mination that a group of workers is eligible ‘‘(a) IN GENERAL.—The Secretary, upon ap- Trade Act of 1974 (19 U.S.C. 2395(a)) is amend- for trade adjustment assistance under sec- proval of a strategic plan from an eligible ed by striking ‘‘section 271’’ and inserting tion 223, (or the Secretary of Agriculture, community, may award a grant to that com- ‘‘section 273’’. immediately upon making a determination munity to carry out any project or program SEC. 535. EFFECTIVE DATE. that a group of agricultural commodity pro- that is certified by the Secretary to be in- The amendments made by this subtitle ducers is eligible for adjustment assistance cluded in the strategic plan approved under shall take effect on October 1, 2004. section 274(d), or consistent with that plan. under section 293, as the case may be) shall Subtitle D—Office of Trade Adjustment ‘‘(b) ADDITIONAL GRANTS.— notify the Secretary of Commerce of the de- Assistance termination. ‘‘(1) IN GENERAL.—Subject to paragraph (2), 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 ‘‘SEC. 274. STRATEGIC PLANS. mental grant made under this subsection Trade Adjustment Assistance. ‘‘(a) IN GENERAL.—An eligible community may be used to provide the non-Federal ‘‘(b) PERSONNEL.—The Office shall be head- may develop a strategic plan for community share of a project, unless the total Federal ed by a Director, and shall have such staff as economic adjustment and diversification. contribution to the project for which the may be necessary to carry out the respon- sibilities of the Secretary of Commerce de- ‘‘(b) REQUIREMENTS FOR STRATEGIC PLAN.— grant is being made exceeds 80 percent and scribed in this chapter. A strategic plan shall contain, at a min- that excess is not permitted by law. ‘‘(c) FUNCTIONS.—The Office shall assist the imum, the following: ‘‘(c) RURAL COMMUNITY PREFERENCE.—The Secretary shall develop guidelines to ensure Secretary of Commerce in carrying out the ‘‘(1) A description and justification of the Secretary’s responsibilities under this chap- capacity for economic adjustment, including that rural communities receive preference in the allocation of resources. ter.’’. the method of financing to be used. (b) CONFORMING AMENDMENT.—The table of ‘‘SEC. 276. GENERAL PROVISIONS. ‘‘(2) A description of the commitment of contents for the Trade Act of 1974 is amended ‘‘(a) REGULATIONS.—The Secretary shall the community to the strategic plan over by inserting after the item relating to sec- prescribe such regulations as are necessary the long term and the participation and 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- dertaken by the eligible community. spect to this chapter, the Secretary shall SEC. 543. EFFECTIVE DATE. ‘‘(4) A description of how the plan and the submit the regulation or guideline to the The amendments made by this subtitle projects to be undertaken by the eligible Committee on Finance of the Senate and the shall take effect on the earlier of— community will lead to job creation and job Committee on Ways and Means of the House (1) the date of the enactment of this Act; retention in the community. of Representatives for approval. or ‘‘(5) A description of how the plan will ‘‘(b) SUPPLEMENT NOT SUPPLANT.—Funds (2) October 1, 2004. achieve economic adjustment and diver- appropriated under this chapter shall be used TITLE VI—IMPROVEMENT OF CREDIT FOR sification. to supplement and not supplant other Fed- HEALTH INSURANCE COSTS OF ELIGI- ‘‘(6) A description of how the plan and the eral, State, and local public funds expended BLE INDIVIDUALS projects will contribute to establishing or to provide economic development assistance SEC. 601. CLARIFICATION OF 3-MONTH REQUIRE- maintaining a level of public services nec- for communities. MENT OF EXISTING COVERAGE. essary to attract and retain economic invest- ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— (a) IN GENERAL.—Clause (i) of section ment. There are authorized to be appropriated to 35(e)(2)(B) of the Internal Revenue Code of ‘‘(7) A description and justification for the the Secretary $100,000,000 for each of fiscal 1986 (defining qualifying individual) is cost and timing of proposed basic and ad- years 2005 through 2008, to carry out this amended by inserting ‘‘(prior to the employ- vanced infrastructure improvements in the chapter. Amounts appropriated pursuant to ment separation necessary to attain the sta- eligible community. this subsection shall remain available until tus of an eligible individual)’’ after ‘‘9801(c)’’. ‘‘(8) A description of how the plan will ad- expended.’’. (b) CONFORMING AMENDMENT.—Section dress the occupational and workforce condi- SEC. 534. CONFORMING AMENDMENTS. 173(f)(2)(B)(ii)(I) of the Workforce Investment tions in the eligible community. (a) TERMINATION.—Section 285(b) of the Act of 1998 (29 U.S.C. 2918(f)(2)(B)(ii)(I)) is ‘‘(9) A description of the educational pro- Trade Act of 1974 (19 U.S.C. 2271 note) is amended by inserting ‘‘(prior to the employ- grams available for workforce training and amended by adding at the end the following ment separation necessary to attain the sta- future employment needs. new paragraph: tus of an eligible individual)’’ after ‘‘1986’’.

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(c) EFFECTIVE DATE.—The amendments (c) EFFECTIVE DATE.—The amendments (2) in subsection (b)— made by this section take effect on the date made by this section apply to taxable years (A) in the matter preceding paragraph (1), of enactment of this Act. beginning after December 31, 2004. by striking ‘‘agricultural firm)’’ and insert- SEC. 602. DISREGARD OF TAA PRE-CERTIFI- SEC. 604. EXPEDITED REFUND OF CREDIT FOR ing ‘‘agricultural firm, and workers in a CATION PERIOD FOR PURPOSES OF PRORATED FIRST MONTHLY PRE- service sector firm or subdivision of a service DETERMINING WHETHER THERE IS MIUM. sector firm or public agency)’’; A 63-DAY LAPSE IN CREDITABLE (a) IN GENERAL.—Section 7527 of the Inter- (B) in paragraph (2), by inserting ‘‘or serv- COVERAGE. nal Revenue Code of 1986 (relating to advance ice’’ after ‘‘related to the article’’; and (a) ERISA AMENDMENT.—Section 701(c)(2) payment of credit for health insurance costs (C) in paragraph (3)(A), by inserting ‘‘or of the Employee Retirement Income Secu- of eligible individuals) is amended by adding rity Act of 1974 (29 U.S.C. 1181(c)(2)) is services’’ after ‘‘component parts’’; at the end the following: (3) in subsection (c)— amended by adding at the end the following: ‘‘(e) EXPEDITED PAYMENT OF PRORATED (A) in paragraph (2), by adding at the end ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— FIRST MONTHLY PREMIUM.—The program es- the following: ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- tablished under subsection (a) shall provide ‘‘(C) Taconite pellets produced in the RIOD.—In the case of a TAA-eligible indi- for payment to a certified individual of an vidual, the period beginning on the date the amount equal to the applicable percentage United States shall be considered to be an individual has a TAA-related loss of cov- (as defined in section 35(a)(2)) of the prorated article that is like or directly competitive erage and ending on the date the individual first monthly premium for coverage of the with imports of semifinished steel slab.’’. is certified by the Secretary (or by any per- taxpayer and qualifying family members (B) in paragraph (3)— son or entity designated by the Secretary) as under qualified health insurance for eligible (i) by inserting ‘‘or services’’ after ‘‘value- being eligible for a qualified health insur- coverage months upon receipt by the Sec- added production processes’’; ance costs credit eligibility certificate for retary of evidence of payment of such pre- (ii) by striking ‘‘or finishing’’ and inserting purposes of section 7527 of the Internal Rev- mium by the certified individual.’’. ‘‘, finishing, or testing’’; enue Code of 1986 shall not be taken into ac- (b) EFFECTIVE DATE.—The amendment (iii) by inserting ‘‘or services’’ after ‘‘for count in determining the continuous period made by this section takes effect on the date articles’’; and under subparagraph (A). of enactment of this Act. (iv) by inserting ‘‘(or subdivision)’’ after ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- ‘‘such other firm’’; and ble individual’, and ‘TAA-related loss of cov- SA 3030. Mr. COLEMAN submitted an (C) in paragraph (4)— erage’ have the meanings given such terms amendment intended to be proposed to (i) by striking ‘‘for articles’’ and inserting in section 605(b)(4)(C).’’. amendment SA 3011 proposed by Mr. ‘‘, or services, used in the production of arti- (b) PHSA AMENDMENT.—Section 2701(c)(2) FRIST to the bill S. 1637, to amend the cles or in the provision of services’’; and of the Public Health Service Act (42 U.S.C. Internal Revenue Code of 1986 to com- (ii) by inserting ‘‘(or subdivision)’’ after 300gg(c)(2)) is amended by adding at the end ply with the World Trade Organization ‘‘such other firm’’; and the following: (4) by adding at the end the following new rulings on the FSC/ETI benefit in a ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— subsection: manner that preserves jobs and produc- ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- ‘‘(d) BASIS FOR SECRETARY’S DETERMINA- RIOD.—In the case of a TAA-eligible indi- tion activities in the United States, to TIONS.— vidual, the period beginning on the date the reform and simplify the international ‘‘(1) INCREASED IMPORTS.—For purposes of individual has a TAA-related loss of cov- taxation rules of the United States, subsection (a)(2)(A)(ii), the Secretary may erage and ending on the date the individual and for other purposes; which was or- determine that increased imports of like or is certified by the Secretary (or by any per- dered to lie on the table; as follows: directly competitive articles or services son or entity designated by the Secretary) as At the end of the instructions, add the fol- exist if the workers’ firm or subdivision or being eligible for a qualified health insur- lowing: customers of the workers’ firm or subdivi- ance costs credit eligibility certificate for TITLE V—TRADE ADJUSTMENT sion accounting for not less than 20 percent purposes of section 7527 of the Internal Rev- ASSISTANCE of the sales of the workers’ firm or subdivi- enue Code of 1986 shall not be taken into ac- sion certify to the Secretary that they are Subtitle A—Service Workers count in determining the continuous period obtaining such articles or services from a under subparagraph (A). SEC. 511. SHORT TITLE. foreign country. ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- This subtitle may be cited as the ‘‘Trade ‘‘(2) OBTAINING SERVICES ABROAD.—For pur- ble individual’, and ‘TAA-related loss of cov- Adjustment Assistance Equity For Service poses of subsection (a)(2)(B)(ii), the Sec- erage’ have the meanings given such terms Workers Act of 2004’’. retary may determine that the workers’ in section 2205(b)(4)(C).’’. SEC. 512. EXTENSION OF TRADE ADJUSTMENT AS- firm, subdivision, or public agency has ob- (c) IRC AMENDMENT.—Section 9801(c)(2) of SISTANCE TO SERVICES SECTOR. tained or is likely to obtain like or directly (a) ADJUSTMENT ASSISTANCE FOR WORK- the Internal Revenue Code of 1986 (relating competitive services from a firm in a foreign ERS.—Section 221(a)(1)(A) of the Trade Act of to not counting periods before significant country based on a certification thereof from 1974 (19 U.S.C. 2271(a)(1)(A)) is amended by breaks in creditable coverage) is amended by the workers’ firm, subdivision, or public adding at the end the following: striking ‘‘firm)’’ and inserting ‘‘firm, and workers in a service sector firm or subdivi- agency. ‘‘(D) TAA-ELIGIBLE INDIVIDUALS.— ‘‘(3) AUTHORITY OF THE SECRETARY.—The ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- sion of a service sector firm or public agen- cy)’’. Secretary may obtain the certifications RIOD.—In the case of a TAA-eligible indi- under paragraphs (1) and (2) through ques- vidual, the period beginning on the date the (b) GROUP ELIGIBILITY REQUIREMENTS.— Section 222 of the Trade Act of 1974 (19 U.S.C. tionnaires or in such other manner as the individual has a TAA-related loss of cov- 2272) is amended— Secretary determines is appropriate.’’. erage and ending on the date the individual (1) in subsection (a)— (c) TRAINING.—Section 236(a)(2)(A) of the is certified by the Secretary of Labor (or by (A) in the matter preceding paragraph (1), Trade Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is any person or entity designated by the Sec- by striking ‘‘agricultural firm)’’ and insert- amended by striking ‘‘$220,000,000’’ and in- retary of Labor) as being eligible for a quali- ing ‘‘agricultural firm, and workers in a serting ‘‘$440,000,000’’. fied health insurance costs credit eligibility service sector firm or subdivision of a service (d) DEFINITIONS.—Section 247 of the Trade certificate for purposes of section 7527 shall sector firm or public agency)’’; Act of 1974 (19 U.S.C. 2319) is amended— not be taken into account in determining the (B) in paragraph (1), by inserting ‘‘or pub- (1) in paragraph (1)— continuous period under subparagraph (A). lic agency’’ after ‘‘of the firm’’; and (A) by inserting ‘‘or public agency’’ after ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- (C) in paragraph (2)— ‘‘of a firm’’; and ble individual’, and ‘TAA-related loss of cov- (i) in subparagraph (A)(ii), by striking (B) by inserting ‘‘or public agency’’ after erage’ have the meanings given such terms ‘‘like or directly competitive with articles ‘‘or subdivision’’; in section 4980B(f)(5)(C)(iv).’’. produced’’ and inserting ‘‘or services like or (2) in paragraph (2)(B), by inserting ‘‘or (d) EFFECTIVE DATE.—The amendments public agency’’ after ‘‘the firm’’; made by this section take effect on the date directly competitive with articles produced of enactment of this Act. or services provided’’; and (3) by redesignating paragraphs (8) through (ii) by striking subparagraph (B) and in- (17) as paragraphs (9) through (18), respec- SEC. 603. IMPROVEMENT OF THE AFFORDABILITY OF THE CREDIT. serting the following: tively; and (a) IN GENERAL.—Section 35(a) of the Inter- ‘‘(B)(i) there has been a shift, by such (4) by inserting after paragraph (6) the fol- nal Revenue Code of 1986 (relating to credit workers’ firm, subdivision, or public agency lowing: for health insurance costs of eligible individ- to a foreign country, of production of arti- ‘‘(7) The term ‘public agency’ means a de- uals) is amended by striking ‘‘65’’ and insert- cles, or in provision of services, like or di- partment or agency of a State or local gov- ing ‘‘75’’. rectly competitive with articles which are ernment or of the Federal Government. (b) CONFORMING AMENDMENT.—Section produced, or services which are provided, by ‘‘(8) The term ‘service sector firm’ means 7527(b) of such Code (relating to advance pay- such firm, subdivision, or public agency; or an entity engaged in the business of pro- ment of credit for health insurance costs of ‘‘(ii) such workers’ firm, subdivision, or viding services.’’. eligible individuals) is amended by striking public agency has obtained or is likely to ob- (e) TECHNICAL AMENDMENT.—Section 245(a) ‘‘65’’ and inserting ‘‘75’’. tain such services from a foreign country.’’; of the Trade Act of 1974 (19 U.S.C. 2317(a)) is

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00092 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3827 amended by striking ‘‘, other than sub- the Secretary of Commerce shall, in con- shall be eligible for certification under sec- chapter D’’. sultation with the Secretary of Labor, con- tion 223 of the Trade Act of 1974 if the work- SEC. 513. TRADE ADJUSTMENT ASSISTANCE FOR duct a study and report to the Congress on ers’ last total or partial separation from the FIRMS AND INDUSTRIES. ways to improve the timeliness and coverage firm or subdivision of the firm occurred on (a) FIRMS.— of data on trade in services, including meth- or after November 4, 2002 and before October (1) ASSISTANCE.—Section 251 of the Trade ods to identify increased imports due to the 1, 2004. Act of 1974 (19 U.S.C. 2341) is amended— relocation of United States firms to foreign Subtitle B—Data Collection (A) in subsection (a), by inserting ‘‘or serv- countries, and increased imports due to SEC. 521. SHORT TITLE. ice sector firm’’ after ‘‘(including any agri- United States firms obtaining services from This subtitle may be cited as the ‘‘Trade cultural firm’’; firms in foreign countries.’’. Adjustment Assistance Accountability Act’’. (B) in subsection (c)(1)— SEC. 515. ALTERNATIVE TRADE ADJUSTMENT AS- SEC. 522. DATA COLLECTION; STUDY; INFORMA- SISTANCE. (i) in the matter preceding subparagraph TION TO WORKERS. IN GENERAL.—Section 246(a)(3) of the Trade (A), by inserting ‘‘or service sector firm’’ (a) DATA COLLECTION; EVALUATIONS.—Sub- Act of 1974 (19 U.S.C. 2318(a)(3)) is amended to after ‘‘any agricultural firm’’; chapter C of chapter 2 of title II of the Trade read as follows: (ii) in subparagraph (B)(ii), by inserting Act of 1974 is amended by inserting after sec- ‘‘(3) ELIGIBILITY.—A worker in the group ‘‘or service’’ after ‘‘of an article’’; and tion 249, the following new section: (iii) in subparagraph (C), by striking ‘‘arti- that the Secretary has certified as eligible for the alternative trade adjustment assist- ‘‘SEC. 250. DATA COLLECTION; EVALUATIONS; RE- cles like or directly competitive with arti- PORTS. ance program may elect to receive benefits cles which are produced’’ and inserting ‘‘arti- ‘‘(a) DATA COLLECTION.—The Secretary under the alternative trade adjustment as- cles or services like or directly competitive shall, pursuant to regulations prescribed by sistance program if the worker— with articles or services which are produced the Secretary, collect any data necessary to ‘‘(A) is covered by a certification under or provided’’; and meet the requirements of this chapter. subchapter A of this chapter; (C) by adding at the end the following: ‘‘(b) PERFORMANCE EVALUATIONS.—The Sec- ‘‘(e) BASIS FOR SECRETARY DETERMINA- ‘‘(B) obtains reemployment not more than retary shall establish an effective perform- TION.— 26 weeks after the date of separation from ance measuring system to evaluate the fol- ‘‘(1) INCREASED IMPORTS.—For purposes of the adversely affected employment; lowing: ‘‘(C) is at least 40 years of age; subsection (c)(1)(C), the Secretary may de- ‘‘(1) PROGRAM PERFORMANCE.—A compari- termine that increases of imports of like or ‘‘(D) earns not more than $50,000 a year in son of the trade adjustment assistance pro- directly competitive articles or services wages from reemployment; gram before and after the effective date of exist if customers accounting for not less ‘‘(E) is employed on a full-time basis as de- the Trade Adjustment Assistance Reform than 20 percent of the sales of the workers’ fined by State law in the State in which the Act of 2002 with respect to— firm certify to the Secretary that they are worker is employed; and ‘‘(A) the number of workers certified and obtaining such articles or services from a ‘‘(F) does not return to the employment the number of workers actually partici- foreign country. from which the worker was separated.’’. pating in the trade adjustment assistance (b) CONFORMING AMENDMENTS.—(1) Sub- ‘‘(2) AUTHORITY OF THE SECRETARY.—The program; paragraphs (A) and (B) of section 246(a)(2) of Secretary may obtain the certifications ‘‘(B) the time for processing petitions; the Trade Act of 1974 (19 U.S.C. 2318(a)(2) (A) under paragraph (1) through questionnaires ‘‘(C) the number of training waivers grant- and (B)) are amended by striking ‘‘paragraph or in such other manner as the Secretary de- ed; termines is appropriate. The Secretary may (3)(B)’’ and inserting ‘‘paragraph (3)’’ each place it appears. ‘‘(D) the coordination of programs under exercise the authority under section 249 in this chapter with programs under the Work- carrying out this subsection.’’. (2) Section 246(b)(2) of such Act is amended by striking ‘‘subsection (a)(3)(B)’’ and insert- force Investment Act of 1998 (29 U.S.C. 2801 et (2) AUTHORIZATION OF APPROPRIATIONS.— ing ‘‘subsection (a)(3)’’. seq.); Section 256(b) of the Trade Act of 1974 (19 SEC. 516. CLARIFICATION OF MARKETING YEAR. ‘‘(E) the effectiveness of individual train- U.S.C. 2346(b)) is amended by striking ing providers in providing appropriate infor- ‘‘$16,000,000’’ and inserting ‘‘$32,000,000’’. Section 291(5) of the Trade Act of 1974 (19 U.S.C. 2401(5)) is amended by inserting before mation and training; (3) DEFINITION.—Section 261 of the Trade the end period the following: ‘‘, or in the case ‘‘(F) the extent to which States have de- Act of 1974 (19 U.S.C. 2351) is amended— signed and implemented health care cov- (A) by striking ‘‘For purposes of’’ and in- of an agricultural commodity that has no marketing year, in a 12-month period for erage options under title II of the Trade Act serting ‘‘(a) FIRM.—For purposes of’’; and which the petitioner provides written jus- of 2002, including any difficulties States have (B) by adding at the end the following: tification’’. encountered in carrying out the provisions of ‘‘(b) SERVICE SECTOR FIRM.—For purposes title II; of this chapter, the term ‘service sector firm’ SEC. 517. EFFECTIVE DATE. (a) IN GENERAL.—Except as provided in ‘‘(G) how Federal, State, and local officials means a firm engaged in the business of pro- are implementing the trade adjustment as- viding services.’’. subsections (b) and (c), the amendments made by this subtitle shall take effect on Oc- sistance program to ensure that all eligible (b) INDUSTRIES.—Section 265(a) of the individuals receive benefits, including pro- Trade Act of 1974 (19 U.S.C. 2355(a)) is amend- tober 1, 2004. (b) SPECIAL RULE FOR CERTAIN SERVICE viding outreach, rapid response, and other ed by inserting ‘‘or service’’ after ‘‘new prod- WORKERS.—A group of workers in a service activities; and uct’’. sector firm, or subdivision of a service sector ‘‘(H) any other data necessary to evaluate SEC. 514. MONITORING AND REPORTING. firm, or public agency (as defined in section how individual States are implementing the Section 282 of the Trade Act of 1974 (19 247 (7) and (8) of the Trade Act of 1974, as requirements of this chapter. U.S.C. 2393) is amended— added by section 512(d) of this Act) who— ‘‘(2) PROGRAM PARTICIPATION .—The effec- (1) in the first sentence— (1) would have been certified eligible to tiveness of the program relating to— (A) by striking ‘‘The Secretary’’ and in- apply for adjustment assistance under chap- ‘‘(A) the number of workers receiving bene- serting ‘‘(a) MONITORING PROGRAMS.—The ter 2 of title II of the Trade Act of 1974 if the fits and the type of benefits being received Secretary’’; amendments made by this Act had been in both before and after the effective date of (B) by inserting ‘‘and services’’ after ‘‘im- effect on November 4, 2002, and the Trade Adjustment Assistance Reform ports of articles’’; (2) file a petition pursuant to section 221 of Act of 2002; (C) by inserting ‘‘and domestic provision of such Act within 6 months after the date of ‘‘(B) the number of workers enrolled in, services’’ after ‘‘domestic production’’; enactment of this Act, and the duration of, training by major types (D) by inserting ‘‘or providing services’’ shall be eligible for certification under sec- of training both before and after the effec- after ‘‘producing articles’’; and tion 223 of the Trade Act of 1974 if the work- tive date of the Trade Adjustment Assist- (E) by inserting ‘‘, or provision of serv- ers’ last total or partial separation from the ance Reform Act of 2002; ices,’’ after ‘‘changes in production’’; and firm or subdivision of the firm or public ‘‘(C) earnings history of workers that re- (2) by adding at the end the following: agency occurred on or after November 4, 2002 flects wages before separation and wages in ‘‘(b) COLLECTION OF DATA AND REPORTS ON and before October 1, 2004. any job obtained after receiving benefits SERVICES SECTOR.— (c) SPECIAL RULE FOR TACONITE.—A group under this Act; ‘‘(1) SECRETARY OF LABOR.—Not later than of workers in a firm, or subdivision of a firm, ‘‘(D) reemployment rates and sectors in 3 months after the date of the enactment of engaged in the production of taconite pellets which dislocated workers have been em- the Trade Adjustment Assistance Equity For who— ployed; Service Workers Act of 2004, the Secretary of (1) would have been certified eligible to ‘‘(E) the cause of dislocation identified in Labor shall implement a system to collect apply for adjustment assistance under chap- each petition that resulted in a certification data on adversely affected service workers ter 2 of title II of the Trade Act of 1974 if the under this chapter; and that includes the number of workers by amendments made by this Act had been in ‘‘(F) the number of petitions filed and State, industry, and cause of dislocation of effect on November 4, 2002, and workers certified in each congressional dis- each worker. (2) file a petition pursuant to section 221 of trict of the United States. ‘‘(2) SECRETARY OF COMMERCE.—Not later such Act within 6 months after the date of ‘‘(c) STATE PARTICIPATION.—The Secretary than 6 months after such date of enactment, enactment of this Act, shall ensure, to the extent practicable,

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00093 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3828 CONGRESSIONAL RECORD — SENATE April 6, 2004 through oversight and effective internal con- with economic adjustment through the inte- the eligible community in recovering from trol measures the following: gration of political and economic organiza- economic distress; ‘‘(1) STATE PARTICIPATION.—Participation tions, the coordination of Federal, State, and ‘‘(B) by ensuring that all Federal agencies by each State in the performance measure- local resources, the creation of community- offering assistance to an eligible community ment system established under subsection based development strategies, and the provi- do so in a targeted, integrated manner that (b). sion of economic transition assistance. ensures that an eligible community has ac- ‘‘(2) MONITORING.—Monitoring by each SEC. 533. TRADE ADJUSTMENT ASSISTANCE FOR cess to all available Federal assistance; State of internal control measures with re- COMMUNITIES. ‘‘(C) by assuring timely consultation and spect to performance measurement data col- Chapter 4 of title II of the Trade Act of 1974 cooperation between Federal, State, and re- lected by each State. (19 U.S.C. 2371 et seq.) is amended to read as gional officials concerning economic adjust- ‘‘(3) RESPONSE.—The quality and speed of follows: ment for an eligible community; and the rapid response provided by each State ‘‘CHAPTER 4—TRADE ADJUSTMENT ‘‘(D) by identifying and strengthening ex- under section 134(a)(2)(A) of the Workforce ASSISTANCE FOR COMMUNITIES isting agency mechanisms designed to assist Investment Act of 1998 (29 U.S.C. ‘‘SEC. 271. DEFINITIONS. eligible communities in their efforts to 2864(a)(2)(A)). ‘‘In this chapter: achieve economic adjustment and workforce ‘‘(d) REPORTS.— reemployment; ‘‘(1) AFFECTED DOMESTIC PRODUCER.—The EPORTS BY THE SECRETARY.— ‘‘(1) R term ‘affected domestic producer’ means any ‘‘(3) provide comprehensive technical as- ‘‘(A) INITIAL REPORT.—Not later than 6 manufacturer, producer, service provider, sistance to any eligible community in the ef- months after the date of enactment of the farmer, rancher, fisherman or worker rep- forts of that community to— Trade Adjustment Assistance Accountability resentative (including associations of such ‘‘(A) identify serious economic problems in Act, the Secretary shall submit to the Com- persons) that was affected by a finding under the community that are the result of nega- mittee on Finance of the Senate and the the Antidumping Act of 1921, or by an anti- tive impacts from trade; Committee on Ways and Means of the House dumping or countervailing duty order issued ‘‘(B) integrate the major groups and orga- of Representatives a report that— under title VII of the Tariff Act of 1930. nizations significantly affected by the eco- ‘‘(i) describes the performance measure- nomic adjustment; ‘‘(2) AGRICULTURAL COMMODITY PRODUCER.— ment system established under subsection The term ‘agricultural commodity producer’ ‘‘(C) access Federal, State, and local re- (b); has the same meaning as the term ‘person’ sources designed to assist in economic devel- ‘‘(ii) includes analysis of data collected as prescribed by regulations promulgated opment and trade adjustment assistance; through the system established under sub- under section 1001(5) of the Food Security ‘‘(D) diversify and strengthen the commu- section (b); and Act of 1985 (7 U.S.C. 1308(5)). nity economy; and ‘‘(iii) provides recommendations for pro- ‘‘(E) develop a community-based strategic ‘‘(3) COMMUNITY.—The term ‘community’ gram improvements. means a city, county, or other political sub- plan to address economic development and NNUAL REPORT.—Not later than 1 ‘‘(B) A division of a State or a consortium of polit- workforce dislocation, including unemploy- year after the date the report is submitted ical subdivisions of a State that the Sec- ment among agricultural commodity pro- under subparagraph (A), and annually there- retary certifies as being negatively impacted ducers, and fishermen; after, the Secretary shall submit to the Com- by trade. ‘‘(4) establish specific criteria for submis- mittee on Finance of the Senate and the sion and evaluation of a strategic plan sub- ‘‘(4) COMMUNITY NEGATIVELY IMPACTED BY Committee on Ways and Means of the House mitted under section 274(d); TRADE.—A community negatively impacted of Representatives a report that includes the by trade means a community with respect to ‘‘(5) establish specific criteria for submit- information collected under clause (ii) of which a determination has been made under ting and evaluating applications for grants subparagraph (A). section 273. under section 275; ‘‘(2) STATE REPORTS.—Pursuant to regula- ‘‘(6) administer the grant programs estab- ‘‘(5) ELIGIBLE COMMUNITY.—The term ‘eligi- tions prescribed by the Secretary, each State ble community’ means a community cer- lished under sections 274 and 275; and 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- Group, consisting of the representatives of ‘‘(6) FISHERMAN.— tains the data necessary to allow the Sec- any Federal department or agency with re- ‘‘(A) IN GENERAL.—The term ‘fisherman’ 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- UBLICATION.—The Secretary shall ‘‘(3) P ‘‘(ii) is a United States fish processor. culture, the Department of Education, the make available to each State, and other pub- Department of Labor, the Department of ‘‘(B) COMMERCIAL FISHING, FISH, FISHERY, lic and private organizations as determined Housing and Urban Development, the De- FISHING, FISHING VESSEL, PERSON, AND UNITED by the Secretary, the data gathered and partment of Health and Human Services, the STATES FISH PROCESSOR.—The terms ‘com- 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- the community for assistance under this serting ‘‘The Secretaries of Commerce, ‘‘SEC. 272. COMMUNITY TRADE ADJUSTMENT AS- 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 group of workers (or their authorized rep- (c) EFFECTIVE DATE.—The amendments ignate such staff as may be necessary to 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

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00094 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3829 ‘‘(E) the Secretary determines that a sig- ‘‘(6) A description of how the plan and the eral, State, and local public funds expended nificant number of fishermen in the commu- projects will contribute to establishing or to provide economic development assistance nity is negatively impacted by trade. maintaining a level of public services nec- for communities. ‘‘(2) NEGATIVELY IMPACTED BY TRADE.—The essary to attract and retain economic invest- ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— Secretary shall determine that a community ment. There are authorized to be appropriated to is negatively impacted by trade, after taking ‘‘(7) A description and justification for the the Secretary $100,000,000 for each of fiscal into consideration— cost and timing of proposed basic and ad- years 2005 through 2008, to carry out this ‘‘(A) the number of jobs affected compared vanced infrastructure improvements in the chapter. Amounts appropriated pursuant to to the size of workforce in the community; eligible community. this subsection shall remain available until ‘‘(B) the severity of the rates of unemploy- ‘‘(8) A description of how the plan will ad- expended.’’. ment in the community and the duration of dress the occupational and workforce condi- SEC. 534. CONFORMING AMENDMENTS. the unemployment in the community; tions in the eligible community. (a) TERMINATION.—Section 285(b) of the ‘‘(C) the income levels and the extent of ‘‘(9) A description of the educational pro- Trade Act of 1974 (19 U.S.C. 2271 note) is underemployment in the community; grams available for workforce training and amended by adding at the end the following ‘‘(D) the outmigration of population from future employment needs. new paragraph: the community and the extent to which the ‘‘(10) A description of how the plan will ‘‘(3) ASSISTANCE FOR COMMUNITIES.—Tech- outmigration is causing economic injury in adapt to changing markets and business cy- nical assistance and other payments may not the community; and cles. be provided under chapter 4 after September ‘‘(E) the unique problems and needs of the ‘‘(11) A description and justification for the 30, 2008.’’. community. cost and timing of the total funds required (b) TABLE OF CONTENTS.—The table of con- ‘‘(c) DEFINITION AND SPECIAL RULES.— by the community for economic assistance. tents for title II of the Trade Act of 1974 is ‘‘(1) EVENT DESCRIBED.—An event described ‘‘(12) A graduation strategy through which amended by striking the items relating to in this paragraph means one of the following: the eligible community demonstrates that chapter 4 of title II and inserting after the ‘‘(A) A notification described in paragraph the community will terminate the need for items relating to chapter 3 the following new (2). Federal assistance. items: ‘‘(B) A certification of a firm under section ‘‘(c) GRANTS TO DEVELOP STRATEGIC 251. PLANS.—The Secretary, upon receipt of an ‘‘CHAPTER 4—TRADE ADJUSTMENT ASSISTANCE ‘‘(C) A finding under the Antidumping Act application from an eligible community, FOR COMMUNITIES of 1921, or an antidumping or countervailing may award a grant to that community to be ‘‘Sec. 271. Definitions. duty order issued under title VII of the Tar- used to develop the strategic plan. ‘‘Sec. 272. Community Trade Adjustment iff Act of 1930. ‘‘(d) SUBMISSION OF PLAN.—A strategic plan Assistance Program. ‘‘(D) A determination by the Secretary developed under subsection (a) shall be sub- ‘‘Sec. 273. Certification and notification. that a significant number of fishermen in a mitted to the Secretary for evaluation and ‘‘Sec. 274. Strategic plans. community have been negatively impacted approval. ‘‘Sec. 275. Grants for economic develop- by trade. ‘‘SEC. 275. GRANTS FOR ECONOMIC DEVELOP- ment. ‘‘(2) NOTIFICATION.—The Secretary of MENT. ‘‘Sec. 276. General provisions.’’. Labor, immediately upon making a deter- ‘‘(a) IN GENERAL.—The Secretary, upon ap- (c) JUDICIAL REVIEW.—Section 284(a) of the mination that a group of workers is eligible proval of a strategic plan from an eligible Trade Act of 1974 (19 U.S.C. 2395(a)) is amend- for trade adjustment assistance under sec- community, may award a grant to that com- ed by striking ‘‘section 271’’ and inserting tion 223, (or the Secretary of Agriculture, munity to carry out any project or program ‘‘section 273’’. immediately upon making a determination that is certified by the Secretary to be in- that a group of agricultural commodity pro- cluded in the strategic plan approved under SEC. 535. EFFECTIVE DATE. ducers is eligible for adjustment assistance section 274(d), or consistent with that plan. The amendments made by this subtitle under section 293, as the case may be) shall ‘‘(b) ADDITIONAL GRANTS.— shall take effect on October 1, 2004. notify the Secretary of Commerce of the de- ‘‘(1) IN GENERAL.—Subject to paragraph (2), Subtitle D—Office of Trade Adjustment termination. in order to assist eligible communities to ob- Assistance ‘‘(d) NOTIFICATION TO ELIGIBLE COMMU- tain funds under Federal grant programs, SEC. 541. SHORT TITLE. NITIES.—Immediately upon certification by other than the grants provided for in section This subtitle may be cited as the ‘‘Trade the Secretary of Commerce that a commu- 274(c) or subsection (a), the Secretary may, Adjustment Assistance for Firms Reorga- nity is eligible for assistance under sub- on the application of an eligible community, nization Act’’. section (b), the Secretary shall notify the make a supplemental grant to the commu- community— SEC. 542. OFFICE OF TRADE ADJUSTMENT AS- nity if— SISTANCE. ‘‘(1) of the determination under subsection ‘‘(A) the purpose of the grant program (a) IN GENERAL.—Chapter 3 of title II of the (b); from which the grant is made is to provide Trade Act of 1974 (19 U.S.C. 2341 et seq.) is ‘‘(2) of the provisions of this chapter; technical or other assistance for planning, amended by inserting after section 255 the ‘‘(3) how to access the clearinghouse estab- constructing, or equipping public works fa- following new section: lished by the Department of Commerce re- cilities or to provide assistance for public garding available economic assistance; service projects; and ‘‘SEC. 255A. OFFICE OF TRADE ADJUSTMENT AS- ‘‘(4) how to obtain technical assistance ‘‘(B) the grant is 1 for which the commu- SISTANCE. provided under section 272(c)(3); and nity is eligible except for the community’s ‘‘(a) ESTABLISHMENT.—Not later than 90 ‘‘(5) how to obtain grants, tax credits, low inability to meet the non-Federal share re- days after the date of enactment of the income loans, and other appropriate eco- quirements of the grant program. Trade Adjustment Assistance for Firms Re- organization Act, there shall be established nomic assistance. ‘‘(2) USE AS NON-FEDERAL SHARE.—A supple- in the International Trade Administration of ‘‘SEC. 274. STRATEGIC PLANS. mental grant made under this subsection may be used to provide the non-Federal the Department of Commerce an Office of ‘‘(a) IN GENERAL.—An eligible community Trade Adjustment Assistance. may develop a strategic plan for community share of a project, unless the total Federal contribution to the project for which the ‘‘(b) PERSONNEL.—The Office shall be head- economic adjustment and diversification. ed by a Director, and shall have such staff as EQUIREMENTS FOR STRATEGIC PLAN.— grant is being made exceeds 80 percent and ‘‘(b) R may be necessary to carry out the respon- A strategic plan shall contain, at a min- that excess is not permitted by law. sibilities of the Secretary of Commerce de- imum, the following: ‘‘(c) RURAL COMMUNITY PREFERENCE.—The scribed in this chapter. ‘‘(1) A description and justification of the Secretary shall develop guidelines to ensure ‘‘(c) FUNCTIONS.—The Office shall assist the capacity for economic adjustment, including that rural communities receive preference in Secretary of Commerce in carrying out the the method of financing to be used. the allocation of resources. Secretary’s responsibilities under this chap- ‘‘(2) A description of the commitment of ‘‘SEC. 276. GENERAL PROVISIONS. ter.’’. the community to the strategic plan over ‘‘(a) REGULATIONS.—The Secretary shall (b) CONFORMING AMENDMENT.—The table of the long term and the participation and prescribe such regulations as are necessary contents for the Trade Act of 1974 is amended input of groups affected by economic disloca- to carry out the provisions of this chapter. by inserting after the item relating to sec- tion. Before implementing any regulation or tion 255, the following new item: ‘‘(3) A description of the projects to be un- guideline proposed by the Secretary with re- dertaken by the eligible community. spect to this chapter, the Secretary shall ‘‘Sec. 255A. Office of Trade Adjustment As- ‘‘(4) A description of how the plan and the submit the regulation or guideline to the sistance.’’. projects to be undertaken by the eligible Committee on Finance of the Senate and the SEC. 543. EFFECTIVE DATE. community will lead to job creation and job Committee on Ways and Means of the House The amendments made by this subtitle retention in the community. of Representatives for approval. shall take effect on the earlier of— ‘‘(5) A description of how the plan will ‘‘(b) SUPPLEMENT NOT SUPPLANT.—Funds (1) the date of the enactment of this Act; achieve economic adjustment and diver- appropriated under this chapter shall be used or sification. to supplement and not supplant other Fed- (2) October 1, 2004.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00095 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3830 CONGRESSIONAL RECORD — SENATE April 6, 2004 TITLE VI—IMPROVEMENT OF CREDIT FOR erage’ have the meanings given such terms fully be performed during regular hours of HEALTH INSURANCE COSTS OF ELIGI- in section 4980B(f)(5)(C)(iv).’’. operation, and any overtime fees incurred in BLE INDIVIDUALS (d) EFFECTIVE DATE.—The amendments connection with such service shall be paid by SEC. 601. CLARIFICATION OF 3-MONTH REQUIRE- made by this section take effect on the date the air carrier.’’. MENT OF EXISTING COVERAGE. of enactment of this Act. (a) IN GENERAL.—Clause (i) of section SEC. 603. IMPROVEMENT OF THE AFFORDABILITY SA 3032. Mr. DAYTON submitted an 35(e)(2)(B) of the Internal Revenue Code of OF THE CREDIT. amendment intended to be proposed by 1986 (defining qualifying individual) is (a) IN GENERAL.—Section 35(a) of the Inter- him to the bill S. 1637, to amend the In- amended by inserting ‘‘(prior to the employ- nal Revenue Code of 1986 (relating to credit ternal Revenue Code of 1986 to comply ment separation necessary to attain the sta- for health insurance costs of eligible individ- with the World Trade Organization rul- tus of an eligible individual)’’ after ‘‘9801(c)’’. uals) is amended by striking ‘‘65’’ and insert- ings on the FSC/ETI benefit in a man- (b) CONFORMING AMENDMENT.—Section ing ‘‘75’’. ner that preserves jobs and production 173(f)(2)(B)(ii)(I) of the Workforce Investment (b) CONFORMING AMENDMENT.—Section Act of 1998 (29 U.S.C. 2918(f)(2)(B)(ii)(I)) is 7527(b) of such Code (relating to advance pay- activities in the United States, to re- amended by inserting ‘‘(prior to the employ- ment of credit for health insurance costs of form and simplify the international ment separation necessary to attain the sta- eligible individuals) is amended by striking taxation rules of the United States, tus of an eligible individual)’’ after ‘‘1986’’. ‘‘65’’ and inserting ‘‘75’’. and for other purposes; which was or- (c) EFFECTIVE DATE.—The amendments (c) EFFECTIVE DATE.—The amendments made by this section take effect on the date dered to lie on the table; as follows: made by this section apply to taxable years of enactment of this Act. Beginning on page 85, line 20, strike all beginning after December 31, 2004. SEC. 602. DISREGARD OF TAA PRE-CERTIFI- through page 146, line 23, and insert the fol- CATION PERIOD FOR PURPOSES OF SEC. 604. EXPEDITED REFUND OF CREDIT FOR lowing: PRORATED FIRST MONTHLY PRE- DETERMINING WHETHER THERE IS SEC. 201. DETERMINATION OF FOREIGN PER- MIUM. A 63-DAY LAPSE IN CREDITABLE SONAL HOLDING COMPANY INCOME COVERAGE. (a) IN GENERAL.—Section 7527 of the Inter- WITH RESPECT TO TRANSACTIONS (a) ERISA AMENDMENT.—Section 701(c)(2) nal Revenue Code of 1986 (relating to advance IN COMMODITIES. of the Employee Retirement Income Secu- payment of credit for health insurance costs (a) IN GENERAL.—Clauses (i) and (ii) of sec- rity Act of 1974 (29 U.S.C. 1181(c)(2)) is of eligible individuals) is amended by adding tion 954(c)(1)(C) (relating to commodity amended by adding at the end the following: at the end the following: transactions) are amended to read as follows: ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— ‘‘(e) EXPEDITED PAYMENT OF PRORATED ‘‘(i) arise out of commodity hedging trans- ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- FIRST MONTHLY PREMIUM.—The program es- actions (as defined in paragraph (4)(A)), RIOD.—In the case of a TAA-eligible indi- tablished under subsection (a) shall provide ‘‘(ii) are active business gains or losses vidual, the period beginning on the date the for payment to a certified individual of an from the sale of commodities, but only if individual has a TAA-related loss of cov- amount equal to the applicable percentage substantially all of the controlled foreign erage and ending on the date the individual (as defined in section 35(a)(2)) of the prorated corporation’s commodities are property de- is certified by the Secretary (or by any per- first monthly premium for coverage of the scribed in paragraph (1), (2), or (8) of section son or entity designated by the Secretary) as taxpayer and qualifying family members 1221(a), or’’. being eligible for a qualified health insur- under qualified health insurance for eligible (b) DEFINITION AND SPECIAL RULES.—Sub- ance costs credit eligibility certificate for coverage months upon receipt by the Sec- section (c) of section 954 is amended by add- purposes of section 7527 of the Internal Rev- retary of evidence of payment of such pre- ing after paragraph (3) the following new enue Code of 1986 shall not be taken into ac- mium by the certified individual.’’. paragraph: count in determining the continuous period (b) EFFECTIVE DATE.—The amendment ‘‘(4) DEFINITION AND SPECIAL RULES RELAT- under subparagraph (A). made by this section takes effect on the date ING TO COMMODITY TRANSACTIONS.— ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- of enactment of this Act. ‘‘(A) COMMODITY HEDGING TRANSACTIONS.— ble individual’, and ‘TAA-related loss of cov- For purposes of paragraph (1)(C)(i), the term erage’ have the meanings given such terms SA 3031. Mr. COLEMAN submitted an ‘commodity hedging transaction’ means any in section 605(b)(4)(C).’’. amendment intended to be proposed by transaction with respect to a commodity if (b) PHSA AMENDMENT.—Section 2701(c)(2) such transaction— of the Public Health Service Act (42 U.S.C. him to the bill S. 1637, to amend the In- ‘‘(i) is a hedging transaction as defined in 300gg(c)(2)) is amended by adding at the end ternal Revenue Code of 1986 to comply the following: with the World Trade Organization rul- section 1221(b)(2), determined— ‘‘(I) without regard to subparagraph (A)(ii) ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— ings on the FSC/ETI benefit in a man- thereof, ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- ner that preserves jobs and production ‘‘(II) by applying subparagraph (A)(i) there- RIOD.—In the case of a TAA-eligible indi- activities in the United States, to re- vidual, the period beginning on the date the of by substituting ‘ordinary property or individual has a TAA-related loss of cov- form and simplify the international property described in section 1231(b)’ for ‘or- erage and ending on the date the individual taxation rules of the United States, dinary property’, and is certified by the Secretary (or by any per- and for other purposes; which was or- ‘‘(III) by substituting ‘controlled foreign son or entity designated by the Secretary) as dered to lie on the table; as follows: corporation’ for ‘taxpayer’ each place it ap- pears, and being eligible for a qualified health insur- At the end of the bill, add the following: ance costs credit eligibility certificate for ‘‘(ii) is clearly identified as such in accord- TITLE V—NON-REVENUE PROVISIONS purposes of section 7527 of the Internal Rev- ance with section 1221(a)(7). enue Code of 1986 shall not be taken into ac- SEC. 501. CUSTOMS SERVICES. ‘‘(B) TREATMENT OF DEALER ACTIVITIES count in determining the continuous period Section 13031(e)(1) of the Consolidated Om- UNDER PARAGRAPH (1)(C).—Commodities with under subparagraph (A). nibus Budget Reconciliation Act of 1985 (19 respect to which gains and losses are not ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- U.S.C. 58c(e)(1)) is amended— taken into account under paragraph (2)(C) in ble individual’, and ‘TAA-related loss of cov- (1) by striking ‘‘(1) Notwithstanding sec- computing a controlled foreign corporation’s erage’ have the meanings given such terms tion 451 of the Tariff Act of 1930 (19 U.S.C. foreign personal holding company income in section 2205(b)(4)(C).’’. 1451) or any other provision of law (other shall not be taken into account in applying (c) IRC AMENDMENT.—Section 9801(c)(2) of than paragraph (2)),’’ and inserting: the substantially all test under paragraph the Internal Revenue Code of 1986 (relating ‘‘(1) IN GENERAL.— (1)(C)(ii) to such corporation. to not counting periods before significant ‘‘(A) SCHEDULED FLIGHTS.—Notwith- ‘‘(C) REGULATIONS.—The Secretary shall breaks in creditable coverage) is amended by standing section 451 of the Tariff Act of 1930 prescribe such regulations as are appropriate adding at the end the following: (19 U.S.C. 1451) or any other provision of law to carry out the purposes of paragraph (1)(C) ‘‘(D) TAA-ELIGIBLE INDIVIDUALS.— (other than subparagraph (B) and paragraph in the case of transactions involving related ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- (2)),’’; and parties.’’. RIOD.—In the case of a TAA-eligible indi- (2) by adding at the end the following: (c) MODIFICATION OF EXCEPTION FOR DEAL- vidual, the period beginning on the date the ‘‘(B) CHARTER FLIGHTS.—If an air carrier ERS.—Clause (i) of section 954(c)(2)(C) is individual has a TAA-related loss of cov- (as defined in section 40102(2) of title 49, amended by inserting ‘‘and transactions in- erage and ending on the date the individual United States Code) specifically requests volving physical settlement’’ after ‘‘(includ- is certified by the Secretary of Labor (or by that customs border patrol services for pas- ing hedging transactions’’. any person or entity designated by the Sec- sengers and their baggage be provided for a (d) EFFECTIVE DATE.—The amendments retary of Labor) as being eligible for a quali- charter flight arriving after normal oper- made by this section shall apply to trans- fied health insurance costs credit eligibility ating hours at a customs border patrol serv- actions entered into after December 31, 2004. certificate for purposes of section 7527 shall iced airport and overtime funds for those not be taken into account in determining the services are not available, the appropriate SA 3033. Mr. DAYTON submitted an continuous period under subparagraph (A). customs border patrol officer may assign suf- amendment intended to be proposed by ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- ficient customs employees (if available) to him to the bill S. 1637, to amend the In- ble individual’, and ‘TAA-related loss of cov- perform any such services, which could law- ternal Revenue Code of 1986 to comply

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00096 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3831 with the World Trade Organization rul- (2) CONFORMING AMENDMENTS.— quisition cost of each residence the owner-fi- ings on the FSC/ETI benefit in a man- (A) Section 38(b) (relating to general busi- nancing of which is provided under the issue ner that preserves jobs and production ness credit) is amended by striking ‘‘plus’’ at does not exceed the greater of— activities in the United States, to re- the end of paragraph (14), by striking the pe- ‘‘(A) 90 percent of the average area pur- riod at the end of paragraph (15) and insert- chase price applicable to the residence, or form and simplify the international ing ‘‘, plus’’, and by adding at the end the ‘‘(B) 3.5 times the applicable median family taxation rules of the United States, following new paragraph: income (as defined in subsection (f)).’’ and for other purposes; which was or- ‘‘(16) the motion picture accessibility cred- (b) EFFECTIVE DATE.—The amendment dered to lie on the table; as follows: it determined under section 45G(a).’’. made by this section shall apply to financing On page 179, after line 25, add the fol- (B) Subsection (a) of section 1016, as provided, and mortgage credit certificates lowing: amended by this Act, is amended by striking issued, after the date of the enactment of SEC. ll. REPEAL OF CHECK-THE-BOX RULES. ‘‘and’’ at the end of paragraph (28), by strik- this Act. (a) IN GENERAL.—Paragraph (3) of section ing the period at the end of paragraph (29) SEC. 503. DETERMINATION OF AREA MEDIAN 7701(a) (relating to corporation) is amended and inserting ‘‘, and’’, and by adding at the GROSS INCOME FOR LOW-INCOME by inserting at the end the following new end the following new paragraph: HOUSING CREDIT PROJECTS. sentence: ‘‘The determination as to whether ‘‘(30) in the case of property with respect (a) IN GENERAL.—Paragraph (4) of section any foreign business entity is a corporation to which a credit was allowed under section 42(g) (relating to certain rules made applica- shall be made without regard to any election 45G, to the extent provided in section ble) is amended by striking the period at the regarding the classification of the business 45G(d).’’. end and inserting ‘‘and the term ‘area me- form of such entity and shall be made under (b) LIMITATION ON CARRYBACK.—Section dian gross income’ means the amount equal rules similar to the rules for determining the 39(d) (relating to transition rules) is amend- to the greater of— status of such entity on December 31, 1996 ed by adding at the end the following new ‘‘(A) the area median gross income deter- (except that any foreign business entity paragraph: mined under section 142(d)(2)(B), or which is defined as a corporation under regu- ‘‘(14) NO CARRYBACK OF MOTION PICTURE AC- ‘‘(B) the statewide median gross income for lations on the date of the enactment of this CESSIBILITY CREDIT BEFORE EFFECTIVE DATE.— the State in which the project is located.’’ sentence shall continue to be classified as a No portion of the unused business credit for (b) EFFECTIVE DATE.—The amendment corporation).’’. any taxable year which is attributable to the made by this section shall apply to— (b) EFFECTIVE DATE.—The amendment motion picture accessibility credit deter- (1) housing credit dollar amounts allocated made by this section shall apply to taxable mined under section 45G may be carried to a after the date of the enactment of this Act, years beginning in calendar years beginning taxable year beginning before January 1, and after the date of the enactment of this Act. 2004.’’. (2) buildings placed in service after such (c) CLERICAL AMENDMENT.—The table of date to the extent paragraph (1) of section SA 3034. Mr. DAYTON submitted an sections for subpart D of part IV of sub- 42(h) of the Internal Revenue Code of 1986 amendment intended to be proposed by chapter A of chapter 1 is amended by insert- does not apply to any building by reason of him to the bill S. 1637, to amend the In- ing after the item relating to section 45F the paragraph (4) thereof. ternal Revenue Code of 1986 to comply following new item: with the World Trade Organization rul- ‘‘Sec. 45G. Expenditures to provide access to SA 3036. Mr. BAUCUS (for himself ings on the FSC/ETI benefit in a man- motion pictures for hearing im- and Mr. THOMAS) submitted an amend- ner that preserves jobs and production paired individuals.’’. ment intended to be proposed by him activities in the United States, to re- (d) EFFECTIVE DATE.—The amendments to the bill S. 1637, to amend the Inter- form and simplify the international made by this section shall apply to taxable nal Revenue Code of 1986 to comply taxation rules of the United States, years beginning after December 31, 2003. with the World Trade Organization rul- and for other purposes; which was or- SA 3035. Mr. DAYTON submitted an ings on the FSC/ETI benefit in a man- dered to lie on the table; as follows: amendment intended to be proposed by ner that preserves jobs and production On page 179, after line 25, add the fol- him to the bill S. 1637, to amend the In- activities in the United States, to re- lowing: ternal Revenue Code of 1986 to comply form and simplify the international SEC. ll. CREDIT FOR INVESTMENT IN TECH- with the World Trade Organization rul- taxation rules of the United States, NOLOGY TO MAKE MOTION PIC- and for other purposes; which was or- TURES MORE ACCESSIBLE TO THE ings on the FSC/ETI benefit in a man- HEARING IMPAIRED. ner that preserves jobs and production dered to lie on the table; as follows: (a) IN GENERAL.— activities in the United States, to re- At the end of the bill, add the following: (1) ALLOWANCE OF CREDIT.—Subpart D of form and simplify the international TITLE V—WOOL TRUST FUND part IV of subchapter A of chapter 1 (relating taxation rules of the United States, to business related credits) is amended by SEC. 501. EXTENSION AND MODIFICATION OF adding at the end the following new section: and for other purposes; which was or- PROVISIONS RELATING TO THE dered to lie on the table; as follows: WOOL RESEARCH, DEVELOPMENT, ‘‘SEC. 45G. EXPENDITURES TO PROVIDE ACCESS AND PROMOTION TRUST FUND. TO MOTION PICTURES FOR HEARING At the end add the following: (a) EXTENSION OF TEMPORARY DUTY REDUC- IMPAIRED INDIVIDUALS. TITLE V—HOUSING BOND AND CREDIT TIONS.— ‘‘(a) GENERAL RULE.—For purposes of sec- MODERNIZATION AND FAIRNESS PROVI- (1) HEADING 9902.51.11.—Heading 9902.51.11 of tion 38, in the case of an eligible taxpayer, SIONS the motion picture accessibility credit for the Harmonized Tariff Schedule of the SEC. 501. REPEAL OF REQUIRED USE OF CERTAIN United States is amended— any taxable year shall be an amount equal to PRINCIPAL REPAYMENTS ON MORT- 90 percent of the qualified expenditures made (A) by striking ‘‘2005’’ and inserting ‘‘2010’’; GAGE SUBSIDY BOND FINANCINGS and by the eligible taxpayer during the taxable TO REDEEM BONDS. (B) by striking ‘‘17.5 %’’ and inserting ‘‘10 year. (a) IN GENERAL.—Subparagraph (A) of sec- %’’. ‘‘(b) ELIGIBLE TAXPAYER.—For purposes of tion 143(a)(2) (defining qualified mortgage EADING 9902.51.12.—Heading 9902.51.12 of this section, the term ‘eligible taxpayer’ issue) is amended by adding ‘‘and’’ at the end (2) H the Harmonized Tariff Schedule of the means a taxpayer who is in the business of— of clause (ii), by striking ‘‘, and’’ at the end United States is amended by striking ‘‘2005’’ ‘‘(1) showing motion pictures to the public, of clause (iii) and inserting a period, and by and inserting ‘‘2010’’. or striking clause (iv) and the last sentence. EADING 9902 51 13 ‘‘(2) producing such motion pictures. (b) CONFORMING AMENDMENT.—Clause (ii) of (3) H . . .—Heading 9902.51.13 of ‘‘(c) QUALIFIED EXPENDITURES.—For pur- section 143(a)(2)(D) of such Code is amended the Harmonized Tariff Schedule of the poses of this section, the term ‘qualified ex- by striking ‘‘(and clause (iv) of subparagraph United States is amended by striking ‘‘2005’’ penditures’ means amounts paid or incurred (A))’’. and inserting ‘‘2010’’. by the taxpayer for the purpose of making (c) EFFECTIVE DATE.—The amendments (4) HEADING 9902.51.14.—Heading 9902.51.14 of motion pictures accessible to hearing im- made by this section shall apply to repay- the Harmonized Tariff Schedule of the paired individuals. ments received after the date of the enact- United States is amended by striking ‘‘2005’’ ‘‘(d) BASIS ADJUSTMENT.—For purposes of ment of this Act. and inserting ‘‘2010’’. this subtitle, if a credit is allowed under this SEC. 502. MODIFICATION OF PURCHASE PRICE (b) MODIFICATION OF LIMITATION ON QUAN- section with respect to any property, the LIMITATION UNDER MORTGAGE TITY OF IMPORTS.— basis of such property shall be reduced by SUBSIDY BOND RULES BASED ON (1) NOTE 15.—U.S. Note 15 to subchapter II the amount of the credit so allowed. MEDIAN FAMILY INCOME. of chapter 99 of the Harmonized Tariff Sched- ‘‘(e) NO DOUBLE BENEFIT.—In the case of (a) IN GENERAL.—Paragraph (1) of section ule of the United States is amended— the credit determined under this section, no 143(e) (relating to purchase price require- (A) by striking ‘‘and’’ after ‘‘2002’’; deduction or credit shall be allowed for such ment) is amended to read as follows: (B) by striking ‘‘year 2003’’ and all that fol- amount under any other provision of this ‘‘(1) IN GENERAL.—An issue meets the re- lows through the end period and inserting chapter.’’. quirements of this subsection only if the ac- the following: ‘‘years 2003 and 2004, and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00097 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3832 CONGRESSIONAL RECORD — SENATE April 6, 2004 5,500,000 square meter equivalents in cal- kind described in heading 9902.51.12 of the ‘‘(G) ‘Super 140’s’ or ‘140’s’ if the average endar year 2005 and each calendar year there- Harmonized Tariff Schedule of the United diameter of wool fiber thereof does not aver- after for the benefit of manufacturers of States during calendar years 1999, 2000, and age 16.5 microns or finer. men’s and boys’ suits.’’. 2001, and $2,666,000 annually to manufactur- ‘‘(H) ‘Super 150’s’ or ‘150’s’ if the average (2) NOTE 16.—U.S. Note 16 to subchapter II ers of worsted wool fabric of the kind de- diameter of wool fiber thereof does not aver- of chapter 99 of the Harmonized Tariff Sched- scribed in heading 9902.51.11 of the Har- age 16.0 microns or finer. ule of the United States is amended— monized Tariff Schedule of the United States ‘‘(I) ‘Super 160’s’ or ‘160’s’ if the average di- (A) by striking ‘‘and’’ after ‘‘2002’’; and during such calendar years, allocated based ameter of wool fiber thereof does not average (B) by striking ‘‘year 2003’’ and all that fol- on the percentage of each manufacturer’s 15.5 microns or finer. lows through the end period and inserting production of the fabric described in such ‘‘(J) ‘Super 170’s’ or ‘170’s’ if the average di- the following: ‘‘years 2003 and 2004, and heading for such 3 years compared to the ameter of wool fiber thereof does not average 5,000,000 square meter equivalents in cal- production of such fabric for all such appli- 15.0 microns or finer. endar year 2005 and each calendar year there- cants who qualify under this paragraph for ‘‘(K) ‘Super 180’s’ or ‘180’s’ if the average after for the benefit of manufacturers of such grant category. Any grant awarded by diameter of wool fiber thereof does not aver- men’s and boys’ suits, and 2,000,000 square the Secretary under this section shall be age 14.5 microns or finer. meter equivalents in calendar year 2005 and final and not subject to appeal or protest. ‘‘(L) ‘Super 190’s’ or ‘190’s’ if the average each calendar year thereafter for the benefit (4) SPECIAL RULE FOR SUCCESSOR-IN-INTER- diameter of wool fiber thereof does not aver- of manufacturers of worsted wool fabric suit- EST.— age 14.0 microns or finer. able for use in men’s and boys’ suits.’’. (A) IN GENERAL.—Any person that becomes ‘‘(M) ‘Super 200’s’ or ‘200’s’ if the average (3) CONFORMING AMENDMENTS.— a successor-in-interest to a manufacturer en- diameter of wool fiber thereof does not aver- (A) SUNSET STAGED REDUCTION REQUIRE- titled to payment, under title V of the Trade age 13.5 microns or finer. MENT.—Paragraph (2) of section 501(a) of the and Development Act of 2002 (Public Law ‘‘(N) ‘Super 210’s’ or ‘210’s’ if the average Trade and Development Act of 2000 (Public 106–200; 114 Stat. 299) or this title, shall be el- diameter of wool fiber thereof does not aver- Law 106–200; 114 Stat. 299) is amended by add- igible to claim payments as if the successor- age 13.0 microns or finer.’’. ing before the period ‘‘for goods entered, or in-interest was the original claimant with- (b) EFFECTIVE DATE.—The amendment withdrawn from warehouse for consumption, out regard to section 3727 of title 31, United made by this section shall apply to wool before January 1, 2005’’. States Code. The right to claim payment as products manufactured on or after January (B) ALLOCATION OF TARIFF-RATE QUOTAS.— a successor-in-interest under the preceding 1, 2005. Subsection (e) of section 501 of the Trade and sentence shall be effective as if the right was Development Act of 2000 (Public Law 106–200; included in section 505 of the Trade and De- SA 3037. Ms. MURKOWSKI submitted 114 Stat. 200) is amended— velopment Act of 2000. an amendment intended to be proposed (i) by inserting ‘‘for manufacturers of (B) STATUS AS SUCCESSOR-IN-INTEREST.—A to amendment SA 3011 proposed by Mr. men’s and boys’ suits’’ after ‘‘implementing person may become a successor-in-interest FRIST to the bill S. 1637, to amend the the limitation’’; and for purposes of subparagraph (A) pursuant Internal Revenue Code of 1986 to com- (ii) by inserting at the end the following to— ply with the World Trade Organization new sentence: ‘‘In implementing the limita- (i) an assignment of the claim for payment rulings on the FSC/ETI benefit in a tion for manufacturers of worsted wool fab- under title V of the Trade and Development ric on the quantity of worsted wool fabrics manner that preserves jobs and produc- Act of 2002; tion activities in the United States, to under heading 9902.51.12 of the Harmonized (ii) an assignment of the original claim- Tariff Schedule of the United States, as re- ant’s right to manufacture under the same reform and simplify the international quired by U.S. Note 16 of subchapter II of trade name as the original claimant; taxation rules of the United States, chapter 99 of such Schedule, for the entry, or (iii) a reorganization; or and for other purposes; which was or- withdrawal from warehouse for consumption, (iv) some other legally recognized manner. dered to lie on the table; as follows: the Secretary of Commerce shall prescribe (5) AUTHORIZATION.—There is authorized to At the end of paragraph (2) of section regulations to allocate fairly the quantity of be appropriated and is hereby appropriated 42A(f) of the Internal Revenue Code of 1986 worsted wool fabrics required under United out of amounts in the general fund of the (as added by section 633 of the Amendment) States note 16 of such schedule to manufac- Treasury not otherwise appropriated such insert the following: turers who weave worsted wool fabric in the sums as are necessary to carry out the provi- ‘‘For purposes of the preceding sentence, the United States.’’. sions of this subsection. term ‘county’ includes any organized bor- (C) SUNSET AUTHORITY TO MODIFY LIMITA- (6) EFFECTIVE DATE.—The grants described ough or unified municipality which is out- TION ON QUANTITY.—Subsection (b) of section in paragraph (3) shall commence on or after side a metropolitan statistical area (as so de- 504 of the Trade and Development Act of 2000 January 1, 2005, and before December 31, 2010. fined) in Alaska and any census area in the (Public Law 106–200; 114 Stat. 301) is repealed (d) EFFECTIVE DATE.—The amendment unorganized borough of Alaska which is rec- effective January 1, 2005. made by subsection (a)(1)(B) shall apply to ognized by the Bureau of the Census.’’. (c) EXTENSION OF DUTY REFUNDS AND WOOL goods entered, or withdrawn from warehouse RESEARCH TRUST FUND.— for consumption, on or after January 1, 2005. SA 3038. Mr. SANTORUM (for himself (1) IN GENERAL.—The United States Cus- SEC. 502. LABELING OF WOOL PRODUCTS TO FA- and Mr. LIEBERMAN) submitted an toms Service shall make 5 additional pay- CILITATE COMPLIANCE AND PRO- ments to each manufacturer that receives a TECT CONSUMERS. amendment intended to be proposed to payment under section 505 of the Trade and (a) IN GENERAL.—Section 4 of the Wool amendment SA 3011 proposed by Mr. Development Act of 2000 (Public Law 106–200; Products Labeling Act of 1939 (15 U.S.C. FRIST to the bill S. 1637, to amend the 114 Stat. 303) during calendar year 2005, and 68b(a)) is amended by adding at the end the Internal Revenue Code of 1986 to com- that, not later than March 1 of each year of following new paragraph: ply with the World Trade Organization an additional payment, provides an affidavit ‘‘(5) In the case of a wool product stamped, ruling on the FSC/ETI benefit in a that it remains a manufacturer in the United tagged, labeled, or otherwise identified in manner that preserves jobs and produc- States as of January 1 of the year of that any one of the following subparagraphs, the tion activities in the United States, to payment. Each payment shall be equal to the average fiber diameter may be subject to a reform and simplify the international amount of the payment received for calendar variation of 0.25 microns, and may be subject year 2005 as follows: to such other standards or deviations as pre- taxation rules of the United States, (A) The first payment to be made after scribed by regulation by the Commission: and for other purposes; which was or- January 1, 2006, but on or before April 15, ‘‘(A) ‘Super 80’s’ or ‘80’s’ if the average dered to lie on the table; as follows: 2006. fiber diameter thereof does not average 19.5 At the end of the instructions add the fol- (B) The second, third, fourth, and fifth pay- microns or finer. lowing: ments to be made after January 1, but on or ‘‘(B) ‘Super 90’s’ or ‘90’s’ if the average DIVISION B—CARE ACT before April 15, of each of the following 4 cal- fiber diameter thereof does not average 19.0 SECTION 1. SHORT TITLE; ETC. endar years. microns or finer. (a) SHORT TITLE.—This division may be (2) EXTENSION OF WOOL RESEARCH, DEVELOP- ‘‘(C) ‘Super 100’s’ or ‘100’s’ if the average cited as the ‘‘CARE Act of 2004’’. MENT, AND PROMOTION TRUST FUND.—Section fiber diameter thereof does not average 18.5 (b) AMENDMENT OF 1986 CODE.—Except as 506(f) of the Trade and Development Act of microns or finer. otherwise expressly provided, whenever in 2000 (Public Law 106–200; 114 Stat. 304) is ‘‘(D) ‘Super 110’s’ or ‘110’s’ if the average this division an amendment or repeal is ex- amended by striking ‘‘2006’’ and inserting diameter of wool fiber thereof does not aver- pressed in terms of an amendment to, or re- ‘‘2011’’. age 18.0 microns or finer. peal of, a section or other provision, the ref- (3) COMMERCE AUTHORITY TO PROMOTE DO- ‘‘(E) ‘Super 120’s’ or ‘120’s’ if the average erence shall be considered to be made to a MESTIC EMPLOYMENT.—The Secretary of Com- diameter of wool fiber thereof does not aver- section or other provision of the Internal merce shall provide grants through Decem- age 17.5 microns or finer. Revenue Code of 1986. ber 31, 2010 to manufacturers of worsted wool ‘‘(F) ‘Super 130’s’ or ‘130’s’ if the average (c) TABLE OF CONTENTS.—The table of con- fabric in the amount of $2,666,000 annually to diameter of wool fiber thereof does not aver- tents for this division is as follows: manufacturers of worsted wool fabric of the age 17.0 microns or finer. Sec. 1. Short title; etc.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00098 Fmt 4637 Sfmt 0655 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3833 TITLE I—CHARITABLE GIVING Sec. 308. Payments by charitable organiza- Sec. 706. Tax shelter exception to confiden- INCENTIVES tions to victims of war on ter- tiality privileges relating to Sec. 101. Deduction for portion of charitable rorism and families of astro- taxpayer communications. contributions to be allowed to nauts killed in the line of duty. Sec. 707. Disclosure of reportable trans- individuals who do not itemize Sec. 309. Modification of scholarship founda- actions. deductions. tion rules. Sec. 708. Modifications to penalty for failure Sec. 102. Tax-free distributions from indi- Sec. 310. Treatment of certain hospital sup- to register tax shelters. vidual retirement accounts for port organizations as qualified Sec. 709. Modification of penalty for failure charitable purposes. organizations for purposes of to maintain lists of investors. Sec. 103. Charitable deduction for contribu- determining acquisition indebt- Sec. 710. Modification of actions to enjoin tions of food inventories. edness. certain conduct related to tax Sec. 104. Charitable deduction for contribu- Sec. 311. Charitable contribution deduction shelters and reportable trans- tions of book inventories. for certain expenses incurred in actions. Sec. 105. Expansion of charitable contribu- support of Native Alaskan sub- Sec. 711. Understatement of taxpayer’s li- tion allowed for scientific prop- sistence whaling. ability by income tax return erty used for research and for Sec. 312. Matching grants to low-income preparer. computer technology and taxpayer clinics for return Sec. 712. Penalty on failure to report inter- equipment used for educational preparation. ests in foreign financial ac- purposes. Sec. 313. Exemption of qualified 501(c)(3) counts. Sec. 106. Modifications to encourage con- bonds for nursing homes from Sec. 713. Frivolous tax submissions. Sec. 714. Regulation of individuals prac- tributions of capital gain real Federal guarantee prohibitions. Sec. 314. Excise taxes exemption for blood ticing before the Department of property made for conservation collector organizations. Treasury. purposes. Sec. 315. Pilot project for forest conserva- Sec. 715. Penalty on promoters of tax shel- Sec. 107. Exclusion of 25 percent of gain on tion activities. ters. sales or exchanges of land or Sec. 316. Clarification of treatment of John- Sec. 716. Statute of limitations for taxable water interests to eligible enti- ny Micheal Spann Patriot years for which listed trans- ties for conservation purposes. Trusts. actions not reported. Sec. 108. Tax exclusion for cost-sharing pay- Sec. 717. Denial of deduction for interest on ments under Partners for Fish TITLE IV—SOCIAL SERVICES BLOCK underpayments attributable to and Wildlife Program. GRANT nondisclosed reportable and Sec. 109. Adjustment to basis of S corpora- Sec. 401. Restoration of funds for the Social noneconomic substance trans- tion stock for certain chari- Services Block Grant. actions. table contributions. Sec. 402. Restoration of authority to trans- Sec. 718. Authorization of appropriations for Sec. 110. Enhanced deduction for charitable fer up to 10 percent of TANF tax law enforcement. contribution of literary, musi- funds to the Social Services cal, artistic, and scholarly com- Block Grant. Subtitle B—Other Provisions positions. Sec. 403. Requirement to submit annual re- Sec. 721. Affirmation of consolidated return Sec. 111. Mileage reimbursements to chari- port on State activities. regulation authority. table volunteers excluded from TITLE V—INDIVIDUAL DEVELOPMENT Sec. 722. Signing of corporate tax returns by gross income. ACCOUNTS chief executive officer. Sec. 112. Extension of enhanced deduction Sec. 501. Short title. Sec. 723. Securities civil enforcement provi- for inventory to include public Sec. 502. Purposes. sions. schools. Sec. 503. Definitions. Sec. 724. Review of State agency blindness Sec. 113. 10-year divestiture period for cer- Sec. 504. Structure and administration of and disability determinations. tain excess business holdings of qualified individual develop- TITLE VIII—COMPASSION CAPITAL FUND private foundations ment account programs. Sec. 801. Support for nonprofit community- TITLE II—PROPOSALS IMPROVING THE Sec. 505. Procedures for opening and main- based organizations; Depart- OVERSIGHT OF TAX-EXEMPT ORGANI- taining an individual develop- ment of Health and Human ZATIONS ment account and qualifying Services. Sec. 201. Disclosure of written determina- for matching funds. Sec. 802. Support for nonprofit community- tions. Sec. 506. Deposits by qualified individual de- based organizations; Corpora- Sec. 202. Disclosure of Internet web site and velopment account programs. tion for National and Commu- name under which organization Sec. 507. Withdrawal procedures. nity Service. does business. Sec. 508. Certification and termination of Sec. 803. Support for nonprofit community- Sec. 203. Modification to reporting capital qualified individual develop- based organizations; Depart- transactions. ment account programs. ment of Justice. Sec. 509. Reporting, monitoring, and evalua- Sec. 204. Disclosure that Form 990 is pub- Sec. 804. Support for nonprofit community- tion. licly available. based organizations; Depart- Sec. 510. Authorization of appropriations. Sec. 205. Disclosure to State officials of pro- ment of Housing and Urban De- Sec. 511. Matching funds for individual de- posed actions related to section velopment. velopment accounts provided 501(c) organizations. Sec. 805. Coordination. through a tax credit for quali- Sec. 206. Expansion of penalties to preparers fied financial institutions. TITLE IX—MATERNITY GROUP HOMES of Form 990. Sec. 512. Account funds disregarded for pur- Sec. 901. Maternity group homes. Sec. 207. Notification requirement for enti- poses of certain means-tested ties not currently required to TITLE I—CHARITABLE GIVING Federal programs. file. INCENTIVES Sec. 208. Suspension of tax-exempt status of TITLE VI—MANAGEMENT OF EXEMPT SEC. 101. DEDUCTION FOR PORTION OF CHARI- terrorist organizations. ORGANIZATIONS TABLE CONTRIBUTIONS TO BE AL- Sec. 601. Authorization of appropriations. LOWED TO INDIVIDUALS WHO DO TITLE III—OTHER CHARITABLE AND NOT ITEMIZE DEDUCTIONS. EXEMPT ORGANIZATION PROVISIONS TITLE VII—REVENUE PROVISIONS (a) IN GENERAL.—Section 170 (relating to Sec. 301. Modification of excise tax on unre- Subtitle A—Provisions Designed To Curtail charitable, etc., contributions and gifts) is lated business taxable income Tax Shelters amended by redesignating subsection (m) as of charitable remainder trusts. Sec. 701. Clarification of economic substance subsection (n) and by inserting after sub- Sec. 302. Modifications to section 512(b)(13). doctrine. section (l) the following new subsection: Sec. 303. Simplification of lobbying expendi- Sec. 702. Penalty for failing to disclose re- ‘‘(m) DEDUCTION FOR INDIVIDUALS NOT ture limitation. portable transaction. ITEMIZING DEDUCTIONS.—In the case of an in- Sec. 304. Expedited review process for cer- Sec. 703. Accuracy-related penalty for listed dividual who does not itemize deductions for tain tax-exemption applica- transactions and other report- any taxable year, there shall be taken into tions. able transactions having a sig- account as a direct charitable deduction Sec. 305. Clarification of definition of church nificant tax avoidance purpose. under section 63 an amount equal to the tax inquiry. Sec. 704. Penalty for understatements at- amount allowable under subsection (a) for Sec. 306. Expansion of declaratory judgment tributable to transactions lack- the taxable year for cash contributions, to remedy to tax-exempt organiza- ing economic substance, etc. the extent that such contributions exceed tions. Sec. 705. Modifications of substantial under- $250 ($500 in the case of a joint return) but do Sec. 307. Definition of convention or associa- statement penalty for non- not exceed $500 ($1,000 in the case of a joint tion of churches. reportable transactions. return).’’.

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(b) DIRECT CHARITABLE DEDUCTION.— ‘‘(C) CONTRIBUTIONS MUST BE OTHERWISE DE- 4947(a)(2) shall furnish such information with (1) IN GENERAL.—Subsection (b) of section DUCTIBLE.—For purposes of this paragraph— respect to the taxable year as the Secretary 63 (defining taxable income) is amended by ‘‘(i) DIRECT CONTRIBUTIONS.—A distribution may by forms or regulations require. striking ‘‘and’’ at the end of paragraph (1), to an organization described in section 170(c) by striking the period at the end of para- shall be treated as a qualified charitable dis- ‘‘(b) TRUSTS CLAIMING A CHARITABLE DE- graph (2) and inserting ‘‘, and’’, and by add- tribution only if a deduction for the entire DUCTION UNDER SECTION 642(c).— ing at the end the following new paragraph: distribution would be allowable under sec- ‘‘(1) IN GENERAL.—Every trust not required ‘‘(3) the direct charitable deduction.’’. tion 170 (determined without regard to sub- to file a return under subsection (a) but (2) DEFINITION.—Section 63 is amended by section (b) thereof and this paragraph). claiming a deduction under section 642(c) for redesignating subsection (g) as subsection ‘‘(ii) SPLIT-INTEREST GIFTS.—A distribution the taxable year shall furnish such informa- (h) and by inserting after subsection (f) the to a split-interest entity shall be treated as tion with respect to such taxable year as the following new subsection: a qualified charitable distribution only if a Secretary may by forms or regulations pre- ‘‘(g) DIRECT CHARITABLE DEDUCTION.—For deduction for the entire value of the interest scribe, including— purposes of this section, the term ‘direct in the distribution for the use of an organiza- ‘‘(A) the amount of the deduction taken charitable deduction’ means that portion of tion described in section 170(c) would be al- under section 642(c) within such year, the amount allowable under section 170(a) lowable under section 170 (determined with- ‘‘(B) the amount paid out within such year which is taken as a direct charitable deduc- out regard to subsection (b) thereof and this which represents amounts for which deduc- tion for the taxable year under section paragraph). tions under section 642(c) have been taken in 170(m).’’. ‘‘(D) APPLICATION OF SECTION 72.—Notwith- prior years, (3) CONFORMING AMENDMENT.—Subsection standing section 72, in determining the ex- ‘‘(C) the amount for which such deductions (d) of section 63 is amended by striking tent to which a distribution is a qualified have been taken in prior years but which has ‘‘and’’ at the end of paragraph (1), by strik- charitable distribution, the entire amount of not been paid out at the beginning of such ing the period at the end of paragraph (2) and the distribution shall be treated as includ- year, inserting ‘‘, and’’, and by adding at the end ible in gross income without regard to sub- ‘‘(D) the amount paid out of principal in the following new paragraph: paragraph (A) to the extent that such the current and prior years for the purposes ‘‘(3) the direct charitable deduction.’’. amount does not exceed the aggregate described in section 642(c), amount which would have been so includible (c) STUDY.— ‘‘(E) the total income of the trust within if all amounts were distributed from all indi- (1) IN GENERAL.—The Secretary of the such year and the expenses attributable Treasury shall study the effect of the amend- vidual retirement accounts treated as 1 con- thereto, and ments made by this section on increased tract under paragraph (2)(A) for purposes of ‘‘(F) a balance sheet showing the assets, li- charitable giving and taxpayer compliance, determining the inclusion on such distribu- abilities, and net worth of the trust as of the including a comparison of taxpayer compli- tion under section 72. Proper adjustments beginning of such year. ance between taxpayers who itemize their shall be made in applying section 72 to other ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not charitable contributions and taxpayers who distributions in such taxable year and subse- apply to a trust for any taxable year if— claim a direct charitable deduction. quent taxable years. ‘‘(A) all the net income for such year, de- ‘‘(E) SPECIAL RULES FOR SPLIT-INTEREST EN- (2) REPORT.—By not later than December termined under the applicable principles of 31, 2004, the Secretary of the Treasury shall TITIES.— the law of trusts, is required to be distrib- report on the study required under para- ‘‘(i) CHARITABLE REMAINDER TRUSTS.—Not- uted currently to the beneficiaries, or graph (1) to the Committee on Finance of the withstanding section 664(b), distributions ‘‘(B) the trust is described in section Senate and the Committee on Ways and made from a trust described in subparagraph 4947(a)(1).’’. Means of the House of Representatives. (G)(i) shall be treated as ordinary income in (2) INCREASE IN PENALTY RELATING TO FIL- the hands of the beneficiary to whom is paid (d) EFFECTIVE DATE.—The amendments ING OF INFORMATION RETURN BY SPLIT-INTER- made by this section shall apply to taxable the annuity described in section 664(d)(1)(A) EST TRUSTS.—Paragraph (2) of section 6652(c) years beginning after December 31, 2002, and or the payment described in section (relating to returns by exempt organizations before January 1, 2005. 664(d)(2)(A). and by certain trusts) is amended by adding ‘‘(ii) POOLED INCOME FUNDS.—No amount at the end the following new subparagraph: SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDI- shall be includible in the gross income of a PLIT INTEREST TRUSTS VIDUAL RETIREMENT ACCOUNTS ‘‘(C) S - .—In the case FOR CHARITABLE PURPOSES. pooled income fund (as defined in subpara- of a trust which is required to file a return graph (G)(ii)) by reason of a qualified chari- under section 6034(a), subparagraphs (A) and (a) IN GENERAL.—Subsection (d) of section table distribution to such fund, and all dis- 408 (relating to individual retirement ac- (B) of this paragraph shall not apply and tributions from the fund which are attrib- counts) is amended by adding at the end the paragraph (1) shall apply in the same manner utable to qualified charitable distributions following new paragraph: as if such return were required under section shall be treated as ordinary income to the 6033, except that— ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR- beneficiary. ‘‘(i) the 5 percent limitation in the second POSES.— ‘‘(iii) CHARITABLE GIFT ANNUITIES.—Quali- sentence of paragraph (1)(A) shall not apply, ‘‘(A) IN GENERAL.—No amount shall be in- fied charitable distributions made for a char- cludible in gross income by reason of a quali- ‘‘(ii) in the case of any trust with gross in- itable gift annuity shall not be treated as an fied charitable distribution. come in excess of $250,000, the first sentence investment in the contract. of paragraph (1)(A) shall be applied by sub- ‘‘(B) QUALIFIED CHARITABLE DISTRIBUTION.— ‘‘(F) DENIAL OF DEDUCTION.—Qualified char- For purposes of this paragraph, the term stituting ‘$100’ for ‘$20’, and the second sen- itable distributions shall not be taken into ‘qualified charitable distribution’ means any tence thereof shall be applied by substituting account in determining the deduction under distribution from an individual retirement ‘$50,000’ for ‘$10,000’, and section 170. account— ‘‘(iii) the third sentence of paragraph (1)(A) ‘‘(G) SPLIT-INTEREST ENTITY DEFINED.—For ‘‘(i) which is made directly by the trustee— shall be disregarded. purposes of this paragraph, the term ‘split- ‘‘(I) to an organization described in section In addition to any penalty imposed on the interest entity’ means— 170(c), or trust pursuant to this subparagraph, if the ‘‘(i) a charitable remainder annuity trust ‘‘(II) to a split-interest entity, and person required to file such return know- or a charitable remainder unitrust (as such ‘‘(ii) which is made on or after— ingly fails to file the return, such penalty terms are defined in section 664(d)) which ‘‘(I) in the case of any distribution de- shall also be imposed on such person who must be funded exclusively by qualified char- scribed in clause (i)(I), the date that the in- shall be personally liable for such penalty.’’. itable distributions, dividual for whose benefit the account is (3) CONFIDENTIALITY OF NONCHARITABLE ‘‘(ii) a pooled income fund (as defined in BENEFICIARIES.—Subsection (b) of section maintained has attained age 701⁄2, and section 642(c)(5)), but only if the fund ac- ‘‘(II) in the case of any distribution de- 6104 (relating to inspection of annual infor- counts separately for amounts attributable scribed in clause (i)(II), the the date that mation returns) is amended by adding at the to qualified charitable distributions, and end the following new sentence: ‘‘In the case such individual has attained age 591⁄2. ‘‘(iii) a charitable gift annuity (as defined A distribution shall be treated as a qualified of a trust which is required to file a return in section 501(m)(5)).’’. charitable distribution only to the extent under section 6034(a), this subsection shall (b) MODIFICATIONS RELATING TO INFORMA- not apply to information regarding bene- that the distribution would be includible in TION RETURNS BY CERTAIN TRUSTS.— gross income without regard to subpara- ficiaries which are not organizations de- (1) RETURNS.—Section 6034 (relating to re- scribed in section 170(c).’’. graph (A) and, in the case of a distribution to turns by trusts described in section 4947(a)(2) a split-interest entity, only if no person or claiming charitable deductions under sec- (c) EFFECTIVE DATES.— holds an income interest in the amounts in tion 642(c)) is amended to read as follows: (1) SUBSECTION (a).—The amendment made the split-interest entity attributable to such by subsection (a) shall apply to distribu- ‘‘SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN distribution other than one or more of the SECTION 4947(a)(2) OR CLAIMING tions— following: the individual for whose benefit CHARITABLE DEDUCTIONS UNDER (A) described in section 408(d)(8)(B)(i)(I) of such account is maintained, the spouse of SECTION 642(c). the Internal Revenue Code of 1986, as added such individual, or any organization de- ‘‘(a) TRUSTS DESCRIBED IN SECTION by this section, made after the date of the scribed in section 170(c). 4947(a)(2).—Every trust described in section enactment of this Act, and

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(B) described in section 408(d)(8)(B)(i)(II) of graph (D) and by inserting after subpara- (1) IN GENERAL.—Clause (ii) of section such Code, as so added, made after December graph (B) the following new subparagraph: 170(e)(6)(B) is amended by inserting ‘‘or as- 31, 2003. ‘‘(C) SPECIAL RULE FOR CONTRIBUTIONS OF sembled’’ after ‘‘constructed’’ and ‘‘or assem- (2) SUBSECTION (b).—The amendments made BOOK INVENTORY FOR EDUCATIONAL PUR- bling’’ after ‘‘construction’’. by subsection (b) shall apply to returns for POSES.— (2) SPECIAL RULE EXTENDED.—Section taxable years beginning after December 31, ‘‘(i) CONTRIBUTIONS OF BOOK INVENTORY.—In 170(e)(6)(G) is amended by striking ‘‘2003’’ 2003. determining whether a qualified book con- and inserting ‘‘2005’’. SEC. 103. CHARITABLE DEDUCTION FOR CON- tribution is a qualified contribution, sub- (3) CONFORMING AMENDMENTS.—Subpara- TRIBUTIONS OF FOOD INVENTORIES. paragraph (A) shall be applied without re- graph (D) of section 170(e)(6) is amended by gard to whether— (a) IN GENERAL.—Subsection (e) of section inserting ‘‘or assembled’’ after ‘‘con- ‘‘(I) the donee is an organization described 170 (relating to certain contributions of ordi- structed’’ and ‘‘or assembling’’ after ‘‘con- in the matter preceding clause (i) of subpara- nary income and capital gain property) is struction’’. amended by adding at the end the following graph (A), and new paragraph: ‘‘(II) the property is to be used by the (c) EFFECTIVE DATE.—The amendments ‘‘(7) APPLICATION OF PARAGRAPH (3) TO CER- donee solely for the care of the ill, the needy, made by this section shall apply to taxable or infants. TAIN CONTRIBUTIONS OF FOOD INVENTORY.—For years beginning after December 31, 2002. purposes of this section— ‘‘(ii) AMOUNT OF REDUCTION.—Notwith- standing subparagraph (B), the amount of SEC. 106. MODIFICATIONS TO ENCOURAGE CON- ‘‘(A) EXTENSION TO INDIVIDUALS.—In the the reduction determined under paragraph TRIBUTIONS OF CAPITAL GAIN REAL case of a charitable contribution of appar- PROPERTY MADE FOR CONSERVA- ently wholesome food— (1)(A) shall not exceed the amount by which the fair market value of the contributed TION PURPOSES. ‘‘(i) paragraph (3)(A) shall be applied with- property (as determined by the taxpayer out regard to whether the contribution is (a) IN GENERAL.—Section 170(h) (relating to using a bona fide published market price for made by a C corporation, and qualified conservation contribution) is such book) exceeds twice the basis of such ‘‘(ii) in the case of a taxpayer other than a amended by adding at the end the following property. C corporation, the aggregate amount of such new paragraph: ‘‘(iii) QUALIFIED BOOK CONTRIBUTION.—For contributions from any trade or business (or ‘‘(7) ADDITIONAL INCENTIVES FOR QUALIFIED purposes of this paragraph, the term ‘quali- interest therein) of the taxpayer for any tax- CONSERVATION CONTRIBUTIONS.— fied book contribution’ means a charitable able year which may be taken into account contribution of books, but only if the re- ‘‘(A) IN GENERAL.—In the case of any quali- under this section shall not exceed 10 percent quirements of clauses (iv) and (v) are met. fied conservation contribution (as defined in of the taxpayer’s net income from any such ‘‘(iv) IDENTITY OF DONEE.—The requirement paragraph (1)) made by an individual— trade or business, computed without regard of this clause is met if the contribution is to ‘‘(i) subparagraph (C) of subsection (b)(1) to this section, for such taxable year. an organization— shall not apply, ‘‘(B) LIMITATION ON REDUCTION.—In the case ‘‘(I) described in subclause (I) or (III) of ‘‘(ii) except as provided in subparagraph of a charitable contribution of apparently paragraph (6)(B)(i), or (B)(i), subsections (b)(1)(A) and (d)(1) shall be wholesome food, notwithstanding paragraph ‘‘(II) described in section 501(c)(3) and ex- applied separately with respect to such con- (3)(B), the amount of the reduction deter- empt from tax under section 501(a) (other tributions by treating references to 50 per- mined under paragraph (1)(A) shall not ex- than a private foundation, as defined in sec- cent of the taxpayer’s contribution base as ceed the amount by which the fair market tion 509(a), which is not an operating founda- references to the amount of such base re- value of such property exceeds twice the tion, as defined in section 4942(j)(3)), which is duced by the amount of other contributions basis of such property. organized primarily to make books available allowable under subsection (b)(1)(A), and ‘‘(C) DETERMINATION OF BASIS.—If a tax- to the general public at no cost or to operate ‘‘(iii) subparagraph (A) of subsection (d)(1) payer— a literacy program. shall be applied— ‘‘(i) does not account for inventories under ‘‘(v) CERTIFICATION BY DONEE.—The require- ‘‘(I) by substituting ‘15 succeeding taxable section 471, and ment of this clause is met if, in addition to years’ for ‘5 succeeding taxable years’, and ‘‘(ii) is not required to capitalize indirect the certifications required by subparagraph ‘‘(II) by applying clause (ii) to each of the costs under section 263A, (A) (as modified by this subparagraph), the 15 succeeding taxable years. the taxpayer may elect, solely for purposes donee certifies in writing that— ‘‘(B) SPECIAL RULES FOR ELIGIBLE FARMERS of paragraph (3)(B), to treat the basis of any ‘‘(I) the books are suitable, in terms of cur- AND RANCHERS.— apparently wholesome food as being equal to rency, content, and quantity, for use in the 25 percent of the fair market value of such ‘‘(i) IN GENERAL.—In the case of any such donee’s educational programs, and contributions by a taxpayer who is an eligi- food. ‘‘(II) the donee will use the books in its ble farmer or rancher for the taxable year in ‘‘(D) DETERMINATION OF FAIR MARKET educational programs. which such contributions are made— VALUE.—In the case of a charitable contribu- ‘‘(vi) BONA FIDE PUBLISHED MARKET PRICE.— ‘‘(I) if the taxpayer is an individual, sub- tion of apparently wholesome food which is a For purposes of this subparagraph, the term qualified contribution (within the meaning ‘bona fide published market price’ means, sections (b)(1)(A) and (d)(1) shall be applied of paragraph (3), as modified by subpara- with respect to any book, a price— separately with respect to such contribu- graph (A) of this paragraph) and which, sole- ‘‘(I) determined using the same printing tions by substituting ‘the taxpayer’s con- ly by reason of internal standards of the tax- and edition, tribution base reduced by the amount of payer or lack of market, cannot or will not ‘‘(II) determined in the usual market in other contributions allowable under sub- be sold, the fair market value of such con- which such a book has been customarily sold section (b)(1)(A)’ for ‘50 percent of the tax- tribution shall be determined— by the taxpayer, and payer’s contribution base’ each place it ap- ‘‘(i) without regard to such internal stand- ‘‘(III) for which the taxpayer can dem- pears, and ards or such lack of market and onstrate to the satisfaction of the Secretary ‘‘(II) if the taxpayer is a corporation, sub- ‘‘(ii) by taking into account the price at that the taxpayer customarily sold such sections (b)(2) and (d)(2) shall be applied sep- which the same or substantially the same books in arm’s length transactions within 7 arately with respect to such contributions, food items (as to both type and quality) are years preceding the contribution of such a subsection (b)(2) shall be applied with re- sold by the taxpayer at the time of the con- book.’’. spect to such contributions as if such sub- tribution (or, if not so sold at such time, in (b) EFFECTIVE DATE.—The amendments section did not contain the words ‘10 percent the recent past). made by this section shall apply to contribu- of’ and as if subparagraph (A) thereof read ‘‘(E) APPARENTLY WHOLESOME FOOD.—For tions made after the date of the enactment ‘the deduction under this section for quali- purposes of this paragraph, the term ‘appar- of this Act. fied conservation contributions’, and rules ently wholesome food’ has the meaning given SEC. 105. EXPANSION OF CHARITABLE CON- similar to the rules of subparagraph (A)(iii) such term by section 22(b)(2) of the Bill TRIBUTION ALLOWED FOR SCI- shall apply for purposes of subsection (d)(2). Emerson Good Samaritan Food Donation ENTIFIC PROPERTY USED FOR RE- SEARCH AND FOR COMPUTER TECH- ‘‘(ii) DEFINITION.—For purposes of clause Act (42 U.S.C. 1791(b)(2)), as in effect on the NOLOGY AND EQUIPMENT USED FOR (i), the term ‘eligible farmer or rancher’ date of the enactment of this paragraph.’’. EDUCATIONAL PURPOSES. means a taxpayer whose gross income from (b) EFFECTIVE DATE.—The amendment (a) SCIENTIFIC PROPERTY USED FOR RE- the trade or business of farming (within the made by this section shall apply to contribu- SEARCH.— meaning of section 2032A(e)(5)) is at least 51 tions made after the date of the enactment (1) IN GENERAL.—Clause (ii) of section percent of the taxpayer’s gross income for of this Act. 170(e)(4)(B) (defining qualified research con- the taxable year, and, in the case of a C cor- SEC. 104. CHARITABLE DEDUCTION FOR CON- tributions) is amended by inserting ‘‘or as- poration, the stock of which is not publicly TRIBUTIONS OF BOOK INVEN- sembled’’ after ‘‘constructed’’. traded on a recognized exchange.’’. TORIES. (2) CONFORMING AMENDMENT.—Clause (iii) of (a) IN GENERAL.—Section 170(e)(3) (relating section 170(e)(4)(B) is amended by inserting (b) EFFECTIVE DATE.—The amendment to certain contributions of ordinary income ‘‘or assembling’’ after ‘‘construction’’. made by this section shall apply to contribu- and capital gain property) is amended by re- (b) COMPUTER TECHNOLOGY AND EQUIPMENT tions made after the date of the enactment designating subparagraph (C) as subpara- FOR EDUCATIONAL PURPOSES.— of this Act.

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SEC. 107. EXCLUSION OF 25 PERCENT OF GAIN ON ‘‘(d) LONG-HELD QUALIFYING LAND OR ‘‘(A) transfer by an eligible entity of own- SALES OR EXCHANGES OF LAND OR WATER INTEREST.—For purposes of this sec- ership or possession, whether by sale, ex- WATER INTERESTS TO ELIGIBLE EN- tion— change, or lease, of property acquired di- TITIES FOR CONSERVATION PUR- ‘‘(1) IN GENERAL.—The term ‘long-held rectly or indirectly in— POSES. qualifying land or water interest’ means any ‘‘(i) a conservation sale described in sub- (a) IN GENERAL.—Part III of subchapter B qualifying land or water interest owned by section (a), or of chapter 1 (relating to items specifically the taxpayer or a member of the taxpayer’s ‘‘(ii) a transfer described in clause (i), (ii), excluded from gross income) is amended by family (as defined in section 2032A(e)(2)) at or (iii) of paragraph (4)(A), or inserting after section 121 the following new all times during the 5-year period ending on ‘‘(B) removal of a conservation restriction section: the date of the sale. contained in an instrument of conveyance of ‘‘SEC. 121A. 25-PERCENT EXCLUSION OF GAIN ON ‘‘(2) QUALIFYING LAND OR WATER INTER- such property. SALES OR EXCHANGES OF LAND OR EST.— ‘‘(2) AMOUNT OF TAX.—The amount of tax WATER INTERESTS TO ELIGIBLE EN- ‘‘(A) IN GENERAL.—The term ‘qualifying imposed by paragraph (1) on any transfer or TITIES FOR CONSERVATION PUR- land or water interest’ means a real property removal shall be equal to the sum of— POSES. interest which constitutes— ‘‘(A) either— ‘‘(a) EXCLUSION.—Gross income shall not ‘‘(i) a taxpayer’s entire interest in land, ‘‘(i) 20 percent of the fair market value (de- include 25 percent of the qualifying gain ‘‘(ii) a taxpayer’s entire interest in water termined at the time of the transfer) of the from a conservation sale of a long-held quali- rights, property the ownership or possession of fying land or water interest. ‘‘(iii) a qualified real property interest (as which is transferred, or ‘‘(b) QUALIFYING GAIN.—For purposes of defined in section 170(h)(2)), or ‘‘(ii) 20 percent of the fair market value this section— ‘‘(iv) stock in a qualifying land or water (determined at the time immediately after ‘‘(1) IN GENERAL.—The term ‘qualifying corporation. the removal) of the property upon which the gain’ means any gain which would be recog- ‘‘(B) ENTIRE INTEREST.—For purposes of conservation restriction was removed, plus nized as long-term capital gain, reduced by clause (i) or (ii) of subparagraph (A)— ‘‘(B) the product of— the amount of any long-term capital gain at- ‘‘(i) a partial interest in land or water is ‘‘(i) the highest rate of tax specified in sec- tributable to disqualified improvements. not a taxpayer’s entire interest if an interest tion 11, times in land or water was divided in order to cre- ‘‘(2) DISQUALIFIED IMPROVEMENT.—For pur- ‘‘(ii) any gain or income realized by the poses of paragraph (1), the term ‘disqualified ate such partial interest in order to avoid transferor or person removing such restric- improvement’ means any building, structure, the requirements of such clause or section tion as a result of the transfer or removal. 170(f)(3)(A), and or other improvement, other than— ‘‘(3) LIABILITY.—The tax imposed by para- ‘‘(ii) a taxpayer’s entire interest in certain ‘‘(A) any improvement which is described graph (1) shall be paid— land does not fail to satisfy subparagraph in section 175(c)(1), determined— ‘‘(A) on any transfer, by the transferor, and (A)(i) solely because the taxpayer has re- ‘‘(i) without regard to the requirements ‘‘(B) on any removal of a conservation re- tained an interest in other land, even if the that the taxpayer be engaged in farming, and striction contained in an instrument of con- other land is contiguous with such certain ‘‘(ii) without taking into account subpara- veyance, by the person removing such re- land and was acquired by the taxpayer along graphs (A) and (B) thereof, or striction. with such certain land in a single convey- ‘‘(B) any improvement which the Secretary ‘‘(4) RELIEF FROM LIABILITY.—The person ance. (otherwise liable for any tax imposed by determines directly furthers conservation ‘‘(e) OTHER DEFINITIONS.—For purposes of purposes. this section— paragraph (1)) shall be relieved of liability for the tax imposed by paragraph (1)— ‘‘(3) SPECIAL RULE FOR SALES OF STOCK.—If ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible the long-held qualifying land or water inter- entity’ means— ‘‘(A) with respect to any transfer if— est is 1 or more shares of stock in a quali- ‘‘(A) a governmental unit referred to in ‘‘(i) the transferee is an eligible entity fying land or water corporation, the quali- section 170(c)(1), or an agency or department which provides such person, at the time of fying gain is equal to the lesser of— thereof operated primarily for 1 or more of transfer, a qualifying letter of intent, ‘‘(A) the qualifying gain determined under the conservation purposes specified in clause ‘‘(ii) in any case where the transferee is paragraph (1), or (i), (ii), or (iii) of section 170(h)(4)(A), or not an eligible entity, it is established to the ‘‘(B) the product of— ‘‘(B) an entity which is— satisfaction of the Secretary, that the trans- ‘‘(i) the percentage of such corporation’s ‘‘(i) described in section 170(b)(1)(A)(vi) or fer of ownership or possession, as the case stock which is transferred by the taxpayer, section 170(h)(3)(B), and may be, will be consistent with section times ‘‘(ii) organized and at all times operated 170(h)(5), and the transferee provides such ‘‘(ii) the amount which would have been primarily for 1 or more of the conservation person, at the time of transfer, a qualifying the qualifying gain (determined under para- purposes specified in clause (i), (ii), or (iii) of letter of intent, or graph (1)) if there had been a conservation section 170(h)(4)(A). ‘‘(iii) tax has previously been paid under this subsection as a result of a prior transfer sale by such corporation of all of its inter- ‘‘(2) QUALIFYING LETTER OF INTENT.—The ests in the land and water for a price equal term ‘qualifying letter of intent’ means a of ownership or possession of the same prop- to the product of the fair market value of written letter of intent which includes the erty, or such interests times the ratio of— following statement: ‘The transferee’s intent ‘‘(B) with respect to any removal of a con- ‘‘(I) the proceeds of the conservation sale is that this acquisition will serve 1 or more servation restriction contained in an instru- of the stock, to of the conservation purposes specified in ment of conveyance, if it is established to ‘‘(II) the fair market value of the stock clause (i), (ii), or (iii) of section 170(h)(4)(A) the satisfaction of the Secretary that the re- which was the subject of the conservation of the Internal Revenue Code of 1986, that tention of the restriction was impracticable sale. the transferee’s use of the property so ac- or impossible and the proceeds continue to ‘‘(c) CONSERVATION SALE.—For purposes of quired will be consistent with section be used in a manner consistent with 1 or this section, the term ‘conservation sale’ 170(h)(5) of such Code, and that the use of the more of the conservation purposes specified means a sale or exchange which meets the property will continue to be consistent with in clause (i), (ii), or (iii) of section following requirements: such section, even if ownership or possession 170(h)(4)(A). ‘‘(1) TRANSFEREE IS AN ELIGIBLE ENTITY.— of such property is subsequently transferred ‘‘(5) ADMINISTRATIVE PROVISIONS.—For pur- The transferee of the long-held qualifying to another person.’ poses of subtitle F, the taxes imposed by this subsection shall be treated as excise taxes land or water interest is an eligible entity. ‘‘(3) QUALIFYING LAND OR WATER CORPORA- with respect to which the deficiency proce- ‘‘(2) QUALIFYING LETTER OF INTENT RE- TION.—The term ‘qualifying land or water QUIRED.—At the time of the sale or exchange, corporation’ means a C corporation (as de- dures of such subtitle apply. such transferee provides the taxpayer with a fined in section 1361(a)(2)) if, as of the date of ‘‘(6) REPORTING.—The Secretary may re- qualifying letter of intent. the conservation sale— quire such reporting as may be necessary or ‘‘(3) NONAPPLICATION TO CERTAIN SALES.— ‘‘(A) the fair market value of the corpora- appropriate to further the purpose under this The sale or exchange is not made pursuant tion’s interests in land or water held by the section that any conservation use be in per- to an order of condemnation or eminent do- corporation at all times during the preceding petuity.’’. main. 5 years equals or exceeds 90 percent of the (b) CLERICAL AMENDMENT.—The table of ‘‘(4) CONTROLLING INTEREST IN STOCK SALE fair market value of all of such corporation’s sections for part III of subchapter B of chap- REQUIRED.—In the case of the sale or ex- assets, and ter 1 is amended by inserting after the item change of stock in a qualifying land or water ‘‘(B) not more than 50 percent of the total relating to section 121 the following new corporation, at the end of the taxpayer’s tax- fair market value of such corporation’s as- item: able year in which such sale or exchange oc- sets consists of water rights or infrastruc- curs, the transferee’s ownership of stock in ture related to the delivery of water, or both. ‘‘Sec. 121A. 25-percent exclusion of gain on such corporation meets the requirements of ‘‘(f) TAX ON SUBSEQUENT TRANSFERS OR RE- sales or exchanges of land or section 1504(a)(2) (determined by sub- MOVALS OF CONSERVATION RESTRICTIONS.— water interests to eligible enti- stituting ‘90 percent’ for ‘80 percent’ each ‘‘(1) IN GENERAL.—A tax is hereby imposed ties for conservation pur- place it appears). on any subsequent— poses.’’.

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(c) EFFECTIVE DATE.—The amendments donee’s use of the property will be in accord- other provision of this title with respect to made by this section shall apply to sales or ance with the provisions of clause (iv), and the expenses under subsection (a). exchanges occurring after the date of the en- ‘‘(vi) the written appraisal referred to in ‘‘(d) EXEMPTION FROM REPORTING REQUIRE- actment of this Act. clause (ii) includes evidence of the extent (if MENTS.—Section 6041 shall not apply with re- SEC. 108. TAX EXCLUSION FOR COST-SHARING any) to which property created by the per- spect to reimbursements excluded from in- PAYMENTS UNDER PARTNERS FOR sonal efforts of the taxpayer and of the same come under subsection (a).’’. FISH AND WILDLIFE PROGRAM. type as the donated property is or has been— (b) CLERICAL AMENDMENT.—The table of (a) IN GENERAL.—Section 126(a) (relating to ‘‘(I) owned, maintained, and displayed by sections for part III of subchapter B of chap- certain cost-sharing payments) is amended organizations described in subsection ter 1 is amended by inserting after the item by redesignating paragraph (10) as paragraph (b)(1)(A), and relating to section 139 the following new (11) and by inserting after paragraph (9) the ‘‘(II) sold to or exchanged by persons other item: following: than the taxpayer, donee, or any related per- ‘‘Sec. 139A. Mileage reimbursements to ‘‘(10) The Partners for Fish and Wildlife son (as defined in section 465(b)(3)(C)). charitable volunteers.’’. Program authorized by the Fish and Wildlife ‘‘(C) MAXIMUM DOLLAR LIMITATION; NO CAR- (c) EFFECTIVE DATE.—The amendments Act of 1956 (16 U.S.C. 742a et seq.).’’. RYOVER OF INCREASED DEDUCTION.—The in- (b) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable made by this section shall apply to payments crease in the deduction under this section by years beginning after the date of the enact- received after the date of the enactment of reason of this paragraph for any taxable ment of this Act. this Act. year— SEC. 112. EXTENSION OF ENHANCED DEDUCTION ‘‘(i) shall not exceed the artistic adjusted FOR INVENTORY TO INCLUDE PUB- SEC. 109. ADJUSTMENT TO BASIS OF S CORPORA- LIC SCHOOLS. TION STOCK FOR CERTAIN CHARI- gross income of the taxpayer for such tax- TABLE CONTRIBUTIONS. able year, and (a) IN GENERAL.—Subparagraph (A) of sec- (a) IN GENERAL.—Paragraph (2) of section ‘‘(ii) shall not be taken into account in de- tion 170(e)(3) (relating to special rule for cer- 1367(a) (relating to adjustments to basis of termining the amount which may be carried tain contributions of inventory and other stock of shareholders, etc.) is amended by from such taxable year under subsection (d). property) is amended by striking ‘‘to an or- adding at the end the following new flush ‘‘(D) ARTISTIC ADJUSTED GROSS INCOME.— ganization which is described in’’ and all sentence: For purposes of this paragraph, the term ‘ar- that follows through the end of clause (i) and ‘‘The decrease under subparagraph (B) by tistic adjusted gross income’ means that por- inserting ‘‘to a qualified organization, but reason of a charitable contribution (as de- tion of the adjusted gross income of the tax- only if— fined in section 170(c)) of property shall be payer for the taxable year attributable to— ‘‘(i) the property is to be used by the donee the amount equal to the shareholder’s pro ‘‘(i) income from the sale or use of prop- solely for the care of the ill, the needy, or in- rata share of the adjusted basis of such prop- erty created by the personal efforts of the fants and, in the case of— erty.’’. taxpayer which is of the same type as the do- ‘‘(I) an organization described in section (b) EFFECTIVE DATE.—The amendment nated property, and 501(c)(3) (other than an organization de- made by this section shall apply to contribu- ‘‘(ii) income from teaching, lecturing, per- scribed in subclause (II)), the use of the prop- tions made after the date of the enactment forming, or similar activity with respect to erty by the donee is related to the purpose or of this Act. property described in clause (i). function constituting the basis for its ex- SEC. 110. ENHANCED DEDUCTION FOR CHARI- ‘‘(E) PARAGRAPH NOT TO APPLY TO CERTAIN emption under section 501, and TABLE CONTRIBUTION OF LIT- CONTRIBUTIONS.—Subparagraph (A) shall not ‘‘(II) an organization described in sub- ERARY, MUSICAL, ARTISTIC, AND apply to any charitable contribution of any section (b)(1)(A)(ii), the use of the property SCHOLARLY COMPOSITIONS. letter, memorandum, or similar property by the donee is related to educational pur- (a) IN GENERAL.—Subsection (e) of section poses and such property is not computer 170 (relating to certain contributions of ordi- which was written, prepared, or produced by or for an individual while the individual is technology or equipment (as defined in para- nary income and capital gain property), as graph (6)(F)(i));’’. amended by this Act, is amended by adding an officer or employee of any person (includ- ing any government agency or instrumen- (b) QUALIFIED ORGANIZATION.—Paragraph at the end the following new paragraph: (3) of section 170(e) of such Code is amended ‘‘(8) SPECIAL RULE FOR CERTAIN CONTRIBU- tality) unless such letter, memorandum, or similar property is entirely personal. by redesignating subparagraph (C) as sub- TIONS OF LITERARY, MUSICAL, ARTISTIC, OR paragraph (D) and by inserting after sub- SCHOLARLY COMPOSITIONS.— ‘‘(F) COPYRIGHT TREATED AS SEPARATE PROPERTY FOR PARTIAL INTEREST RULE.—In paragraph (B) the following new subpara- ‘‘(A) IN GENERAL.—In the case of a qualified graph: artistic charitable contribution— the case of a qualified artistic charitable contribution, the tangible literary, musical, ‘‘(C) QUALIFIED ORGANIZATION.—For pur- ‘‘(i) the amount of such contribution taken poses of this paragraph, the term ‘qualified into account under this section shall be the artistic, or scholarly composition, or similar property and the copyright on such work organization’ means— fair market value of the property contrib- ‘‘(i) an organization which is described in uted (determined at the time of such con- shall be treated as separate properties for purposes of this paragraph and subsection section 501(c)(3) and is exempt under section tribution), and 501(a) (other than a private foundation, as ‘‘(ii) no reduction in the amount of such (f)(3).’’. (b) EFFECTIVE DATE.—The amendment defined in section 509(a), which is not an op- contribution shall be made under paragraph erating foundation, as defined in section (1). made by this section shall apply to contribu- tions made after the date of the enactment 4942(j)(3)), and ‘‘(B) QUALIFIED ARTISTIC CHARITABLE CON- of this Act. ‘‘(ii) an educational organization described TRIBUTION.—For purposes of this paragraph, SEC. 111. MILEAGE REIMBURSEMENTS TO CHARI- in subsection (b)(1)(A)(ii).’’. the term ‘qualified artistic charitable con- (c) EFFECTIVE DATE.—The amendments tribution’ means a charitable contribution of TABLE VOLUNTEERS EXCLUDED FROM GROSS INCOME. made by this section shall apply to contribu- any literary, musical, artistic, or scholarly (a) IN GENERAL.—Part III of subchapter B tions made after December 31, 2003. composition, or similar property, or the of chapter 1 is amended by inserting after SEC. 113. 10-YEAR DIVESTITURE PERIOD FOR copyright thereon (or both), but only if— section 139 the following new section: CERTAIN EXCESS BUSINESS HOLD- ‘‘(i) such property was created by the per- INGS OF PRIVATE FOUNDATIONS. ‘‘SEC. 139A. MILEAGE REIMBURSEMENTS TO sonal efforts of the taxpayer making such CHARITABLE VOLUNTEERS. (a) IN GENERAL.—Section 4943(c) (relating contribution no less than 18 months prior to ‘‘(a) IN GENERAL.—Gross income of an indi- to excess business holdings) is amended by such contribution, vidual does not include amounts received, redesignating paragraph (7) as paragraph (8) ‘‘(ii) the taxpayer— from an organization described in section and by inserting after paragraph (6) the fol- ‘‘(I) has received a qualified appraisal of 170(c), as reimbursement of operating ex- lowing new paragraph: the fair market value of such property in ac- penses with respect to use of a passenger ‘‘(7) 10-YEAR PERIOD TO DISPOSE OF CERTAIN cordance with the regulations under this sec- automobile for the benefit of such organiza- LARGE GIFTS AND BEQUESTS.— tion, and tion. The preceding sentence shall apply only ‘‘(A) IN GENERAL.—Paragraph (6) shall be ‘‘(II) attaches to the taxpayer’s income tax to the extent that the expenses which are re- applied by substituting ‘10-year period’ for return for the taxable year in which such imbursed would be deductible under this ‘5-year period’ if— contribution was made a copy of such ap- chapter if section 274(d) were applied— ‘‘(i) upon the election of a private founda- praisal, ‘‘(1) by using the standard business mileage tion, it is established to the satisfaction of ‘‘(iii) the donee is an organization de- rate established under such section, and the Secretary that— scribed in subsection (b)(1)(A), ‘‘(2) as if the individual were an employee ‘‘(I) the excess business holdings (or in- ‘‘(iv) the use of such property by the donee of an organization not described in section crease in excess business holdings) in a busi- is related to the purpose or function consti- 170(c). ness enterprise by the private foundation in tuting the basis for the donee’s exemption ‘‘(b) APPLICATION TO VOLUNTEER SERVICES an amount which is not less than under section 501 (or, in the case of a govern- ONLY.—Subsection (a) shall not apply with $1,000,000,000 is the result of a gift or bequest mental unit, to any purpose or function de- respect to any expenses relating to the per- the fair market value of which is not less scribed under section 501(c)), formance of services for compensation. than $1,000,000,000, and ‘‘(v) the taxpayer receives from the donee a ‘‘(c) NO DOUBLE BENEFIT.—A taxpayer may ‘‘(II) after such gift or bequest, the private written statement representing that the not claim a deduction or credit under any foundation does not have effective control of

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such business enterprise to which such gift ‘‘(2) ADDITIONAL MATTERS.—This section appropriate publications or other materials or bequest relates, shall not apply to any—’’. of the extent to which an exempt organiza- ‘‘(ii) subject to subparagraph (C), the pri- (b) EFFECTIVE DATE.—The amendment tion’s Form 990, Form 990–EZ, or Form 990– vate foundation submits to the Secretary made by this section shall apply to written PF is publicly available. with such election a reasonable plan for dis- determinations issued after the date of the posing of all of the excess business holdings enactment of this Act. (b) EFFECTIVE DATE.—The amendments related to such gift or bequest, and SEC. 202. DISCLOSURE OF INTERNET WEB SITE made by this section shall apply to publica- ‘‘(iii) the private foundation certifies annu- AND NAME UNDER WHICH ORGANI- tions or other materials issued or revised ally to the Secretary that the private foun- ZATION DOES BUSINESS. after the date of the enactment of this Act. dation is complying with the plan submitted (a) IN GENERAL.—Section 6033 (relating to under this paragraph, the requirement under returns by exempt organizations) is amended SEC. 205. DISCLOSURE TO STATE OFFICIALS OF clause (i)(II), and the rules under subpara- by redesignating subsection (h) as subsection PROPOSED ACTIONS RELATED TO SECTION 501(c) ORGANIZATIONS. graph (D). (i) and by inserting after subsection (g) the ‘‘(B) ELECTION.—Any election under sub- following new subsection: (a) IN GENERAL.—Subsection (c) of section paragraph (A)(i) shall be made not later than ‘‘(h) DISCLOSURE OF NAME UNDER WHICH OR- 6104 is amended by striking paragraph (2) and 6 months after the date of such gift or be- GANIZATION DOES BUSINESS AND ITS INTERNET inserting the following new paragraphs: WEB SITE.—Any organization which is sub- quest and shall— ‘‘(2) DISCLOSURE OF PROPOSED ACTIONS RE- ject to the requirements of subsection (a) ‘‘(i) establish the fair market value of such LATED TO CHARITABLE ORGANIZATIONS.— shall include on the return required under gift or bequest, and ‘‘(A) SPECIFIC NOTIFICATIONS.—In the case subsection (a)— ‘‘(ii) include a certification that the re- of an organization to which paragraph (1) ap- ‘‘(1) any name under which such organiza- quirement of subparagraph (A)(i)(II) is met. plies, the Secretary may disclose to the ap- ‘‘(C) REASONABLENESS OF PLAN.— tion operates or does business, and propriate State officer— ‘‘(i) IN GENERAL.—Any plan submitted ‘‘(2) the Internet web site address (if any) ‘‘(i) a notice of proposed refusal to recog- under subparagraph (A)(ii) shall be presumed of such organization.’’. nize such organization as an organization de- reasonable unless the Secretary notifies the (b) EFFECTIVE DATE.—The amendments private foundation to the contrary not later made by this section shall apply to returns scribed in section 501(c)(3) or a notice of pro- than 6 months after the submission of such filed after December 31, 2003. posed revocation of such organization’s rec- plan. SEC. 203. MODIFICATION TO REPORTING CAP- ognition as an organization exempt from ‘‘(ii) RESUBMISSION.—Upon notice by the ITAL TRANSACTIONS. taxation, Secretary under clause (i), the private foun- (a) REQUIREMENT OF SUMMARY REPORT.— ‘‘(ii) the issuance of a letter of proposed de- dation may resubmit a plan and shall have Section 6033(c) (relating to additional provi- ficiency of tax imposed under section 507 or the burden of establishing the reasonable- sions relating to private foundations) is chapter 41 or 42, and ness of such plan to the Secretary. amended by adding at the end the following ‘‘(iii) the names, addresses, and taxpayer ‘‘(D) SPECIAL RULES.—During any period in new sentence: ‘‘Any information included in identification numbers of organizations which an election under this paragraph is in an annual return regarding the gain or loss which have applied for recognition as organi- effect— from the sale or other disposition of stock or zations described in section 501(c)(3). ‘‘(i) section 4941(d)(2) (other than subpara- securities which are listed on an established ‘‘(B) ADDITIONAL DISCLOSURES.—Returns graph (A) thereof) shall apply only with re- securities market which is required to be and return information of organizations with spect to any disqualified person described in furnished in order to calculate the tax on net respect to which information is disclosed section 4941(a)(1)(B), investment income shall also be reported in under subparagraph (A) may be made avail- ‘‘(ii) section 4942(a) shall be applied by sub- summary form with a notice that detailed able for inspection by or disclosed to an ap- stituting ‘third’ for ‘second’ both places it information is available upon request by the propriate State officer. appears, public.’’. ‘‘(C) PROCEDURES FOR DISCLOSURE.—Infor- ‘‘(iii) section 4942(e)(1) shall be applied by (b) DISCLOSURE REQUIREMENT.—Section mation may be inspected or disclosed under substituting ‘12 percent’ for ‘5 percent’, and 6104(b) (relating to inspection of annual in- subparagraph (A) or (B) only— ‘‘(iv) section 4942(g)(1)(A) shall be applied formation returns), as amended by this Act, ‘‘(i) upon written request by an appropriate without regard to any portion of reasonable is amended by adding at the end the fol- State officer, and and necessary administrative expenses. lowing new sentence: ‘‘With respect to any ‘‘(ii) for the purpose of, and only to the ex- ‘‘(E) INFLATION ADJUSTMENT.—In the case private foundation (as defined in section tent necessary in, the administration of of any taxable year beginning in a calendar 509(a)), any information regarding the gain State laws regulating such organizations. year after 2003, the $1,000,000,000 amount or loss from the sale or other disposition of Such information may only be inspected by under subparagraph (A)(i)(I) shall be in- stock or securities which are listed on an es- or disclosed to representatives of the appro- creased by an amount equal to such dollar tablished securities market which is re- priate State officer designated as the indi- amount, multiplied by the cost-of-living ad- quired to be furnished in order to calculate viduals who are to inspect or to receive the justment determined under section 1(f)(3) for the tax on net investment income but which returns or return information under this such calendar year, determined by sub- is not in summary form is not required to be paragraph on behalf of such officer. Such stituting ‘2002’ for ‘1992’ in subparagraph (B) made available to the public under this sub- representatives shall not include any con- thereof. If the $1,000,000,000 amount as in- section except upon the explicit request by a tractor or agent. creased under this subparagraph is not a member of the public to the Secretary.’’. ‘‘(D) DISCLOSURES OTHER THAN BY RE- multiple of $100,000,000, such amount shall be (c) PUBLIC INSPECTION REQUIREMENT.—Sec- QUEST.—The Secretary may make available rounded to the next lowest multiple of tion 6104(d) (relating to public inspection of for inspection or disclose returns and return $100,000,000.’’. certain annual returns, applications for ex- information of an organization to which (b) EFFECTIVE DATE.—The amendments emptions, and notices of status) is amended made by this section shall apply to gifts and by adding at the end the following new para- paragraph (1) applies to an appropriate State bequests made after the date of the enact- graph: officer of any State if the Secretary deter- mines that such inspection or disclosure may ment of this Act. ‘‘(9) APPLICATION TO PRIVATE FOUNDATION facilitate the resolution of Federal or State TITLE II—PROPOSALS IMPROVING THE CAPITAL TRANSACTION INFORMATION.—With re- OVERSIGHT OF TAX-EXEMPT ORGANIZA- spect to any private foundation (as defined issues relating to the tax-exempt status of TIONS in section 509(a)), any information regarding such organization. ‘‘(3) DISCLOSURE WITH RESPECT TO CERTAIN SEC. 201. DISCLOSURE OF WRITTEN DETERMINA- the gain or loss from the sale or other dis- OTHER EXEMPT ORGANIZATIONS.—Upon written TIONS. position of stock or securities which are list- request by an appropriate State officer, the (a) IN GENERAL.—Section 6110(l) (relating ed on an established securities market which to section not to apply) is amended by strik- is required to be furnished in order to cal- Secretary may make available for inspection ing all matter before subparagraph (A) of culate the tax on net investment income but or disclosure returns and return information paragraph (2) and inserting the following: which is not in summary form is not re- of an organization described in paragraph (2), ‘‘(l) SECTION NOT TO APPLY.— quired to be made available to the public (4), (6), (7), (8), (10), or (13) of section 501(c) for ‘‘(1) IN GENERAL.—This section shall not under this subsection except upon the ex- the purpose of, and to the extent necessary apply to any matter to which section 6104 or plicit request by a member of the public to in, the administration of State laws regu- 6105 applies, except that this section shall the private foundation in the form and man- lating the solicitation or administration of apply to any written determination and re- ner of a request described in paragraph the charitable funds or charitable assets of lated background file document relating to (1)(B).’’. such organizations. Such information may an organization described under subsection (d) EFFECTIVE DATE.—The amendments be inspected only by or disclosed only to rep- (c) or (d) of section 501 (including any writ- made by this section shall apply to returns resentatives of the appropriate State officer ten determination denying an organization filed after December 31, 2003. designated as the individuals who are to in- tax-exempt status under such subsection) or SEC. 204. DISCLOSURE THAT FORM 990 IS PUB- spect or to receive the returns or return in- a political organization described in section LICLY AVAILABLE. formation under this paragraph on behalf of 527 which is not required to be disclosed by (a) IN GENERAL.—The Commissioner of the such officer. Such representatives shall not section 6104(a)(1)(A). Internal Revenue shall notify the public in include any contractor or agent.

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‘‘(4) USE IN CIVIL JUDICIAL AND ADMINISTRA- was known or should have been known by an annual return or notice required under ei- TIVE PROCEEDINGS.—Returns and return in- such person shall pay a penalty of $250 with ther subsection for 3 consecutive years, such formation disclosed pursuant to this sub- respect to such return. organization’s status as an organization ex- section may be disclosed in civil administra- ‘‘(2) EXCEPTION FOR MINOR, INADVERTENT empt from tax under section 501(a) shall be tive and civil judicial proceedings pertaining OMISSIONS.—Paragraph (1) shall not apply to considered revoked on and after the date set to the enforcement of State laws regulating minor, inadvertent omissions. by the Secretary for the filing of the third such organizations in a manner prescribed by ‘‘(3) RULES FOR DETERMINING RETURN PRE- annual return or notice. The Secretary shall the Secretary similar to that for tax admin- PARER.—For purposes of this subsection and publish and maintain a list of any organiza- istration proceedings under section subsection (i), any reference to a person who tion the status of which is so revoked. 6103(h)(4). prepares for compensation a return under ‘‘(2) APPLICATION NECESSARY FOR REIN- ‘‘(5) NO DISCLOSURE IF IMPAIRMENT.—Re- section 6033— STATEMENT.—Any organization the tax-ex- turns and return information shall not be ‘‘(A) shall include any person who employs empt status of which is revoked under para- disclosed under this subsection, or in any 1 or more persons to prepare for compensa- graph (1) must apply in order to obtain rein- proceeding described in paragraph (4), to the tion a return under section 6033, and statement of such status regardless of extent that the Secretary determines that ‘‘(B) shall not include any person who whether such organization was originally re- such disclosure would seriously impair Fed- would be described in clause (i), (ii), (iii), or quired to make such an application. eral tax administration. (iv) of section 7701(a)(36)(B) if such section ‘‘(3) RETROACTIVE REINSTATEMENT IF REA- ‘‘(6) DEFINITIONS.—For purposes of this sub- referred to a return under section 6033. SONABLE CAUSE SHOWN FOR FAILURE.—If upon section— ‘‘(i) WILLFUL OR RECKLESS CONDUCT.— application for reinstatement of status as an ‘‘(A) RETURN AND RETURN INFORMATION.— ‘‘(1) IN GENERAL.—Any person who prepares organization exempt from tax under section The terms ‘return’ and ‘return information’ for compensation any return under section 501(a), an organization described in para- have the respective meanings given to such 6033 who recklessly or intentionally mis- graph (1) can show to the satisfaction of the terms by section 6103(b). represents any information or recklessly or Secretary evidence of reasonable cause for ‘‘(B) APPROPRIATE STATE OFFICER.—The intentionally disregards any rule or regula- the failure described in such paragraph, the term ‘appropriate State officer’ means— tion with respect to such return shall pay a organization’s exempt status may, in the dis- ‘‘(i) the State attorney general, penalty of $1,000 with respect to such return. cretion of the Secretary, be reinstated effec- ‘‘(ii) in the case of an organization to ‘‘(2) COORDINATION WITH OTHER PENALTIES.— tive from the date of the revocation under which paragraph (1) applies, any other State With respect to any return, the amount of such paragraph.’’. official charged with overseeing organiza- the penalty payable by any person by reason (c) NO DECLARATORY JUDGMENT RELIEF.— tions of the type described in section of paragraph (1) shall be reduced by the Section 7428(b) (relating to limitations) is 501(c)(3), and amount of the penalty paid by such person amended by adding at the end the following ‘‘(iii) in the case of an organization to by reason of subsection (h) or section 6694.’’. new paragraph: which paragraph (3) applies, the head of an (b) CONFORMING AMENDMENTS.— ‘‘(4) NONAPPLICATION FOR CERTAIN REVOCA- agency designated by the State attorney (1) The heading for section 6695 is amended TIONS.—No action may be brought under this general as having primary responsibility for by inserting ‘‘AND OTHER’’ after ‘‘INCOME section with respect to any revocation of overseeing the solicitation of funds for chari- TAX’’. status described in section 6033(j)(1).’’. table purposes.’’. (2) The item relating to section 6695 in the (b) CONFORMING AMENDMENTS.— table of sections for part I of subchapter B of (d) NO INSPECTION REQUIREMENT.—Section (1) Subsection (a) of section 6103 is amend- chapter 68 is amended by inserting ‘‘and 6104(b) (relating to inspection of annual in- ed— other’’ after ‘‘income tax’’. formation returns) is amended by inserting (A) by inserting ‘‘or any appropriate State (c) EFFECTIVE DATE.—The amendments ‘‘(other than subsection (i) thereof)’’ after officer who has or had access to returns or made by this section shall apply with respect ‘‘6033’’. return information under section 6104(c)’’ to documents prepared after the date of the (e) NO DISCLOSURE REQUIREMENT.—Section after ‘‘this section’’ in paragraph (2), and enactment of this Act. 6104(d)(3) (relating to exceptions from disclo- (B) by striking ‘‘or subsection (n)’’ in para- SEC. 207. NOTIFICATION REQUIREMENT FOR EN- sure requirements) is amended by redesig- graph (3) and inserting ‘‘subsection (n), or TITIES NOT CURRENTLY REQUIRED nating subparagraph (B) as subparagraph (C) section 6104(c)’’. TO FILE. and by inserting after subparagraph (A) the (2) Subparagraph (A) of section 6103(p)(3) is (a) IN GENERAL.—Section 6033 (relating to following new subparagraph: amended by inserting ‘‘and section 6104(c)’’ returns by exempt organizations), as amend- ‘‘(B) NONDISCLOSURE OF ANNUAL NOTICES.— after ‘‘section’’ in the first sentence. ed by this Act, is amended by redesignating Paragraph (1) shall not require the disclosure (3) Paragraph (4) of section 6103(p), as subsection (i) as subsection (j) and by insert- of any notice required under section 6033(i).’’. amended by section 202(b)(2)(B) of the Trade ing after subsection (h) the following new (f) NO MONETARY PENALTY FOR FAILURE TO Act of 2002 (Public Law 107–210; 116 Stat. 961), subsection: NOTIFY.—Section 6652(c)(1) (relating to an- is amended by striking ‘‘or (17)’’ after ‘‘any ‘‘(i) ADDITIONAL NOTIFICATION REQUIRE- nual returns under section 6033 or 6012(a)(6)) other person described in subsection (l)(16)’’ MENTS.—Any organization the gross receipts is amended by adding at the end the fol- each place it appears and inserting ‘‘or (18) of which in any taxable year result in such lowing new subparagraph: organization being referred to in subsection or any appropriate State officer (as defined ‘‘(E) NO PENALTY FOR CERTAIN ANNUAL NO- (a)(2)(A)(ii) or (a)(2)(B)— in section 6104(c))’’. TICES.—This paragraph shall not apply with (4) The heading for paragraph (1) of section ‘‘(1) shall furnish annually, at such time respect to any notice required under section 6104(c) is amended by inserting ‘‘FOR CHARI- and in such manner as the Secretary may by 6033(i).’’. TABLE ORGANIZATIONS’’. forms or regulations prescribe, information setting forth— (g) SECRETARIAL OUTREACH REQUIRE- (5) Paragraph (2) of section 7213(a) is MENTS.— amended by inserting ‘‘or under section ‘‘(A) the legal name of the organization, ‘‘(B) any name under which such organiza- (1) NOTICE REQUIREMENT.—The Secretary of 6104(c)’’ after ‘‘6103’’. the Treasury shall notify in a timely manner (6) Paragraph (2) of section 7213A(a) is tion operates or does business, ‘‘(C) the organization’s mailing address and every organization described in section amended by inserting ‘‘or 6104(c)’’ after 6033(i) of the Internal Revenue Code of 1986 ‘‘6103’’. Internet web site address (if any), ‘‘(D) the organization’s taxpayer identi- (as added by this section) of the requirement (7) Paragraph (2) of section 7431(a) is under such section 6033(i) and of the penalty amended by inserting ‘‘(including any disclo- fication number, ‘‘(E) the name and address of a principal established under section 6033(j)— sure in violation of section 6104(c))’’ after (A) by mail, in the case of any organization ‘‘6103’’. officer, and ‘‘(F) evidence of the continuing basis for the identity and address of which is included (c) EFFECTIVE DATE.—The amendments in the list of exempt organizations main- made by this section shall take effect on the the organization’s exemption from the filing tained by the Secretary, and date of the enactment of this Act but shall requirements under subsection (a)(1), and (B) by Internet or other means of outreach, not apply to requests made before such date. ‘‘(2) upon the termination of the existence in the case of any other organization. SEC. 206. EXPANSION OF PENALTIES TO PRE- of the organization, shall furnish notice of (2) LOSS OF STATUS PENALTY FOR FAILURE PARERS OF FORM 990. such termination.’’. TO FILE RETURN.—The Secretary of the Treas- (a) IN GENERAL.—Section 6695 (relating to (b) LOSS OF EXEMPT STATUS FOR FAILURE other assessable penalties with respect to TO FILE RETURN OR NOTICE.—Section 6033 (re- ury shall publicize in a timely manner in ap- the preparation of income tax returns for lating to returns by exempt organizations), propriate forms and instructions and other persons) is amended by adding at the as amended by subsection (a), is amended by through other appropriate means, the pen- end the following new subsections: redesignating subsection (j) as subsection (k) alty established under section 6033(j) of such ‘‘(h) CERTAIN OMISSIONS AND MISREPRESEN- and by inserting after subsection (i) the fol- Code for the failure to file a return under TATIONS.— lowing new subsection: section 6033(a)(1) of such Code. ‘‘(1) IN GENERAL.—Any person who prepares ‘‘(j) LOSS OF EXEMPT STATUS FOR FAILURE (h) EFFECTIVE DATE.—The amendments for compensation any return under section TO FILE RETURN OR NOTICE.— made by this section shall apply to notices 6033 who omits or misrepresents any infor- ‘‘(1) IN GENERAL.—If an organization de- and returns with respect to annual periods mation with respect to such return which scribed in subsection (a)(1) or (i) fails to file beginning after 2003.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00105 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3840 CONGRESSIONAL RECORD — SENATE April 6, 2004 SEC. 208. SUSPENSION OF TAX-EXEMPT STATUS ‘‘(ii) each designation and identification ment met the requirements prescribed under OF TERRORIST ORGANIZATIONS. described in paragraph (2) which has been section 482. (a) IN GENERAL.—Section 501 of the Inter- made with respect to such organization is de- ‘‘(ii) ADDITION TO TAX FOR VALUATION nal Revenue Code of 1986 (relating to exemp- termined to be erroneous pursuant to the MISSTATEMENTS.—The tax imposed by this tion from tax on corporations, certain law or Executive order under which such des- chapter on the controlling organization shall trusts, etc.) is amended by redesignating ignation or identification was made, and be increased by an amount equal to 20 per- subsection (p) as subsection (q) and by in- ‘‘(iii) the erroneous designations and iden- cent of the larger of— serting after subsection (o) the following new tifications result in an overpayment of in- ‘‘(I) such excess determined without regard subsection: come tax for any taxable year by such orga- to any amendment or supplement to a return ‘‘(p) SUSPENSION OF TAX-EXEMPT STATUS OF nization, of tax, or TERRORIST ORGANIZATIONS.— credit or refund (with interest) with respect ‘‘(II) such excess determined with regard to ‘‘(1) IN GENERAL.—The exemption from tax to such overpayment shall be made. all such amendments and supplements.’’. under subsection (a) with respect to any or- ‘‘(B) WAIVER OF LIMITATIONS.—If the credit (b) EFFECTIVE DATE.— ganization described in paragraph (2), and or refund of any overpayment of tax de- (1) IN GENERAL.—The amendment made by the eligibility of any organization described this section shall apply to payments received in paragraph (2) to apply for recognition of scribed in subparagraph (A)(iii) is prevented or accrued after December 31, 2000. exemption under subsection (a), shall be sus- at any time by the operation of any law or (2) PAYMENTS SUBJECT TO BINDING CONTRACT pended during the period described in para- rule of law (including res judicata), such TRANSITION RULE.—If the amendments made graph (3). credit or refund may nevertheless be allowed or made if the claim therefor is filed before by section 1041 of the Taxpayer Relief Act of ‘‘(2) TERRORIST ORGANIZATIONS.—An organi- 1997 did not apply to any amount received or zation is described in this paragraph if such the close of the 1-year period beginning on accrued in the first 2 taxable years beginning organization is designated or otherwise indi- the date of the last determination described vidually identified— in subparagraph (A)(ii). on or after the date of the enactment of the ‘‘(A) under section 212(a)(3)(B)(vi)(II) or 219 ‘‘(7) NOTICE OF SUSPENSIONS.—If the tax ex- Taxpayer Relief Act of 1997 under any con- of the Immigration and Nationality Act as a emption of any organization is suspended tract described in subsection (b)(2) of such terrorist organization or foreign terrorist or- under this subsection, the Internal Revenue section, such amendments also shall not ganization, Service shall update the listings of tax-ex- apply to amounts received or accrued under ‘‘(B) in or pursuant to an Executive order empt organizations and shall publish appro- such contract before January 1, 2001. which is related to terrorism and issued priate notice to taxpayers of such suspension SEC. 303. SIMPLIFICATION OF LOBBYING EX- under the authority of the International and of the fact that contributions to such or- PENDITURE LIMITATION. Emergency Economic Powers Act or section ganization are not deductible during the pe- (a) REPEAL OF GRASSROOTS EXPENDITURE 5 of the United Nations Participation Act of riod of such suspension.’’. LIMIT.—Paragraph (1) of section 501(h) (relat- 1945 for the purpose of imposing on such or- (b) EFFECTIVE DATE.—The amendments ing to expenditures by public charities to in- ganization an economic or other sanction, or made by this section shall apply to designa- fluence legislation) is amended to read as ‘‘(C) in or pursuant to an Executive order tions made before, on, or after the date of follows: issued under the authority of any Federal the enactment of this Act. ‘‘(1) GENERAL RULE.—In the case of an orga- law if— TITLE III—OTHER CHARITABLE AND nization to which this subsection applies, ex- ‘‘(i) the organization is designated or oth- EXEMPT ORGANIZATION PROVISIONS emption from taxation under subsection (a) erwise individually identified in or pursuant shall be denied because a substantial part of SEC. 301. MODIFICATION OF EXCISE TAX ON UN- the activities of such organization consists to such Executive order as supporting or en- RELATED BUSINESS TAXABLE IN- of carrying on propaganda, or otherwise at- gaging in terrorist activity (as defined in COME OF CHARITABLE REMAINDER section 212(a)(3)(B) of the Immigration and TRUSTS. tempting, to influence legislation, but only Nationality Act) or supporting terrorism (as (a) IN GENERAL.—Subsection (c) of section if such organization normally makes lob- defined in section 140(d)(2) of the Foreign Re- 664 (relating to exemption from income bying expenditures in excess of the lobbying lations Authorization Act, Fiscal Years 1988 taxes) is amended to read as follows: ceiling amount for such organization for and 1989); and ‘‘(c) TAXATION OF TRUSTS.— each taxable year.’’. (b) EXCESS LOBBYING EXPENDITURES.—Sec- ‘‘(ii) such Executive order refers to this ‘‘(1) INCOME TAX.—A charitable remainder tion 4911(b) is amended to read as follows: subsection. annuity trust and a charitable remainder ‘‘(b) EXCESS LOBBYING EXPENDITURES.—For unitrust shall, for any taxable year, not be ‘‘(3) PERIOD OF SUSPENSION.—With respect purposes of this section, the term ‘excess subject to any tax imposed by this subtitle. to any organization described in paragraph lobbying expenditures’ means, for a taxable ‘‘(2) EXCISE TAX.— (2), the period of suspension— year, the amount by which the lobbying ex- ‘‘(A) IN GENERAL.—In the case of a chari- ‘‘(A) begins on the later of— penditures made by the organization during table remainder annuity trust or a chari- ‘‘(i) the date of the first publication of a the taxable year exceed the lobbying non- table remainder unitrust which has unre- designation or identification described in taxable amount for such organization for lated business taxable income (within the paragraph (2) with respect to such organiza- such taxable year.’’. meaning of section 512, determined as if part tion, or (c) CONFORMING AMENDMENTS.— III of subchapter F applied to such trust) for ‘‘(ii) the date of the enactment of this sub- (1) Section 501(h)(2) is amended by striking a taxable year, there is hereby imposed on section, and subparagraphs (C) and (D). such trust or unitrust an excise tax equal to ‘‘(B) ends on the first date that all designa- (2) Section 4911(c) is amended by striking the amount of such unrelated business tax- tions and identifications described in para- paragraphs (3) and (4). able income. graph (2) with respect to such organization (3) Paragraph (1)(A) of section 4911(f) is ‘‘(B) CERTAIN RULES TO APPLY.—The tax are rescinded pursuant to the law or Execu- amended by striking ‘‘limits of section imposed by subparagraph (A) shall be treated tive order under which such designation or 501(h)(1) have’’ and inserting ‘‘limit of sec- as imposed by chapter 42 for purposes of this identification was made. tion 501(h)(1) has’’. title other than subchapter E of chapter 42. ‘‘(4) DENIAL OF DEDUCTION.—No deduction (4) Paragraph (1)(C) of section 4911(f) is ‘‘(C) TAX COURT PROCEEDINGS.—For pur- shall be allowed under any provision of this amended by striking ‘‘limits of section poses of this paragraph, the references in title, including sections 170, 545(b)(2), 501(h)(1) are’’ and inserting ‘‘limit of section section 6212(c)(1) to section 4940 shall be 556(b)(2), 642(c), 2055, 2106(a)(2), and 2522, with 501(h)(1) is’’. deemed to include references to this para- respect to any contribution to an organiza- (5) Paragraphs (4)(A) and (4)(B) of section graph.’’. tion described in paragraph (2) during the pe- 4911(f) are each amended by striking ‘‘limits (b) EFFECTIVE DATE.—The amendment riod described in paragraph (3). of section 501(h)(1)’’ and inserting ‘‘limit of made by this section shall apply to taxable ‘‘(5) DENIAL OF ADMINISTRATIVE OR JUDICIAL section 501(h)(1)’’. years beginning after December 31, 2002. CHALLENGE OF SUSPENSION OR DENIAL OF DE- (6) Paragraph (8) of section 6033(b) (relating DUCTION.—Notwithstanding section 7428 or SEC. 302. MODIFICATIONS TO SECTION 512(b)(13). to certain organizations described in section any other provision of law, no organization (a) IN GENERAL.—Paragraph (13) of section 501(c)(3)) is amended by inserting ‘‘and’’ at or other person may challenge a suspension 512(b) (relating to special rules for certain the end of subparagraph (A) and by striking under paragraph (1), a designation or identi- amounts received from controlled entities) is subparagraphs (C) and (D). fication described in paragraph (2), the pe- amended by redesignating subparagraph (E) (d) EFFECTIVE DATE.—The amendments riod of suspension described in paragraph (3), as subparagraph (F) and by inserting after made by this section shall apply to taxable or a denial of a deduction under paragraph subparagraph (D) the following new subpara- years beginning after December 31, 2002. (4) in any administrative or judicial pro- graph: SEC. 304. EXPEDITED REVIEW PROCESS FOR CER- ceeding relating to the Federal tax liability ‘‘(E) PARAGRAPH TO APPLY ONLY TO EXCESS TAIN TAX-EXEMPTION APPLICA- of such organization or other person. PAYMENTS.— TIONS. ‘‘(6) ERRONEOUS DESIGNATION.— ‘‘(i) IN GENERAL.—Subparagraph (A) shall (a) IN GENERAL.—The Secretary of the ‘‘(A) IN GENERAL.—If— apply only to the portion of a specified pay- Treasury or the Secretary’s delegate (in this ‘‘(i) the tax exemption of any organization ment received or accrued by the controlling section, referred to as the ‘‘Secretary’’) shall described in paragraph (2) is suspended under organization that exceeds the amount which adopt procedures to expedite the consider- paragraph (1), would have been paid or accrued if such pay- ation of applications for exempt status under

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section 501(c)(3) of the Internal Revenue Code ‘‘(6) information provided by the Secretary (b) EFFECTIVE DATES.—This section shall of 1986 filed after December 31, 2003, by any related to the standards for exemption from apply to— organization that— tax under this title and the requirements (1) payments described in subsection (1) is organized and operated for the pri- under this title relating to unrelated busi- (a)(1)(A) made after the date of the enact- mary purpose of providing social services; ness taxable income.’’. ment of this Act and before September 11, (2) is seeking a contract or grant under a SEC. 306. EXPANSION OF DECLARATORY JUDG- 2004, and Federal, State, or local program that pro- MENT REMEDY TO TAX-EXEMPT OR- (2) payments described in subsection vides funding for social services programs; GANIZATIONS. (a)(1)(B) made after December 31, 2002. (a) IN GENERAL.—Paragraph (1) of section (3) establishes that, under the terms and SEC. 309. MODIFICATION OF SCHOLARSHIP conditions of the contract or grant program, 7428(a) (relating to creation of remedy) is FOUNDATION RULES. amended— an organization is required to obtain such In applying the limitations on the percent- (1) in subparagraph (B) by inserting after exempt status before the organization is eli- age of scholarship grants which may be ‘‘509(a))’’ the following: ‘‘or as a private oper- gible to apply for a contract or grant; awarded after the date of the enactment of ating foundation (as defined in section (4) includes with its exemption application this Act, to children of current or former 4942(j)(3))’’; and a copy of its completed Federal, State, or employees under Revenue Procedure 76–47, (2) by amending subparagraph (C) to read local contract or grant application; and such percentage shall be increased to 35 per- (5) meets such other criteria as the Sec- as follows: ‘‘(C) with respect to the initial qualifica- cent of the eligible applicants to be consid- retary deems appropriate for expedited con- ered by the selection committee and to 20 sideration. tion or continuing qualification of an organi- zation as an organization described in sec- percent of individuals eligible for the grants, The Secretary may prescribe other similar tion 501(c) (other than paragraph (3)) or but only if the foundation awarding the circumstances in which such organizations 501(d) which is exempt from tax under sec- grants demonstrates that, in addition to may be entitled to expedited consideration. tion 501(a), or’’. meeting the other requirements of Revenue (b) WAIVER OF APPLICATION FEE FOR EX- (b) COURT JURISDICTION.—Subsection (a) of Procedure 76–47, it provides a comparable EMPT STATUS.—Any organization that meets section 7428 is amended in the material fol- number and aggregate amount of grants dur- the conditions described in subsection (a) lowing paragraph (2) by striking ‘‘United ing the same program year to individuals (without regard to paragraph (3) of that sub- States Tax Court, the United States Claims who are not such employees, children or de- section) is entitled to a waiver of any fee for Court, or the district court of the United pendents of such employees, or affiliated an application for exempt status under sec- States for the District of Columbia’’ and in- with the employer of such employees. tion 501(c)(3) of the Internal Revenue Code of serting the following: ‘‘United States Tax 1986 if the organization certifies that the or- SEC. 310. TREATMENT OF CERTAIN HOSPITAL Court (in the case of any such determination SUPPORT ORGANIZATIONS AS ganization has had (or expects to have) aver- or failure) or the United States Claims Court QUALIFIED ORGANIZATIONS FOR age annual gross receipts of not more than or the district court of the United States for PURPOSES OF DETERMINING ACQUI- $50,000 during the preceding 4 years (or, in the District of Columbia (in the case of a de- SITION INDEBTEDNESS. the case of an organization not in existence termination or failure with respect to an (a) IN GENERAL.—Subparagraph (C) of sec- throughout the preceding 4 years, during issue referred to in subparagraph (A) or (B) tion 514(c)(9) (relating to real property ac- such organization’s first 4 years). of paragraph (1)),’’. quired by a qualified organization) is amend- (c) SOCIAL SERVICES DEFINED.—For pur- (c) EFFECTIVE DATE.—The amendments ed by striking ‘‘or’’ at the end of clause (ii), poses of this section— made by this section shall apply to pleadings by striking the period at the end of clause (1) IN GENERAL.—The term ‘‘social serv- filed with respect to determinations (or re- (iii) and inserting ‘‘; or’’, and by adding at ices’’ means services directed at helping peo- quests for determinations) made after De- the end the following new clause: ple in need, reducing poverty, improving out- cember 31, 2002. ‘‘(iv) a qualified hospital support organiza- comes of low-income children, revitalizing SEC. 307. DEFINITION OF CONVENTION OR ASSO- tion (as defined in subparagraph (I)).’’. low-income communities, and empowering CIATION OF CHURCHES. (b) QUALIFIED HOSPITAL SUPPORT ORGANI- low-income families and low-income individ- Section 7701 (relating to definitions) is ZATIONS.—Paragraph (9) of section 514(c) is uals to become self-sufficient, including— amended by redesignating subsection (n) as amended by adding at the end the following (A) child care services, protective services subsection (o) and by inserting after sub- new subparagraph: for children and adults, services for children section (m) the following new subsection: ‘‘(I) QUALIFIED HOSPITAL SUPPORT ORGANI- and adults in foster care, adoption services, ‘‘(n) CONVENTION OR ASSOCIATION OF ZATIONS.—For purposes of subparagraph services related to the management and CHURCHES.—For purposes of this title, any (C)(iv), the term ‘qualified hospital support maintenance of the home, day care services organization which is otherwise a convention organization’ means, with respect to any eli- for adults, and services to meet the special or association of churches shall not fail to so gible indebtedness (including any qualified needs of children, older individuals, and indi- qualify merely because the membership of refinancing of such eligible indebtedness), a viduals with disabilities (including physical, such organization includes individuals as support organization (as defined in section mental, or emotional disabilities); well as churches or because individuals have 509(a)(3)) which supports a hospital described (B) transportation services; voting rights in such organization.’’. in section 119(d)(4)(B) and with respect to (C) job training and related services, and SEC. 308. PAYMENTS BY CHARITABLE ORGANIZA- which— employment services; TIONS TO VICTIMS OF WAR ON TER- ‘‘(i) more than half of the organization’s (D) information, referral, and counseling RORISM AND FAMILIES OF ASTRO- assets (by value) at any time since its orga- services; NAUTS KILLED IN THE LINE OF nization— (E) the preparation and delivery of meals, DUTY. (a) IN GENERAL.—For purposes of the Inter- ‘‘(I) were acquired, directly or indirectly, and services related to soup kitchens or food nal Revenue Code of 1986— by testamentary gift or devise, and banks; (1) any payment made by an organization ‘‘(II) consisted of real property, and (F) health support services; described in section 501(c)(3) of such Code ‘‘(ii) the fair market value of the organiza- (G) literacy and mentoring programs; to— tion’s real estate acquired, directly or indi- (H) services for the prevention and treat- (A) a member of the Armed Forces of the rectly, by gift or devise, exceeded 25 percent ment of juvenile delinquency and substance United States, or to an individual of such of the fair market value of all investment as- abuse, services for the prevention of crime member’s immediate family, by reason of sets held by the organization immediately and the provision of assistance to the vic- the death, injury, wounding, or illness of prior to the time that the eligible indebted- tims and the families of criminal offenders, such member incurred as the result of the ness was incurred. and services related to the intervention in, military response of the United States to the and prevention of, domestic violence; and For purposes of this subparagraph, the term terrorist attacks against the United States (I) services related to the provision of as- ‘eligible indebtedness’ means indebtedness on September 11, 2001, or sistance for housing under Federal law. secured by real property acquired by the or- (B) an individual of an astronaut’s imme- (2) EXCLUSIONS.—The term does not include ganization, directly or indirectly, by gift or diate family by reason of the death of such a program having the purpose of delivering devise, the proceeds of which are used exclu- astronaut occurring in the line of duty after educational assistance under the Elementary sively to acquire any leasehold interest in December 31, 2002, and Secondary Education Act of 1965 (20 such real property or for improvements on, U.S.C. 6301 et seq.) or under the Higher Edu- shall be treated as related to the purpose or or repairs to, such real property. A deter- cation Act of 1965 (20 U.S.C. 1001 et seq.). function constituting the basis for such or- mination under clauses (i) and (ii) of this SEC. 305. CLARIFICATION OF DEFINITION OF ganization’s exemption under section 501 of subparagraph shall be made each time such CHURCH TAX INQUIRY. such Code if such payment is made using an an eligible indebtedness (or the qualified re- Subsection (i) of section 7611 (relating to objective formula which is consistently ap- financing of such an eligible indebtedness) is section not to apply to criminal investiga- plied, and incurred. For purposes of this subparagraph, tions, etc.) is amended by striking ‘‘or’’ at (2) in the case of a private foundation (as a refinancing of such an eligible indebted- the end of paragraph (4), by striking the pe- defined in section 509 of such Code), any pay- ness shall be considered qualified if such refi- riod at the end of paragraph (5) and inserting ment described in paragraph (1) shall not be nancing does not exceed the amount of the ‘‘, or’’, and by inserting after paragraph (5) treated as made to a disqualified person for refinanced eligible indebtedness immediately the following: purposes of section 4941 of such Code. before the refinancing.’’.

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(c) EFFECTIVE DATE.—The amendments not exceed 250 percent of the poverty level, SEC. 314. EXCISE TAXES EXEMPTION FOR BLOOD made by this section shall apply to indebted- as determined in accordance with criteria es- COLLECTOR ORGANIZATIONS. ness incurred after December 31, 2003. tablished by the Director of the Office of (a) EXEMPTION FROM IMPOSITION OF SPECIAL SEC. 311. CHARITABLE CONTRIBUTION DEDUC- Management and Budget. FUELS TAX.—Section 4041(g) (relating to TION FOR CERTAIN EXPENSES IN- ‘‘(2) CLINIC.—The term ‘clinic’ includes— other exemptions) is amended by striking CURRED IN SUPPORT OF NATIVE ‘‘(A) a clinical program at an eligible edu- ‘‘and’’ at the end of paragraph (3), by strik- ALASKAN SUBSISTENCE WHALING. cational institution (as defined in section ing the period in paragraph (4) and inserting (a) IN GENERAL.—Section 170 (relating to 529(e)(5)) which satisfies the requirements of ‘‘; and’’, and by inserting after paragraph (4) charitable, etc., contributions and gifts), as paragraph (1) through student assistance of the following new paragraph: amended by this Act, is amended by redesig- taxpayers in return preparation and filing, ‘‘(5) with respect to the sale of any liquid nating subsection (n) as subsection (o) and and to a qualified blood collector organization by inserting after subsection (m) the fol- ‘‘(B) an organization described in section (as defined in section 7701(a)(48)) for such or- ganization’s exclusive use, or with respect to lowing new subsection: 501(c) and exempt from tax under section the use by a qualified blood collector organi- ‘‘(n) EXPENSES PAID BY CERTAIN WHALING 501(a) which satisfies the requirements of zation of any liquid as a fuel.’’. CAPTAINS IN SUPPORT OF NATIVE ALASKAN paragraph (1). SUBSISTENCE WHALING.— (b) EXEMPTION FROM MANUFACTURERS EX- ‘‘(c) SPECIAL RULES AND LIMITATIONS.— ‘‘(1) IN GENERAL.—In the case of an indi- CISE TAX.— vidual who is recognized by the Alaska Es- ‘‘(1) AGGREGATE LIMITATION.—Unless other- (1) IN GENERAL.—Section 4221(a) (relating kimo Whaling Commission as a whaling cap- wise provided by specific appropriation, the to certain tax-free sales) is amended by tain charged with the responsibility of main- Secretary shall not allocate more than striking ‘‘or’’ at the end of paragraph (4), by taining and carrying out sanctioned whaling $10,000,000 per year (exclusive of costs of ad- adding ‘‘or’’ at the end of paragraph (5), and activities and who engages in such activities ministering the program) to grants under by inserting after paragraph (5) the following during the taxable year, the amount de- this section. new paragraph: scribed in paragraph (2) (to the extent such ‘‘(2) OTHER APPLICABLE RULES.—Rules simi- ‘‘(6) to a qualified blood collector organiza- amount does not exceed $10,000 for the tax- lar to the rules under paragraphs (2) through tion (as defined in section 7701(a)(48)) for able year) shall be treated for purposes of (5) of section 7526(c) shall apply with respect such organization’s exclusive use,’’. this section as a charitable contribution. to the awarding of grants to qualified return (2) CONFORMING AMENDMENTS.— preparation clinics.’’. ‘‘(2) AMOUNT DESCRIBED.— (A) The second sentence of section 4221(a) ‘‘(A) IN GENERAL.—The amount described in (b) CLERICAL AMENDMENT.—The table of is amended by striking ‘‘Paragraphs (4) and this paragraph is the aggregate of the rea- sections for chapter 77 is amended by insert- (5)’’ and inserting ‘‘Paragraphs (4), (5), and sonable and necessary whaling expenses paid ing after the item relating to section 7526 the (6)’’. by the taxpayer during the taxable year in following new item: (B) Section 6421(c) is amended by striking carrying out sanctioned whaling activities. ‘‘or (5)’’ and inserting ‘‘(5), or (6)’’. ‘‘Sec. 7526A. Return preparation clinics for (c) EXEMPTION FROM COMMUNICATION EX- ‘‘(B) WHALING EXPENSES.—For purposes of low-income taxpayers.’’. CISE TAX.— subparagraph (A), the term ‘whaling ex- (1) IN GENERAL.—Section 4253 (relating to penses’ includes expenses for— (c) EFFECTIVE DATE.—The amendments exemptions) is amended by redesignating ‘‘(i) the acquisition and maintenance of made by this section shall apply to grants subsection (k) as subsection (l) and inserting whaling boats, weapons, and gear used in made after the date of the enactment of this after subsection (j) the following new sub- sanctioned whaling activities, Act. section: ‘‘(ii) the supplying of food for the crew and SEC. 313. EXEMPTION OF QUALIFIED 501(c)(3) ‘‘(k) EXEMPTION FOR QUALIFIED BLOOD COL- other provisions for carrying out such activi- BONDS FOR NURSING HOMES FROM LECTOR ORGANIZATIONS.—Under regulations ties, and FEDERAL GUARANTEE PROHIBI- provided by the Secretary, no tax shall be ‘‘(iii) storage and distribution of the catch TIONS. imposed under section 4251 on any amount from such activities. (a) IN GENERAL.—Section 149(b)(3) (relating paid by a qualified blood collector organiza- ‘‘(3) SANCTIONED WHALING ACTIVITIES.—For to exceptions) is amended by adding at the tion (as defined in section 7701(a)) for serv- purposes of this subsection, the term ‘sanc- end the following new subparagraph: ices or facilities furnished to such organiza- tioned whaling activities’ means subsistence ‘‘(E) EXCEPTION FOR QUALIFIED 501(c)(3) tion.’’. bowhead whale hunting activities conducted BONDS FOR NURSING HOMES.— (2) CONFORMING AMENDMENT.—Section pursuant to the management plan of the ‘‘(i) IN GENERAL.—Paragraph (1) shall not 4253(l), as redesignated by paragraph (1), is Alaska Eskimo Whaling Commission.’’. apply to any qualified 501(c)(3) bond issued amended by striking ‘‘or (j)’’ and inserting (b) EFFECTIVE DATE.—The amendments before the date which is 1 year after the date ‘‘(j), or (k)’’. made by subsection (a) shall apply to con- REDIT FOR REFUND FOR CERTAIN TAXES of the enactment of this subparagraph for (d) C tributions made after December 31, 2003. ON SALES AND SERVICES.— the benefit of an organization described in (1) DEEMED OVERPAYMENT.— SEC. 312. MATCHING GRANTS TO LOW-INCOME section 501(c)(3), if such bond is part of an TAXPAYER CLINICS FOR RETURN (A) IN GENERAL.—Section 6416(b)(2) is issue the proceeds of which are used to fi- PREPARATION. amended by redesignating subparagraphs (E) nance 1 or more of the following facilities (a) IN GENERAL.—Chapter 77 (relating to and (F) as subparagraphs (F) and (G), respec- primarily for the benefit of the elderly: miscellaneous provisions) is amended by in- tively, and by inserting after subparagraph ‘‘(I) Licensed nursing home facility. serting after section 7526 the following new (D) the following new subparagraph: ‘‘(II) Licensed or certified assisted living section: ‘‘(E) sold to a qualified blood collector or- facility. ‘‘SEC. 7526A. RETURN PREPARATION CLINICS ganization’s (as defined in section 7701(a)(48)) FOR LOW-INCOME TAXPAYERS. ‘‘(III) Licensed personal care facility. for such organization’s exclusive use;’’. ‘‘(IV) Continuing care retirement commu- ‘‘(a) IN GENERAL.—The Secretary may, sub- (B) CONFORMING AMENDMENTS.—Section ject to the availability of appropriated nity. 6416(b)(2) is amended— funds, make grants to provide matching ‘‘(ii) LIMITATION.—With respect to any cal- (i) by striking ‘‘Subparagraphs (C) and (D)’’ funds for the development, expansion, or endar year, clause (i) shall not apply to any and inserting ‘‘Subparagraphs (C), (D), and continuation of qualified return preparation bond described in such clause if the aggre- (E)’’, and clinics. gate authorized face amount of the issue of (ii) by striking ‘‘(C), and (D)’’ and inserting ‘‘(b) DEFINITIONS.—For purposes of this sec- which such bond is a part when increased by ‘‘(C), (D), and (E)’’. the outstanding amount of such bonds issued tion— (2) SALES OF TIRES.—Clause (ii) of section ‘‘(1) QUALIFIED RETURN PREPARATION CLIN- by the issuer for such calendar year exceeds 6416(b)(4)(B) is amended by inserting ‘‘sold to IC.— $15,000,000. a qualified blood collector organization (as ‘‘(A) IN GENERAL.—The term ‘qualified re- ‘‘(iii) CONTINUING CARE RETIREMENT COMMU- defined in section 7701(a)(48)),’’ after ‘‘for its turn preparation clinic’ means a clinic NITY.—For purposes of this subparagraph, exclusive use,’’. which— the term ‘continuing care retirement com- (e) DEFINITION OF QUALIFIED BLOOD COL- ‘‘(i) does not charge more than a nominal munity’ means a community which provides, LECTOR ORGANIZATION.—Section 7701(a) is fee for its services (except for reimbursement on the same campus, a continuum of residen- amended by inserting at the end the fol- of actual costs incurred), and tial living options and support services to lowing new paragraph: ‘‘(ii) operates programs which assist low- persons at least 60 years of age under a writ- ‘‘(48) QUALIFIED BLOOD COLLECTOR ORGANI- income taxpayers in preparing and filing ten agreement. For purposes of the preceding ZATION.—For purposes of this title, the term their Federal income tax returns, including sentence, the residential living options shall ‘qualified blood collector organization’ schedules reporting sole proprietorship or include independent living units, nursing means an organization which is— farm income. home beds, and either assisted living units or ‘‘(A) described in section 501(c)(3) and ex- ‘‘(B) ASSISTANCE TO LOW-INCOME TAX- personal care beds.’’. empt from tax under section 501(a), PAYERS.—A clinic is treated as assisting low- (b) EFFECTIVE DATE.—The amendment ‘‘(B) registered by the Food and Drug Ad- income taxpayers under subparagraph (A)(ii) made by this section shall apply to bonds ministration to collect blood, and if at least 90 percent of the taxpayers as- issued after the date of the enactment of this ‘‘(C) primarily engaged in the activity of sisted by the clinic have incomes which do Act. the collection of blood.’’.

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(f) EFFECTIVE DATE.— apply to any bond (or series of bonds) issued with respect to such qualified organization (1) IN GENERAL.—Except as provided in to refund a qualified forest conservation or any such bond ceases to be a tax-exempt paragraph (2), the amendments made by this bond issued before December 31, 2006, if— bond. section shall apply with respect to excise (A) the average maturity date of the issue (5) PARTIAL RECAPTURE OF BENEFITS IF HAR- taxes imposed on sales or uses occurring on of which the refunding bond is a part is not VESTING LIMIT EXCEEDED.—If, as of the date or after October 1, 2003. later than the average maturity date of the that this subsection ceases to apply under (2) REFUND OF GASOLINE TAX.—For purposes bonds to be refunded by such issue, paragraph (3), the average annual area of of section 6421(c) of the Internal Revenue (B) the amount of the refunding bond does timber harvested from the land exceeds the Code of 1986 and any other provision that al- not exceed the outstanding amount of the re- requirement of paragraph (3)(B)(ii)(I), the lows for a refund or a payment in respect of funded bond, and tax imposed by chapter 1 of the Internal Rev- an excise tax payable at a level before the (C) the net proceeds of the refunding bond enue Code of 1986 shall be increased, under sale to a qualified blood collector organiza- are used to redeem the refunded bond not rules prescribed by the Secretary of the tion, the amendments made by this section later than 90 days after the date of the Treasury, by the sum of the tax benefits at- shall apply with respect to sales to a quali- issuance of the refunding bond. tributable to such excess and interest at the fied collector organization on or after Octo- For purposes of subparagraph (A), average underpayment rate under section 6621 of ber 1, 2003. maturity shall be determined in accordance such Code for the period of the under- SEC. 315. PILOT PROJECT FOR FOREST CON- with section 147(b)(2)(A) of such Code. payment. SERVATION ACTIVITIES. (c) DEFINITIONS.—For purposes of this sec- (7) EFFECTIVE DATE.—This subsection shall tion— (a) TAX-EXEMPT BOND FINANCING.— apply to obligations issued on or after the (1) IN GENERAL.—For purposes of the Inter- (1) QUALIFIED CONSERVATION PLAN.—The date which is 180 days after the enactment of nal Revenue Code of 1986, any qualified forest term ‘‘qualified conservation plan’’ means a this Act. multiple land use program or plan which— conservation bond shall be treated as an ex- (b) ITEMS FROM QUALIFIED HARVESTING AC- (A) is designed and administered primarily empt facility bond under section 142 of such TIVITIES NOT SUBJECT TO TAX OR TAKEN INTO for the purposes of protecting and enhancing Code. ACCOUNT.— wildlife and fish, timber, scenic attributes, (2) QUALIFIED FOREST CONSERVATION BOND.— (1) IN GENERAL.—Income, gains, deductions, For purposes of this section, the term losses, or credits from a qualified harvesting recreation, and soil and water quality of the ‘‘qualified forest conservation bond’’ means activity conducted by a qualified organiza- forest and forest land, any bond issued as part of an issue if— tion shall not be subject to tax or taken into (B) mandates that conservation of forest and forest land is the single-most significant (A) 95 percent or more of the net proceeds account under subtitle A of the Internal Rev- use of the forest and forest land, and (as defined in section 150(a)(3) of such Code) enue Code of 1986. of such issue are to be used for qualified (C) requires that timber harvesting be con- (2) LIMITATION.—The amount of income ex- sistent with— project costs, cluded from gross income under paragraph (B) such bond is issued for a qualified orga- (i) restoring and maintaining reference (1) for any taxable year shall not exceed the nization, and conditions for the region’s ecotype, amount used by the qualified organization to (C) such bond is issued before December 31, (ii) restoring and maintaining a represent- make debt service payments during such tax- 2006. ative sample of young, mid, and late succes- able year for qualified forest conservation (3) LIMITATION ON AGGREGATE AMOUNT sional forest age classes, bonds. ISSUED.— (iii) maintaining or restoring the re- (3) QUALIFIED HARVESTING ACTIVITY.—For (A) IN GENERAL.—The maximum aggregate sources’ ecological health for purposes of purposes of paragraph (1)— face amount of bonds which may be issued preventing damage from fire, insect, or dis- (A) IN GENERAL.—The term ‘‘qualified har- under this subsection shall not exceed ease, vesting activity’’ means the sale, lease, or $2,000,000,000 for all projects (excluding re- (iv) maintaining or enhancing wildlife or funding bonds). harvesting, of standing timber— fish habitat, or (i) on land owned by a qualified organiza- (B) ALLOCATION OF LIMITATION.—The limi- (v) enhancing research opportunities in tation described in subparagraph (A) shall be tion which was acquired with proceeds of sustainable renewable resource uses. allocated by the Secretary of the Treasury qualified forest conservation bonds, (2) CONSERVATION RESTRICTION.—The con- among qualified organizations based on cri- (ii) with respect to which a written ac- servation restriction described in this para- teria established by the Secretary not later knowledgement has been obtained by the graph is a restriction which— than 180 days after the date of the enactment qualified organization from the State or (A) is granted in perpetuity to an unre- of this section, after consultation with the local governments with jurisdiction over lated person which is described in section Chief of the Forest Service. such land that the acquisition lessens the 170(h)(3) of such Code and which, in the case (4) QUALIFIED PROJECT COSTS.—For pur- burdens of such government with respect to of a nongovernmental unit, is organized and poses of this subsection, the term ‘‘qualified such land, and operated for conservation purposes, project costs’’ means the sum of— (iii) pursuant to a qualified conservation (B) meets the requirements of clause (ii) or (A) the cost of acquisition by the qualified plan adopted by the qualified organization. (iii)(II) of section 170(h)(4)(A) of such Code, organization from an unrelated person of for- (B) EXCEPTIONS.— (C) obligates the qualified organization to ests and forest land which at the time of ac- (i) CESSATION AS QUALIFIED ORGANIZATION.— pay the costs incurred by the holder of the quisition or immediately thereafter are sub- The term ‘‘qualified harvesting activity’’ conservation restriction in monitoring com- ject to a conservation restriction described shall not include any sale, lease, or har- pliance with such restriction, and in subsection (c)(2), vesting for any period during which the orga- (D) requires an increasing level of con- (B) capitalized interest on the qualified nization ceases to qualify as a qualified orga- servation benefits to be provided whenever forest conservation bonds for the 3-year pe- nization. circumstances allow it. riod beginning on the date of issuance of (ii) EXCEEDING LIMITS ON HARVESTING.—The (3) QUALIFIED ORGANIZATION.—The term such bonds, and term ‘‘qualified harvesting activity’’ shall ‘‘qualified organization’’ means an organiza- (C) credit enhancement fees which con- not include any sale, lease, or harvesting of tion— stitute qualified guarantee fees (within the standing timber on land acquired with pro- (A) which is a nonprofit organization sub- meaning of section 148 of such Code). ceeds of qualified forest conservation bonds stantially all the activities of which are (5) SPECIAL RULES.—In applying the Inter- to the extent that— charitable, scientific, or educational, includ- nal Revenue Code of 1986 to any qualified for- (I) the average annual area of timber har- ing acquiring, protecting, restoring, man- est conservation bond, the following modi- vested from such land exceeds 2.5 percent of aging, and developing forest lands and other fications shall apply: the total area of such land or, renewable resources for the long-term chari- (A) Section 146 of such Code (relating to (II) the quantity of timber removed from table, educational, scientific and public ben- volume cap) shall not apply. such land exceeds the quantity which can be efit, (B) For purposes of section 147(b) of such removed from such land annually in per- (B) more than half of the value of the prop- Code (relating to maturity may not exceed petuity on a sustained-yield basis with re- erty of which consists of forests and forest 120 percent of economic life), the land and spect to such land. land acquired with the proceeds from quali- standing timber acquired with proceeds of The limitations under subclauses (I) and (II) fied forest conservation bonds, qualified forest conservation bonds shall shall not apply to post-fire restoration and (C) which periodically conducts edu- have an economic life of 35 years. rehabilitation or sanitation harvesting of cational programs designed to inform the (C) Subsections (c) and (d) of section 147 of timber stands which are substantially dam- public of environmentally sensitive forestry such Code (relating to limitations on acqui- aged by fire, windthrow, or other catas- management and conservation techniques, sition of land and existing property) shall trophes, or which are in imminent danger (D) which has at all times a board of direc- not apply. from insect or disease attack. tors— (D) Section 57(a)(5) of such Code (relating (4) TERMINATION.—This subsection shall (i) at least 20 percent of the members of to tax-exempt interest) shall not apply to in- not apply to any qualified harvesting activ- which represent the holders of the conserva- terest on qualified forest conservation bonds. ity of a qualified organization occurring tion restriction described in paragraph (2), (6) TREATMENT OF CURRENT REFUNDING after the date on which there is no out- (ii) at least 20 percent of the members of BONDS.—Paragraphs (2)(C) and (3) shall not standing qualified forest conservation bond which are public officials, and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00109 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3844 CONGRESSIONAL RECORD — SENATE April 6, 2004 (iii) not more than one-third of the mem- (B) by striking ‘‘invested in a private foun- (3) stabilize families and build commu- bers of which are individuals who are or were dation’’ in paragraph (2) and inserting ‘‘con- nities, and at any time within 5 years before the begin- tributed to a private foundation described in (4) support continued United States eco- ning of a term of membership on the board, paragraph (8)’’. nomic expansion. an employee of, independent contractor with (d) REQUIREMENTS FOR DISTRIBUTIONS FROM SEC. 503. DEFINITIONS. respect to, officer of, director of, or held a TRUSTS.—Section 601(c)(9)(A) of the Home- As used in this title: material financial interest in, a commercial land Security Act of 2002 is amended by (1) ELIGIBLE INDIVIDUAL.— forest products enterprise with which the striking ‘‘should’’ and inserting ‘‘shall’’. (A) IN GENERAL.—The term ‘‘eligible indi- qualified organization has a contractual or (e) REGULATIONS REGARDING NOTIFICATION vidual’’ means, with respect to any taxable other financial arrangement, OF TRUST BENEFICIARIES.—Section 601(f) of year, an individual who— (E) the bylaws of which require at least the Homeland Security Act of 2002 is amend- (i) has attained the age of 18 but not the two-thirds of the members of the board of di- ed by striking ‘‘this section’’ and inserting age of 61 as of the last day of such taxable rectors to vote affirmatively to approve the ‘‘subsection (e)’’. year, qualified conservation plan and any change (f) EFFECTIVE DATE.—The amendments (ii) is a citizen or lawful permanent resi- thereto, and made by this section shall take effect as if dent (within the meaning of section 7701(b)(6) (F) upon dissolution, is required to dedi- included in the enactment of section 601 of of the Internal Revenue Code of 1986) of the cate its assets to— the Homeland Security Act of 2002. United States as of the last day of such tax- (i) an organization described in section TITLE IV—SOCIAL SERVICES BLOCK able year, 501(c)(3) of such Code which is organized and GRANT (iii) was not a student (as defined in sec- operated for conservation purposes, or SEC. 401. RESTORATION OF FUNDS FOR THE SO- tion 151(c)(4) of such Code) for the imme- (ii) a governmental unit described in sec- CIAL SERVICES BLOCK GRANT. diately preceding taxable year, tion 170(c)(1) of such Code. (a) FINDINGS.—Congress makes the fol- (iv) is not an individual with respect to (4) UNRELATED PERSON.—The term ‘‘unre- lowing findings: whom a deduction under section 151 of such lated person’’ means a person who is not a (1) On August 22, 1996, the Personal Re- Code is allowable to another taxpayer for a related person. sponsibility and Work Opportunity Rec- taxable year of the other taxpayer ending (5) RELATED PERSON.—A person shall be onciliation Act of 1996 (Public Law 104–193; during the immediately preceding taxable treated as related to another person if— 110 Stat. 2105) was signed into law. year of the individual, (A) such person bears a relationship to (2) In enacting that law, Congress author- (v) is not a taxpayer described in sub- such other person described in section 267(b) ized $2,800,000,000 for fiscal year 2003 and each section (c), (d), or (e) of section 6402 of such (determined without regard to paragraph (9) fiscal year thereafter to carry out the Social Code for the immediately preceding taxable thereof), or 707(b)(1), of such Code, deter- Services Block Grant program established year, mined by substituting ‘‘25 percent’’ for ‘‘50 under title XX of the Social Security Act (42 (vi) is not a taxpayer described in section 1(d) of such Code for the immediately pre- percent’’ each place it appears therein, and U.S.C. 1397 et seq.). ceding taxable year, and (B) in the case such other person is a non- (b) RESTORATION OF FUNDS.—Section profit organization, if such person controls 2003(c)(11) of the Social Security Act (42 (vii) is a taxpayer the modified adjusted directly or indirectly more than 25 percent of U.S.C. 1397b(c)(11)) is amended by inserting gross income of whom for the immediately the governing body of such organization. ‘‘, except that, with respect to fiscal year preceding taxable year does not exceed— (I) $18,000, in the case of a taxpayer de- SEC. 316. CLARIFICATION OF TREATMENT OF 2004, the amount shall be $1,975,000,000, and scribed in section 1(c) of such Code, JOHNNY MICHEAL SPANN PATRIOT with respect to fiscal year 2005, the amount (II) $30,000, in the case of a taxpayer de- TRUSTS. shall be $2,800,000,000’’ after ‘‘thereafter.’’. (a) CLARIFICATION OF TAX-EXEMPT STATUS scribed in section 1(b) of such Code, and SEC. 402. RESTORATION OF AUTHORITY TO (III) $38,000, in the case of a taxpayer de- OF TRUSTS.— TRANSFER UP TO 10 PERCENT OF (1) IN GENERAL.—Subsection (b) of section TANF FUNDS TO THE SOCIAL SERV- scribed in section 1(a) of such Code. 601 of the Homeland Security Act of 2002 is ICES BLOCK GRANT. (B) INFLATION ADJUSTMENT.— amended to read as follows: (a) IN GENERAL.—Section 404(d)(2) of the (i) IN GENERAL.—In the case of any taxable ‘‘(b) DESIGNATION OF JOHNNY MICHEAL Social Security Act (42 U.S.C. 604(d)(2)) is year beginning after 2004, each dollar SPANN PATRIOT TRUSTS.—Any charitable cor- amended to read as follows: amount referred to in subparagraph (A)(vii) poration, fund, foundation, or trust (or sepa- ‘‘(2) LIMITATION ON AMOUNT TRANSFERABLE shall be increased by an amount equal to— rate fund or account thereof) which is de- TO TITLE XX PROGRAMS.—A State may use not (I) such dollar amount, multiplied by scribed in section 501(c)(3) of the Internal more than 10 percent of the amount of any (II) the cost-of-living adjustment deter- Revenue Code of 1986 and exempt from tax grant made to the State under section 403(a) mined under section (1)(f)(3) of the Internal under section 501(a) of such Code and meets for a fiscal year to carry out State programs Revenue Code of 1986 for the calendar year in the requirements described in subsection (c) pursuant to title XX.’’. which the taxable year begins, by sub- shall be eligible to designate itself as a (b) EFFECTIVE DATE.—The amendment stituting ‘‘2003’’ for ‘‘1992’’. ‘Johnny Micheal Spann Patriot trust’.’’. made by subsection (a) applies to amounts (ii) ROUNDING.—If any amount as adjusted (2) CONFORMING AMENDMENT.—Section made available for fiscal year 2004 and each under clause (i) is not a multiple of $50, such 601(c)(3) of such Act is amended by striking fiscal year thereafter. amount shall be rounded to the nearest mul- tiple of $50. ‘‘based’’ and all that follows through SEC. 403. REQUIREMENT TO SUBMIT ANNUAL RE- ‘‘Trust’’. PORT ON STATE ACTIVITIES. (C) MODIFIED ADJUSTED GROSS INCOME.—For purposes of subparagraph (A)(v), the term (b) PUBLICLY AVAILABLE AUDITS.—Section (a) IN GENERAL.—Section 2006(c) of the So- 601(c)(7) of the Homeland Security Act of 2002 cial Security Act (42 U.S.C. 1397e(c)) is ‘‘modified adjusted gross income’’ means ad- is amended by striking ‘‘shall be filed with amended by adding at the end the following: justed gross income— (i) determined without regard to sections the Internal Revenue Service, and shall be ‘‘The Secretary shall compile the informa- 86, 893, 911, 931, and 933 of the Internal Rev- open to public inspection’’ and inserting tion submitted by the States and submit enue Code of 1986, and ‘‘shall be open to public inspection con- that information to Congress on an annual (ii) increased by the amount of interest re- sistent with section 6104(d)(1) of the Internal basis.’’. ceived or accrued by the taxpayer during the Revenue Code of 1986’’. (b) EFFECTIVE DATE.—The amendment (c) CLARIFICATION OF REQUIRED DISTRIBU- made by subsection (a) applies to informa- taxable year which is exempt from tax. TIONS TO PRIVATE FOUNDATION.— NDIVIDUAL DEVELOPMENT ACCOUNT.—The tion submitted by States under section 2006 (2) I (1) IN GENERAL.—Section 601(c)(8) of the term ‘‘Individual Development Account’’ of the Social Security Act (42 U.S.C. 1397e) Homeland Security Act of 2002 is amended by means an account established for an eligible with respect to fiscal year 2003 and each fis- striking ‘‘not placed’’ and all that follows individual as part of a qualified individual cal year thereafter. and inserting ‘‘not so distributed shall be development account program, but only if contributed to a private foundation which is TITLE V—INDIVIDUAL DEVELOPMENT the written governing instrument creating described in section 509(a) of the Internal ACCOUNTS the account meets the following require- Revenue Code of 1986 and exempt from tax SEC. 501. SHORT TITLE. ments: under section 501(a) of such Code and which This title may be cited as the ‘‘Savings for (A) The owner of the account is the indi- is dedicated to such beneficiaries not later Working Families Act of 2004’’. vidual for whom the account was estab- than 36 months after the end of the fiscal SEC. 502. PURPOSES. lished. year in which such funds, donations, or earn- The purposes of this title are to provide for (B) No contribution will be accepted unless ings are received.’’. the establishment of individual development it is in cash, and, except in the case of any (2) CONFORMING AMENDMENTS.—Section account programs that will— qualified rollover, contributions will not be 601(c) of such Act is amended— (1) provide individuals and families with accepted for the taxable year in excess of (A) by striking ‘‘(or, if placed in a private limited means an opportunity to accumulate $1,500 on behalf of any individual. foundation, held in trust for)’’ in paragraph assets and to enter the financial main- (C) The trustee of the account is a quali- (1) and inserting ‘‘(or contributed to a pri- stream, fied financial institution. vate foundation described in paragraph (8) (2) promote education, homeownership, and (D) The assets of the account will not be for the benefit of)’’, and the development of small businesses, commingled with other property except in a

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00110 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3845 common trust fund or common investment be reduced by the amount of any qualified qualified individual development account fund. higher education expenses taken into ac- program. (E) Except as provided in section 507(b), count as qualified expense distributions dur- (c) COORDINATION WITH PUBLIC HOUSING any amount in the account may be paid out ing such taxable year. AGENCY INDIVIDUAL SAVINGS ACCOUNTS.—Sec- only for the purpose of paying the qualified (iii) QUALIFIED FIRST-TIME HOMEBUYER tion 3(e)(2) of the United States Housing Act expenses of the account owner. COSTS.—The term ‘‘qualified first-time home- of 1937 (42 U.S.C. 1437a(e)(2)) is amended by (3) PARALLEL ACCOUNT.—The term ‘‘parallel buyer costs’’ means qualified acquisition inserting ‘‘or in any Individual Development account’’ means a separate, parallel indi- costs (as defined in section 72(t)(8)(C) of the Account established under the Savings for vidual or pooled account for all matching Internal Revenue Code of 1986) with respect Working Families Act of 2004’’ after ‘‘sub- funds and earnings dedicated to an Indi- to a principal residence (within the meaning section’’. vidual Development Account owner as part of section 121 of such Code) for a qualified (d) TAX TREATMENT OF PARALLEL AC- of a qualified individual development ac- first-time homebuyer (as defined in section COUNTS.— count program, the trustee of which is a 72(t)(8)(D)(i) of such Code). (1) IN GENERAL.—Chapter 77 (relating to qualified financial institution. (iv) QUALIFIED BUSINESS CAPITALIZATION OR miscellaneous provisions) is amended by add- (4) QUALIFIED FINANCIAL INSTITUTION.—The EXPANSION COSTS.— ing at the end the following new section: term ‘‘qualified financial institution’’ means (I) IN GENERAL.—The term ‘‘qualified busi- ‘‘SEC. 7528. TAX INCENTIVES FOR INDIVIDUAL DE- any person authorized to be a trustee of any ness capitalization or expansion costs’’ VELOPMENT PARALLEL ACCOUNTS. individual retirement account under section means qualified expenditures for the capital- ‘‘For purposes of this title— 408(a)(2) of the Internal Revenue Code of 1986. ization or expansion of a qualified business ‘‘(1) any account described in section (5) QUALIFIED INDIVIDUAL DEVELOPMENT AC- pursuant to a qualified business plan. 504(b)(1)(B) of the Savings for Working Fami- COUNT PROGRAM.—The term ‘‘qualified indi- (II) QUALIFIED EXPENDITURES.—The term lies Act of 2004 shall be exempt from tax- vidual development account program’’ ‘‘qualified expenditures’’ means expenditures ation, means a program established upon approval normally associated with starting or expand- ‘‘(2) except as provided in section 45G, no of the Secretary under section 504 after De- ing a business and included in a qualified item of income, expense, basis, gain, or loss cember 31, 2002, under which— business plan, including costs for capital, with respect to such an account may be (A) Individual Development Accounts and plant, and equipment, inventory expenses, taken into account, and parallel accounts are held in trust by a and attorney and accounting fees. ‘‘(3) any amount withdrawn from such an qualified financial institution, and (III) QUALIFIED BUSINESS.—The term account shall not be includible in gross in- (B) additional activities determined by the ‘‘qualified business’’ means any business come.’’. Secretary, in consultation with the Sec- that does not contravene any law. (2) CONFORMING AMENDMENT.—The table of retary of Health and Human Services, as nec- (IV) QUALIFIED BUSINESS PLAN.—The term sections for chapter 77 is amended by adding essary to responsibly develop and administer ‘‘qualified business plan’’ means a business at the end the following new item: accounts, including recruiting, providing fi- plan which has been approved by the quali- ‘‘Sec. 7528. Tax incentives for individual de- nancial education and other training to Ac- fied financial institution and which meets velopment parallel accounts.’’. count owners, and regular program moni- such requirements as the Secretary may toring, are carried out by the qualified finan- specify. (e) COORDINATION OF CERTAIN EXPENSES.— cial institution. (v) QUALIFIED ROLLOVERS.—The term Section 25A(g)(2) is amended by striking (6) QUALIFIED EXPENSE DISTRIBUTION.— ‘‘qualified rollover’’ means the complete dis- ‘‘and’’ at the end of subparagraph (C), by (A) IN GENERAL.—The term ‘‘qualified ex- tribution of the amounts in an Individual striking the period at the end of subpara- pense distribution’’ means any amount paid Development Account and parallel account graph (D) and inserting ‘‘, and’’, and by add- (including through electronic payments) or to another Individual Development Account ing at the end the following new subpara- distributed out of an Individual Development and parallel account established in another graph: Account or a parallel account established for qualified financial institution for the benefit ‘‘(D) a qualified expense distribution with an eligible individual if such amount— of the Account owner. respect to qualified higher education ex- (i) is used exclusively to pay the qualified (vi) QUALIFIED FINAL DISTRIBUTION.—The penses from an Individual Development Ac- expenses of the Individual Development Ac- term ‘‘qualified final distribution’’ means, in count or a parallel account under section count owner or such owner’s spouse or de- the case of a deceased Account owner, the 507(a) of the Savings for Working Families pendents, complete distribution of the amounts in the Act of 2004.’’. (ii) is paid by the qualified financial insti- Individual Development Account and par- SEC. 505. PROCEDURES FOR OPENING AND MAIN- tution— allel account directly to the spouse, any de- TAINING AN INDIVIDUAL DEVELOP- (I) except as otherwise provided in this pendent, or other named beneficiary of the MENT ACCOUNT AND QUALIFYING clause, directly to the unrelated third party deceased. FOR MATCHING FUNDS. to whom the amount is due, (a) OPENING AN ACCOUNT.—An eligible indi- (7) SECRETARY.—The term ‘‘Secretary’’ (II) in the case of any qualified rollover, di- means the Secretary of the Treasury. vidual may open an Individual Development rectly to another Individual Development Account with a qualified financial institu- Account and parallel account, or SEC. 504. STRUCTURE AND ADMINISTRATION OF QUALIFIED INDIVIDUAL DEVELOP- tion upon certification that such individual (III) in the case of a qualified final dis- MENT ACCOUNT PROGRAMS. has never maintained any other Individual tribution, directly to the spouse, dependent, (a) ESTABLISHMENT OF QUALIFIED INDI- Development Account (other than an Indi- or other named beneficiary of the deceased VIDUAL DEVELOPMENT ACCOUNT PROGRAMS.— vidual Development Account to be termi- Account owner, and Any qualified financial institution may nated by a qualified rollover). (iii) is paid after the Account owner has apply to the Secretary for approval to estab- (b) REQUIRED COMPLETION OF FINANCIAL completed a financial education course if re- lish 1 or more qualified individual develop- EDUCATION COURSE.— quired under section 505(b). ment account programs which meet the re- (1) IN GENERAL.—Before becoming eligible (B) QUALIFIED EXPENSES.— quirements of this title and for an allocation to withdraw funds to pay for qualified ex- (i) IN GENERAL.—The term ‘‘qualified ex- of the Individual Development Account limi- penses, owners of Individual Development penses’’ means any of the following expenses tation under section 45G(i)(3) of the Internal Accounts must complete 1 or more financial approved by the qualified financial institu- Revenue Code of 1986 with respect to such education courses specified in the qualified tion: programs. individual development account program. (I) Qualified higher education expenses. (b) BASIC PROGRAM STRUCTURE.— (2) STANDARD AND APPLICABILITY OF (II) Qualified first-time homebuyer costs. (1) IN GENERAL.—All qualified individual COURSE.—The Secretary, in consultation (III) Qualified business capitalization or development account programs shall consist with representatives of qualified individual expansion costs. of the following 2 components for each par- development account programs and financial (IV) Qualified rollovers. ticipant: educators, shall not later than January 1, (V) Qualified final distribution. (A) An Individual Development Account to 2004, establish minimum quality standards (ii) QUALIFIED HIGHER EDUCATION EX- which an eligible individual may contribute for the contents of financial education PENSES.— cash in accordance with section 505. courses and providers of such courses de- (I) IN GENERAL.—The term ‘‘qualified high- (B) A parallel account to which all match- scribed in paragraph (1) and a protocol to ex- er education expenses’’ has the meaning ing funds shall be deposited in accordance empt individuals from the requirement given such term by section 529(e)(3) of the In- with section 506. under paragraph (1) in the case of hardship, ternal Revenue Code of 1986, determined by (2) TAILORED IDA PROGRAMS.—A qualified fi- lack of need, the attainment of age 65, or a treating the Account owner, the owner’s nancial institution may tailor its qualified qualified final distribution. spouse, or one or more of the owner’s depend- individual development account program to (c) PROOF OF STATUS AS AN ELIGIBLE INDI- ents as a designated beneficiary, and reduced allow matching funds to be spent on 1 or VIDUAL.—Federal income tax forms for the as provided in section 25A(g)(2) of such Code. more of the categories of qualified expenses. immediately preceding taxable year and any (II) COORDINATION WITH OTHER BENEFITS.— (3) NO FEES MAY BE CHARGED TO IDAS.—A other evidence of eligibility which may be The amount of expenses which may be taken qualified financial institution may not required by a qualified financial institution into account for purposes of section 135, 529, charge any fees to any Individual Develop- shall be presented to such institution at the or 530 of such Code for any taxable year shall ment Account or parallel account under a time of the establishment of the Individual

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(B) parallel account, but only— fied financial institution to assume the au- (d) SPECIAL RULE IN THE CASE OF MARRIED (i) from matching funds which have been thority to conduct such program, then any INDIVIDUALS.—For purposes of this title, if, on deposit in such parallel account for at funds in a parallel account established for with respect to any taxable year, 2 married least 1 year, the benefit of any individual under such pro- individuals file a Federal joint income tax (ii) from earnings in such parallel account, gram shall be deposited into the Individual return, then not more than 1 of such individ- after all matching funds described in clause Development Account of such individual as uals may be treated as an eligible individual (i) have been withdrawn, and of the first day of such termination. with respect to the succeeding taxable year. (iii) to the extent such withdrawal does not SEC. 509. REPORTING, MONITORING, AND EVAL- UATION. SEC. 506. DEPOSITS BY QUALIFIED INDIVIDUAL result in a remaining balance in such par- (a) RESPONSIBILITIES OF QUALIFIED FINAN- DEVELOPMENT ACCOUNT PRO- allel account which is less than the remain- GRAMS. ing balance in the Individual Development CIAL INSTITUTIONS.— (1) IN GENERAL.—Each qualified financial (a) PARALLEL ACCOUNTS.—The qualified fi- Account after such withdrawal. institution that operates a qualified indi- nancial institution shall deposit all match- (2) PROCEDURE.—Upon receipt of a with- vidual development account program under ing funds for each Individual Development drawal request which meets the require- section 504 shall report annually to the Sec- Account into a parallel account at a quali- ments of paragraph (1), the qualified finan- retary within 90 days after the end of each fied financial institution. cial institution shall directly transfer the calendar year on— (b) REGULAR DEPOSITS OF MATCHING funds electronically to the distributees de- scribed in section 503(6)(A)(ii). If a dis- (A) the number of individuals making con- FUNDS.— tributions into Individual Development Ac- tributee is not equipped to receive funds (1) IN GENERAL.—Subject to paragraph (2), counts and the amounts contributed, electronically, the qualified financial insti- the qualified financial institution shall de- (B) the amounts contributed into Indi- tution may issue such funds by paper check posit into the parallel account with respect vidual Development Accounts by eligible in- to the distributee. to each eligible individual the following dividuals and the amounts deposited into (b) WITHDRAWALS FOR NONQUALIFIED EX- amounts: parallel accounts for matching funds, PENSES.—An Individual Development Ac- (A) A dollar-for-dollar match for the first (C) the amounts withdrawn from Indi- $500 contributed by the eligible individual count owner may withdraw any amount of funds from the Individual Development Ac- vidual Development Accounts and parallel into an Individual Development Account accounts, and the purposes for which such with respect to any taxable year of such in- count for purposes other than to pay quali- fied expense distributions, but if, after such amounts were withdrawn, dividual. (D) the balances remaining in Individual (B) Any matching funds provided by State, withdrawal, the amount in the parallel ac- count of such owner (excluding earnings on Development Accounts and parallel ac- local, or private sources in accordance with counts, and the matching ratio set by those sources. matching funds) exceeds the amount remain- ing in such Individual Development Account, (E) such other information needed to help (2) TIMING OF DEPOSITS.—A deposit of the then such owner shall forfeit from the par- the Secretary monitor the effectiveness of amounts described in paragraph (1) shall be the qualified individual development account made into a parallel account— allel account the lesser of such excess or the amount withdrawn. program (provided in a non-individually- (A) in the case of amounts described in (c) WITHDRAWALS FROM ACCOUNTS OF NON- identifiable manner). paragraph (1)(A), not later than 30 days after ELIGIBLE INDIVIDUALS.—If the individual for (2) ADDITIONAL REPORTING REQUIREMENTS.— the end of the calendar quarter during which whose benefit an Individual Development Ac- Each qualified financial institution that op- the contribution described in such paragraph count is established ceases to be an eligible erates a qualified individual development ac- was made, and individual, such account shall remain an In- count program under section 504 shall report (B) in the case of amounts described in dividual Development Account, but such in- at such time and in such manner as the Sec- paragraph (1)(B), not later than 2 business dividual shall not be eligible for any further retary may prescribe any additional infor- days after such amounts were provided. matching funds under section 506(b)(1)(A) for mation that the Secretary requires to be (3) CROSS REFERENCE.— contributions which are made to the Ac- provided for purposes of administering and For allowance of tax credit for Individual count during any taxable year when such in- supervising the qualified individual develop- Development Account subsidies, including dividual is not an eligible individual. ment account program. This additional data matching funds, see section 45G of the Inter- (d) EFFECT OF PLEDGING ACCOUNT AS SECU- may include, without limitation, identifying nal Revenue Code of 1986. RITY.—If, during any taxable year of the indi- information about Individual Development Account owners, their Accounts, additions to (c) DEPOSIT OF MATCHING FUNDS INTO INDI- vidual for whose benefit an Individual Devel- the Accounts, and withdrawals from the Ac- VIDUAL DEVELOPMENT ACCOUNT OF INDIVIDUAL opment Account is established, that indi- counts. WHO HAS ATTAINED AGE 65.—In the case of an vidual uses the Account, the individual’s (b) RESPONSIBILITIES OF THE SECRETARY.— Individual Development Account owner who parallel account, or any portion thereof as (1) MONITORING PROTOCOL.—Not later than attains the age of 65, the qualified financial security for a loan, the portion so used shall 12 months after the date of the enactment of institution shall deposit the funds in the par- be treated as a withdrawal of such portion this Act, the Secretary, in consultation with allel account with respect to such individual from the Individual Development Account the Secretary of Health and Human Services, into the Individual Development Account of for purposes other than to pay qualified ex- shall develop and implement a protocol and such individual on the later of— penses. process to monitor the cost and outcomes of (1) the day which is the 1-year anniversary SEC. 508. CERTIFICATION AND TERMINATION OF the qualified individual development account of the deposit of such funds in the parallel QUALIFIED INDIVIDUAL DEVELOP- programs established under section 504. account, or MENT ACCOUNT PROGRAMS. (a) CERTIFICATION PROCEDURES.—Upon es- (2) ANNUAL REPORTS.—For each year after (2) the first business day of the taxable tablishing a qualified individual develop- 2004, the Secretary shall submit a progress year of such individual following the taxable ment account program under section 504, a report to Congress on the status of such year in which such individual attained age qualified financial institution shall certify qualified individual development account 65. to the Secretary at such time and in such programs. Such report shall, to the extent (d) UNIFORM ACCOUNTING REGULATIONS.—To manner as may be prescribed by the Sec- data are available, include from a represent- ensure proper recordkeeping and determina- retary and accompanied by any documenta- ative sample of qualified individual develop- tion of the tax credit under section 45G of tion required by the Secretary, that— ment account programs information on— the Internal Revenue Code of 1986, the Sec- (1) the accounts described in subparagraphs (A) the characteristics of participants, in- retary shall prescribe regulations with re- (A) and (B) of section 504(b)(1) are operating cluding age, gender, race or ethnicity, mar- spect to accounting for matching funds in pursuant to all the provisions of this title, ital status, number of children, employment the parallel accounts. and status, and monthly income, (e) REGULAR REPORTING OF ACCOUNTS.— (2) the qualified financial institution (B) deposits, withdrawals, balances, uses of Any qualified financial institution shall re- agrees to implement an information system Individual Development Accounts, and par- port the balances in any Individual Develop- necessary to monitor the cost and outcomes ticipant characteristics, ment Account and parallel account of an in- of the qualified individual development ac- (C) the characteristics of qualified indi- dividual on not less than an annual basis to count program. vidual development account programs, in- such individual. (b) AUTHORITY TO TERMINATE QUALIFIED cluding match rate, economic education re- SEC. 507. WITHDRAWAL PROCEDURES. IDA PROGRAM.—If the Secretary determines quirements, permissible uses of accounts, (a) WITHDRAWALS FOR QUALIFIED EX- that a qualified financial institution under staffing of programs in full time employees, PENSES.— this title is not operating a qualified indi- and the total costs of programs, and (1) IN GENERAL.—An Individual Develop- vidual development account program in ac- (D) process information on program imple- ment Account owner may withdraw funds in cordance with the requirements of this title mentation and administration, especially on order to pay qualified expense distributions (and has not implemented any corrective problems encountered and how problems from such individual’s— recommendations directed by the Secretary), were solved.

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(3) REAUTHORIZATION REPORT ON COST AND ‘‘SEC. 45G. INDIVIDUAL DEVELOPMENT ACCOUNT ‘‘(1) such regulations as necessary to in- OUTCOMES OF IDAS.— INVESTMENT CREDIT. sure that any credit described in subsection (A) IN GENERAL.—Not later than July 1, ‘‘(a) DETERMINATION OF AMOUNT.—For pur- (g)(1) is claimed once and not retransferred 2008, the Secretary of the Treasury shall sub- poses of section 38, the individual develop- by a transferee, and mit a report to Congress and the chairmen ment account investment credit determined ‘‘(2) regulations providing for a recapture and ranking members of the Committee on under this section with respect to any eligi- of the credit allowed under this section (not- Finance, the Committee on Banking, Hous- ble entity for any taxable year is an amount withstanding any termination date described ing, and Urban Affairs, and the Committee equal to the individual development account in subsection (i)) in cases where there is a on Health, Education, Labor, and Pensions of investment provided by such eligible entity forfeiture under section 507(b) of the Savings the Senate and the Committee on Ways and during the taxable year under an individual for Working Families Act of 2004 in a subse- Means, the Committee on Banking and Fi- development account program established quent taxable year of any amount which was nancial Services, and the Committee on Edu- under section 504 of the Savings for Working taken into account in determining the cation and the Workforce of the House of Families Act of 2004. amount of such credit. Representatives, in which the Secretary ‘‘(b) APPLICABLE TAX.—For the purposes of ‘‘(i) APPLICATION OF SECTION.— shall— this section, the term ‘applicable tax’ means ‘‘(1) IN GENERAL.—This section shall apply (i) summarize the previously submitted an- the excess (if any) of— to any expenditure made in any taxable year nual reports required under paragraph (2), ‘‘(1) the tax imposed under this chapter ending after December 31, 2004, and begin- (ii) from a representative sample of quali- (other than the taxes imposed under the pro- ning on or before January 1, 2012, with re- fied individual development account pro- visions described in subparagraphs (C) spect to any Individual Development Ac- grams, include an analysis of— through (Q) of section 26(b)(2)), over count which— (I) the economic, social, and behavioral ‘‘(2) the credits allowable under subpart B ‘‘(A) is opened before January 1, 2012, and outcomes, (other than this section) and subpart D of ‘‘(B) as determined by the Secretary, when (II) the changes in savings rates, asset this part. added to all of the previously opened Indi- holdings, and household debt, and overall ‘‘(c) INDIVIDUAL DEVELOPMENT ACCOUNT IN- vidual Development Accounts, does not ex- changes in economic stability, VESTMENT.—For purposes of this section, the ceed— (III) the changes in outlooks, attitudes, term ‘individual development account in- ‘‘(i) 100,000 Accounts if opened after Decem- and behavior regarding savings strategies, vestment’ means, with respect to an indi- ber 31, 2004, and before January 1, 2007, investment, education, and family, vidual development account program in any ‘‘(ii) an additional 100,000 Accounts if (IV) the integration into the financial taxable year, an amount equal to the sum opened after December 31, 2006, and before mainstream, including decreased reliance on of— January 1, 2009, but only if, except as pro- alternative financial services, and increase ‘‘(1) the aggregate amount of dollar-for- vided in paragraph (4), the total number of in acquisition of mainstream financial prod- dollar matches under such program under Accounts described in clause (i) are opened ucts, and section 506(b)(1)(A) of the Savings for Work- and the Secretary determines that such Ac- (V) the involvement in civic affairs, includ- ing Families Act of 2004 for such taxable counts are being reasonably and responsibly ing neighborhood schools and associations, year, plus administered, and associated with participation in qualified in- ‘‘(2) $50 with respect to each Individual De- ‘‘(iii) an additional 100,000 Accounts if dividual development account programs, velopment Account maintained— opened after December 31, 2008, and before (iii) from a representative sample of quali- ‘‘(A) as of the end of such taxable year, but January 1, 2012, but only if the total number fied individual development account pro- only if such taxable year is within the 7-tax- of Accounts described in clauses (i) and (ii) grams, include a comparison of outcomes as- able-year period beginning with the taxable are opened and the Secretary makes a deter- sociated with such programs with outcomes year in which such Account is opened, and mination described in paragraph (2). associated with other Federal Government ‘‘(B) with a balance of not less than $100 (other than the taxable year in which such Notwithstanding the preceding sentence, social and economic development programs, this section shall apply to amounts which including asset building programs, and Account is opened). ‘‘(d) ELIGIBLE ENTITY.—For purposes of this are described in subsection (c)(1)(A) and (iv) make recommendations regarding the section, except as provided in regulations, which are timely deposited into a parallel reauthorization of the qualified individual the term ‘eligible entity’ means a qualified account during the 30-day period following development account programs, including— financial institution. the end of last taxable year beginning before (I) recommendations regarding reforms ‘‘(e) OTHER DEFINITIONS.—For purposes of January 1, 2012. that will improve the cost and outcomes of this section, any term used in this section ‘‘(2) DETERMINATION WITH RESPECT TO THIRD the such programs, including the ability to and also in the Savings for Working Families GROUP OF ACCOUNTS.—A determination is de- help low income families save and accumu- Act of 2004 shall have the meaning given scribed in this paragraph if the Secretary de- late productive assets, such term by such Act. termines that— (II) recommendations regarding the appro- ‘‘(f) DENIAL OF DOUBLE BENEFIT.— ‘‘(A) substantially all of the previously priate levels of subsidies to provide effective ‘‘(1) IN GENERAL.—No deduction or credit opened Accounts have been reasonably and incentives to financial institutions and Ac- (other than under this section) shall be al- responsibly administered prior to the date of count owners under such programs, and lowed under this chapter with respect to any the determination, (III) recommendations regarding how such expense which— ‘‘(B) the individual development account programs should be integrated into other ‘‘(A) is taken into account under sub- programs have increased net savings of par- Federal poverty reduction, asset building, section (c)(1)(A) in determining the credit ticipants in the programs, and community development policies and under this section, or ‘‘(C) participants in the individual develop- programs. ‘‘(B) is attributable to the maintenance of ment account programs have increased Fed- (B) AUTHORIZATION.—There is authorized to an Individual Development Account. eral income tax liability and decreased utili- be appropriated $2,500,000, for carrying out ‘‘(2) DETERMINATION OF AMOUNT.—Solely for zation of Federal assistance programs rel- the purposes of this paragraph. purposes of paragraph (1)(B), the amount at- ative to similarly situated individuals that (4) USE OF ACCOUNTS IN RURAL AREAS EN- tributable to the maintenance of an Indi- did not participate in the individual develop- COURAGED.—The Secretary shall develop vidual Development Account shall be deemed ment account programs, and methods to encourage the use of Individual to be the dollar amount of the credit allowed ‘‘(D) the sum of the estimated increased Development Accounts in rural areas. under subsection (c)(l)(B) for each taxable Federal tax liability and reduction of Fed- SEC. 510. AUTHORIZATION OF APPROPRIATIONS. year such Individual Development Account eral assistance program benefits to partici- is maintained. pants in the individual development account There is authorized to be appropriated to ‘‘(g) CREDIT MAY BE TRANSFERRED.— programs is greater than the cost of the indi- the Secretary $1,000,000 for fiscal year 2004 ‘‘(1) IN GENERAL.—An eligible entity may vidual development account programs to the and for each fiscal year through 2012, for the transfer any credit allowable to the eligible Federal government. purposes of implementing this title, includ- entity under subsection (a) to any person ‘‘(3) DETERMINATION OF LIMITATION.—The ing the reporting, monitoring, and evalua- other than to another eligible entity which limitation on the number of Individual De- tion required under section 509, to remain is exempt from tax under this title. The de- velopment Accounts under paragraph (1)(B) available until expended. termination as to whether a credit is allow- shall be allocated by the Secretary among able shall be made without regard to the tax- qualified individual development account SEC. 511. MATCHING FUNDS FOR INDIVIDUAL DE- exempt status of the eligible entity. programs selected by the Secretary and, in VELOPMENT ACCOUNTS PROVIDED ‘‘(2) CONSENT REQUIRED FOR REVOCATION.— the case of the limitation under clause (iii) THROUGH A TAX CREDIT FOR of such paragraph, shall be equally divided QUALIFIED FINANCIAL INSTITU- Any transfer under paragraph (1) may be re- TIONS. voked only with the consent of the Sec- among the States. retary. ‘‘(4) SPECIAL RULE IF SMALLER NUMBER OF (a) IN GENERAL.—Subpart D of part IV of ‘‘(h) REGULATIONS.—The Secretary may ACCOUNTS ARE OPENED.—For purposes of para- subchapter A of chapter 1 (relating to busi- prescribe such regulations as may be nec- graph (1)(B)(ii)— ness related credits) is amended by adding at essary or appropriate to carry out this sec- ‘‘(i) IN GENERAL.—If less than 100,000 Ac- the end the following new section: tion, including counts are opened before January 1, 2007,

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such paragraph shall be applied by sub- TITLE VII—REVENUE PROVISIONS ‘‘(B) TAX-INDIFFERENT PARTY.—The term stituting ‘‘applicable number of Accounts’ Subtitle A—Provisions Designed To Curtail ‘tax-indifferent party’ means any person or for ‘100,000 Accounts’. Tax Shelters entity not subject to tax imposed by subtitle ‘‘(ii) APPLICABLE NUMBER.—For purposes of SEC. 701. CLARIFICATION OF ECONOMIC SUB- A. A person shall be treated as a tax-indif- clause (i), the applicable number equals the STANCE DOCTRINE. ferent party with respect to a transaction if lesser of— (a) IN GENERAL.—Section 7701, as amended the items taken into account with respect to ‘‘(I) 75,000, or by this Act, is amended by redesignating the transaction have no substantial impact ‘‘(II) 3 times the number of Accounts subsection (o) as subsection (p) and by in- on such person’s liability under subtitle A. opened before January 1, 2007.’’. serting after subsection (n) the following ‘‘(C) EXCEPTION FOR PERSONAL TRANS- (b) CREDIT TREATED AS BUSINESS CREDIT.— new subsection: ACTIONS OF INDIVIDUALS.—In the case of an Section 38(b) (relating to current year busi- ‘‘(o) CLARIFICATION OF ECONOMIC SUBSTANCE individual, this subsection shall apply only ness credit) is amended by striking ‘‘plus’’ at DOCTRINE; ETC.— to transactions entered into in connection the end of paragraph (14), by striking the pe- ‘‘(1) GENERAL RULES.— with a trade or business or an activity en- riod at the end of paragraph (15) and insert- ‘‘(A) IN GENERAL.—In applying the eco- gaged in for the production of income. ing ‘‘, plus’’, and by adding at the end the nomic substance doctrine, the determination ‘‘(D) TREATMENT OF LESSORS.—In applying following new paragraph: of whether a transaction has economic sub- subclause (I) of paragraph (1)(B)(ii) to the lessor of tangible property subject to a lease, ‘‘(16) the individual development account stance shall be made as provided in this the expected net tax benefits shall not in- investment credit determined under section paragraph. clude the benefits of depreciation, or any tax 45G(a).’’. ‘‘(B) DEFINITION OF ECONOMIC SUBSTANCE.— For purposes of subparagraph (A)— credit, with respect to the leased property O ARRYBACKS (c) N C .—Subsection (d) of sec- ‘‘(i) IN GENERAL.—A transaction has eco- and subclause (II) of paragraph (1)(B)(ii) tion 39 (relating to carryback and nomic substance only if— shall be disregarded in determining whether carryforward of unused credits) is amended ‘‘(I) the transaction changes in a meaning- any of such benefits are allowable. by adding at the end the following: ful way (apart from Federal tax effects and, ‘‘(4) OTHER COMMON LAW DOCTRINES NOT AF- ‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT if there is any Federal tax effects, also apart FECTED.—Except as specifically provided in BEFORE EFFECTIVE DATE.—No portion of the from any foreign, State, or local tax effects) this subsection, the provisions of this sub- unused business credit for any taxable year the taxpayer’s economic position, and section shall not be construed as altering or which is attributable to the individual devel- ‘‘(II) the taxpayer has a substantial nontax supplanting any other rule of law, and the opment account investment credit deter- purpose for entering into such transaction requirements of this subsection shall be con- mined under section 45G may be carried back and the transaction is a reasonable means of strued as being in addition to any such other to a taxable year ending before January 1, accomplishing such purpose. rule of law. 2004.’’. ‘‘(ii) SPECIAL RULE WHERE TAXPAYER RELIES ‘‘(5) REGULATIONS.—The Secretary shall (d) CONFORMING AMENDMENT.—The table of ON PROFIT POTENTIAL.—A transaction shall prescribe such regulations as may be nec- sections for subpart C of part IV of sub- not be treated as having economic substance essary or appropriate to carry out the pur- chapter A of chapter 1 is amended by adding by reason of having a potential for profit un- poses of this subsection. Such regulations at the end the following new item: less— may include exemptions from the applica- ‘‘(I) the present value of the reasonably ex- tion of this subsection.’’. ‘‘Sec. 45G. Individual development account pected pre-tax profit from the transaction is (b) EFFECTIVE DATE.—The amendments investment credit.’’. substantial in relation to the present value made by this section shall apply to trans- of the expected net tax benefits that would actions entered into after February 15, 2004. (e) REPORT REGARDING ACCOUNT MAINTE- be allowed if the transaction were respected, SEC. 702. PENALTY FOR FAILING TO DISCLOSE NANCE FEES.—The Secretary of the Treasury and REPORTABLE TRANSACTION. shall study the adequacy of the amount spec- ‘‘(II) the reasonably expected pre-tax profit (a) IN GENERAL.—Part I of subchapter B of ified in section 45G(c)(2) of the Internal Rev- from the transaction exceeds a risk-free rate chapter 68 (relating to assessable penalties) enue Code of 1986 (as added by this section). of return. is amended by inserting after section 6707 Not later than December 31, 2009, the Sec- ‘‘(C) TREATMENT OF FEES AND FOREIGN the following new section: retary of the Treasury shall report the find- TAXES.—Fees and other transaction expenses ‘‘SEC. 6707A. PENALTY FOR FAILURE TO INCLUDE ings of the study described in the preceding and foreign taxes shall be taken into account REPORTABLE TRANSACTION INFOR- sentence to Congress. as expenses in determining pre-tax profit MATION WITH RETURN OR STATE- MENT. (f) EFFECTIVE DATE.—The amendments under subparagraph (B)(ii). ‘‘(a) IMPOSITION OF PENALTY.—Any person made by this section shall apply to taxable ‘‘(2) SPECIAL RULES FOR TRANSACTIONS WITH years ending after December 31, 2004. who fails to include on any return or state- TAX-INDIFFERENT PARTIES.— ment any information with respect to a re- SEC. 512. ACCOUNT FUNDS DISREGARDED FOR ‘‘(A) SPECIAL RULES FOR FINANCING TRANS- portable transaction which is required under PURPOSES OF CERTAIN MEANS- ACTIONS.—The form of a transaction which is section 6011 to be included with such return TESTED FEDERAL PROGRAMS. in substance the borrowing of money or the or statement shall pay a penalty in the Notwithstanding any other provision of acquisition of financial capital directly or amount determined under subsection (b). Federal law (other than the Internal Rev- indirectly from a tax-indifferent party shall ‘‘(b) AMOUNT OF PENALTY.— enue Code of 1986) that requires consider- not be respected if the present value of the ‘‘(1) IN GENERAL.—Except as provided in ation of 1 or more financial circumstances of deductions to be claimed with respect to the paragraphs (2) and (3), the amount of the an individual, for the purpose of determining transaction is substantially in excess of the penalty under subsection (a) shall be $50,000. eligibility to receive, or the amount of, any present value of the anticipated economic re- ‘‘(2) LISTED TRANSACTION.—The amount of assistance or benefit authorized by such pro- turns of the person lending the money or the penalty under subsection (a) with respect vision to be provided to or for the benefit of providing the financial capital. A public of- to a listed transaction shall be $100,000. such individual, any amount (including earn- fering shall be treated as a borrowing, or an ‘‘(3) INCREASE IN PENALTY FOR LARGE ENTI- acquisition of financial capital, from a tax- ings thereon) in any Individual Development TIES AND HIGH NET WORTH INDIVIDUALS.— indifferent party if it is reasonably expected Account of such individual and any match- ‘‘(A) IN GENERAL.—In the case of a failure that at least 50 percent of the offering will be ing deposit made on behalf of such individual under subsection (a) by— placed with tax-indifferent parties. (including earnings thereon) in any parallel ‘‘(i) a large entity, or ‘‘(B) ARTIFICIAL INCOME SHIFTING AND BASIS account shall be disregarded for such purpose ‘‘(ii) a high net worth individual, ADJUSTMENTS.—The form of a transaction with respect to any period during which such the penalty under paragraph (1) or (2) shall with a tax-indifferent party shall not be re- individual maintains or makes contributions be twice the amount determined without re- spected if— into such Individual Development Account. gard to this paragraph. ‘‘(i) it results in an allocation of income or ‘‘(B) LARGE ENTITY.—For purposes of sub- TITLE VI—MANAGEMENT OF EXEMPT gain to the tax-indifferent party in excess of paragraph (A), the term ‘large entity’ means, ORGANIZATIONS such party’s economic income or gain, or with respect to any taxable year, a person ‘‘(ii) it results in a basis adjustment or SEC. 601. AUTHORIZATION OF APPROPRIATIONS. (other than a natural person) with gross re- shifting of basis on account of overstating ceipts in excess of $10,000,000 for the taxable (a) IN GENERAL.—There is authorized to be the income or gain of the tax-indifferent year in which the reportable transaction oc- appropriated to the Secretary of the Treas- party. curs or the preceding taxable year. Rules ury $80,000,000 for each fiscal year to carry ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For similar to the rules of paragraph (2) and sub- out the administration of exempt organiza- purposes of this subsection— paragraphs (B), (C), and (D) of paragraph (3) tions by the Internal Revenue Service. ‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.—The of section 448(c) shall apply for purposes of (b) IMPLEMENTATION OF SECTION 527.—There term ‘economic substance doctrine’ means this subparagraph. is authorized to be appropriated to the Sec- the common law doctrine under which tax ‘‘(C) HIGH NET WORTH INDIVIDUAL.—The retary of the Treasury $3,000,000 to carry out benefits under subtitle A with respect to a term ‘high net worth individual’ means, with the provisions of Public Laws 106–230 and 107– transaction are not allowable if the trans- respect to a transaction, a natural person 276 relating to section 527 of the Internal action does not have economic substance or whose net worth exceeds $2,000,000 imme- Revenue Code of 1986. lacks a business purpose. diately before the transaction.

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‘‘(c) DEFINITIONS.—For purposes of this sec- ‘‘(C) is required to pay a penalty under sec- reportable transaction understatement with tion— tion 6662B with respect to any noneconomic respect to which the requirement of section ‘‘(1) REPORTABLE TRANSACTION.—The term substance transaction, 6664(d)(2)(A) is not met. ‘reportable transaction’ means any trans- the requirement to pay such penalty shall be ‘‘(2) RULES APPLICABLE TO COMPROMISE OF action with respect to which information is disclosed in such reports filed by such person PENALTY.— required to be included with a return or for such periods as the Secretary shall speci- ‘‘(A) IN GENERAL.—If the 1st letter of pro- statement because, as determined under reg- fy. Failure to make a disclosure in accord- posed deficiency which allows the taxpayer ulations prescribed under section 6011, such ance with the preceding sentence shall be an opportunity for administrative review in transaction is of a type which the Secretary treated as a failure to which the penalty the Internal Revenue Service Office of Ap- determines as having a potential for tax under subsection (b)(2) applies. peals has been sent with respect to a penalty avoidance or evasion. ‘‘(f) COORDINATION WITH OTHER PEN- to which paragraph (1) applies, only the ‘‘(2) LISTED TRANSACTION.—Except as pro- ALTIES.—The penalty imposed by this section Commissioner of Internal Revenue may com- vided in regulations, the term ‘listed trans- is in addition to any penalty imposed under promise all or any portion of such penalty. action’ means a reportable transaction this title.’’. ‘‘(B) APPLICABLE RULES.—The rules of para- which is the same as, or substantially simi- (b) CONFORMING AMENDMENT.—The table of graphs (2), (3), (4), and (5) of section 6707A(d) lar to, a transaction specifically identified sections for part I of subchapter B of chapter shall apply for purposes of subparagraph (A). by the Secretary as a tax avoidance trans- 68 is amended by inserting after the item re- ‘‘(d) DEFINITIONS OF REPORTABLE AND LIST- action for purposes of section 6011. lating to section 6707 the following: ED TRANSACTIONS.—For purposes of this sec- tion, the terms ‘reportable transaction’ and ‘‘Sec. 6707A. Penalty for failure to include re- ‘‘(d) AUTHORITY TO RESCIND PENALTY.— ‘listed transaction’ have the respective portable transaction informa- ‘‘(1) IN GENERAL.—The Commissioner of In- meanings given to such terms by section tion with return or state- ternal Revenue may rescind all or any por- 6707A(c). tion of any penalty imposed by this section ment.’’. ‘‘(e) SPECIAL RULES.— with respect to any violation if— (c) EFFECTIVE DATE.—The amendments ‘‘(1) COORDINATION WITH PENALTIES, ETC., ON ‘‘(A) the violation is with respect to a re- made by this section shall apply to returns OTHER UNDERSTATEMENTS.—In the case of an portable transaction other than a listed and statements the due date for which is understatement (as defined in section transaction, after the date of the enactment of this Act. 6662(d)(2))— ‘‘(B) the person on whom the penalty is im- SEC. 703. ACCURACY-RELATED PENALTY FOR ‘‘(A) the amount of such understatement posed has a history of complying with the re- LISTED TRANSACTIONS AND OTHER (determined without regard to this para- quirements of this title, REPORTABLE TRANSACTIONS HAV- graph) shall be increased by the aggregate ‘‘(C) it is shown that the violation is due to ING A SIGNIFICANT TAX AVOIDANCE amount of reportable transaction under- an unintentional mistake of fact; PURPOSE. statements and noneconomic substance ‘‘(D) imposing the penalty would be (a) IN GENERAL.—Subchapter A of chapter transaction understatements for purposes of against equity and good conscience, and 68 is amended by inserting after section 6662 determining whether such understatement is ‘‘(E) rescinding the penalty would promote the following new section: a substantial understatement under section compliance with the requirements of this ‘‘SEC. 6662A. IMPOSITION OF ACCURACY-RE- 6662(d)(1), and title and effective tax administration. LATED PENALTY ON UNDERSTATE- ‘‘(B) the addition to tax under section MENTS WITH RESPECT TO REPORT- ‘‘(2) DISCRETION.—The exercise of authority ABLE TRANSACTIONS. 6662(a) shall apply only to the excess of the under paragraph (1) shall be at the sole dis- ‘‘(a) IMPOSITION OF PENALTY.—If a taxpayer amount of the substantial understatement cretion of the Commissioner and may be del- has a reportable transaction understatement (if any) after the application of subparagraph egated only to the head of the Office of Tax for any taxable year, there shall be added to (A) over the aggregate amount of reportable Shelter Analysis. The Commissioner, in the the tax an amount equal to 20 percent of the transaction understatements and non- Commissioner’s sole discretion, may estab- amount of such understatement. economic substance transaction understate- lish a procedure to determine if a penalty ‘‘(b) REPORTABLE TRANSACTION UNDER- ments. should be referred to the Commissioner or STATEMENT.—For purposes of this section— ‘‘(2) COORDINATION WITH OTHER PENALTIES.— the head of such Office for a determination ‘‘(1) IN GENERAL.—The term ‘reportable ‘‘(A) APPLICATION OF FRAUD PENALTY.—Ref- under paragraph (1). transaction understatement’ means the sum erences to an underpayment in section 6663 ‘‘(3) NO APPEAL.—Notwithstanding any of— shall be treated as including references to a other provision of law, any determination ‘‘(A) the product of— reportable transaction understatement and a under this subsection may not be reviewed in ‘‘(i) the amount of the increase (if any) in noneconomic substance transaction under- any administrative or judicial proceeding. taxable income which results from a dif- statement. ‘‘(4) RECORDS.—If a penalty is rescinded ference between the proper tax treatment of ‘‘(B) NO DOUBLE PENALTY.—This section under paragraph (1), the Commissioner shall an item to which this section applies and the shall not apply to any portion of an under- place in the file in the Office of the Commis- taxpayer’s treatment of such item (as shown statement on which a penalty is imposed sioner the opinion of the Commissioner or on the taxpayer’s return of tax), and under section 6662B or 6663. the head of the Office of Tax Shelter Anal- ‘‘(ii) the highest rate of tax imposed by ‘‘(3) SPECIAL RULE FOR AMENDED RETURNS.— ysis with respect to the determination, in- section 1 (section 11 in the case of a taxpayer Except as provided in regulations, in no cluding— which is a corporation), and event shall any tax treatment included with ‘‘(A) the facts and circumstances of the ‘‘(B) the amount of the decrease (if any) in an amendment or supplement to a return of transaction, the aggregate amount of credits determined tax be taken into account in determining the ‘‘(B) the reasons for the rescission, and under subtitle A which results from a dif- amount of any reportable transaction under- ‘‘(C) the amount of the penalty rescinded. ference between the taxpayer’s treatment of statement or noneconomic substance trans- ‘‘(5) REPORT.—The Commissioner shall an item to which this section applies (as action understatement if the amendment or each year report to the Committee on Ways shown on the taxpayer’s return of tax) and supplement is filed after the earlier of the and Means of the House of Representatives the proper tax treatment of such item. date the taxpayer is first contacted by the and the Committee on Finance of the Sen- Secretary regarding the examination of the For purposes of subparagraph (A), any reduc- ate— return or such other date as is specified by tion of the excess of deductions allowed for ‘‘(A) a summary of the total number and the Secretary. the taxable year over gross income for such aggregate amount of penalties imposed, and ‘‘(4) NONECONOMIC SUBSTANCE TRANSACTION year, and any reduction in the amount of rescinded, under this section, and UNDERSTATEMENT.—For purposes of this sub- capital losses which would (without regard ‘‘(B) a description of each penalty re- section, the term ‘noneconomic substance to section 1211) be allowed for such year, scinded under this subsection and the rea- transaction understatement’ has the mean- shall be treated as an increase in taxable in- sons therefor. ing given such term by section 6662B(c). come. ‘‘(5) CROSS REFERENCE.— ‘‘(e) PENALTY REPORTED TO SEC.—In the ‘‘(2) ITEMS TO WHICH SECTION APPLIES.—This case of a person— section shall apply to any item which is at- ‘‘For reporting of section 6662A(c) penalty ‘‘(1) which is required to file periodic re- tributable to— to the Securities and Exchange Commission, ports under section 13 or 15(d) of the Securi- ‘‘(A) any listed transaction, and see section 6707A(e).’’. ties Exchange Act of 1934 or is required to be ‘‘(B) any reportable transaction (other (b) DETERMINATION OF OTHER UNDERSTATE- consolidated with another person for pur- than a listed transaction) if a significant MENTS.—Subparagraph (A) of section poses of such reports, and purpose of such transaction is the avoidance 6662(d)(2) is amended by adding at the end ‘‘(2) which— or evasion of Federal income tax. the following flush sentence: ‘‘(A) is required to pay a penalty under this ‘‘(c) HIGHER PENALTY FOR NONDISCLOSED ‘‘The excess under the preceding sentence section with respect to a listed transaction, LISTED AND OTHER AVOIDANCE TRANS- shall be determined without regard to items ‘‘(B) is required to pay a penalty under sec- ACTIONS.— to which section 6662A applies and without tion 6662A with respect to any reportable ‘‘(1) IN GENERAL.—Subsection (a) shall be regard to items with respect to which a pen- transaction at a rate prescribed under sec- applied by substituting ‘30 percent’ for ‘20 alty is imposed by section 6662B.’’. tion 6662A(c), or percent’ with respect to the portion of any (c) REASONABLE CAUSE EXCEPTION.—

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(1) IN GENERAL.—Section 6664 is amended by inserting ‘‘FOR UNDERPAYMENTS’’ after ‘‘(A) there is a lack of economic substance by adding at the end the following new sub- ‘‘EXCEPTION’’. (within the meaning of section 7701(o)(1)) for section: (d) CONFORMING AMENDMENTS.— the transaction giving rise to the claimed ‘‘(d) REASONABLE CAUSE EXCEPTION FOR RE- (1) Subparagraph (C) of section 461(i)(3) is benefit or the transaction was not respected PORTABLE TRANSACTION UNDERSTATEMENTS.— amended by striking ‘‘section under section 7701(o)(2), or ‘‘(1) IN GENERAL.—No penalty shall be im- 6662(d)(2)(C)(iii)’’ and inserting ‘‘section ‘‘(B) the transaction fails to meet the re- posed under section 6662A with respect to 1274(b)(3)(C)’’. quirements of any similar rule of law. any portion of a reportable transaction un- (2) Paragraph (3) of section 1274(b) is ‘‘(d) RULES APPLICABLE TO COMPROMISE OF derstatement if it is shown that there was a amended— PENALTY.— reasonable cause for such portion and that (A) by striking ‘‘(as defined in section ‘‘(1) IN GENERAL.—If the 1st letter of pro- the taxpayer acted in good faith with respect 6662(d)(2)(C)(iii))’’ in subparagraph (B)(i), and posed deficiency which allows the taxpayer to such portion. (B) by adding at the end the following new an opportunity for administrative review in ‘‘(2) SPECIAL RULES.—Paragraph (1) shall subparagraph: the Internal Revenue Service Office of Ap- not apply to any reportable transaction un- ‘‘(C) TAX SHELTER.—For purposes of sub- peals has been sent with respect to a penalty derstatement unless— paragraph (B), the term ‘tax shelter’ means— to which this section applies, only the Com- ‘‘(A) the relevant facts affecting the tax ‘‘(i) a partnership or other entity, missioner of Internal Revenue may com- treatment of the item are adequately dis- ‘‘(ii) any investment plan or arrangement, promise all or any portion of such penalty. closed in accordance with the regulations or ‘‘(2) APPLICABLE RULES.—The rules of para- prescribed under section 6011, ‘‘(iii) any other plan or arrangement, graphs (2), (3), (4), and (5) of section 6707A(d) ‘‘(B) there is or was substantial authority if a significant purpose of such partnership, shall apply for purposes of paragraph (1). for such treatment, and entity, plan, or arrangement is the avoid- ‘‘(e) COORDINATION WITH OTHER PEN- ‘‘(C) the taxpayer reasonably believed that ance or evasion of Federal income tax.’’. ALTIES.—Except as otherwise provided in this such treatment was more likely than not the (3) Section 6662(d)(2) is amended by strik- part, the penalty imposed by this section proper treatment. ing subparagraphs (C) and (D). shall be in addition to any other penalty im- A taxpayer failing to adequately disclose in (4) Section 6664(c)(1) is amended by strik- posed by this title. accordance with section 6011 shall be treated ing ‘‘this part’’ and inserting ‘‘section 6662 or ‘‘(f) CROSS REFERENCES.— as meeting the requirements of subparagraph 6663’’. ‘‘(1) For coordination of penalty with un- (A) if the penalty for such failure was re- (5) Subsection (b) of section 7525 is amend- derstatements under section 6662 and other scinded under section 6707A(d). ed by striking ‘‘section 6662(d)(2)(C)(iii)’’ and special rules, see section 6662A(e). ‘‘(3) RULES RELATING TO REASONABLE BE- inserting ‘‘section 1274(b)(3)(C)’’. ‘‘(2) For reporting of penalty imposed LIEF.—For purposes of paragraph (2)(C)— (6)(A) The heading for section 6662 is under this section to the Securities and Ex- ‘‘(A) IN GENERAL.—A taxpayer shall be amended to read as follows: change Commission, see section 6707A(e).’’. treated as having a reasonable belief with re- ‘‘SEC. 6662. IMPOSITION OF ACCURACY-RELATED (b) CLERICAL AMENDMENT.—The table of spect to the tax treatment of an item only if PENALTY ON UNDERPAYMENTS.’’. sections for part II of subchapter A of chap- such belief— (B) The table of sections for part II of sub- ter 68 is amended by inserting after the item ‘‘(i) is based on the facts and law that exist chapter A of chapter 68 is amended by strik- relating to section 6662A the following new at the time the return of tax which includes ing the item relating to section 6662 and in- item: such tax treatment is filed, and serting the following new items: ‘‘(ii) relates solely to the taxpayer’s ‘‘Sec. 6662B. Penalty for understatements at- ‘‘Sec. 6662. Imposition of accuracy-related chances of success on the merits of such tributable to transactions lack- penalty on underpayments. treatment and does not take into account ing economic substance, etc.’’. 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 February 15, 2004. through settlement if it is raised. transactions.’’. SEC. 705. MODIFICATIONS OF SUBSTANTIAL UN- ‘‘(B) CERTAIN OPINIONS MAY NOT BE RELIED (e) EFFECTIVE DATE.—The amendments DERSTATEMENT PENALTY FOR NON- UPON.— made by this section shall apply to taxable REPORTABLE TRANSACTIONS. ‘‘(i) IN GENERAL.—An opinion of a tax advi- years ending after the date of the enactment (a) SUBSTANTIAL UNDERSTATEMENT OF COR- sor may not be relied upon to establish the of this Act. PORATIONS.—Section 6662(d)(1)(B) (relating to reasonable belief of a taxpayer if— SEC. 704. PENALTY FOR UNDERSTATEMENTS AT- special rule for corporations) is amended to ‘‘(I) the tax advisor is described in clause TRIBUTABLE TO TRANSACTIONS read as follows: (ii), or LACKING ECONOMIC SUBSTANCE, ‘‘(B) SPECIAL RULE FOR CORPORATIONS.—In ‘‘(II) the opinion is described in clause (iii). ETC. the case of a corporation other than an S ‘‘(ii) DISQUALIFIED TAX ADVISORS.—A tax (a) IN GENERAL.—Subchapter A of chapter corporation or a personal holding company advisor is described in this clause if the tax 68 is amended by inserting after section (as defined in section 542), there is a substan- advisor— 6662A the following new section: tial understatement of income tax for any ‘‘(I) is a material advisor (within the mean- ‘‘SEC. 6662B. PENALTY FOR UNDERSTATEMENTS taxable year if the amount of the understate- ing of section 6111(b)(1)) who participates in ATTRIBUTABLE TO TRANSACTIONS ment for the taxable year exceeds the lesser the organization, management, promotion, LACKING ECONOMIC SUBSTANCE, of— ETC. or sale of the transaction or who is related ‘‘(i) 10 percent of the tax required to be ‘‘(a) IMPOSITION OF PENALTY.—If a taxpayer (within the meaning of section 267(b) or has an noneconomic substance transaction shown on the return for the taxable year (or, 707(b)(1)) to any person who so participates, understatement for any taxable year, there if greater, $10,000), or ‘‘(II) is compensated directly or indirectly shall be added to the tax an amount equal to ‘‘(ii) $10,000,000.’’. by a material advisor with respect to the 40 percent of the amount of such understate- (b) REDUCTION FOR UNDERSTATEMENT OF transaction, ment. TAXPAYER DUE TO POSITION OF TAXPAYER OR ‘‘(III) has a fee arrangement with respect ‘‘(b) REDUCTION OF PENALTY FOR DISCLOSED DISCLOSED ITEM.— to the transaction which is contingent on all TRANSACTIONS.—Subsection (a) shall be ap- (1) IN GENERAL.—Section 6662(d)(2)(B)(i) (re- or part of the intended tax benefits from the plied by substituting ‘20 percent’ for ‘40 per- lating to substantial authority) is amended transaction being sustained, or cent’ with respect to the portion of any non- to read as follows: ‘‘(IV) as determined under regulations pre- economic substance transaction understate- ‘‘(i) the tax treatment of any item by the scribed by the Secretary, has a continuing fi- ment with respect to which the relevant taxpayer if the taxpayer had reasonable be- nancial interest with respect to the trans- facts affecting the tax treatment of the item lief that the tax treatment was more likely action. are adequately disclosed in the return or a than not the proper treatment, or’’. ‘‘(iii) DISQUALIFIED OPINIONS.—For purposes statement attached to the return. (2) CONFORMING AMENDMENT.—Section of clause (i), an opinion is disqualified if the ‘‘(c) NONECONOMIC SUBSTANCE TRANSACTION 6662(d) is amended by adding at the end the opinion— UNDERSTATEMENT.—For purposes of this sec- following new paragraph: ‘‘(I) is based on unreasonable factual or tion— ‘‘(3) SECRETARIAL LIST.—For purposes of legal assumptions (including assumptions as ‘‘(1) IN GENERAL.—The term ‘noneconomic this subsection, section 6664(d)(2), and sec- to future events), substance transaction understatement’ tion 6694(a)(1), the Secretary may prescribe a ‘‘(II) unreasonably relies on representa- means any amount which would be an under- list of positions for which the Secretary be- tions, statements, findings, or agreements of statement under section 6662A(b)(1) if section lieves there is not substantial authority or the taxpayer or any other person, 6662A were applied by taking into account there is no reasonable belief that the tax ‘‘(III) does not identify and consider all rel- items attributable to noneconomic sub- treatment is more likely than not the proper evant facts, or stance transactions rather than items to tax treatment. Such list (and any revisions ‘‘(IV) fails to meet any other requirement which section 6662A applies. thereof) shall be published in the Federal as the Secretary may prescribe.’’. ‘‘(2) NONECONOMIC SUBSTANCE TRANS- Register or the Internal Revenue Bulletin.’’. (2) CONFORMING AMENDMENT.—The heading ACTION.—The term ‘noneconomic substance (c) EFFECTIVE DATE.—The amendments for subsection (c) of section 6664 is amended transaction’ means any transaction if— made by this section shall apply to taxable

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MATERIAL ADVISORS OF REPORT- stituting ‘75 percent’ for ‘50 percent’ in the (a) IN GENERAL.—Section 7525(b) (relating ABLE TRANSACTIONS MUST KEEP case of an intentional failure or act de- to section not to apply to communications LISTS OF ADVISEES. scribed in subsection (a). regarding corporate tax shelters) is amended ‘‘(a) IN GENERAL.—Each material advisor ‘‘(c) RESCISSION AUTHORITY.—The provi- to read as follows: (as defined in section 6111) with respect to sions of section 6707A(d) (relating to author- ‘‘(b) SECTION NOT TO APPLY TO COMMUNICA- any reportable transaction (as defined in sec- ity of Commissioner to rescind penalty) shall TIONS REGARDING TAX SHELTERS.—The privi- tion 6707A(c)) shall maintain, in such manner apply to any penalty imposed under this sec- lege under subsection (a) shall not apply to as the Secretary may by regulations pre- tion. any written communication which is— scribe, a list— ‘‘(d) REPORTABLE AND LISTED TRANS- ‘‘(1) between a federally authorized tax ‘‘(1) identifying each person with respect to ACTIONS.—The terms ‘reportable transaction’ practitioner and— whom such advisor acted as such a material and ‘listed transaction’ have the respective ‘‘(A) any person, advisor with respect to such transaction, and meanings given to such terms by section ‘‘(B) any director, officer, employee, agent, ‘‘(2) containing such other information as 6707A(c).’’. or representative of the person, or the Secretary may by regulations require. (b) CLERICAL AMENDMENT.—The item relat- ‘‘(C) any other person holding a capital or This section shall apply without regard to ing to section 6707 in the table of sections for profits interest in the person, and whether a material advisor is required to file part I of subchapter B of chapter 68 is ‘‘(2) in connection with the promotion of a return under section 6111 with respect to amended by striking ‘‘tax shelters’’ and in- the direct or indirect participation of the such transaction.’’. serting ‘‘reportable transactions’’. person in any tax shelter (as defined in sec- (B) Section 6112 is amended by redesig- (c) EFFECTIVE DATE.—The amendments tion 1274(b)(3)(C)).’’. nating subsection (c) as subsection (b). made by this section shall apply to returns (b) EFFECTIVE DATE.—The amendment (C) Section 6112(b), as redesignated by sub- the due date for which is after the date of made by this section shall apply to commu- paragraph (B), is amended— the enactment of this Act. nications made on or after the date of the (i) by inserting ‘‘written’’ before ‘‘request’’ SEC. 709. MODIFICATION OF PENALTY FOR FAIL- enactment of this Act. in paragraph (1)(A), and URE TO MAINTAIN LISTS OF INVES- SEC. 707. DISCLOSURE OF REPORTABLE TRANS- (ii) by striking ‘‘shall prescribe’’ in para- TORS. ACTIONS. graph (2) and inserting ‘‘may prescribe’’. (a) IN GENERAL.—Subsection (a) of section (a) IN GENERAL.—Section 6111 (relating to (D) The item relating to section 6112 in the 6708 is amended to read as follows: registration of tax shelters) is amended to table of sections for subchapter B of chapter ‘‘(a) IMPOSITION OF PENALTY.— read as follows: 61 is amended to read as follows: ‘‘(1) IN GENERAL.—If any person who is re- quired to maintain a list under section ‘‘SEC. 6111. DISCLOSURE OF REPORTABLE TRANS- ‘‘Sec. 6112. Material advisors of reportable ACTIONS. 6112(a) fails to make such list available upon transactions must keep lists of ‘‘(a) IN GENERAL.—Each material advisor written request to the Secretary in accord- advisees.’’. with respect to any reportable transaction ance with section 6112(b)(1)(A) within 20 busi- shall make a return (in such form as the Sec- (3)(A) The heading for section 6708 is ness days after the date of the Secretary’s retary may prescribe) setting forth— amended to read as follows: request, such person shall pay a penalty of ‘‘(1) information identifying and describing ‘‘SEC. 6708. FAILURE TO MAINTAIN LISTS OF $10,000 for each day of such failure after such the transaction, ADVISEES WITH RESPECT TO RE- 20th day. ‘‘(2) information describing any potential PORTABLE TRANSACTIONS.’’. ‘‘(2) REASONABLE CAUSE EXCEPTION.—No tax benefits expected to result from the (B) The item relating to section 6708 in the penalty shall be imposed by paragraph (1) transaction, and table of sections for part I of subchapter B of with respect to the failure on any day if such ‘‘(3) such other information as the Sec- chapter 68 is amended to read as follows: failure is due to reasonable cause.’’. retary may prescribe. ‘‘Sec. 6708. Failure to maintain lists of (b) EFFECTIVE DATE.—The amendment made by this section shall apply to requests Such return shall be filed not later than the advisees with respect to report- made after the date of the enactment of this date specified by the Secretary. able transactions.’’. Act. ‘‘(b) DEFINITIONS.—For purposes of this sec- (c) EFFECTIVE DATE.—The amendments tion— SEC. 710. MODIFICATION OF ACTIONS TO ENJOIN made by this section shall apply to trans- CERTAIN CONDUCT RELATED TO ‘‘(1) MATERIAL ADVISOR.— actions with respect to which material aid, TAX SHELTERS AND REPORTABLE ‘‘(A) IN GENERAL.—The term ‘material ad- assistance, or advice referred to in section TRANSACTIONS. visor’ means any person— 6111(b)(1)(A)(i) of the Internal Revenue Code (a) IN GENERAL.—Section 7408 (relating to ‘‘(i) who provides any material aid, assist- of 1986 (as added by this section) is provided action to enjoin promoters of abusive tax ance, or advice with respect to organizing, after the date of the enactment of this Act. shelters, etc.) is amended by redesignating promoting, selling, implementing, or car- SEC. 708. MODIFICATIONS TO PENALTY FOR FAIL- subsection (c) as subsection (d) and by strik- rying out any reportable transaction, and URE TO REGISTER TAX SHELTERS. ing subsections (a) and (b) and inserting the ‘‘(ii) who directly or indirectly derives (a) IN GENERAL.—Section 6707 (relating to following new subsections: gross income in excess of the threshold failure to furnish information regarding tax ‘‘(a) AUTHORITY TO SEEK INJUNCTION.—A amount for such aid, assistance, or advice. shelters) is amended to read as follows: civil action in the name of the United States ‘‘(B) THRESHOLD AMOUNT.—For purposes of ‘‘SEC. 6707. FAILURE TO FURNISH INFORMATION to enjoin any person from further engaging subparagraph (A), the threshold amount is— REGARDING REPORTABLE TRANS- in specified conduct may be commenced at ‘‘(i) $50,000 in the case of a reportable ACTIONS. the request of the Secretary. Any action transaction substantially all of the tax bene- ‘‘(a) IN GENERAL.—If a person who is re- under this section shall be brought in the fits from which are provided to natural per- quired to file a return under section 6111(a) district court of the United States for the sons, and with respect to any reportable transaction— district in which such person resides, has his ‘‘(ii) $250,000 in any other case. ‘‘(1) fails to file such return on or before principal place of business, or has engaged in ‘‘(2) REPORTABLE TRANSACTION.—The term the date prescribed therefor, or specified conduct. The court may exercise its ‘reportable transaction’ has the meaning ‘‘(2) files false or incomplete information jurisdiction over such action (as provided in given to such term by section 6707A(c). with the Secretary with respect to such section 7402(a)) separate and apart from any ‘‘(c) REGULATIONS.—The Secretary may transaction, other action brought by the United States prescribe regulations which provide— such person shall pay a penalty with respect against such person. ‘‘(1) that only 1 person shall be required to to such return in the amount determined ‘‘(b) ADJUDICATION AND DECREE.—In any ac- meet the requirements of subsection (a) in under subsection (b). tion under subsection (a), if the court finds— cases in which 2 or more persons would oth- ‘‘(b) AMOUNT OF PENALTY.— ‘‘(1) that the person has engaged in any erwise be required to meet such require- ‘‘(1) IN GENERAL.—Except as provided in specified conduct, and ments, paragraph (2), the penalty imposed under ‘‘(2) that injunctive relief is appropriate to ‘‘(2) exemptions from the requirements of subsection (a) with respect to any failure prevent recurrence of such conduct, this section, and shall be $50,000. the court may enjoin such person from en- ‘‘(3) such rules as may be necessary or ap- ‘‘(2) LISTED TRANSACTIONS.—The penalty gaging in such conduct or in any other activ- propriate to carry out the purposes of this imposed under subsection (a) with respect to ity subject to penalty under this title. section.’’. any listed transaction shall be an amount ‘‘(c) SPECIFIED CONDUCT.—For purposes of (b) CONFORMING AMENDMENTS.— equal to the greater of— this section, the term ‘specified conduct’ (1) The item relating to section 6111 in the ‘‘(A) $200,000, or means any action, or failure to take action, table of sections for subchapter B of chapter ‘‘(B) 50 percent of the gross income derived subject to penalty under section 6700, 6701, 61 is amended to read as follows: by such person with respect to aid, assist- 6707, or 6708.’’.

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(b) CONFORMING AMENDMENTS.— ‘‘(ii) in the case of a violation involving a ‘‘(e) PENALTIES IN ADDITION TO OTHER PEN- (1) The heading for section 7408 is amended failure to report the existence of an account ALTIES.—The penalties imposed by this sec- to read as follows: or any identifying information required to be tion shall be in addition to any other penalty ‘‘SEC. 7408. ACTIONS TO ENJOIN SPECIFIED CON- provided with respect to an account, the bal- provided by law.’’. DUCT RELATED TO TAX SHELTERS ance in the account at the time of the viola- (b) TREATMENT OF FRIVOLOUS REQUESTS AND REPORTABLE TRANSACTIONS.’’. tion.’’. FOR HEARINGS BEFORE LEVY.— (2) The table of sections for subchapter A (b) EFFECTIVE DATE.—The amendment (1) FRIVOLOUS REQUESTS DISREGARDED.— of chapter 67 is amended by striking the item made by this section shall apply to viola- Section 6330 (relating to notice and oppor- relating to section 7408 and inserting the fol- tions occurring after the date of the enact- tunity for hearing before levy) is amended by lowing new item: ment of this Act. adding at the end the following new sub- ‘‘Sec. 7408. Actions to enjoin specified SEC. 713. FRIVOLOUS TAX SUBMISSIONS. section: conduct related to tax shelters (a) CIVIL PENALTIES.—Section 6702 is ‘‘(g) FRIVOLOUS REQUESTS FOR HEARING, and reportable transactions.’’. amended to read as follows: ETC.—Notwithstanding any other provision of this section, if the Secretary determines (c) EFFECTIVE DATE.—The amendment ‘‘SEC. 6702. FRIVOLOUS TAX SUBMISSIONS. that any portion of a request for a hearing made by this section shall take effect on the ‘‘(a) CIVIL PENALTY FOR FRIVOLOUS TAX RE- under this section or section 6320 meets the day after the date of the enactment of this TURNS.—A person shall pay a penalty of requirement of clause (i) or (ii) of section Act. $5,000 if— ‘‘(1) such person files what purports to be a 6702(b)(2)(A), then the Secretary may treat SEC. 711. UNDERSTATEMENT OF TAXPAYER’S LI- such portion as if it were never submitted ABILITY BY INCOME TAX RETURN return of a tax imposed by this title but PREPARER. which— and such portion shall not be subject to any further administrative or judicial review.’’. (a) STANDARDS CONFORMED TO TAXPAYER ‘‘(A) does not contain information on (2) PRECLUSION FROM RAISING FRIVOLOUS STANDARDS.—Section 6694(a) (relating to un- which the substantial correctness of the self- derstatements due to unrealistic positions) assessment may be judged, or ISSUES AT HEARING.—Section 6330(c)(4) is is amended— ‘‘(B) contains information that on its face amended— (1) by striking ‘‘realistic possibility of indicates that the self-assessment is substan- (A) by striking ‘‘(A)’’ and inserting being sustained on its merits’’ in paragraph tially incorrect; and ‘‘(A)(i)’’; (1) and inserting ‘‘reasonable belief that the ‘‘(2) the conduct referred to in paragraph (B) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’; tax treatment in such position was more (1)— (C) by striking the period at the end of the likely than not the proper treatment’’, ‘‘(A) is based on a position which the Sec- first sentence and inserting ‘‘; or’’; and (2) by striking ‘‘or was frivolous’’ in para- retary has identified as frivolous under sub- (D) by inserting after subparagraph (A)(ii) graph (3) and inserting ‘‘or there was no rea- section (c), or (as so redesignated) the following: sonable basis for the tax treatment of such ‘‘(B) reflects a desire to delay or impede ‘‘(B) the issue meets the requirement of position’’, and the administration of Federal tax laws. clause (i) or (ii) of section 6702(b)(2)(A).’’. (3) STATEMENT OF GROUNDS.—Section (3) by striking ‘‘UNREALISTIC’’ in the head- ‘‘(b) CIVIL PENALTY FOR SPECIFIED FRIVO- 6330(b)(1) is amended by striking ‘‘under sub- ing and inserting ‘‘IMPROPER’’. LOUS SUBMISSIONS.— section (a)(3)(B)’’ and inserting ‘‘in writing (b) AMOUNT OF PENALTY.—Section 6694 is ‘‘(1) IMPOSITION OF PENALTY.—Except as amended— provided in paragraph (3), any person who under subsection (a)(3)(B) and states the (1) by striking ‘‘$250’’ in subsection (a) and submits a specified frivolous submission grounds for the requested hearing’’. REATMENT OF FRIVOLOUS REQUESTS inserting ‘‘$1,000’’, and shall pay a penalty of $5,000. (c) T FOR HEARINGS UPON FILING OF NOTICE OF (2) by striking ‘‘$1,000’’ in subsection (b) ‘‘(2) SPECIFIED FRIVOLOUS SUBMISSION.—For LIEN.—Section 6320 is amended— and inserting ‘‘$5,000’’. purposes of this section— (1) in subsection (b)(1), by striking ‘‘under (c) EFFECTIVE DATE.—The amendments ‘‘(A) SPECIFIED FRIVOLOUS SUBMISSION.— made by this section shall apply to docu- The term ‘specified frivolous submission’ subsection (a)(3)(B)’’ and inserting ‘‘in writ- ments prepared after the date of the enact- means a specified submission if any portion ing under subsection (a)(3)(B) and states the ment of this Act. of such submission— grounds for the requested hearing’’, and ‘‘(i) is based on a position which the Sec- (2) in subsection (c), by striking ‘‘and (e)’’ SEC. 712. PENALTY ON FAILURE TO REPORT IN- and inserting ‘‘(e), and (g)’’. TERESTS IN FOREIGN FINANCIAL retary has identified as frivolous under sub- (d) TREATMENT OF FRIVOLOUS APPLICATIONS ACCOUNTS. section (c), or FOR OFFERS-IN-COMPROMISE AND INSTALL- (a) IN GENERAL.—Section 5321(a)(5) of title ‘‘(ii) reflects a desire to delay or impede MENT AGREEMENTS.—Section 7122 is amended 31, United States Code, is amended to read as the administration of Federal tax laws. by adding at the end the following new sub- follows: ‘‘(B) SPECIFIED SUBMISSION.—The term section: ‘‘(5) FOREIGN FINANCIAL AGENCY TRANS- ‘specified submission’ means— ‘‘(e) FRIVOLOUS SUBMISSIONS, ETC.—Not- ACTION VIOLATION.— ‘‘(i) a request for a hearing under— withstanding any other provision of this sec- ‘‘(A) PENALTY AUTHORIZED.—The Secretary ‘‘(I) section 6320 (relating to notice and op- tion, if the Secretary determines that any of the Treasury may impose a civil money portunity for hearing upon filing of notice of portion of an application for an offer-in-com- penalty on any person who violates, or lien), or promise or installment agreement submitted causes any violation of, any provision of sec- ‘‘(II) section 6330 (relating to notice and under this section or section 6159 meets the tion 5314. opportunity for hearing before levy), and requirement of clause (i) or (ii) of section ‘‘(B) AMOUNT OF PENALTY.— ‘‘(ii) an application under— 6702(b)(2)(A), then the Secretary may treat ‘‘(i) IN GENERAL.—Except as provided in ‘‘(I) section 6159 (relating to agreements such portion as if it were never submitted subparagraph (C), the amount of any civil for payment of tax liability in installments), and such portion shall not be subject to any penalty imposed under subparagraph (A) ‘‘(II) section 7122 (relating to com- further administrative or judicial review.’’. shall not exceed $5,000. promises), or (e) CLERICAL AMENDMENT.—The table of ‘‘(ii) REASONABLE CAUSE EXCEPTION.—No ‘‘(III) section 7811 (relating to taxpayer as- sections for part I of subchapter B of chapter penalty shall be imposed under subparagraph sistance orders). 68 is amended by striking the item relating (A) with respect to any violation if— ‘‘(3) OPPORTUNITY TO WITHDRAW SUBMIS- to section 6702 and inserting the following ‘‘(I) such violation was due to reasonable SION.—If the Secretary provides a person new item: cause, and with notice that a submission is a specified ‘‘(II) the amount of the transaction or the frivolous submission and such person with- ‘‘Sec. 6702. Frivolous tax submissions.’’. balance in the account at the time of the draws such submission within 30 days after (f) EFFECTIVE DATE.—The amendments transaction was properly reported. such notice, the penalty imposed under para- made by this section shall apply to submis- ‘‘(C) WILLFUL VIOLATIONS.—In the case of graph (1) shall not apply with respect to such sions made and issues raised after the date any person willfully violating, or willfully submission. on which the Secretary first prescribes a list causing any violation of, any provision of ‘‘(c) LISTING OF FRIVOLOUS POSITIONS.—The under section 6702(c) of the Internal Revenue section 5314— Secretary shall prescribe (and periodically Code of 1986, as amended by subsection (a). ‘‘(i) the maximum penalty under subpara- revise) a list of positions which the Sec- SEC. 714. REGULATION OF INDIVIDUALS PRAC- graph (B)(i) shall be increased to the greater retary has identified as being frivolous for TICING BEFORE THE DEPARTMENT of— purposes of this subsection. The Secretary OF TREASURY. ‘‘(I) $25,000, or shall not include in such list any position (a) CENSURE; IMPOSITION OF PENALTY.— ‘‘(II) the amount (not exceeding $100,000) that the Secretary determines meets the re- (1) IN GENERAL.—Section 330(b) of title 31, determined under subparagraph (D), and quirement of section 6662(d)(2)(B)(ii)(II). United States Code, is amended— ‘‘(ii) subparagraph (B)(ii) shall not apply. ‘‘(d) REDUCTION OF PENALTY.—The Sec- (A) by inserting ‘‘, or censure,’’ after ‘‘De- ‘‘(D) AMOUNT.—The amount determined retary may reduce the amount of any pen- partment’’, and under this subparagraph is— alty imposed under this section if the Sec- (B) by adding at the end the following new ‘‘(i) in the case of a violation involving a retary determines that such reduction would flush sentence: transaction, the amount of the transaction, promote compliance with and administra- ‘‘The Secretary may impose a monetary pen- or tion of the Federal tax laws. alty on any representative described in the

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preceding sentence. If the representative was ‘‘(1) the portion of any reportable trans- ‘‘(B) SECOND TIER.—Notwithstanding sub- acting on behalf of an employer or any firm action understatement (as defined in section paragraph (A), the maximum amount of pen- or other entity in connection with the con- 6662A(b)) with respect to which the require- alty for such act or omission described in duct giving rise to such penalty, the Sec- ment of section 6664(d)(2)(A) is not met, or paragraph (1) shall be $500,000 for a natural retary may impose a monetary penalty on ‘‘(2) any noneconomic substance trans- person or $1,000,000 for any other person, if such employer, firm, or entity if it knew, or action understatement (as defined in section the act or omission involved fraud, deceit, reasonably should have known, of such con- 6662B(c)).’’. manipulation, or deliberate or reckless dis- duct. Such penalty shall not exceed the gross (b) EFFECTIVE DATE.—The amendments regard of a statutory or regulatory require- income derived (or to be derived) from the made by this section shall apply to trans- ment. conduct giving rise to the penalty and may actions in taxable years beginning after the ‘‘(C) THIRD TIER.—Notwithstanding sub- be in addition to, or in lieu of, any suspen- date of the enactment of this Act. paragraphs (A) and (B), the maximum sion, disbarment, or censure.’’. SEC. 718. AUTHORIZATION OF APPROPRIATIONS amount of penalty for each act or omission (2) EFFECTIVE DATE.—The amendments FOR TAX LAW ENFORCEMENT. described in paragraph (1) shall be $1,000,000 made by this subsection shall apply to ac- There is authorized to be appropriated for a natural person or $2,000,000 for any tions taken after the date of the enactment $300,000,000 for each fiscal year beginning other person, if— of this Act. after September 30, 2002, for the purpose of ‘‘(i) the act or omission involved fraud, de- (b) TAX SHELTER OPINIONS, ETC.—Section carrying out tax law enforcement to combat ceit, manipulation, or deliberate or reckless 330 of such title 31 is amended by adding at tax avoidance transactions and other tax the end the following new subsection: disregard of a statutory or regulatory re- shelters, including the use of offshore finan- quirement; and ‘‘(d) Nothing in this section or in any other cial accounts to conceal taxable income. provision of law shall be construed to limit ‘‘(ii) such act or omission directly or indi- the authority of the Secretary of the Treas- Subtitle B—Other Provisions rectly resulted in substantial losses or cre- ury to impose standards applicable to the SEC. 721. AFFIRMATION OF CONSOLIDATED RE- ated a significant risk of substantial losses rendering of written advice with respect to TURN REGULATION AUTHORITY. to other persons or resulted in substantial any entity, transaction plan or arrangement, (a) IN GENERAL.—Section 1502 (relating to pecuniary gain to the person who committed or other plan or arrangement, which is of a consolidated return regulations) is amended the act or omission. type which the Secretary determines as hav- by adding at the end the following new sen- ‘‘(3) EVIDENCE CONCERNING ABILITY TO ing a potential for tax avoidance or eva- tence: ‘‘In prescribing such regulations, the PAY.—In any proceeding in which the Com- sion.’’. Secretary may prescribe rules applicable to mission or the appropriate regulatory agen- SEC. 715. PENALTY ON PROMOTERS OF TAX corporations filing consolidated returns cy may impose a penalty under this section, SHELTERS. under section 1501 that are different from a respondent may present evidence of the (a) PENALTY ON PROMOTING ABUSIVE TAX other provisions of this title that would ability of the respondent to pay such pen- SHELTERS.—Section 6700(a) is amended by apply if such corporations filed separate re- alty. The Commission or the appropriate reg- adding at the end the following new sen- turns.’’. ulatory agency may, in its discretion, con- tence: ‘‘Notwithstanding the first sentence, (b) RESULT NOT OVERTURNED.—Notwith- sider such evidence in determining whether if an activity with respect to which a pen- standing subsection (a), the Internal Rev- the penalty is in the public interest. Such alty imposed under this subsection involves enue Code of 1986 shall be construed by treat- evidence may relate to the extent of the per- a statement described in paragraph (2)(A), ing Treasury regulation § 1.1502–20(c)(1)(iii) son’s ability to continue in business and the the amount of the penalty shall be equal to (as in effect on January 1, 2001) as being in- collectability of a penalty, taking into ac- 50 percent of the gross income derived (or to applicable to the type of factual situation in count any other claims of the United States be derived) from such activity by the person 255 F.3d 1357 (Fed. Cir. 2001). or third parties upon the assets of that per- (c) EFFECTIVE DATE.—The provisions of on which the penalty is imposed.’’. son and the amount of the assets of that per- (b) EFFECTIVE DATE.—The amendment this section shall apply to taxable years be- son.’’. made by this section shall apply to activities ginning before, on, or after the date of the (2) SECURITIES EXCHANGE ACT OF 1934.—Sec- after the date of the enactment of this Act. enactment of this Act. tion 21B(a) of the Securities Exchange Act of SEC. 716. STATUTE OF LIMITATIONS FOR TAX- SEC. 722. SIGNING OF CORPORATE TAX RETURNS 1934 (15 U.S.C. 78u–2(a)) is amended— ABLE YEARS FOR WHICH LISTED BY CHIEF EXECUTIVE OFFICER. (A) in paragraph (4), by striking ‘‘super- TRANSACTIONS NOT REPORTED. (a) IN GENERAL.—Section 6062 (relating to vision;’’ and all that follows through the end (a) IN GENERAL.—Section 6501(e)(1) (relat- signing of corporation returns) is amended of the subsection and inserting ‘‘super- ing to substantial omission of items for in- by striking the first sentence and inserting vision.’’; come taxes) is amended by adding at the end the following new sentence: ‘‘The return of a (B) by redesignating paragraphs (1) the following new subparagraph: corporation with respect to income shall be through (4) as subparagraphs (A) through ‘‘(C) LISTED TRANSACTIONS.—If a taxpayer signed by the chief executive officer of such (D), respectively, and moving the margins 2 fails to include on any return or statement corporation (or other such officer of the cor- ems to the right; for any taxable year any information with poration as the Secretary may designate if respect to a listed transaction (as defined in the corporation does not have a chief execu- (C) by inserting ‘‘that such penalty is in section 6707A(c)(2)) which is required under tive officer). The preceding sentence shall the public interest and’’ after ‘‘hearing,’’; section 6011 to be included with such return not apply to any return of a regulated in- (D) by striking ‘‘In any proceeding’’ and in- or statement, the tax for such taxable year vestment company (within the meaning of serting the following: may be assessed, or a proceeding in court for section 851).’’. ‘‘(1) IN GENERAL.—In any proceeding’’; and collection of such tax may be begun without (b) EFFECTIVE DATE.—The amendment (E) by adding at the end the following: assessment, at any time within 6 years after made by this section shall apply to returns ‘‘(2) OTHER MONEY PENALTIES.—In any pro- the time the return is filed. This subpara- filed after the date of the enactment of this ceeding under section 21C against any per- graph shall not apply to any taxable year if Act. son, the Commission may impose a civil the time for assessment or beginning the monetary penalty if it finds, on the record SEC. 723. SECURITIES CIVIL ENFORCEMENT PRO- proceeding in court has expired before the VISIONS. after notice and opportunity for hearing, time a transaction is treated as a listed (a) AUTHORITY TO ASSESS CIVIL MONEY that such person is violating, has violated, transaction under section 6011.’’. PENALTIES.— or is or was a cause of the violation of, any (b) EFFECTIVE DATE.—The amendment (1) SECURITIES ACT OF 1933.—Section 8A of provision of this title or any rule or regula- made by this section shall apply to trans- the Securities Act of 1933 (15 U.S.C. 77h–1) is tion thereunder, and that such penalty is in actions in taxable years beginning after the amended by adding at the end the following the public interest.’’. date of the enactment of this Act. new subsection: (3) INVESTMENT COMPANY ACT OF 1940.—Sec- SEC. 717. DENIAL OF DEDUCTION FOR INTEREST ‘‘(g) AUTHORITY OF THE COMMISSION TO AS- tion 9(d)(1) of the Investment Company Act ON UNDERPAYMENTS ATTRIB- SESS MONEY PENALTY.— of 1940 (15 U.S.C. 80a–9(d)(1)) is amended— UTABLE TO NONDISCLOSED RE- (A) in subparagraph (C), by striking PORTABLE AND NONECONOMIC SUB- ‘‘(1) IN GENERAL.—In any cease-and-desist STANCE TRANSACTIONS. proceeding under subsection (a), the Com- ‘‘therein;’’ and all that follows through the (a) IN GENERAL.—Section 163 (relating to mission may impose a civil monetary pen- end of the paragraph and inserting ‘‘super- deduction for interest) is amended by redes- alty if it finds, on the record after notice and vision.’’; ignating subsection (m) as subsection (n) and opportunity for hearing, that a person is vio- (B) by redesignating subparagraphs (A) by inserting after subsection (l) the fol- lating, has violated, or is or was a cause of through (C) as clauses (i) through (iii), re- lowing new subsection: the violation of, any provision of this title or spectively, and moving the margins 2 ems to ‘‘(m) INTEREST ON UNPAID TAXES ATTRIB- any rule or regulation thereunder, and that the right; UTABLE TO NONDISCLOSED REPORTABLE such penalty is in the public interest. (C) by inserting ‘‘that such penalty is in TRANSACTIONS AND NONECONOMIC SUBSTANCE ‘‘(2) MAXIMUM AMOUNT OF PENALTY.— the public interest and’’ after ‘‘hearing,’’; TRANSACTIONS.—No deduction shall be al- ‘‘(A) FIRST TIER.—The maximum amount of (D) by striking ‘‘In any proceeding’’ and in- lowed under this chapter for any interest penalty for each act or omission described in serting the following: paid or accrued under section 6601 on any un- paragraph (1) shall be $100,000 for a natural ‘‘(A) IN GENERAL.—In any proceeding’’; and derpayment of tax which is attributable to— person or $250,000 for any other person. (E) by adding at the end the following:

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‘‘(B) OTHER MONEY PENALTIES.—In any pro- (II) by striking ‘‘$500,000’’ and inserting (I) by striking ‘‘$50,000’’ and inserting ceeding under subsection (f) against any per- ‘‘$2,000,000’’. ‘‘$500,000’’; and son, the Commission may impose a civil (D) CIVIL ACTIONS.—Section 21(d)(3)(B) of (II) by striking ‘‘$250,000’’ and inserting monetary penalty if it finds, on the record the Securities Exchange Act of 1934 (15 ‘‘$1,000,000’’; and after notice and opportunity for hearing, U.S.C. 78u(d)(3)(B)) is amended— (iii) in subparagraph (C)— that such person is violating, has violated, (i) in clause (i)— (I) by striking ‘‘$100,000’’ and inserting or is or was a cause of the violation of, any (I) by striking ‘‘$5,000’’ and inserting ‘‘$1,000,000’’; and provision of this title or any rule or regula- ‘‘$100,000’’; and (II) by striking ‘‘$500,000’’ and inserting tion thereunder, and that such penalty is in (II) by striking ‘‘$50,000’’ and inserting ‘‘$2,000,000’’. the public interest.’’. ‘‘$250,000’’; (c) AUTHORITY TO OBTAIN FINANCIAL (4) INVESTMENT ADVISERS ACT OF 1940.—Sec- (ii) in clause (ii)— RECORDS.—Section 21(h) of the Securities Ex- tion 203(i)(1) of the Investment Advisers Act (I) by striking ‘‘$50,000’’ and inserting change Act of 1934 (15 U.S.C. 78u(h)) is of 1940 (15 U.S.C. 80b–3(i)(1)) is amended— ‘‘$500,000’’; and amended— (1) by striking paragraphs (2) through (8); (A) in subparagraph (D), by striking ‘‘su- (II) by striking ‘‘$250,000’’ and inserting (2) in paragraph (9), by striking ‘‘(9)(A)’’ pervision;’’ and all that follows through the ‘‘$1,000,000’’; and and all that follows through ‘‘(B) The’’ and end of the paragraph and inserting ‘‘super- (iii) in clause (iii)— inserting ‘‘(3) The’’; vision.’’; (I) by striking ‘‘$100,000’’ and inserting (3) by inserting after paragraph (1), the fol- (B) by redesignating subparagraphs (A) ‘‘$1,000,000’’; and through (D) as clauses (i) through (iv), re- lowing: (II) by striking ‘‘$500,000’’ and inserting spectively, and moving the margins 2 ems to ‘‘(2) ACCESS TO FINANCIAL RECORDS.— ‘‘$2,000,000’’. the right; ‘‘(A) IN GENERAL.—Notwithstanding section (3) INVESTMENT COMPANY ACT OF 1940.— (C) by inserting ‘‘that such penalty is in 1105 or 1107 of the Right to Financial Privacy (A) INELIGIBILITY.—Section 9(d)(2) of the the public interest and’’ after ‘‘hearing,’’; Act of 1978, the Commission may obtain ac- Investment Company Act of 1940 (15 U.S.C. (D) by striking ‘‘In any proceeding’’ and in- cess to and copies of, or the information con- 80a–9(d)(2)) is amended— serting the following: tained in, financial records of any person (i) in subparagraph (A)— ‘‘(A) IN GENERAL.—In any proceeding’’; and held by a financial institution, including the (E) by adding at the end the following: (I) by striking ‘‘$5,000’’ and inserting financial records of a customer, without no- ‘‘$100,000’’; and ‘‘(B) OTHER MONEY PENALTIES.—In any pro- tice to that person, when it acts pursuant to ceeding under subsection (k) against any per- (II) by striking ‘‘$50,000’’ and inserting a subpoena authorized by a formal order of son, the Commission may impose a civil ‘‘$250,000’’; investigation of the Commission and issued monetary penalty if it finds, on the record (ii) in subparagraph (B)— under the securities laws or pursuant to an after notice and opportunity for hearing, (I) by striking ‘‘$50,000’’ and inserting administrative or judicial subpoena issued in that such person is violating, has violated, ‘‘$500,000’’; and a proceeding or action to enforce the securi- or is or was a cause of the violation of, any (II) by striking ‘‘$250,000’’ and inserting ties laws. provision of this title or any rule or regula- ‘‘$1,000,000’’; and ‘‘(B) NONDISCLOSURE OF REQUESTS.—If the tion thereunder, and that such penalty is in (iii) in subparagraph (C)— Commission so directs in its subpoena, no fi- the public interest.’’. (I) by striking ‘‘$100,000’’ and inserting nancial institution, or officer, director, part- (b) INCREASED MAXIMUM CIVIL MONEY PEN- ‘‘$1,000,000’’; and ner, employee, shareholder, representative ALTIES.— (II) by striking ‘‘$500,000’’ and inserting or agent of such financial institution, shall, (1) SECURITIES ACT OF 1933.—Section 20(d)(2) ‘‘$2,000,000’’. directly or indirectly, disclose that records of the Securities Act of 1933 (15 U.S.C. (B) ENFORCEMENT OF INVESTMENT COMPANY have been requested or provided in accord- 77t(d)(2)) is amended— ACT.—Section 42(e)(2) of the Investment ance with subparagraph (A), if the Commis- (A) in subparagraph (A)(i)— Company Act of 1940 (15 U.S.C. 80a–41(e)(2)) is sion finds reason to believe that such disclo- (i) by striking ‘‘$5,000’’ and inserting amended— sure may— ‘‘$100,000’’; and (i) in subparagraph (A)— ‘‘(i) result in the transfer of assets or (ii) by striking ‘‘$50,000’’ and inserting (I) by striking ‘‘$5,000’’ and inserting records outside the territorial limits of the ‘‘$250,000’’; ‘‘$100,000’’; and United States; (B) in subparagraph (B)(i)— (II) by striking ‘‘$50,000’’ and inserting ‘‘(ii) result in improper conversion of in- (i) by striking ‘‘$50,000’’ and inserting ‘‘$250,000’’; vestor assets; ‘‘$500,000’’; and (ii) in subparagraph (B)— ‘‘(iii) impede the ability of the Commission (ii) by striking ‘‘$250,000’’ and inserting (I) by striking ‘‘$50,000’’ and inserting to identify, trace, or freeze funds involved in ‘‘$1,000,000’’; and ‘‘$500,000’’; and any securities transaction; (C) in subparagraph (C)(i)— (II) by striking ‘‘$250,000’’ and inserting ‘‘(iv) endanger the life or physical safety of (i) by striking ‘‘$100,000’’ and inserting ‘‘$1,000,000’’; and an individual; ‘‘$1,000,000’’; and (iii) in subparagraph (C)— ‘‘(v) result in flight from prosecution; (ii) by striking ‘‘$500,000’’ and inserting (I) by striking ‘‘$100,000’’ and inserting ‘‘(vi) result in destruction of or tampering ‘‘$2,000,000’’. ‘‘$1,000,000’’; and with evidence; (2) SECURITIES EXCHANGE ACT OF 1934.— (II) by striking ‘‘$500,000’’ and inserting ‘‘(vii) result in intimidation of potential (A) PENALTIES.—Section 32 of the Securi- ‘‘$2,000,000’’. witnesses; or ties Exchange Act of 1934 (15 U.S.C. 78ff) is (4) INVESTMENT ADVISERS ACT OF 1940.— ‘‘(viii) otherwise seriously jeopardize an in- amended— (A) REGISTRATION.—Section 203(i)(2) of the vestigation or unduly delay a trial. (i) in subsection (b), by striking ‘‘$100’’ and Investment advisers Act of 1940 (15 U.S.C. ‘‘(C) TRANSFER OF RECORDS TO GOVERNMENT inserting ‘‘$10,000’’; and 80b–3(i)(2)) is amended— AUTHORITIES.—The Commission may transfer (ii) in subsection (c)— (i) in subparagraph (A)— financial records or the information con- (I) in paragraph (1)(B), by striking (I) by striking ‘‘$5,000’’ and inserting tained therein to any government authority, ‘‘$10,000’’ and inserting ‘‘$500,000’’; and ‘‘$100,000’’; and if the Commission proceeds as a transferring (II) in paragraph (2)(B), by striking (II) by striking ‘‘$50,000’’ and inserting agency in accordance with section 1112 of the ‘‘$10,000’’ and inserting ‘‘$500,000’’. ‘‘$250,000’’; Right to Financial Privacy Act of 1978 (12 (B) INSIDER TRADING.—Section 21A(a)(3) of (ii) in subparagraph (B)— U.S.C. 3412), except that a customer notice the Securities Exchange Act of 1934 (15 (I) by striking ‘‘$50,000’’ and inserting shall not be required under subsection (b) or U.S.C. 78u–1(a)(3)) is amended by striking ‘‘$500,000’’; and (c) of that section 1112, if the Commission de- ‘‘$1,000,000’’ and inserting ‘‘$2,000,000’’. (II) by striking ‘‘$250,000’’ and inserting termines that there is reason to believe that (C) ADMINISTRATIVE PROCEEDINGS.—Section ‘‘$1,000,000’’; and such notification may result in or lead to 21B(b) of the Securities Exchange Act of 1934 (iii) in subparagraph (C)— any of the factors identified under clauses (i) (15 U.S.C. 78u–2(b)) is amended— (I) by striking ‘‘$100,000’’ and inserting through (viii) of subparagraph (B) of this (i) in paragraph (1)— ‘‘$1,000,000’’; and paragraph.’’; (I) by striking ‘‘$5,000’’ and inserting (II) by striking ‘‘$500,000’’ and inserting (4) by striking paragraph (10); and ‘‘$100,000’’; and ‘‘$2,000,000’’. (5) by redesignating paragraphs (11), (12), (II) by striking ‘‘$50,000’’ and inserting (B) ENFORCEMENT OF INVESTMENT ADVISERS and (13) as paragraphs (4), (5), and (6), respec- ‘‘$250,000’’; ACT.—Section 209(e)(2) of the Investment ad- tively. (ii) in paragraph (2)— visers Act of 1940 (15 U.S.C. 80b–9(e)(2)) is SEC. 724. REVIEW OF STATE AGENCY BLINDNESS (I) by striking ‘‘$50,000’’ and inserting amended— AND DISABILITY DETERMINATIONS. ‘‘$500,000’’; and (i) in subparagraph (A)— Section 1633 of the Social Security Act (42 (II) by striking ‘‘$250,000’’ and inserting (I) by striking ‘‘$5,000’’ and inserting U.S.C. 1383b) is amended by adding at the end ‘‘$1,000,000’’; and ‘‘$100,000’’; and the following: (iii) in paragraph (3)— (II) by striking ‘‘$50,000’’ and inserting ‘‘(e)(1) The Commissioner of Social Secu- (I) by striking ‘‘$100,000’’ and inserting ‘‘$250,000’’; rity shall review determinations, made by ‘‘$1,000,000’’; and (ii) in subparagraph (B)— State agencies pursuant to subsection (a) in

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00120 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3855 connection with applications for benefits cipient of a grant or cooperative agreement nonprofit corporation or association that under this title on the basis of blindness or from the Secretary) may receive more than 1 has— disability, that individuals who have at- grant or cooperative agreement under this (1) not more than 6 full-time equivalent tained 18 years of age are blind or disabled as section for the same purpose. employees who are engaged in the provision of a specified onset date. The Commissioner (e) AUTHORIZATION OF APPROPRIATIONS.— of social services; or of Social Security shall review such a deter- There are authorized to be appropriated to (2) a current annual budget (current as of mination before any action is taken to im- carry out this section $85,000,000 for fiscal the date the entity seeks assistance under plement the determination. year 2003, and such sums as may be necessary this section) for the provision of social serv- ‘‘(2)(A) In carrying out paragraph (1), the for each of fiscal years 2004 through 2007. ices, compiled and adopted in good faith, of Commissioner of Social Security shall re- (f) DEFINITION.—In this section, the term less than $450,000. view— ‘‘community-based organization’’ means a SEC. 803. SUPPORT FOR NONPROFIT COMMU- ‘‘(i) at least 25 percent of all determina- nonprofit corporation or association that NITY-BASED ORGANIZATIONS; DE- has— tions referred to in paragraph (1) that are PARTMENT OF JUSTICE. (1) not more than 6 full-time equivalent made in fiscal year 2004; and (a) SUPPORT FOR NONGOVERNMENTAL ORGA- employees who are engaged in the provision ‘‘(ii) at least 50 percent of all such deter- NIZATIONS.—The Attorney General may of social services; or minations that are made in fiscal year 2005 award grants to and enter into cooperative (2) a current annual budget (current as of or thereafter. agreements with nongovernmental organiza- the date the entity seeks assistance under tions, to— ‘‘(B) In carrying out subparagraph (A), the this section) for the provision of social serv- (1) provide technical assistance for commu- Commissioner of Social Security shall, to ices, compiled and adopted in good faith, of nity-based organizations, which may in- the extent feasible, select for review the de- less than $450,000. clude— terminations which the Commissioner of So- (A) grant writing and grant management cial Security identifies as being the most SEC. 802. SUPPORT FOR NONPROFIT COMMU- NITY-BASED ORGANIZATIONS; COR- assistance, which may include assistance likely to be incorrect.’’. PORATION FOR NATIONAL AND COM- provided through workshops and other guid- TITLE VIII—COMPASSION CAPITAL FUND MUNITY SERVICE. ance; SEC. 801. SUPPORT FOR NONPROFIT COMMU- (a) SUPPORT FOR NONGOVERNMENTAL ORGA- (B) legal assistance with incorporation; NITY-BASED ORGANIZATIONS; DE- NIZATIONS.—The Corporation for National (C) legal assistance to obtain tax-exempt PARTMENT OF HEALTH AND HUMAN and Community Service (referred to in this status; and SERVICES. section as ‘‘the Corporation’’) may award (D) information on, and referrals to, other (a) SUPPORT FOR NONGOVERNMENTAL ORGA- grants to and enter into cooperative agree- nongovernmental organizations that provide NIZATIONS.—The Secretary of Health and ments with nongovernmental organizations expertise in accounting, on legal issues, on Human Services (referred to in this section and State Commissions on National and tax issues, in program development, and on a Community Service established under sec- as ‘‘the Secretary’’) may award grants to and variety of other organizational topics; tion 178 of the National and Community enter into cooperative agreements with non- (2) provide information and assistance for Service Act of 1990 (42 U.S.C. 12638), to— governmental organizations, to— community-based organizations on capacity (1) provide technical assistance for commu- (1) provide technical assistance for commu- building; nity-based organizations, which may in- nity-based organizations, which may in- (3) provide for community-based organiza- clude— clude— tions information on and assistance in iden- (A) grant writing and grant management (A) grant writing and grant management tifying and using best practices for deliv- assistance, which may include assistance assistance, which may include assistance ering assistance to persons, families, and provided through workshops and other guid- provided through workshops and other guid- communities in need; ance; ance; (4) provide information on and assistance (B) legal assistance with incorporation; (B) legal assistance with incorporation; in utilizing regional intermediary organiza- (C) legal assistance to obtain tax-exempt (C) legal assistance to obtain tax-exempt tions to increase and strengthen the capa- status; and status; and bilities of nonprofit community-based orga- (D) information on, and referrals to, other (D) information on, and referrals to, other nizations; nongovernmental organizations that provide nongovernmental organizations that provide (5) assist community-based organizations expertise in accounting, on legal issues, on expertise in accounting, on legal issues, on in replicating social service programs of tax issues, in program development, and on a tax issues, in program development, and on a demonstrated effectiveness; and variety of other organizational topics; variety of other organizational topics; (6) encourage research on the best prac- (2) provide information and assistance for (2) provide information and assistance for tices of social service organizations. community-based organizations on capacity community-based organizations on capacity (b) APPLICATIONS.—To be eligible to receive building; building; a grant or enter into a cooperative agree- (3) provide for community-based organiza- (3) provide for community-based organiza- ment under this section, a nongovernmental tions information on and assistance in iden- tions information on and assistance in iden- organization, State, or political subdivision tifying and using best practices for deliv- tifying and using best practices for deliv- shall submit an application to the Attorney ering assistance to persons, families, and ering assistance to persons, families, and General at such time, in such manner, and communities in need; communities in need; containing such information as the Attorney (4) provide information on and assistance (4) provide information on and assistance General may require. in utilizing regional intermediary organiza- in utilizing regional intermediary organiza- (c) LIMITATION.—In order to widely dis- tions to increase and strengthen the capa- tions to increase and strengthen the capa- burse limited resources, no community- bilities of nonprofit community-based orga- bilities of community-based organizations; based organization (other than a direct re- nizations; (5) assist community-based organizations cipient of a grant or cooperative agreement (5) assist community-based organizations in replicating social service programs of from the Attorney General) may receive in replicating social service programs of demonstrated effectiveness; and more than 1 grant or cooperative agreement demonstrated effectiveness; and (6) encourage research on the best prac- under this section for the same purpose. (6) encourage research on the best prac- tices of social service organizations. (d) AUTHORIZATION OF APPROPRIATIONS.— tices of social service organizations. (b) APPLICATIONS.—To be eligible to receive There are authorized to be appropriated to a grant or enter into a cooperative agree- carry out this section $35,000,000 for fiscal (b) SUPPORT FOR STATES.—The Secretary— year 2003, and such sums as may be necessary (1) may award grants to and enter into co- ment under this section, a nongovernmental for each of fiscal years 2004 through 2007. operative agreements with States and polit- organization, State Commission, State, or political subdivision shall submit an applica- (e) DEFINITION.—In this section, the term ical subdivisions of States to provide seed tion to the Corporation at such time, in such ‘‘community-based organization’’ means a money to establish State and local offices of manner, and containing such information as nonprofit corporation or association that faith-based and community initiatives; and the Corporation may require. has— (2) shall provide technical assistance to (c) LIMITATION.—In order to widely dis- (1) not more than 6 full-time equivalent States and political subdivisions of States in burse limited resources, no community- employees who are engaged in the provision administering the provisions of this Act. based organization (other than a direct re- of social services; or (c) APPLICATIONS.—To be eligible to receive cipient of a grant or cooperative agreement (2) a current annual budget (current as of a grant or enter into a cooperative agree- from the Secretary) may receive more than 1 the date the entity seeks assistance under ment under this section, a nongovernmental grant or cooperative agreement under this this section) for the provision of social serv- organization, State, or political subdivision section for the same purpose. ices, compiled and adopted in good faith, of shall submit an application to the Secretary (d) AUTHORIZATION OF APPROPRIATIONS.— less than $450,000. at such time, in such manner, and con- There are authorized to be appropriated to SEC. 804. SUPPORT FOR NONPROFIT COMMU- taining such information as the Secretary carry out this section $15,000,000 for fiscal NITY-BASED ORGANIZATIONS; DE- may require. year 2003, and such sums as may be necessary PARTMENT OF HOUSING AND URBAN (d) LIMITATION.—In order to widely dis- for each of fiscal years 2004 through 2007. DEVELOPMENT. burse limited resources, no community- (e) DEFINITION.—In this section, the term (a) SUPPORT FOR NONGOVERNMENTAL ORGA- based organization (other than a direct re- ‘‘community-based organization’’ means a NIZATIONS.—The Secretary of Housing and

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READY RESERVE-NATIONAL GUARD tion ‘‘the Secretary’’) may award grants to ‘‘(c) MATERNITY GROUP HOME.—In this part, EMPLOYEE CREDIT. and enter into cooperative agreements with the term ‘maternity group home’ means a ‘‘(a) GENERAL RULE.—For purposes of sec- nongovernmental organizations, to— community-based, adult-supervised group tion 38, the Ready Reserve-National Guard (1) provide technical assistance for commu- home that provides young mothers and their employee credit determined under this sec- nity-based organizations, which may in- children with a supportive and supervised tion for any taxable year is an amount equal clude— living arrangement in which such mothers to 50 percent of the actual compensation (A) grant writing and grant management are required to learn parenting skills, in- amount for such taxable year. ‘‘(b) DEFINITION OF ACTUAL COMPENSATION assistance, which may include assistance cluding child development, family budgeting, AMOUNT.—For purposes of this section, the provided through workshops and other guid- health and nutrition, and other skills to pro- term ‘actual compensation amount’ means ance; mote their long-term economic independence the amount of compensation paid or incurred (B) legal assistance with incorporation; and the well-being of their children.’’. by an employer with respect to a Ready Re- (C) legal assistance to obtain tax-exempt (b) CONTRACT FOR EVALUATION.—Part B of serve-National Guard employee on any day status; and the Runaway and Homeless Youth Act (42 when the employee was absent from employ- (D) information on, and referrals to, other U.S.C. 5701 et seq.) is amended by adding at ment for the purpose of performing qualified nongovernmental organizations that provide the end the following: active duty. expertise in accounting, on legal issues, on ‘‘SEC. 323. CONTRACT FOR EVALUATION. ‘‘(c) LIMITATIONS.— tax issues, in program development, and on a ‘‘(a) IN GENERAL.—The Secretary shall ‘‘(1) MAXIMUM PERIOD FOR CREDIT PER EM- variety of other organizational topics; enter into a contract with a public or private PLOYEE.—The maximum period with respect (2) provide information and assistance for entity for an evaluation of the maternity to which the credit may be allowed with re- community-based organizations on capacity group homes that are supported by grant spect to any Ready Reserve-National Guard building; funds under this Act. employee shall not exceed the 12-month pe- (3) provide for community-based organiza- ‘‘(b) INFORMATION.—The evaluation de- riod beginning on the first day such credit is tions information on and assistance in iden- scribed in subsection (a) shall include the so allowed with respect to such employee. tifying and using best practices for deliv- collection of information about the relevant ‘‘(2) DAYS OTHER THAN WORK DAYS.—No ering assistance to persons, families, and characteristics of individuals who benefit credit shall be allowed with respect to any communities in need; from maternity group homes such as those day that a Ready Reserve-National Guard (4) provide information on and assistance that are supported by grant funds under this employee who performs qualified active duty in utilizing regional intermediary organiza- Act and what services provided by those ma- was not scheduled to work (for reason other tions to increase and strengthen the capa- ternity group homes are most beneficial to than to participate in qualified active duty). bilities of community-based organizations; such individuals. ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For (5) assist community-based organizations ‘‘(c) REPORT.—Not later than 2 years after purposes of this section— in replicating social service programs of the date on which the Secretary enters into ‘‘(1) QUALIFIED ACTIVE DUTY.—The term demonstrated effectiveness; and a contract for an evaluation under sub- ‘qualified active duty’ means— (6) encourage research on the best prac- section (a), and biennially thereafter, the en- ‘‘(A) active duty, other than the training tices of social service organizations. tity conducting the evaluation under this duty specified in section 10147 of title 10, (b) APPLICATIONS.—To be eligible to receive section shall submit to Congress a report on United States Code (relating to training re- a grant or enter into a cooperative agree- the status, activities, and accomplishments quirements for the Ready Reserve), or sec- ment under this section, a nongovernmental of maternity group homes that are supported tion 502(a) of title 32, United States Code (re- organization, State, or political subdivision by grant funds under this Act.’’. lating to required drills and field exercises shall submit an application to the Secretary (c) AUTHORIZATION OF APPROPRIATIONS.— for the National Guard), in connection with at such time, in such manner, and con- Section 388 of the Runaway and Homeless which an employee is entitled to reemploy- taining such information as the Secretary Youth Act (42 U.S.C. 5751) is amended— ment rights and other benefits or to a leave may require. (1) in subsection (a)(1)— of absence from employment under chapter (c) LIMITATION.—In order to widely dis- (A) by striking ‘‘There’’ and inserting the 43 of title 38, United States Code, and burse limited resources, no community- following: ‘‘(B) hospitalization incident to such duty. based organization (other than a direct re- ‘‘(A) IN GENERAL.—There’’; ‘‘(2) COMPENSATION.—The term ‘compensa- cipient of a grant or cooperative agreement (B) in subparagraph (A), as redesignated, tion’ means any remuneration for employ- from the Secretary) may receive more than 1 by inserting ‘‘and the purpose described in ment, whether in cash or in kind, which is grant or cooperative agreement under this subparagraph (B)’’ after ‘‘other than part E’’; paid or incurred by a taxpayer and which is section for the same purpose. and deductible from the taxpayer’s gross income (d) AUTHORIZATION OF APPROPRIATIONS.— (C) by adding at the end the following: under section 162(a)(1). There are authorized to be appropriated to ‘‘(3) READY RESERVE-NATIONAL GUARD EM- carry out this section $15,000,000 for fiscal ‘‘(B) MATERNITY GROUP HOMES.—There is authorized to be appropriated, for maternity PLOYEE.—The term ‘Ready Reserve-National year 2003, and such sums as may be necessary Guard employee’ means an employee who is for each of fiscal years 2004 through 2007. group homes eligible for assistance under section 322(a)(1)— a member of the Ready Reserve of a reserve (e) DEFINITION.—In this section, the term component of an Armed Force of the United ‘‘community-based organization’’ means a ‘‘(i) $33,000,000 for fiscal year 2003; and ‘‘(ii) such sums as may be necessary for fis- States as described in sections 10142 and nonprofit corporation or association that 10101 of title 10, United States Code. has— cal year 2004.’’; and (2) in subsection (a)(2)(A), by striking ‘‘(4) CERTAIN RULES TO APPLY.—Rules simi- (1) not more than 6 full-time equivalent lar to the rules of section 52 shall apply.’’. employees who are engaged in the provision ‘‘paragraph (1)’’ and inserting ‘‘paragraph (1)(A)’’. (b) CREDIT TO BE PART OF GENERAL BUSI- of social services; or NESS CREDIT.—Subsection (b) of section 38 (2) a current annual budget (current as of Ms. LANDRIEU submitted (relating to general business credit), as the date the entity seeks assistance under SA 3039. amended by this Act, is amended by striking this section) for the provision of social serv- an amendment intended to be proposed ‘‘plus’’ at the end of paragraph (15), by strik- ices, compiled and adopted in good faith, of to amendment SA 3011 proposed by Mr. ing the period at the end of paragraph (16) less than $450,000. FRIST to the bill S. 1637, to amend the and inserting ‘‘, plus’’, and by adding at the SEC. 805. COORDINATION. Internal Revenue Code of 1986 to com- end the following: The Secretary of Health and Human Serv- ply with the World Trade Organization ‘‘(17) the Ready Reserve-National Guard ices, the Corporation for National and Com- rulings on the FSC/ETI benefit in a employee credit determined under section munity Service, the Attorney General, and manner that preserves jobs and produc- 45H(a).’’. the Secretary of Housing and Urban Develop- (c) DENIAL OF DOUBLE BENEFIT.—Section ment shall coordinate their activities under tion activities in the United States, to 280C(a) (relating to rule for employment this title to ensure— reform and simplify the international credits) is amended by inserting ‘‘45H(a),’’ (1) nonduplication of activities under this taxation rules of the United States, after ‘‘45A(a),’’. title; and and for other purposes; which was or- (d) CONFORMING AMENDMENT.—The table of (2) an equitable distribution of resources dered to lie on the table; as follows: sections for subpart D of part IV of sub- chapter A of chapter 1, as amended by this under this title. Strike section 632 and insert the following: TITLE IX—MATERNITY GROUP HOMES Act, is amended by inserting after the item SEC. 632. READY RESERVE-NATIONAL GUARD EM- relating to section 45G the following: SEC. 901. MATERNITY GROUP HOMES. PLOYEE CREDIT ADDED TO GEN- (a) PERMISSIBLE USE OF FUNDS.—Section ERAL BUSINESS CREDIT. ‘‘Sec. 45H. Ready Reserve-National Guard 322 of the Runaway and Homeless Youth Act (a) READY RESERVE-NATIONAL GUARD CRED- employee credit.’’. (42 U.S.C. 5714–2) is amended— IT.—Subpart D of part IV of subchapter A of (e) EFFECTIVE DATE.—The amendments (1) in subsection (a)(1), by inserting ‘‘(in- chapter 1 (relating to business-related cred- made by this section shall apply to amounts cluding maternity group homes)’’ after its), as amended by this Act, is amended by paid or incurred after October 6, 2001, in tax- ‘‘group homes’’; and adding at the end the following: able years ending after such date.

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00122 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY April 6, 2004 CONGRESSIONAL RECORD — SENATE S3857 SA 3040. Mr. NICKLES (for himself year, the amount of credit determined under 1986 to comply with the World Trade and Mr. THOMAS) submitted an amend- subsection (a) (without regard to this sub- Organization rulings of the FSC/ETI ment intended to be proposed to section)— benefit in a manner that preserves jobs amendment SA 3011 proposed by Mr. ‘‘(A) if the value of domestic production and production activities in the United determined under subsection (g)(2) for the FRIST to the bill S. 1637, to amend the taxable year does not exceed such value for States, to reform and simplify the Internal Revenue Code of 1986 to com- the preceding taxable year, shall be zero, and international taxation rules of the ply with the World Trade Organization ‘‘(B) if subparagraph (A) does not apply, United States, and for other purposes; rulings on the FSC/ETI benefit in a shall be reduced (but not below zero) by the which was ordered to lie on the table; manner that preserves jobs and produc- applicable percentage of such amount. as follows: tion activities in the United States, to ‘‘(2) APPLICABLE PERCENTAGE.—For pur- At the end add the following: poses of paragraph (1), the term ‘applicable reform and simplify the international TITLE V—TRADE ADJUSTMENT taxation rules of the United States, percentage’ means, with respect to any tax- able year, the percentage equal to a frac- ASSISTANCE and for other purposes; which was or- tion— Subtitle A—Service Workers dered to lie on the table; as follows: ‘‘(A) the numerator of which is the excess SEC. 511. SHORT TITLE. At the end of title VIII of the instructions, (if any) of the modified value of worldwide This subtitle may be cited as the ‘‘Trade add the following: production of the taxpayer for the taxable Adjustment Assistance Equity For Service SEC. ll. ELECTRIC TRANSMISSION PROPERTY year over such modified value for the pre- Workers Act of 2004’’. TREATED AS 15-YEAR PROPERTY. ceding taxable year, and SEC. 512. EXTENSION OF TRADE ADJUSTMENT AS- (a) IN GENERAL.—Subparagraph (E) of sec- ‘‘(B) the denominator of which is the ex- SISTANCE TO SERVICES SECTOR. tion 168(e)(3) (relating to classification of cess (if any) of the value of worldwide pro- (a) ADJUSTMENT ASSISTANCE FOR WORK- certain property), as amended by this Act, is duction of the taxpayer for the taxable year ERS.—Section 221(a)(1)(A) of the Trade Act of amended by striking ‘‘and’’ at the end of over such value for the preceding taxable 1974 (19 U.S.C. 2271(a)(1)(A)) is amended by clause (iii), by striking the period at the end year. striking ‘‘firm)’’ and inserting ‘‘firm, and of clause (iv) and by inserting ‘‘, and’’, and ‘‘(3) DEFINITIONS.—For purposes of this sub- workers in a service sector firm or subdivi- by adding at the end the following new section— sion of a service sector firm or public agen- clause: ‘‘(A) VALUE OF WORLDWIDE PRODUCTION.— cy)’’. ‘‘(v) any section 1245 property (as defined The value of worldwide production for any (b) GROUP ELIGIBILITY REQUIREMENTS.— in section 1245(a)(3)) used in the transmission taxable year shall be determined under sub- Section 222 of the Trade Act of 1974 (19 U.S.C. at 69 or more kilovolts of electricity for sale section (g)(4). 2272) is amended— the original use of which commences with ‘‘(B) MODIFIED VALUE.—The term ‘modified (1) in subsection (a)— the taxpayer after the date of the enactment value of worldwide production’ means the (A) in the matter preceding paragraph (1), of this clause.’’. value of worldwide production determined by by striking ‘‘agricultural firm)’’ and insert- (b) ALTERNATIVE SYSTEM.—The table con- not taking into account any item taken into ing ‘‘agricultural firm, and workers in a tained in section 168(g)(3)(B) is amended by account in determining the value of domes- service sector firm or subdivision of a service inserting after the item relating to subpara- tic production under subsection (g)(2). sector firm or public agency)’’; graph (E)(iv) the following: ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of (B) in paragraph (1), by inserting ‘‘or pub- ‘‘(E)(v) ...... 30’’. this section, the term ‘eligible taxpayer’ lic agency’’ after ‘‘of the firm’’; and (c) EFFECTIVE DATE.—The amendments means any taxpayer— (C) in paragraph (2)— made by this section shall apply to property ‘‘(1) which has domestic production gross (i) in subparagraph (A)(ii), by striking placed in service after the date of the enact- receipts for the taxable year and the pre- ‘‘like or directly competitive with articles ment of this Act, in taxable years ending ceding taxable year, and produced’’ and inserting ‘‘or services like or after such date. ‘‘(2) which is not treated at any time dur- directly competitive with articles produced ing the taxable year as an inverted domestic or services provided’’; and SA 3041. Ms. COLLINS submitted an corporation under section 7874. (ii) by striking subparagraph (B) and in- amendment intended to be proposed to ‘‘(d) DEFINITIONS.—For purposes of this sec- serting the following: tion— amendment SA 3011 proposed by Mr. ‘‘(B)(i) there has been a shift, by such ‘‘(1) IN GENERAL.—Any term used in this workers’ firm, subdivision, or public agency FRIST to the bill S. 1637, to amend the section which is also used in section 199 shall Internal Revenue Code of 1986 to com- to a foreign country, of production of arti- have the meaning given such term by section cles, or in provision of services, like or di- ply with the World Trade Organization 199. rectly competitive with articles which are rulings on the FSC/ETI benefit in a ‘‘(2) SPECIAL RULE FOR W–2 WAGES.—Not- produced, or services which are provided, by manner that preserves jobs and produc- withstanding paragraph (1), the amount of such firm, subdivision, or public agency; or tion activities in the United States, to W–2 wages taken into account with respect ‘‘(ii) such workers’ firm, subdivision, or reform and simplify the international to any employee for any taxable year shall public agency has obtained or is likely to ob- not exceed $50,000. taxation rules of the United States, tain such services from a foreign country.’’; ‘‘(e) CERTAIN RULES MADE APPLICABLE.— (2) in subsection (b)— and for other purposes; which was or- For purposes of this section, rules similar to dered to lie on the table; as follows: (A) in the matter preceding paragraph (1), the rules of section 52 shall apply. by striking ‘‘agricultural firm)’’ and insert- At the appropriate place in the instruc- ‘‘(f) TERMINATION.—This section shall not ing ‘‘agricultural firm, and workers in a tion, insert: apply to any taxable year beginning after service sector firm or subdivision of a service SEC. ll. MANUFACTURER’S JOBS CREDIT. December 31, 2005.’’ sector firm or public agency)’’; (a) IN GENERAL.—Subpart D of part IV of (b) CREDIT TO BE PART OF GENERAL BUSI- (B) in paragraph (2), by inserting ‘‘or serv- subchapter A of chapter 1 (relating to busi- NESS CREDIT.—Section 38(b) (relating to cur- ice’’ after ‘‘related to the article’’; and ness-related credits) is amended by adding at rent year business credit) is amended by (C) in paragraph (3)(A), by inserting ‘‘or the end the following: striking ‘‘plus’’ at the end of paragraph (14), services’’ after ‘‘component parts’’; ‘‘SEC. 45G. MANUFACTURER’S JOBS CREDIT. by striking the period at the end of para- (3) in subsection (c)— graph (15) and inserting ‘‘, plus’’, and by add- ‘‘(a) GENERAL RULE.—For purposes of sec- (A) in paragraph (2), by adding at the end tion 38, in the case of an eligible taxpayer, ing at the end the following: the following: the manufacturer’s jobs credit determined ‘‘(16) the manufacturer’s jobs credit deter- ‘‘(C) Taconite pellets produced in the under this section is an amount equal to the mined under section 45G.’’ United States shall be considered to be an lesser of the following: (c) CLERICAL AMENDMENT.—The table of article that is like or directly competitive ‘‘(1) The excess of the W–2 wages paid by sections for subpart D of part IV of sub- with imports of semifinished steel slab.’’. the taxpayer during the taxable year over chapter A of chapter 1 is amended by adding (B) in paragraph (3)— the W–2 wages paid by the taxpayer during at the end the following: (i) by inserting ‘‘or services’’ after ‘‘value- the preceding taxable year. ‘‘Sec. 45G. Manufacturer’s jobs credit.’’ added production processes’’; ‘‘(2) The W–2 wages paid by the taxpayer (ii) by striking ‘‘or finishing’’ and inserting (d) EFFECTIVE DATE.—The amendments ‘‘, finishing, or testing’’; during the taxable year to any employee who made by this section shall apply to taxable (iii) by inserting ‘‘or services’’ after ‘‘for is an eligible TAA recipient (as defined in years beginning after December 31, 2003. section 35(c)(2)) for any month during such articles’’; and (iv) by inserting ‘‘(or subdivision)’’ after taxable year. SA 3042. Mr. WYDEN (for himself, ‘‘(3) 22.4 percent of the W–2 wages paid by ‘‘such other firm’’; and the taxpayer during the taxable year. Mr. COLEMAN, and Mr. DAYTON) sub- (C) in paragraph (4)— ‘‘(b) LIMITATION.— mitted an amendment intended to be (i) by striking ‘‘for articles’’ and inserting ‘‘(1) IN GENERAL.—If there is an excess de- proposed by him to the bill S. 1637, to ‘‘, or services, used in the production of arti- scribed in paragraph (2)(A) for any taxable amend the Internal Revenue Code of cles or in the provision of services’’; and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00123 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3858 CONGRESSIONAL RECORD — SENATE April 6, 2004 (ii) by inserting ‘‘(or subdivision)’’ after firm certify to the Secretary that they are ‘‘(F) does not return to the employment ‘‘such other firm’’; and obtaining such articles or services from a from which the worker was separated.’’. (4) by adding at the end the following new foreign country. (b) CONFORMING AMENDMENTS.—(1) Sub- subsection: ‘‘(2) AUTHORITY OF THE SECRETARY.—The paragraphs (A) and (B) of section 246(a)(2) of ‘‘(d) BASIS FOR SECRETARY’S DETERMINA- Secretary may obtain the certifications the Trade Act of 1974 (19 U.S.C. 2318(a)(2) (A) TIONS.— under paragraph (1) through questionnaires and (B)) are amended by striking ‘‘paragraph ‘‘(1) INCREASED IMPORTS.—For purposes of or in such other manner as the Secretary de- (3)(B)’’ and inserting ‘‘paragraph (3)’’ each subsection (a)(2)(A)(ii), the Secretary may termines is appropriate. The Secretary may place it appears. determine that increased imports of like or exercise the authority under section 249 in (2) Section 246(b)(2) of such Act is amended directly competitive articles or services carrying out this subsection.’’. by striking ‘‘subsection (a)(3)(B)’’ and insert- exist if the workers’ firm or subdivision or (2) AUTHORIZATION OF APPROPRIATIONS.— ing ‘‘subsection (a)(3)’’. customers of the workers’ firm or subdivi- Section 256(b) of the Trade Act of 1974 (19 SEC. 516. CLARIFICATION OF MARKETING YEAR. sion accounting for not less than 20 percent U.S.C. 2346(b)) is amended by striking Section 291(5) of the Trade Act of 1974 (19 of the sales of the workers’ firm or subdivi- ‘‘$16,000,000’’ and inserting ‘‘$32,000,000’’. U.S.C. 2401(5)) is amended by inserting before sion certify to the Secretary that they are (3) DEFINITION.—Section 261 of the Trade the end period the following: ‘‘, or in the case obtaining such articles or services from a Act of 1974 (19 U.S.C. 2351) is amended— of an agricultural commodity that has no foreign country. (A) by striking ‘‘For purposes of’’ and in- marketing year, in a 12-month period for ‘‘(2) OBTAINING SERVICES ABROAD.—For pur- serting ‘‘(a) FIRM.—For purposes of’’; and which the petitioner provides written jus- poses of subsection (a)(2)(B)(ii), the Sec- (B) by adding at the end the following: tification’’. retary may determine that the workers’ ‘‘(b) SERVICE SECTOR FIRM.—For purposes SEC. 517. EFFECTIVE DATE. of this chapter, the term ‘service sector firm’ firm, subdivision, or public agency has ob- (a) IN GENERAL.—Except as provided in means a firm engaged in the business of pro- tained or is likely to obtain like or directly subsections (b) and (c), the amendments viding services.’’. competitive services from a firm in a foreign made by this subtitle shall take effect on Oc- country based on a certification thereof from (b) INDUSTRIES.—Section 265(a) of the Trade Act of 1974 (19 U.S.C. 2355(a)) is amend- tober 1, 2004. the workers’ firm, subdivision, or public (b) SPECIAL RULE FOR CERTAIN SERVICE agency. ed by inserting ‘‘or service’’ after ‘‘new prod- uct’’. WORKERS.—A group of workers in a service ‘‘(3) AUTHORITY OF THE SECRETARY.—The sector firm, or subdivision of a service sector SEC. 514. MONITORING AND REPORTING. Secretary may obtain the certifications firm, or public agency (as defined in section under paragraphs (1) and (2) through ques- Section 282 of the Trade Act of 1974 (19 U.S.C. 2393) is amended— 247 (7) and (8) of the Trade Act of 1974, as tionnaires or in such other manner as the added by section 512(d) of this Act) who— Secretary determines is appropriate.’’. (1) in the first sentence— (A) by striking ‘‘The Secretary’’ and in- (1) would have been certified eligible to (c) TRAINING.—Section 236(a)(2)(A) of the apply for adjustment assistance under chap- serting ‘‘(a) MONITORING PROGRAMS.—The Trade Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is ter 2 of title II of the Trade Act of 1974 if the amended by striking ‘‘$220,000,000’’ and in- Secretary’’; (B) by inserting ‘‘and services’’ after ‘‘im- amendments made by this Act had been in serting ‘‘$440,000,000’’. effect on November 4, 2002, and (d) DEFINITIONS.—Section 247 of the Trade ports of articles’’; (2) file a petition pursuant to section 221 of Act of 1974 (19 U.S.C. 2319) is amended— (C) by inserting ‘‘and domestic provision of such Act within 6 months after the date of (1) in paragraph (1)— services’’ after ‘‘domestic production’’; (D) by inserting ‘‘or providing services’’ enactment of this Act, (A) by inserting ‘‘or public agency’’ after shall be eligible for certification under sec- after ‘‘producing articles’’; and ‘‘of a firm’’; and tion 223 of the Trade Act of 1974 if the work- (E) by inserting ‘‘, or provision of serv- (B) by inserting ‘‘or public agency’’ after ers’ last total or partial separation from the ices,’’ after ‘‘changes in production’’; and ‘‘or subdivision’’; firm or subdivision of the firm or public (2) by adding at the end the following: (2) in paragraph (2)(B), by inserting ‘‘or agency occurred on or after November 4, 2002 ‘‘(b) COLLECTION OF DATA AND REPORTS ON public agency’’ after ‘‘the firm’’; and before October 1, 2004. SERVICES SECTOR.— (3) by redesignating paragraphs (8) through (c) SPECIAL RULE FOR TACONITE.—A group ‘‘(1) SECRETARY OF LABOR.—Not later than (17) as paragraphs (9) through (18), respec- of workers in a firm, or subdivision of a firm, tively; and 3 months after the date of the enactment of the Trade Adjustment Assistance Equity For engaged in the production of taconite pellets (4) by inserting after paragraph (6) the fol- who— lowing: Service Workers Act of 2004, the Secretary of Labor shall implement a system to collect (1) would have been certified eligible to ‘‘(7) The term ‘public agency’ means a de- apply for adjustment assistance under chap- partment or agency of a State or local gov- data on adversely affected service workers that includes the number of workers by ter 2 of title II of the Trade Act of 1974 if the ernment or of the Federal Government. amendments made by this Act had been in ‘‘(8) The term ‘service sector firm’ means State, industry, and cause of dislocation of each worker. effect on November 4, 2002, and an entity engaged in the business of pro- (2) file a petition pursuant to section 221 of ‘‘(2) SECRETARY OF COMMERCE.—Not later viding services.’’. such Act within 6 months after the date of (e) TECHNICAL AMENDMENT.—Section 245(a) than 6 months after such date of enactment, the Secretary of Commerce shall, in con- enactment of this Act, of the Trade Act of 1974 (19 U.S.C. 2317(a)) is shall be eligible for certification under sec- sultation with the Secretary of Labor, con- amended by striking ‘‘, other than sub- tion 223 of the Trade Act of 1974 if the work- chapter D’’. duct a study and report to the Congress on ers’ last total or partial separation from the ways to improve the timeliness and coverage SEC. 513. TRADE ADJUSTMENT ASSISTANCE FOR firm or subdivision of the firm occurred on FIRMS AND INDUSTRIES. of data on trade in services, including meth- or after November 4, 2002 and before October (a) FIRMS.— ods to identify increased imports due to the 1, 2004. (1) ASSISTANCE.—Section 251 of the Trade relocation of United States firms to foreign Act of 1974 (19 U.S.C. 2341) is amended— countries, and increased imports due to Subtitle B—Data Collection (A) in subsection (a), by inserting ‘‘or serv- United States firms obtaining services from SEC. 521. SHORT TITLE. ice sector firm’’ after ‘‘(including any agri- firms in foreign countries.’’. This subtitle may be cited as the ‘‘Trade cultural firm’’; SEC. 515. ALTERNATIVE TRADE ADJUSTMENT AS- Adjustment Assistance Accountability Act’’. (B) in subsection (c)(1)— SISTANCE. SEC. 522. DATA COLLECTION; STUDY; INFORMA- (i) in the matter preceding subparagraph IN GENERAL.—Section 246(a)(3) of the Trade TION TO WORKERS. (A), by inserting ‘‘or service sector firm’’ Act of 1974 (19 U.S.C. 2318(a)(3)) is amended to (a) DATA COLLECTION; EVALUATIONS.—Sub- after ‘‘any agricultural firm’’; read as follows: chapter C of chapter 2 of title II of the Trade (ii) in subparagraph (B)(ii), by inserting ‘‘(3) ELIGIBILITY.—A worker in the group Act of 1974 is amended by inserting after sec- ‘‘or service’’ after ‘‘of an article’’; and that the Secretary has certified as eligible tion 249, the following new section: (iii) in subparagraph (C), by striking ‘‘arti- for the alternative trade adjustment assist- ‘‘SEC. 250. DATA COLLECTION; EVALUATIONS; RE- cles like or directly competitive with arti- ance program may elect to receive benefits PORTS. cles which are produced’’ and inserting ‘‘arti- under the alternative trade adjustment as- ‘‘(a) DATA COLLECTION.—The Secretary cles or services like or directly competitive sistance program if the worker— shall, pursuant to regulations prescribed by with articles or services which are produced ‘‘(A) is covered by a certification under the Secretary, collect any data necessary to or provided’’; and subchapter A of this chapter; meet the requirements of this chapter. (C) by adding at the end the following: ‘‘(B) obtains reemployment not more than ‘‘(b) PERFORMANCE EVALUATIONS.—The Sec- ‘‘(e) BASIS FOR SECRETARY DETERMINA- 26 weeks after the date of separation from retary shall establish an effective perform- TION.— the adversely affected employment; ance measuring system to evaluate the fol- ‘‘(1) INCREASED IMPORTS.—For purposes of ‘‘(C) is at least 40 years of age; lowing: subsection (c)(1)(C), the Secretary may de- ‘‘(D) earns not more than $50,000 a year in ‘‘(1) PROGRAM PERFORMANCE.—A compari- termine that increases of imports of like or wages from reemployment; son of the trade adjustment assistance pro- directly competitive articles or services ‘‘(E) is employed on a full-time basis as de- gram before and after the effective date of exist if customers accounting for not less fined by State law in the State in which the the Trade Adjustment Assistance Reform than 20 percent of the sales of the workers’ worker is employed; and Act of 2002 with respect to—

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‘‘(A) the number of workers certified and ‘‘(B) ANNUAL REPORT.—Not later than 1 division of a State or a consortium of polit- the number of workers actually partici- year after the date the report is submitted ical subdivisions of a State that the Sec- pating in the trade adjustment assistance under subparagraph (A), and annually there- retary certifies as being negatively impacted program; after, the Secretary shall submit to the Com- by trade. ‘‘(B) the time for processing petitions; mittee on Finance of the Senate and the ‘‘(4) COMMUNITY NEGATIVELY IMPACTED BY ‘‘(C) the number of training waivers grant- Committee on Ways and Means of the House TRADE.—A community negatively impacted ed; of Representatives a report that includes the by trade means a community with respect to ‘‘(D) the coordination of programs under information collected under clause (ii) of which a determination has been made under this chapter with programs under the Work- subparagraph (A). section 273. force Investment Act of 1998 (29 U.S.C. 2801 et ‘‘(2) STATE REPORTS.—Pursuant to regula- ‘‘(5) ELIGIBLE COMMUNITY.—The term ‘eligi- seq.); tions prescribed by the Secretary, each State ble community’ means a community cer- ‘‘(E) the effectiveness of individual train- shall submit to the Secretary a report that tified under section 273 for assistance under ing providers in providing appropriate infor- details its participation in the programs es- this chapter. mation and training; tablished under this chapter, and that con- ‘‘(6) FISHERMAN.— ‘‘(F) the extent to which States have de- tains the data necessary to allow the Sec- ‘‘(A) IN GENERAL.—The term ‘fisherman’ signed and implemented health care cov- retary to submit the report required under means any person who— erage options under title II of the Trade Act paragraph (1). ‘‘(i) is engaged in commercial fishing; or of 2002, including any difficulties States have ‘‘(3) PUBLICATION.—The Secretary shall ‘‘(ii) is a United States fish processor. encountered in carrying out the provisions of make available to each State, and other pub- ‘‘(B) COMMERCIAL FISHING, FISH, FISHERY, title II; lic and private organizations as determined FISHING, FISHING VESSEL, PERSON, AND UNITED ‘‘(G) how Federal, State, and local officials by the Secretary, the data gathered and STATES FISH PROCESSOR.—The terms ‘com- are implementing the trade adjustment as- evaluated through the performance measure- mercial fishing’, ‘fish’, ‘fishery’, ‘fishing’, sistance program to ensure that all eligible ment system established under subsection ‘fishing vessel’, ‘person’, and ‘United States individuals receive benefits, including pro- (b).’’. fish processor’ have the same meanings as viding outreach, rapid response, and other (b) CONFORMING AMENDMENTS.— such terms have in the Magnuson-Stevens activities; and (1) COORDINATION.—Section 281 of the Trade Fishery Conservation and Management Act ‘‘(H) any other data necessary to evaluate Act of 1974 (19 U.S.C. 2392) is amended by (16 U.S.C. 1802). how individual States are implementing the striking ‘‘Departments of Labor and Com- ‘‘(7) JOB LOSS.—The term ‘job loss’ means requirements of this chapter. merce’’ and inserting ‘‘Departments of the total or partial separation of an indi- ‘‘(2) PROGRAM PARTICIPATION .—The effec- Labor, Commerce, and Agriculture’’. vidual, as those terms are defined in section tiveness of the program relating to— (2) TRADE MONITORING SYSTEM.—Section 282 247. ‘‘(A) the number of workers receiving bene- of the Trade Act of 1974 (19 U.S.C. 2393) is ‘‘(8) SECRETARY.—The term ‘Secretary’ fits and the type of benefits being received amended by striking ‘‘The Secretary of Com- means the Secretary of Commerce. both before and after the effective date of merce and the Secretary of Labor’’ and in- the Trade Adjustment Assistance Reform ‘‘SEC. 272. COMMUNITY TRADE ADJUSTMENT AS- serting ‘‘The Secretaries of Commerce, SISTANCE PROGRAM. Act of 2002; Labor, and Agriculture’’. ‘‘(B) the number of workers enrolled in, ‘‘(a) ESTABLISHMENT.—Within 6 months (3) TABLE OF CONTENTS.—The table of con- after the date of enactment of the Trade Ad- and the duration of, training by major types tents for title II of the Trade Act of 1974 is of training both before and after the effec- justment Assistance for Communities Act of amended by inserting after the item relating 2004, the Secretary shall establish a Trade tive date of the Trade Adjustment Assist- to section 249, the following new item: ance Reform Act of 2002; Adjustment Assistance for Communities ‘‘(C) earnings history of workers that re- ‘‘Sec. 250. Data collection; evaluations; re- Program at the Department of Commerce. flects wages before separation and wages in ports.’’. ‘‘(b) PERSONNEL.—The Secretary shall des- any job obtained after receiving benefits (c) EFFECTIVE DATE.—The amendments ignate such staff as may be necessary to under this Act; made by this section shall take effect on Oc- carry out the responsibilities described in ‘‘(D) reemployment rates and sectors in tober 1, 2004. this chapter. ‘‘(c) COORDINATION OF FEDERAL RE- which dislocated workers have been em- Subtitle C—Trade Adjustment Assistance for SPONSE.—The Secretary shall— ployed; Communities ‘‘(E) the cause of dislocation identified in ‘‘(1) provide leadership, support, and co- SEC. 531. SHORT TITLE. ordination for a comprehensive management each petition that resulted in a certification This subtitle may be cited as the ‘‘Trade under this chapter; and program to address economic dislocation in Adjustment Assistance for Communities Act eligible communities; ‘‘(F) the number of petitions filed and of 2004’’. workers certified in each congressional dis- ‘‘(2) coordinate the Federal response to an SEC. 532. PURPOSE. eligible community— trict of the United States. The purpose of this subtitle is to assist ‘‘(c) STATE PARTICIPATION.—The Secretary ‘‘(A) by identifying all Federal, State, and communities negatively impacted by trade shall ensure, to the extent practicable, local resources that are available to assist through oversight and effective internal con- with economic adjustment through the inte- the eligible community in recovering from trol measures the following: gration of political and economic organiza- economic distress; tions, the coordination of Federal, State, and ‘‘(1) STATE PARTICIPATION.—Participation ‘‘(B) by ensuring that all Federal agencies by each State in the performance measure- local resources, the creation of community- offering assistance to an eligible community ment system established under subsection based development strategies, and the provi- do so in a targeted, integrated manner that (b). sion of economic transition assistance. ensures that an eligible community has ac- ‘‘(2) MONITORING.—Monitoring by each SEC. 533. TRADE ADJUSTMENT ASSISTANCE FOR cess to all available Federal assistance; State of internal control measures with re- COMMUNITIES. ‘‘(C) by assuring timely consultation and Chapter 4 of title II of the Trade Act of 1974 spect to performance measurement data col- cooperation between Federal, State, and re- (19 U.S.C. 2371 et seq.) is amended to read as lected by each State. gional officials concerning economic adjust- follows: ‘‘(3) RESPONSE.—The quality and speed of ment for an eligible community; and the rapid response provided by each State ‘‘CHAPTER 4—TRADE ADJUSTMENT ‘‘(D) by identifying and strengthening ex- under section 134(a)(2)(A) of the Workforce ASSISTANCE FOR COMMUNITIES isting agency mechanisms designed to assist Investment Act of 1998 (29 U.S.C. ‘‘SEC. 271. DEFINITIONS. eligible communities in their efforts to 2864(a)(2)(A)). ‘‘In this chapter: achieve economic adjustment and workforce ‘‘(d) REPORTS.— ‘‘(1) AFFECTED DOMESTIC PRODUCER.—The reemployment; ‘‘(1) REPORTS BY THE SECRETARY.— term ‘affected domestic producer’ means any ‘‘(3) provide comprehensive technical as- ‘‘(A) INITIAL REPORT.—Not later than 6 manufacturer, producer, service provider, sistance to any eligible community in the ef- months after the date of enactment of the farmer, rancher, fisherman or worker rep- forts of that community to— Trade Adjustment Assistance Accountability resentative (including associations of such ‘‘(A) identify serious economic problems in Act, the Secretary shall submit to the Com- persons) that was affected by a finding under the community that are the result of nega- mittee on Finance of the Senate and the the Antidumping Act of 1921, or by an anti- tive impacts from trade; Committee on Ways and Means of the House dumping or countervailing duty order issued ‘‘(B) integrate the major groups and orga- of Representatives a report that— under title VII of the Tariff Act of 1930. nizations significantly affected by the eco- ‘‘(i) describes the performance measure- ‘‘(2) AGRICULTURAL COMMODITY PRODUCER.— nomic adjustment; ment system established under subsection The term ‘agricultural commodity producer’ ‘‘(C) access Federal, State, and local re- (b); has the same meaning as the term ‘person’ sources designed to assist in economic devel- ‘‘(ii) includes analysis of data collected as prescribed by regulations promulgated opment and trade adjustment assistance; through the system established under sub- under section 1001(5) of the Food Security ‘‘(D) diversify and strengthen the commu- section (b); and Act of 1985 (7 U.S.C. 1308(5)). nity economy; and ‘‘(iii) provides recommendations for pro- ‘‘(3) COMMUNITY.—The term ‘community’ ‘‘(E) develop a community-based strategic gram improvements. means a city, county, or other political sub- plan to address economic development and

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00125 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3860 CONGRESSIONAL RECORD — SENATE April 6, 2004 workforce dislocation, including unemploy- community have been negatively impacted ‘‘SEC. 275. GRANTS FOR ECONOMIC DEVELOP- ment among agricultural commodity pro- by trade. MENT. ducers, and fishermen; ‘‘(2) NOTIFICATION.—The Secretary of ‘‘(a) IN GENERAL.—The Secretary, upon ap- ‘‘(4) establish specific criteria for submis- Labor, immediately upon making a deter- proval of a strategic plan from an eligible sion and evaluation of a strategic plan sub- mination that a group of workers is eligible community, may award a grant to that com- mitted under section 274(d); for trade adjustment assistance under sec- munity to carry out any project or program ‘‘(5) establish specific criteria for submit- tion 223, (or the Secretary of Agriculture, that is certified by the Secretary to be in- ting and evaluating applications for grants immediately upon making a determination cluded in the strategic plan approved under under section 275; that a group of agricultural commodity pro- section 274(d), or consistent with that plan. ‘‘(6) administer the grant programs estab- ducers is eligible for adjustment assistance ‘‘(b) ADDITIONAL GRANTS.— lished under sections 274 and 275; and under section 293, as the case may be) shall ‘‘(1) IN GENERAL.—Subject to paragraph (2), ‘‘(7) establish an interagency Trade Adjust- notify the Secretary of Commerce of the de- in order to assist eligible communities to ob- ment Assistance for Communities Working termination. tain funds under Federal grant programs, Group, consisting of the representatives of ‘‘(d) NOTIFICATION TO ELIGIBLE COMMU- other than the grants provided for in section any Federal department or agency with re- NITIES.—Immediately upon certification by 274(c) or subsection (a), the Secretary may, sponsibility for economic adjustment assist- the Secretary of Commerce that a commu- on the application of an eligible community, ance, including the Department of Agri- nity is eligible for assistance under sub- make a supplemental grant to the commu- culture, the Department of Education, the section (b), the Secretary shall notify the nity if— Department of Labor, the Department of community— ‘‘(A) the purpose of the grant program Housing and Urban Development, the De- ‘‘(1) of the determination under subsection from which the grant is made is to provide partment of Health and Human Services, the (b); technical or other assistance for planning, Small Business Administration, the Depart- ‘‘(2) of the provisions of this chapter; constructing, or equipping public works fa- ment of the Treasury, the Department of ‘‘(3) how to access the clearinghouse estab- cilities or to provide assistance for public Commerce, and any other Federal, State, or lished by the Department of Commerce re- service projects; and regional department or agency the Secretary garding available economic assistance; ‘‘(B) the grant is 1 for which the commu- determines necessary or appropriate. ‘‘(4) how to obtain technical assistance nity is eligible except for the community’s ‘‘SEC. 273. CERTIFICATION AND NOTIFICATION. provided under section 272(c)(3); and inability to meet the non-Federal share re- ‘‘(a) CERTIFICATION.—Not later than 45 days ‘‘(5) how to obtain grants, tax credits, low quirements of the grant program. after an event described in subsection (c)(1), income loans, and other appropriate eco- ‘‘(2) USE AS NON-FEDERAL SHARE.—A supple- the Secretary of Commerce shall determine nomic assistance. mental grant made under this subsection if a community described in subsection (b)(1) ‘‘SEC. 274. STRATEGIC PLANS. may be used to provide the non-Federal is negatively impacted by trade, and if a ‘‘(a) IN GENERAL.—An eligible community share of a project, unless the total Federal positive determination is made, shall certify may develop a strategic plan for community contribution to the project for which the the community for assistance under this economic adjustment and diversification. grant is being made exceeds 80 percent and chapter. ‘‘(b) REQUIREMENTS FOR STRATEGIC PLAN.— that excess is not permitted by law. ‘‘(b) DETERMINATION THAT COMMUNITY IS A strategic plan shall contain, at a min- ‘‘(c) RURAL COMMUNITY PREFERENCE.—The ELIGIBLE.— imum, the following: Secretary shall develop guidelines to ensure ‘‘(1) COMMUNITY DESCRIBED.—A community ‘‘(1) A description and justification of the that rural communities receive preference in described in this paragraph means a commu- capacity for economic adjustment, including the allocation of resources. nity with respect to which on or after Octo- the method of financing to be used. ‘‘SEC. 276. GENERAL PROVISIONS. ber 1, 2004— ‘‘(2) A description of the commitment of ‘‘(a) REGULATIONS.—The Secretary shall ‘‘(A) the Secretary of Labor certifies a the community to the strategic plan over prescribe such regulations as are necessary group of workers (or their authorized rep- the long term and the participation and to carry out the provisions of this chapter. resentative) in the community as eligible for input of groups affected by economic disloca- Before implementing any regulation or assistance pursuant to section 223; tion. guideline proposed by the Secretary with re- ‘‘(B) the Secretary of Commerce certifies a ‘‘(3) A description of the projects to be un- spect to this chapter, the Secretary shall firm located in the community as eligible for dertaken by the eligible community. submit the regulation or guideline to the adjustment assistance under section 251; ‘‘(4) A description of how the plan and the Committee on Finance of the Senate and the ‘‘(C) the Secretary of Agriculture certifies projects to be undertaken by the eligible Committee on Ways and Means of the House a group of agricultural commodity producers community will lead to job creation and job of Representatives for approval. (or their authorized representative) in the retention in the community. ‘‘(b) SUPPLEMENT NOT SUPPLANT.—Funds community as eligible for adjustment assist- ‘‘(5) A description of how the plan will appropriated under this chapter shall be used ance under section 293; achieve economic adjustment and diver- to supplement and not supplant other Fed- ‘‘(D) an affected domestic producer is lo- sification. eral, State, and local public funds expended cated in the community; or ‘‘(6) A description of how the plan and the to provide economic development assistance ‘‘(E) the Secretary determines that a sig- projects will contribute to establishing or for communities. nificant number of fishermen in the commu- maintaining a level of public services nec- ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— nity is negatively impacted by trade. essary to attract and retain economic invest- There are authorized to be appropriated to ‘‘(2) NEGATIVELY IMPACTED BY TRADE.—The ment. the Secretary $100,000,000 for each of fiscal Secretary shall determine that a community ‘‘(7) A description and justification for the years 2005 through 2008, to carry out this is negatively impacted by trade, after taking cost and timing of proposed basic and ad- chapter. Amounts appropriated pursuant to into consideration— vanced infrastructure improvements in the this subsection shall remain available until ‘‘(A) the number of jobs affected compared eligible community. expended.’’. to the size of workforce in the community; ‘‘(8) A description of how the plan will ad- SEC. 534. CONFORMING AMENDMENTS. ‘‘(B) the severity of the rates of unemploy- dress the occupational and workforce condi- (a) TERMINATION.—Section 285(b) of the ment in the community and the duration of tions in the eligible community. Trade Act of 1974 (19 U.S.C. 2271 note) is the unemployment in the community; ‘‘(9) A description of the educational pro- amended by adding at the end the following ‘‘(C) the income levels and the extent of grams available for workforce training and new paragraph: underemployment in the community; future employment needs. ‘‘(3) ASSISTANCE FOR COMMUNITIES.—Tech- ‘‘(D) the outmigration of population from ‘‘(10) A description of how the plan will nical assistance and other payments may not the community and the extent to which the adapt to changing markets and business cy- be provided under chapter 4 after September outmigration is causing economic injury in cles. 30, 2008.’’. the community; and ‘‘(11) A description and justification for the (b) TABLE OF CONTENTS.—The table of con- ‘‘(E) the unique problems and needs of the cost and timing of the total funds required tents for title II of the Trade Act of 1974 is community. by the community for economic assistance. amended by striking the items relating to ‘‘(c) DEFINITION AND SPECIAL RULES.— ‘‘(12) A graduation strategy through which chapter 4 of title II and inserting after the ‘‘(1) EVENT DESCRIBED.—An event described the eligible community demonstrates that items relating to chapter 3 the following new in this paragraph means one of the following: the community will terminate the need for items: ‘‘(A) A notification described in paragraph Federal assistance. ‘‘CHAPTER 4—TRADE ADJUSTMENT ASSISTANCE (2). ‘‘(c) GRANTS TO DEVELOP STRATEGIC FOR COMMUNITIES ‘‘(B) A certification of a firm under section PLANS.—The Secretary, upon receipt of an ‘‘Sec. 271. Definitions. 251. application from an eligible community, ‘‘Sec. 272. Community Trade Adjustment ‘‘(C) A finding under the Antidumping Act may award a grant to that community to be Assistance Program. of 1921, or an antidumping or countervailing used to develop the strategic plan. ‘‘Sec. 273. Certification and notification. duty order issued under title VII of the Tar- ‘‘(d) SUBMISSION OF PLAN.—A strategic plan ‘‘Sec. 274. Strategic plans. iff Act of 1930. developed under subsection (a) shall be sub- ‘‘Sec. 275. Grants for economic develop- ‘‘(D) A determination by the Secretary mitted to the Secretary for evaluation and ment. that a significant number of fishermen in a approval. ‘‘Sec. 276. General provisions.’’.

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(c) JUDICIAL REVIEW.—Section 284(a) of the being eligible for a qualified health insur- under qualified health insurance for eligible Trade Act of 1974 (19 U.S.C. 2395(a)) is amend- ance costs credit eligibility certificate for coverage months upon receipt by the Sec- ed by striking ‘‘section 271’’ and inserting purposes of section 7527 of the Internal Rev- retary of evidence of payment of such pre- ‘‘section 273’’. enue Code of 1986 shall not be taken into ac- mium by the certified individual.’’. SEC. 535. EFFECTIVE DATE. count in determining the continuous period (b) EFFECTIVE DATE.—The amendment The amendments made by this subtitle under subparagraph (A). made by this section takes effect on the date shall take effect on October 1, 2004. ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- of enactment of this Act. Subtitle D—Office of Trade Adjustment ble individual’, and ‘TAA-related loss of cov- f Assistance erage’ have the meanings given such terms in section 605(b)(4)(C).’’. NOTICES OF HEARINGS/MEETINGS SEC. 541. SHORT TITLE. (b) PHSA AMENDMENT.—Section 2701(c)(2) This subtitle may be cited as the ‘‘Trade of the Public Health Service Act (42 U.S.C. SUBCOMMITTEE ON PRODUCTION AND PRICE Adjustment Assistance for Firms Reorga- 300gg(c)(2)) is amended by adding at the end COMPETITIVENESS nization Act’’. the following: Mr. COCHRAN. Mr. President, I an- SEC. 542. OFFICE OF TRADE ADJUSTMENT AS- ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— nounce that the Subcommittee on Pro- SISTANCE. ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- duction and Price Competitiveness of (a) IN GENERAL.—Chapter 3 of title II of the RIOD.—In the case of a TAA-eligible indi- the Committee on Agriculture, Nutri- Trade Act of 1974 (19 U.S.C. 2341 et seq.) is vidual, the period beginning on the date the tion, and Forestry will conduct a field amended by inserting after section 255 the individual has a TAA-related loss of cov- hearing on April 13, 2004 in Smithfield following new section: erage and ending on the date the individual ‘‘SEC. 255A. OFFICE OF TRADE ADJUSTMENT AS- is certified by the Secretary (or by any per- North Carolina at 10 a.m. The purpose SISTANCE. son or entity designated by the Secretary) as of this hearing will be to discuss the ‘‘(a) ESTABLISHMENT.—Not later than 90 being eligible for a qualified health insur- necessity of a tobacco quota buyout. days after the date of enactment of the ance costs credit eligibility certificate for COMMITTEE ON INDIAN AFFAIRS Trade Adjustment Assistance for Firms Re- purposes of section 7527 of the Internal Rev- Mr. CAMPBELL. Mr. President, I organization Act, there shall be established enue Code of 1986 shall not be taken into ac- would like to announce that the Com- in the International Trade Administration of count in determining the continuous period the Department of Commerce an Office of under subparagraph (A). mittee on Indian Affairs will meet on Trade Adjustment Assistance. ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- Wednesday, April 7, 2004, at 10 a.m. in ‘‘(b) PERSONNEL.—The Office shall be head- ble individual’, and ‘TAA-related loss of cov- Room 485 of the Russell Senate Office ed by a Director, and shall have such staff as erage’ have the meanings given such terms Building to conduct a business meeting may be necessary to carry out the respon- in section 2205(b)(4)(C).’’. on S. 1529, bill to amend the Indian sibilities of the Secretary of Commerce de- (c) IRC AMENDMENT.—Section 9801(c)(2) of Gaming Regulatory Act to include pro- scribed in this chapter. the Internal Revenue Code of 1986 (relating visions relating to the payment and ad- ‘‘(c) FUNCTIONS.—The Office shall assist the to not counting periods before significant Secretary of Commerce in carrying out the breaks in creditable coverage) is amended by ministration of gaming fees, and for Secretary’s responsibilities under this chap- adding at the end the following: other purposes; and S. 1955, a bill to ter.’’. ‘‘(D) TAA-ELIGIBLE INDIVIDUALS.— make technical corrections to laws re- (b) CONFORMING AMENDMENT.—The table of ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- lating to Native Americans, and for contents for the Trade Act of 1974 is amended RIOD.—In the case of a TAA-eligible indi- other purposes. by inserting after the item relating to sec- vidual, the period beginning on the date the Those wishing additional information tion 255, the following new item: individual has a TAA-related loss of cov- may contact the Indian Affairs Com- ‘‘Sec. 255A. Office of Trade Adjustment As- erage and ending on the date the individual mittee at 224–2251. sistance.’’. is certified by the Secretary of Labor (or by f SEC. 543. EFFECTIVE DATE. any person or entity designated by the Sec- The amendments made by this subtitle retary of Labor) as being eligible for a quali- AUTHORITY FOR COMMITTEES TO fied health insurance costs credit eligibility shall take effect on the earlier of— MEET (1) the date of the enactment of this Act; certificate for purposes of section 7527 shall or not be taken into account in determining the SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND (2) October 1, 2004. continuous period under subparagraph (A). WATER ‘‘(ii) DEFINITIONS.—The terms ‘TAA-eligi- TITLE VI—IMPROVEMENT OF CREDIT FOR Mr. GRASSLEY. Mr. President, I ask ble individual’, and ‘TAA-related loss of cov- unanimous consent that the Sub- HEALTH INSURANCE COSTS OF ELIGI- erage’ have the meanings given such terms BLE INDIVIDUALS in section 4980B(f)(5)(C)(iv).’’. committee Committee on Fisheries, SEC. 601. CLARIFICATION OF 3-MONTH REQUIRE- (d) EFFECTIVE DATE.—The amendments Wildlife, and Water be authorized to MENT OF EXISTING COVERAGE. made by this section take effect on the date meet on Tuesday, April 6, 2004 at 9:30 (a) IN GENERAL.—Clause (i) of section of enactment of this Act. a.m. to conduct a hearing to evaluate 35(e)(2)(B) of the Internal Revenue Code of SEC. 603. IMPROVEMENT OF THE AFFORDABILITY chronic wasting and disease in our Na- 1986 (defining qualifying individual) is OF THE CREDIT. tion’s water. amended by inserting ‘‘(prior to the employ- (a) IN GENERAL.—Section 35(a) of the Inter- The PRESIDING OFFICER. Without ment separation necessary to attain the sta- nal Revenue Code of 1986 (relating to credit tus of an eligible individual)’’ after ‘‘9801(c)’’. for health insurance costs of eligible individ- objection, it is so ordered. (b) CONFORMING AMENDMENT.—Section uals) is amended by striking ‘‘65’’ and insert- f 173(f)(2)(B)(ii)(I) of the Workforce Investment ing ‘‘75’’. Act of 1998 (29 U.S.C. 2918(f)(2)(B)(ii)(I)) is (b) CONFORMING AMENDMENT.—Section PRIVILEGES OF THE FLOOR amended by inserting ‘‘(prior to the employ- 7527(b) of such Code (relating to advance pay- Mr. CORNYN. Mr. President, I ask ment separation necessary to attain the sta- ment of credit for health insurance costs of unanimous consent that two members tus of an eligible individual)’’ after ‘‘1986’’. eligible individuals) is amended by striking of my staff, Adam Aston and Tiffany (c) EFFECTIVE DATE.—The amendments ‘‘65’’ and inserting ‘‘75’’. made by this section take effect on the date (c) EFFECTIVE DATE.—The amendments Kebodeaux, be granted the privilege of of enactment of this Act. made by this section apply to taxable years the floor for the duration of the debate SEC. 602. DISREGARD OF TAA PRE-CERTIFI- beginning after December 31, 2004. on S. 2207. CATION PERIOD FOR PURPOSES OF SEC. 604. EXPEDITED REFUND OF CREDIT FOR The PRESIDING OFFICER. Without DETERMINING WHETHER THERE IS PRORATED FIRST MONTHLY PRE- objection, it is so ordered. A 63-DAY LAPSE IN CREDITABLE MIUM. Mr. GRASSLEY. Mr. President, I ask COVERAGE. (a) IN GENERAL.—Section 7527 of the Inter- (a) ERISA AMENDMENT.—Section 701(c)(2) nal Revenue Code of 1986 (relating to advance unanimous consent that Jarret Heil of the Employee Retirement Income Secu- payment of credit for health insurance costs and Trenton Norman be granted the rity Act of 1974 (29 U.S.C. 1181(c)(2)) is of eligible individuals) is amended by adding privilege of the floor during the re- amended by adding at the end the following: at the end the following: mainder of the debate on S. 1367. ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— ‘‘(e) EXPEDITED PAYMENT OF PRORATED The PRESIDING OFFICER. Without ‘‘(i) DISREGARD OF PRE-CERTIFICATION PE- FIRST MONTHLY PREMIUM.—The program es- objection, it is so ordered. RIOD.—In the case of a TAA-eligible indi- tablished under subsection (a) shall provide vidual, the period beginning on the date the for payment to a certified individual of an f individual has a TAA-related loss of cov- amount equal to the applicable percentage APPOINTMENT erage and ending on the date the individual (as defined in section 35(a)(2)) of the prorated is certified by the Secretary (or by any per- first monthly premium for coverage of the The PRESIDING OFFICER. The son or entity designated by the Secretary) as taxpayer and qualifying family members Chair, on behalf of the majority leader,

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00127 Fmt 4637 Sfmt 0634 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY S3862 CONGRESSIONAL RECORD — SENATE April 6, 2004 pursuant to Public Law 108–199, Title ADJOURNMENT UNTIL 9:45 A.M. DOUGLAS M TAYLOR, 0000 WADE E WALLACE, 0000 VI, Section 637, appoints the following TOMORROW MARK B WINDHAM, 0000 individual to serve as a member of the Mr. MCCONNELL. Mr. President, if IN THE NAVY Helping to Enhance the Livelihood of there is no further business to come be- THE FOLLOWING NAMED OFFICER FOR REGULAR AP- People (HELP) Around the Globe Com- fore the Senate, I ask unanimous con- POINTMENT TO THE GRADE INDICATED IN THE UNITED mission: Steve K. Berry of Washington, STATES NAVY UNDER TITLE 10, U.S.C., SECTION 531: sent that the Senate stand in adjourn- To be lieutenant D.C. ment under the previous order. f There being no objection, the Senate, MELISSA A. HARVISON, 0000 THE FOLLOWING NAMED OFFICERS FOR REGULAR AP- ORDERS FOR WEDNESDAY, APRIL at 6:29 p.m., adjourned until Wednes- POINTMENT IN THE GRADES INDICATED IN THE UNITED 7, 2004 day, April 7, 2004, at 9:45 a.m. STATES NAVY UNDER TITLE 10, U.S.C., SECTIONS 531 AND 5582: f Mr. MCCONNELL. Mr. President, I To be commander ask unanimous consent that when the NOMINATIONS VICTORIA T CRESCENZI, 0000 Senate completes its business today, it MARK A DESJARDINS, 0000 adjourn until 9:45 in the morning, Executive nominations received by SUSAN L EATON, 0000 the Senate April 6, 2004: PAUL T HORAN, 0000 Wednesday, April 7. I further ask unan- JACQUELINE KOVACS, 0000 imous consent that following the pray- THE JUDICIARY JAMIN T MCMAHON, 0000 FERNANDO MORENO, 0000 er and pledge, the morning hour be MICHAEL H. WATSON, OF OHIO, TO BE UNITED STATES THOMAS W SITSCH, 0000 DISTRICT JUDGE FOR THE SOUTHERN DISTRICT OF OHIO, STEVEN F VINCENT, 0000 deemed expired, the Journal of pro- VICE JAMES L. GRAHAM, RETIRING. ceedings be approved to date, the time JOHNNY WON, 0000 IN THE AIR FORCE for the two leaders be reserved for their To be lieutenant commander use later in the day, and the Senate THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT FELIX A BIGBY, 0000 TO THE GRADE INDICATED IN THE RESERVE OF THE AIR LYNELLE M BOAMAN, 0000 then begin a period of morning busi- FORCE UNDER TITLE 10, U.S.C., SECTION 12203: EDWARD A BRADFIELD, 0000 ness until 10:45 a.m. with the first half To be colonel GREGORY R CADLE, 0000 ROY D EVANS, 0000 of that time under the control of the RICHARD J. BURLING JR., 0000 GREGORY L GRADY, 0000 Democratic leader or his designee, and ROBERT L. TULLMAN, 0000 STELLA M HAYES, 0000 ROBERT L KENDALL, 0000 the second half of the time under the IN THE ARMY SUSANNE M LEMAIRE, 0000 control of the majority leader or his THE FOLLOWING NAMED OFFICER FOR APPOINTMENT JOEL A LOWTHER, 0000 designee; provided that at 10:45 the IN THE GRADE INDICATED IN THE RESERVE OF THE WILLIAM D MAY, 0000 ARMY UNDER TITLE 10, U.S.C., SECTION 12203: SEAN P MCDERMOTT, 0000 Senate resume consideration of the IAN G MCLEOD, 0000 To be colonel JOHN M MYERS, 0000 motion to proceed to Calendar No. 462, TANYA M PONDER, 0000 S. 2207, the Pregnancy and Trauma CRAIG D. HARTRANFT, 0000 GEORGE J SEMPLE, 0000 Care Access Protection Act of 2004, and THE FOLLOWING NAMED OFFICER FOR APPOINTMENT MARTHA L SIRUS, 0000 TO THE GRADE INDICATED IN THE UNITED STATES ARMY CHRISTOPHER T SOSA, 0000 the time until 12:45 be equally divided JUDGE ADVOCATE GENERAL’S CORPS UNDER TITLE 10, ANTONIO TELLADO, 0000 U.S.C., SECTIONS 531, 624, AND 3064: RICHARD W THOMPSON, 0000 between the two leaders or their des- GALE R VANDEVENTER JR., 0000 ignees. To be colonel DARREL G VAUGHN, 0000 MICHAEL W WENTWORTH, 0000 I further ask unanimous consent that WILLIS C. HUNTER, 0000 DEBORAH J WHITE, 0000 the Senate recess from 12:45 until 2:15 THE FOLLOWING NAMED ARMY NATIONAL GUARD OF To be lieutenant for the weekly party luncheons; pro- THE UNITED STATES OFFICER FOR APPOINTMENT TO THE GRADE INDICATED IN THE RESERVE OF THE ARMY JEFFREY J ABBADINI, 0000 vided that at 2:15 the Senate proceed to UNDER TITLE 10, U.S.C., SECTIONS 12203 AND 12211: JOSEPH P ABBOTT JR., 0000 the cloture vote on the motion to pro- To be colonel ROB L ABBOTT, 0000 ceed to the consideration of S. 2207 as LILLIAN A ABUAN, 0000 DANA R. YETTON, 0000 CHARLES F ADAMS, 0000 provided under the previous order; pro- JASON W ADAMS, 0000 IN THE MARINE CORPS REBECCA M D ADAMS, 0000 vided further that notwithstanding TERRI D ADAMS, 0000 rule XXII, the mandatory quorum be THE FOLLOWING NAMED OFFICERS FOR ORIGINAL REG- RICHARD S ADCOOK, 0000 ULAR APPOINTMENT AS PERMANENT LIMITED DUTY OF- MONICA AGARWAL, 0000 waived prior to the vote on the motion FICERS TO THE GRADE INDICATED IN THE UNITED RYAN P AHLER, 0000 to invoke cloture on the motion to re- STATES MARINE CORPS UNDER TITLE 10, U.S.C., SEC- HYO S AHN, 0000 TIONS 531 AND 5589: commit S. 1637, the FSC/ETI JOBS bill. RECO L AIKENS, 0000 To be captain JAMES T AIKIN II, 0000 The PRESIDING OFFICER. Without JAY P ALDEA, 0000 objection, it is so ordered. TRAVIS R AVENT, 0000 STEPHEN W ALDRIDGE, 0000 GREGORY R BIEHL, 0000 KENNETH D ALEXANDER, 0000 f FRANCIS J BOYER, 0000 OSMEL ALFONSO, 0000 DONALD F CARTER JR., 0000 GERALD G ALFORD, 0000 PROGRAM MICHAEL R CIRILLO, 0000 JAMES ALGER, 0000 JEFFREY S CLEMONS, 0000 JEROME S ALINA, 0000 Mr. MCCONNELL. Mr. President, to- SEAN J COLLINS, 0000 RODNEY ALLEN, 0000 JERRY R COPLEY, 0000 TERESA W ALLMAN, 0000 morrow, following morning business, BRIAN J CORRIS, 0000 CIELO I ALMANZA, 0000 the Senate will resume consideration CHARLES E DANIELS, 0000 GERVY J ALOTA, 0000 of the motion to proceed to the consid- RANDALL E DAVIS, 0000 THOMAS M ALPERS, 0000 DARREN R DEMYER, 0000 GALEN R ALSOP, 0000 eration of the Pregnancy and Trauma BILLY A DUBOSE, 0000 LUIS A ALTAMIRANO, 0000 Care Access Protection Act of 2004. At GREGG R EDWARDS, 0000 BRIAN S AMADOR, 0000 LLOYD E EDWARDS JR., 0000 RICHARD H AMARAL, 0000 2:15 the Senate will proceed to two KENNETH M ELIUK, 0000 PETER AMENDOLARE, 0000 back-to-back rollcall votes. The first ROBERT F EMMINGER, 0000 ERIK E ANDERSON, 0000 ARMAND J FRAPPIER, 0000 JOHN A ANDERSON, 0000 vote will be on the motion to invoke LAWRENCE P GOSHEN, 0000 JUSTIN W ANDERSON, 0000 cloture on the bill we have been dis- WARREN A GRAHAM JR., 0000 MARK A ANDERSON, 0000 JAMES E GRIFFITH, 0000 MICHAEL R ANDERSON, 0000 cussing, the Pregnancy and Trauma PATRICK T GROSSO, 0000 SEAN M ANDREWS, 0000 Care Access Protection Act. That vote, DANIEL E GUIMOND, 0000 BRADLEY J ANDROS, 0000 SEAN P HEICHLINGER, 0000 MARK A ANGELO, 0000 regardless of outcome, will be imme- BRUCE D HENDERSON, 0000 JAMES M ANSLEY, 0000 diately followed by a vote on the mo- JAMES R HUBER III, 0000 BRENDA K ANTHONY, 0000 STEVEN P HULSE, 0000 MARC A ARAGON, 0000 tion to invoke cloture on the motion to KELLY M JONES, 0000 JOHN W ARBUCKLE, 0000 recommit S. 1637, the FSC/ETI JOBS CAMERON D KLUNDER, 0000 JASON L ARGANBRIGHT, 0000 DONALD R KNOWLES, 0000 JOHN M ARMSTRONG, 0000 bill. These two votes will be the first DIRK D KUNTZ, 0000 MATTHEW T ARMSTRONG, 0000 votes of the day. MICHAEL D LIPSCOMB, 0000 MELODY ARMSTRONG, 0000 ANTHONY C LYONS, 0000 JEFFREY C ARNESON, 0000 In addition to those votes, the major- MICHAEL G MARCHAND, 0000 KEVIN W ARNEY, 0000 ity leader has repeated his desire to DAVID A MCCOVERY, 0000 CHRISTOPHER W ARTIS, 0000 KENNETHE R MCMILLAN, 0000 MARK S ASAHARA, 0000 consider and complete the pension eq- ROBERT J MEISINGER JR., 0000 AARON J ASCHENBRENNER, 0000 uity conference report prior to the CHRISTOPHER K MILLER, 0000 JARED T ASMAN, 0000 CLIFF D MRKVICKA, 0000 KENNETH M ATHANS, 0000 Easter recess. That conference report JOHN P MULLERY, 0000 MICHAEL L ATWELL, 0000 is here and is available. We will be JOHN F REYNOLDS JR., 0000 STEPHEN A AUDELO, 0000 PAUL E RICHARD, 0000 BRIAN L BABIN, 0000 seeking an agreement, obviously, to JOSE L SADA, 0000 JOHN A BACHMORE, 0000 finish that bill. WILLIAM H TAPSCOTT, 0000 JOSEPH C BACON, 0000

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LUCELINA L BADURA, 0000 EDWIN W BOUNDS, 0000 ANTONIO D CARMICHAEL, 0000 SHELBY Y BAECKER, 0000 LEO S BOURQUE, 0000 ROBERT C CARNELL, 0000 JOSEPH A BAGGETT, 0000 SILAS L BOUYER II, 0000 JESSE E CARPENTER, 0000 SCOTT P BAILEY, 0000 DESOBRY E BOWENS, 0000 RUDY R CARRASCO, 0000 CARMEN A BAKER, 0000 ROBERT F BOWLUS, 0000 STEPHEN J CARRIER, 0000 CHRISTOPHER P BAKER, 0000 DAWN M BOWMAN, 0000 JUSTIN M CARSTEN, 0000 JAMES A BAKER, 0000 JEFFREY M BOWMAN, 0000 CHRISTOPHER D CARTER, 0000 JEFFREY D BAKER, 0000 JOHN A BOWMAN, 0000 MARK A CARTER, 0000 JENNIFER S BAKER, 0000 ORLANDO S BOWMAN, 0000 WILLIAM D CARTER III, 0000 JONATHAN M BAKER, 0000 DAVID W BOYANTON, 0000 JEREMY T CASELLA, 0000 WILLIAM C BAKER, 0000 ROBERT D BOYCE, 0000 JORGE C CASTANON, 0000 KURT D BALAGNA, 0000 STEVEN E BOYCOURT, 0000 CAREY F CASTELEIN, 0000 JESSE H BALBOA II, 0000 SHARON C BOYD, 0000 ARMANDO J CASTELLANOS, 0000 DEAN R BALCIRAK II, 0000 JARED S BRADEL, 0000 JOHN D CASTILLO, 0000 SUSAN M BALCIRAK, 0000 BRIAN A BRADFORD, 0000 AARON B CASTLE, 0000 KATHLEEN M BALDWIN, 0000 MATTHEW BRADSHAW, 0000 JANINE CASTORINA, 0000 JONATHAN R BALL, 0000 CHARLES B BRADY III, 0000 ERNESTO CASTRO, 0000 MICHAEL W BALL, 0000 DEREK BRADY, 0000 ANDRE R CATALANO, 0000 THOMAS C BALL, 0000 JOHN C BRADY, 0000 JAMES A CAUDILL, 0000 TRAPPER J BALLARD, 0000 DALLAS E BRAHAM, 0000 GABRIEL B CAVAZOS, 0000 GREGORY BALLENGER, 0000 SEAN J BRANDES, 0000 JAMES V CELANI JR., 0000 ANDREW J BALLINGER, 0000 VONDA L BRANDT, 0000 TULLIO I CELANO, 0000 ROLAN T BANGALAN, 0000 KEVIN M BRANSON, 0000 CYNTHIA C CHAN, 0000 ROY L BARBER, 0000 PAUL S BRANTUAS, 0000 PAUL A CHANDLER, 0000 ROBERTO A BARBOSA, 0000 THOMAS J BRASHEAR, 0000 RONALD R CHAON JR., 0000 KEVIN J BARCLAY, 0000 KEVIN F BRAVOFERRER, 0000 ERIC A CHAPMAN, 0000 MARIA L BAREFIELD, 0000 WILBERT B BREEDEN, 0000 MATTHEW E CHAPMAN, 0000 BJORN S BARJA, 0000 MICHAEL R BREEN, 0000 THOMAS R CHAPMAN III, 0000 RONNIE M P BARKER, 0000 ANDREW F BRENNAN, 0000 JONATHAN N CHARBONNET, 0000 AUDRA L BARKLEY, 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0000 PATRCK M COLLETTE, 0000 STEVEN M BETTNER JR., 0000 ROCKY A BURNS, 0000 KRISTIN COLLINS, 0000 LARA L BEWLEY, 0000 PATRICK BURRUS, 0000 TEAGUE L COLLINS, 0000 NORMAN J BEZNOSKA III, 0000 HEATHER E BURWELL, 0000 STEPHEN C COLN, 0000 MANUEL A BIASCOECHEA, 0000 ABE A BUSH III, 0000 MATTHEW G COMPTON, 0000 DANIEL E BIBLE, 0000 JOHN R BUSH, 0000 JAMES R CONDINO, 0000 JOSHUA D BIGHAM, 0000 JILLENE M BUSHNELL, 0000 MICHAEL L CONRADY, 0000 BERNARD BILLINGSLEY, 0000 CHRISTOPHER R BUTLER, 0000 ARWEN E CONSAUL, 0000 BRYAN J BILLINGTON, 0000 DANIEL E BUTLER, 0000 JOHN P CONZA, 0000 BRIAN A BINDER, 0000 LEBRON I BUTTS, 0000 CHARLES O COOK, 0000 FRANCIS T BISAGNI, 0000 KIMBERLY D BYNUM, 0000 DAVID B COOK, 0000 BLAINE S BITTERMAN, 0000 ROGER L BYRON, 0000 JOSHUA B COOK, 0000 NATHAN R BITZ, 0000 NOEL J CABRAL III, 0000 WILLIAM W COOK, 0000 TRACY L BLACKHOWELL, 0000 BERNARD F CALAMUG, 0000 TRAVIS C COOKE, 0000 DERRICK E BLACKSTON, 0000 RUSSELL J CALDWELL, 0000 WILLIAM H COOMBS, 0000 MICHAEL S 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COWDREY, 0000 RANDALL B BOHANON, 0000 CHRISTOPHER L CANNIFF, 0000 DAVID S COX, 0000 ROBERT J BOLDIN, 0000 LEO M CANONIZADO, 0000 THORVALD S COX, 0000 DANIEL A BOMAN, 0000 CRAIG J CANTU, 0000 TIMOTHY G CRAIG, 0000 JOHN P BONENFANT, 0000 MARCOS D CANTU, 0000 BRADFORD P CRAIN, 0000 MATTHEW J BONZELLA, 0000 KEVIN S CANTY, 0000 JASON R CRAIN, 0000 HASSAN M BOOKER, 0000 JING J CAO, 0000 CLARKE S CRAMER, 0000 REBECCA A BOONE, 0000 REMIL J CAPILI, 0000 JAYSON L CRAMER, 0000 CHARLES J BORGES, 0000 DARREL J CAPO, 0000 MARC D CRAWFORD, 0000 MICHAEL P BORRELLI, 0000 GEORGE R CARAMICO, 0000 RUSSELL N CRAWFORD JR., 0000 BRENDAN A BOSCH, 0000 PAOLO CARCAVALLO JR., 0000 JOHN J CREMINS, 0000 LISA A BOSEMAN, 0000 MICHAEL S CARL, 0000 JOSHUA D CRINKLAW, 0000 PATRICK W BOSSERMAN, 0000 MARC J CARLIN, 0000 JOHN R CROES, 0000 DOMENICA V BOSWELL, 0000 KEVIN L CARLISLE, 0000 JUSTIN S CROSS, 0000 BRYAN J BOUDREAUX SR, 0000 ANNE E CARLSON, 0000 MICHAEL C CROUSE, 0000

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KEVIN W CROWDER, 0000 JASON B ELLIS, 0000 LELAND I GARDNER, 0000 DAVID M CROWE, 0000 MATTHEW R ELLIS, 0000 SCOTT J GARDNER, 0000 CURTIS W CRUTHIRDS, 0000 STEPHANIE A ELLIS, 0000 LAURA L G GARLAND, 0000 ANGELA M CRUZ, 0000 TREVOR D ELLIS, 0000 ALLEN L GARNER, 0000 DANNY H CRUZ, 0000 CHRISTOPHER D ENG, 0000 MARK S GARRETT, 0000 DOMINGO C CRUZ, 0000 LOUISE M ERB, 0000 SHAINE L GARRISON, 0000 MATTHEW A CRYER, 0000 RYAN D ERDMAN, 0000 STEVEN P GARZA, 0000 JAMES H CULLEN, 0000 JASON T ERICKSON, 0000 MICAH J GASPARY, 0000 HAROLD V CULLY, 0000 JOANNE M ERNST, 0000 ERIC C GATLEY, 0000 ANNA M CULPEPPER, 0000 CHRISTOPHER E ESCAJEDA, 0000 FRANK L GATTO, 0000 SEAN T CURTIN, 0000 MICHAEL A ESPARZA, 0000 DAVID E GAUGLER, 0000 BRIAN K CUSHMAN, 0000 PEDRO H ESPINOZA, 0000 MICHAEL R GAWLAS, 0000 KERI C CUSICK, 0000 THEODORE E ESSENFELD, 0000 GILBERT D GAY, 0000 MARK A CUTLER, 0000 JOHN ESTERHAY, 0000 JEFFERY J GAYDASH, 0000 CHRISTOPHER J DAHL, 0000 TRAVIS M ESTEVES, 0000 WILLIAM T GEARY JR., 0000 HAAKON B DAHL, 0000 MARLON M ESTRADA, 0000 SCOTT R GEBICKE, 0000 THOMAS J DAIGNAULT, 0000 JOHN E ETHRIDGE II, 0000 SHAWN C GEE, 0000 DONALD B DAILEY, 0000 RYAN C EUL, 0000 ALBERT H GEIS JR., 0000 CHARLES E DALE III, 0000 DAVE S EVANS, 0000 GRANT C GEISEN, 0000 JASON C DALLEY, 0000 ROY C EVANS, 0000 MATTHEW T GEISER, 0000 CHRISTINA L DALMAU, 0000 VINSANT D EVANS, 0000 ROBERT J GELINAS, 0000 ADAM A DAMBROSIO, 0000 JOHN EVEGES III, 0000 JAMES P GENNARI, 0000 ROBERT B DANBERG JR., 0000 RANDALL E EVERLY, 0000 CHAD E GEORGE, 0000 TUAN Q DANG, 0000 JENNIFER L EWING, 0000 DANIEL F GERAGHTY, 0000 WILLIAM G DANIEL, 0000 MELINDA R EWING, 0000 CHRISTOPHER M GIACOMARO, 0000 BRENDAN P DANNA, 0000 DAVID J EXTEROVICH, 0000 LOUISE J GIANNOTTI, 0000 BOBBY D DASHER JR., 0000 MICHAEL D EYMAN, 0000 ROBERT C GIBBS, 0000 WESLEY S DAUGHERTY, 0000 MICHAEL J FAGAN, 0000 ANTHONY A GIBERMAN, 0000 WILLIAM A DAVEY, 0000 LOUIS A FAIELLA, 0000 MICHAEL M GIBSON, 0000 CARROLL B DAVIS JR., 0000 WILLIAM P FALLON, 0000 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DYNAN, 0000 DENNIS M GAINES, 0000 MATTHEW T HARDING, 0000 BRENDAN R EAGAN, 0000 STEPHEN A GALAYDA, 0000 NICOLE M HARDISTY, 0000 JENNIFER L EATON, 0000 VERONICA A GALE, 0000 SUZANNE M HARKER, 0000 LACEY F EDGE, 0000 SEAN J GALLAGHER, 0000 LARICO T HARLEY, 0000 ROY A EDGE, 0000 PAUL A GALLOWAY, 0000 DETRIK F HARMEYER, 0000 DALE J EDGECOMB, 0000 MARCUS B GALMAN, 0000 RANDALL E HARMEYER, 0000 DAVID L EDGERTON, 0000 JOHN W GAMBLE, 0000 GARY A HARRINGTON II, 0000 JAMES A EDMONDS, 0000 JOSHUA J GAMEZ, 0000 CHRISTOPHER W HARRIS, 0000 MARTIN L EDMONDS, 0000 KELLY GANNON, 0000 DAVID F HARRIS, 0000 SHANE J EISENBRAUN, 0000 NEAL T GARBETT, 0000 ERIK T HARRIS, 0000 BRIAN A EISENHUTH, 0000 DANNY J GARCIA, 0000 ROBERT HARRIS, 0000 KRISTOPHER C EISENRIETH, 0000 MICHAEL J GARCIA, 0000 ASHLEY E HARRISON, 0000 BRIAN J ELLIS JR., 0000 THOMAS J GARCIA, 0000 ROBERT E HART JR., 0000

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MICHAEL E MADRID, 0000 GREGORY J MILICIC, 0000 PATRICK H OMAHONEY, 0000 ANGELA K MAGANZA, 0000 ALAN D MILLER, 0000 JACK B ONEILL II, 0000 JOHN J MAGUIRE IV, 0000 BRETT M MILLER, 0000 MICHAEL P ONEILL, 0000 MARTIN G MAHER, 0000 CASEY J MILLER, 0000 ROBERT M ORE, 0000 BRENDAN M MAHON, 0000 EDWARD B MILLER IV, 0000 MANUEL A ORELLANA, 0000 JAMES K MAIN, 0000 JEFFREY A MILLER, 0000 JONATHAN D ORINGDULPH, 0000 DAREN C MAINER, 0000 JEFFREY S MILLS, 0000 SCOTT R ORLOFF, 0000 JAMES I MAIZE, 0000 JOHANNA M MILLS, 0000 CHRISTOPHER D ORMSBY, 0000 GEORGE S MAJOR, 0000 SCOTT W MILLS, 0000 JAMES J OROURKE III, 0000 GREGORY P MALANDRINO, 0000 TAMARA D MILLS, 0000 MATTHEW H ORT, 0000 SHAWN M MALONE, 0000 CHRISTOPHER G MILNER, 0000 CHRISTOPHER M OSBORN, 0000 CARINA E MALONEY, 0000 KELLY D MINER, 0000 JENNIFER L OSICK, 0000 MATTHEW J MALONEY, 0000 THOMAS D MINER, 0000 BRETT R OSTER, 0000 WILLIAM J MALPASS, 0000 RAY W MINIHAN, 0000 NEAL T OSTERHAUS, 0000 DENNIS N MALZACHER JR., 0000 ERNUEL MIRANDAROSARIO, 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ROBERT S PUDNEY IV, 0000 DAVID J SANCHEZ, 0000 GUY M SNODGRASS, 0000 MICHAEL T PUFFER, 0000 FRANK E SANCHEZ, 0000 KATHRYN L SNOOK, 0000 DANIEL J PUGH JR., 0000 ROBERTO F SANCHEZ, 0000 TIMOTHY M SNOWDEN, 0000 PATRICK D PURCELL, 0000 KARL S SANDER, 0000 KURT R SNYDER, 0000 STEVEN R PUSKAR, 0000 DAMIAN A SANDERS, 0000 RYAN S SNYDER, 0000 THEODORE M O QUIDEM, 0000 ERIC D SANDERS, 0000 MATTHEW A SOBECKI, 0000 MICHAEL J QUINN, 0000 GREGG S SANDERS, 0000 TABITHA R SOBEL, 0000 PETER P QUINN, 0000 KENT L SANDERS, 0000 GLENN A SOUTHERN, 0000 JAMES W RACHAL, 0000 KEITH C SANDOVAL, 0000 MARYELIZABTH F SOUTHWELL, 0000 LUKE W RADLINSKI, 0000 TODD A SANTALA, 0000 GEORGE T SOUTHWORTH, 0000 JOHN E RAEL, 0000 JONATHAN P SANTANGELO, 0000 JEFFREY R SOWA, 0000 JOSEPH A RAEZ, 0000 SERGIO T SANTILLAN, 0000 WILLIAM J SPARKOWSKI, 0000 ADRIAN D RAGLAND, 0000 ROLAND T SASAKI, 0000 WILLIAM H SPEAKS, 0000 VICTORIO A RAMIREZ, 0000 JOSEPH W SATTERFIELD, 0000 KEMIT W SPEARS, 0000 DOUGLAS E RAMSEY, 0000 CHRISTOPHER M SAVAGE, 0000 CHARLES D SPENCELEY, 0000 DANIEL C RAPHAEL, 0000 WILLIAM A SAVAGE, 0000 KARSTEN E SPIES, 0000 DAVID E RASH JR., 0000 MICHAEL J SAVARESE, 0000 PETER J SPITALE, 0000 ABDUL K RASUL, 0000 ROBERT W SAVERING, 0000 SINGO S SPRAUVE, 0000 JOHN C RATH, 0000 WILLIAM T SAWHILL, 0000 PAUL R SPRINGER, 0000 DONALD V RAUCH, 0000 BRIAN J SAWICKI, 0000 LANCE A SRP, 0000 SABRA S RAWLINGS, 0000 MATTHEW D SCARLETT, 0000 SAMANTHA L STAHL, 0000 ALEKSEI RAZSADIN, 0000 ROBERT J SCAUZILLO, 0000 ARNOLD R STANKUS III, 0000 JOSEPH E REAUME, 0000 MARK E SCEPANSKY, 0000 ROBERT A STANLEY, 0000 CLAY J REDDING, 0000 JERRY A SCHAFER JR., 0000 ROBERT D STARKS JR., 0000 CLAYTON T REDINGER, 0000 WILLIAM A SCHENCK III, 0000 JACOB P STAUB, 0000 MICHAEL E REED, 0000 DONALD W SCHENK JR., 0000 DANIEL V STAUFFER, 0000 DORA O REID, 0000 JOHN M SCHILLER, 0000 GRIFFIN K STAUFFER, 0000 ALVIN J REINAUER, 0000 IAN J SCHILLINGER, 0000 JEFFREY W STEBBINS, 0000 LOREN S REINKE, 0000 DANIEL G SCHLAFF, 0000 ANDREW T STEELE, 0000 DANIEL J REISS, 0000 ADAM P SCHLISMANN, 0000 MISTY N STEELE, 0000 MATTHEW A RENNER, 0000 DUSTIN J SCHOUTEN, 0000 LORI L STEEN, 0000 MICHAEL F RENY, 0000 TIMOTHY P SCHUBERT, 0000 JUSTIN E STEENSON, 0000 RICHARD R REYES, 0000 SETH G SCHUKNECHT, 0000 MISTY R STEINBERGER, 0000 JAMES REYNOLDS, 0000 BRYAN L SCHULTZ, 0000 FREDERICK M STELL, 0000 JAMES T REYNOLDS, 0000 CORNELIA E SCHULTZ, 0000 MELISSA S STEPHENS, 0000 ROBERT F REYNOLDS, 0000 RICHARD W SCHULZ, 0000 PHILLIP V J STEPHENSON, 0000 RYAN I REYNOLDS, 0000 CHAD C SCHUMACHER, 0000 JASON T STEPP, 0000 JASON M RHEA, 0000 KENNETH E SCHWALBE, 0000 BRADLEY D STEVENS, 0000 JEFFREY D RHINEFIELD JR., 0000 ANTHONY J SCHWARZ, 0000 MARK S STEVENS, 0000 DARREN E RICE, 0000 STEVEN J SCHWENKLER, 0000 NATALIE R STEVENS, 0000 KEVIN S RICE, 0000 KIMBERLY E SCOTT, 0000 FREDERICK W STEVENSON, 0000 NEIL A RICE, 0000 ROSS A SCOTT, 0000 CHANET N STEWART, 0000 KEITH D RICHARDS, 0000 TROY D SCOTT, 0000 EDWARD T STICKLE JR., 0000 STEPHEN S RICHARDSON, 0000 WINSTON E SCOTT II, 0000 ADAM C STIEVE, 0000 DAVID E RICKETSON, 0000 GREGORY A SCOVEL JR., 0000 SARA A STIRES, 0000 JESSICA A RIDGLEY, 0000 MATTHEW W SCROGGINS, 0000 JABALI R STJULIEN, 0000 DAVID E RIDINGS, 0000 DEAN G SEARS, 0000 MICHAEL G STOKES, 0000 CHRISTOPHER J RIERSON, 0000 JOSEPH M SEEBURGER, 0000 LUCRETIA STOLL, 0000 DAYNAN K RIGG, 0000 RYAN L SEGGERTY, 0000 BRADLEY J STOREY, 0000 SETH D RIGGINS, 0000 JENNIFER L SEGUIN, 0000 GEOFFREY S STOW, 0000 LESLIE E RIGGS JR., 0000 PATRICIA R SERRANO, 0000 SCOTT E STRADER, 0000 DAVID C RILEY, 0000 SHAUN S SERVAES, 0000 BRIAN P STRANAHAN, 0000 SAMUEL T RISER, 0000 JENNIFER L SERVICE, 0000 KAREN A STRANGE, 0000 JOSE R RIVERA, 0000 MATTHEW R SEVERSON, 0000 JOSEPH V STRASSBERGER, 0000 BRANDON J ROACH, 0000 JEAN P SEVILLA, 0000 JOEL R STRAUS, 0000 MICHAEL L ROACH, 0000 CHRISTIAN M SEWELL, 0000 TOWANDA M STREET, 0000 KENNETH C ROBB, 0000 MATTHEW D SEYMOUR, 0000 HARRY A STROTHER II, 0000 KEVIN E ROBB, 0000 CLAYTON G SHANE, 0000 PATRICK R STUART, 0000 DARYL ROBBIN, 0000 ERIC L SHANGLE, 0000 RYAN D STURGILL, 0000 KELLY M ROBBINS, 0000 LEE H SHANNON, 0000 TEAGUE J SUAREZ, 0000 CLAYTON L ROBERSON, 0000 MICHAEL E SHANNON, 0000 TRAVIS K SUGGS, 0000 REMY P ROBERT, 0000 TERRENCE M SHASHATY, 0000 BRIAN D SUMMERS, 0000 GARY G ROBERTS, 0000 MICHAEL S SHAW II, 0000 MELISSA A SUMMERVILLE, 0000 MICHELLE L ROBERTS, 0000 MATTHEW E SHEARIN, 0000 DINYI SUN, 0000 MARTIN L ROBERTSON, 0000 MATHEW T SHEFLIN, 0000 GENE E SUND, 0000 JASON M ROBINSON, 0000 KEITH J SHERER, 0000 SCOTT T SUNDEM, 0000 CAROLINE G RODI, 0000 COLBY W SHERWOOD, 0000 ROBERT J SUTTON, 0000 MICHAEL R RODMAN, 0000 ELIZABETH H SHIAU, 0000 DARREN M SWEENEY, 0000 SERGIO G RODRIGUERA, 0000 MATTHEW S SHIELDS, 0000 CRAIG A SYLVESTER, 0000 JOEL RODRIGUEZ, 0000 JAMES E SHIPMAN, 0000 JOSEPH B SYMMES JR., 0000 LUIS A RODRIGUEZ, 0000 JOSEPH B SHIPP, 0000 MARK A SYMMES, 0000 NOEL RODRIGUEZ, 0000 DERRIN R SHRINER, 0000 MATTHEW A SZOKA, 0000 DARREN C ROE, 0000 ADRIAN SIEBENHAAR, 0000 FAITH K TABATSKO, 0000 HENRY M ROENKE IV, 0000 JAY E SIEMBIEDA, 0000 KENTARO A TACHIKAWA, 0000 ANNE K ROGERS, 0000 BENJAMIN C SIGURDSON, 0000 MANDY M TAIRA, 0000 DAVID J ROGERS, 0000 JAMES D SILCOX, 0000 BRIAN A TAKACS, 0000 OSCAR E ROJAS, 0000 CHRISTOPHER A SILVA, 0000 LORENZO J TARPLEY, 0000 JOEL C ROLLEY, 0000 RICHARD A SILVA, 0000 ANDREW D TARRANT, 0000 SARAH E ROLLINGS, 0000 DAVID K SILVERMAN, 0000 CHRISTOPHER J TARSA, 0000 ADAM A ROMAN, 0000 SEAN M SIMMONS, 0000 MANUEL K TATAVAK, 0000 ALEXANDER ROMO, 0000 ESAN O SIMON, 0000 RUSSELL J TATE, 0000 JOSEPH A ROOT, 0000 RISA B SIMON, 0000 TODD D TAVOLAZZI, 0000 SCOTT A ROSCOE, 0000 DAVID M SIMPRINI, 0000 AARON J TAYLOR, 0000 MICHELLE G ROSEANO, 0000 CHAD E SIMPSON, 0000 ASA E TAYLOR, 0000 BRIAN P ROSEMARK, 0000 BRIAN G SIMS, 0000 BRYAN P TAYLOR, 0000 CRAIG A ROSEN, 0000 JONATHAN W SIMS, 0000 DONALD O TAYLOR, 0000 MARC S ROSEN, 0000 TODD M SINCLAIR, 0000 ERIC L TAYLOR, 0000 SCOTT A ROSETTI, 0000 LEE A SINGLETON, 0000 GREGORY S TAYLOR, 0000 BRYN C ROSKOS, 0000 WILLIAM D SIPPERLY, 0000 RICK T TAYLOR, 0000 ANNA A ROSS, 0000 EDWARD L SISK, 0000 ROBERT J TEAGUE, 0000 ROBERT A ROSS, 0000 MAX SISSON, 0000 JASON D TEETER, 0000 PAUL E ROTSCH, 0000 JULIA L Y SITZMANN, 0000 HERNESTO TELLEZ, 0000 JOANNIS C ROUSSAKIES, 0000 GREGORY A SIUTA, 0000 MICHAEL S TERKANIAN, 0000 JOSEPH R ROVITO, 0000 DAVID W SKAROSI, 0000 MICHAEL P TERP, 0000 GREGORY L ROWLAND, 0000 BRIAN L SKUBIN, 0000 WILLIAM TERRILL, 0000 MARK C ROWLAND, 0000 MATTHEW C SLADKY, 0000 RONALD K TERRY, 0000 JAMES L ROYAL JR., 0000 SEAN L SLAPPY, 0000 DANIEL W TESTA, 0000 BRIAN K RUDITSKY, 0000 MARK J SLEPSKI, 0000 CRAIG T THAYER, 0000 JASON J RUDRUD, 0000 ANDRIA L SLOUGH, 0000 JOHN P THOMAS, 0000 MALCOLM J RUMPH, 0000 DAMON M SLUTZ, 0000 KEVIN M THOMAS, 0000 JOSHUA J RUSSELL, 0000 RALPHAEL U SMALLS, 0000 MARCUS O THOMAS, 0000 LUKE A RUSSELL, 0000 ALBERT SMITH, 0000 MARTIN C THOMAS, 0000 GEOFFREY G RUTECKI, 0000 BRITTON D SMITH, 0000 MAVIS R THOMAS, 0000 CHRISTOPHER D RUTLAND, 0000 EDWARD A SMITH, 0000 MEGAN A THOMAS, 0000 JOHN C RUZICKA, 0000 IRVIN D SMITH JR., 0000 SHADRIC A THOMAS, 0000 WILLIAM G RYHERD, 0000 JERRY D SMITH, 0000 STEVEN W THOMAS, 0000 BRIAN T SAAL, 0000 JOSHUA A SMITH, 0000 EDDIE F THOMPSON, 0000 ERWIN R SABILE, 0000 KEEVIN L SMITH, 0000 HERBERT R THOMPSON, 0000 CHRISTOPHER J SACRA, 0000 KENT D SMITH, 0000 PETER THRIFT, 0000 ANDRE T SADOWSKI, 0000 MEGHAN K SMITH, 0000 NICHOLAS A TICHICH, 0000 ERIC M SAGER, 0000 MICAH D SMITH, 0000 PAUL J TILL, 0000 DAVID L SAGUNSKY, 0000 MICHAEL W SMITH, 0000 WILLIAM K TIRRELL, 0000 BENJAMIN N SALE, 0000 NATHAN C SMITH, 0000 KIRBY L TOLCH, 0000 PETER J SALVAGGIO JR., 0000 RANDAL C SMITH, 0000 ANTHONY M TOMA, 0000 ANTHONY D SALVATORE, 0000 ROBERT E SMITH, 0000 ROBERT D TOMCHICK, 0000 LENSWORTH A SAMUEL, 0000 ROBERT K SMITH, 0000 WARREN W TOMLINSON, 0000 ALFREDO J SANCHEZ, 0000 JOSEPH W SMOTHERMAN, 0000 MAY N TON, 0000

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JACINTO TORIBIO JR., 0000 ARCHIBALD WATKINS, 0000 JAKOB C WRIEDEN, 0000 JOSEPH A TORRES, 0000 EDWARD T WATKINS, 0000 DARREN B WRIGHT, 0000 JASON I TOSCANO, 0000 BRIAN M WEAVER, 0000 GLENN A WRIGHT, 0000 SUMMER S TOSCANO, 0000 MICHAEL WEAVER, 0000 JONATHAN L WRIGHT, 0000 GEORGE B TOSH, 0000 RICHARD A WEBB, 0000 KEVIN T WRIGHT, 0000 DAVID B TOWNLEY, 0000 ANGELA M WEBSTER, 0000 ERIC D WYATT, 0000 SCOTT A TRACEY, 0000 CURTIS E WEBSTER, 0000 RAFE K WYSHAM, 0000 RONNIE D TRAHAN JR., 0000 AMY C WECAS, 0000 TIMOTHY J YANIK, 0000 AARON M TRENT, 0000 JASON E WEED, 0000 PETER YAO, 0000 DARYL E TRENT, 0000 ORION P WELCH, 0000 LAWRENCE J YATCH II, 0000 KEVIN M TREXLER, 0000 WILFRED H WELLS, 0000 MARK E YATES, 0000 AUGUST J TROTTMAN, 0000 MICAH A WELTMER, 0000 JARED H YEE, 0000 DAVID W TRUMAN, 0000 CHRISTOPHER D WENDT, 0000 ANTHONY M YONNONE, 0000 KATHLEEN M TSCHANZ, 0000 STEVEN C WESSNER, 0000 BRADLY A YOUNG, 0000 STEVEN J TUCK, 0000 CEDRIC L WEST, 0000 BRIAN A YOUNG, 0000 BRANDON J TUCKER, 0000 MARK B WEST, 0000 CHARLES YOUNG, 0000 BRIAN A TUIN, 0000 WILLIAM D WESTMORELAND, 0000 CURTIS E YOUNG, 0000 WILLIAM J TULL, 0000 PETER A WESTON, 0000 PATRICK D TUMY, 0000 MARTIN L WEYENBERG, 0000 HEATHER K YOUNG, 0000 BRITTON E TURNER II, 0000 JEREMY M WHALEN, 0000 JASON P YOUNG, 0000 CHARLES W TURNER, 0000 OMAR J WHEATLEY, 0000 JAY A YOUNG, 0000 KYLE M TWENTER, 0000 SCOTT V WHELPLEY, 0000 JODY K YOUNG, 0000 DEVIN R TYLER, 0000 BENJAMIN T WHITE, 0000 MATTHEW C YOUNG, 0000 TELICHA M TYLER, 0000 RAYMOND M WHITE, 0000 DAVEY C YU, 0000 KURT C UHLMANN, 0000 EDDIE F WHITLEY JR., 0000 HOLLY A YUDISKY, 0000 ROBERT L UNDERHILL JR., 0000 ROBERT G WICKMAN, 0000 MICHAEL L YUTESLER, 0000 GREGGORY M UNGER, 0000 MATTHEW J WIDELSKI, 0000 JOHN T ZABLOCKI, 0000 WILLIAM R URBAN, 0000 ADAM D WIEDER, 0000 JOSEPH M ZACK, 0000 ANDREW J URBANSKI, 0000 ROBERT C WIEDERIEN, 0000 MICHAEL J ZAIKO, 0000 ROGELIO P VALENCIA II, 0000 WILLIAM W WIEGMANN, 0000 TODD D ZENTNER, 0000 MICHAEL T VALENZUELA, 0000 JOHN S WIGGINS, 0000 TRAVIS W ZETTEL, 0000 MICHAEL A VANCHERI, 0000 BLAKE D WILBURN, 0000 CHI ZHANG, 0000 NICHOLAS A VANDEGRIEND, 0000 EVELYN K WILDMAN, 0000 AARON J ZIELINSKI, 0000 ADRIAN F VANDELLEN, 0000 THOMAS S WILKERSON, 0000 MATTHEW D ZIELINSKI, 0000 JONATHAN K VANDERVELDE, 0000 JOEL L WILLE, 0000 JONAS S ZIKAS, 0000 BRIAN E VANDIVER, 0000 CHRISTOPHER G WILLIAMS, 0000 LUKE P ZIMMER, 0000 THOMAS M VANSCOTEN, 0000 DANIEL E WILLIAMS, 0000 GREGORY M ZIMMERMAN, 0000 BRIAN C VANYO, 0000 DONALD J WILLIAMS, 0000 JOANNA ZUHOSKI, 0000 SAMIT K VARMA, 0000 ENNIS E WILLIAMS, 0000 JOHN R ZURN, 0000 DAVID C VARONA, 0000 JAMES C WILLIAMS, 0000 RANDALL J VAVRA, 0000 JENNIFER L WILLIAMS, 0000 To be lieutenant junior grade CASE S VERNON, 0000 JOHNATHAN L WILLIAMS, 0000 CODY B VERNON, 0000 KATHYLYN B WILLIAMS, 0000 KEITH E CAMPBELL, 0000 TARAIL VERNON, 0000 MARION O WILLIAMS III, 0000 JOHN P CARDIN, 0000 MORRIS C VERVERS, 0000 MICHELLE M WILLIAMS, 0000 ANDREW M CENISEROZ, 0000 DEREK A VESTAL, 0000 MORTEZ WILLIAMS, 0000 PETER P CHRAPKIEWICZ, 0000 MARJORIE E VIGAL, 0000 NATHAN A WILLIAMS, 0000 BRIAN CONNETT, 0000 THOMAS A VILEVAC, 0000 SAI G WILLIAMS, 0000 CHRISTOPHER M DRAGO, 0000 BLANDINO A VILLANUEVA, 0000 TASHA R WILLIAMS, 0000 VINCENT V ERNO, 0000 DAMIAN K VILTZ, 0000 ULRIC A WILLIAMS, 0000 DANILO S EVANGELISTA, 0000 JOHN W VINYARD III, 0000 MARK B WILLIAMSON, 0000 SEAN M GREENAWAY, 0000 MICHAEL A VIOLETTE, 0000 WALTER D WILLIAMSON, 0000 MICHAEL M HARMON, 0000 BURR M VOGEL, 0000 JOHN G WILLINK, 0000 JASON D HUTCHERSON, 0000 KENNETH E VOGEL, 0000 BRANDON J WILLIS, 0000 CALVIN P JONES III, 0000 KYLE C VOSS, 0000 DARRELL J WILSON, 0000 JAMES T WADDELL, 0000 DAVID J WILSON JR., 0000 ANTHONY J JUNGBLUT, 0000 DAVID B WAGNER, 0000 JAMES H WILSON, 0000 PETER T KELLEHER, 0000 DAVID B WAIDELICH, 0000 JASON A WILSON, 0000 SETH A LIEBMAN, 0000 ERIC G WALBORN, 0000 SEAN A WILSON, 0000 ALLEN L MAXWELL JR., 0000 STEFAN L WALCH, 0000 DONALD M WINGARD, 0000 JEFFREY S MCCAFFREY, 0000 MARGARET A WALKER, 0000 GREGORY V WINGER, 0000 PATRICIA A MCGUIRE, 0000 SHANNON W WALKER, 0000 DAVID W WINN, 0000 ROBERT D MCLAUGHLIN, 0000 BRIGITTE L WALLACE, 0000 CRAIG M WINTERS, 0000 CRAIG A MIHALIK, 0000 KENNETH A WALLACE, 0000 CHRISTOPHER J WISE, 0000 GREGORY R MITCHELL, 0000 JENNIFER C WALLINGER, 0000 RICHARD A WISE, 0000 JAMES A MURDOCK, 0000 KENNETH WALLS, 0000 TERRY P WISE JR., 0000 LEE A NICKEL, 0000 GREGORY E WALTERS, 0000 BRIDGET B WISESANANTONIO, 0000 GILBERTO P PENSERGA, 0000 JAMES E WALTERS JR., 0000 FREDERICK WISSEN, 0000 MATTHEW L PETTIS, 0000 SCOTT S WALTERS, 0000 JONATHAN P WITHAM, 0000 STIG SANNESS, 0000 MARK L WALTON, 0000 SHAWN D WITHERSPOON, 0000 REYNALDO C SANTOS, 0000 MICHAEL J WANGER, 0000 KIRT J WLASCHIN, 0000 BLAS A SARAS, 0000 CHRISTIAN W WANGSGARD, 0000 SEAN Z WOJTEK, 0000 NATHAN W SCHERRY, 0000 CAROL A L WARD, 0000 JEANINE B WOMBLE, 0000 JEFFREY R SIMS, 0000 JASON L WARD, 0000 JOHN I WOOD, 0000 ANDREW J SONIER, 0000 CHRISTOPHER J WARDEN, 0000 WILLIAM R WOOD II, 0000 JOSEPH M SPAGNOLI, 0000 CLINTON J WARREN, 0000 SCOTT R WOODEN, 0000 HAZELANN K TEAMER, 0000 PETER W WARREN, 0000 KEITH C WOODLEY, 0000 MARCUS A THIES, 0000 ANNETTE P WASHBURN, 0000 RENEE M WOODWORTH, 0000 CARL R WARD, 0000 SHONDA D WASHINGTON, 0000 AARON T WORKMAN, 0000 MCKINNYA J WILLIAMS, 0000 KENNETH D WASSON II, 0000 JEFFREY C WORTHLEY, 0000 JOSEPH ZULIANI, 0000

VerDate Mar 15 2010 21:42 Jan 29, 2014 Jkt 081600 PO 00000 Frm 00134 Fmt 4637 Sfmt 9801 E:\2004SENATE\S06AP4.REC S06AP4 mmaher on DSKCGSP4G1 with SOCIALSECURITY Tuesday, April 6, 2004 Daily Digest Senate Michael H. Watson, of Ohio, to be United States Chamber Action District Judge for the Southern District of Ohio. Routine Proceedings, pages S3735–S3868 Routine lists in the Air Force, Army, Marine Measures Introduced: Six bills and one resolution Corps, Navy. Pages S3862–68 were introduced, as follows: S. 2284–2289, and S. Executive Communications: Pages S3789–91 Res. 332. Page S3791 Additional Cosponsors: Pages S3791–92 Pregnancy and Trauma Care Access Protection Statements on Introduced Bills/Resolutions: Act: Senate resumed consideration of the motion to Pages S3792–96 proceed to consideration of S. 2207, to improve women’s access to health care services, and the access Additional Statements: Pages S3785–89 of all individuals to emergency and trauma care serv- Amendments Submitted: Pages S3796–S3861 ices, by reducing the excessive burden the liability Notices of Hearings/Meetings: Page S3861 system places on the delivery of such services. Authority for Committees to Meet: Page S3861 Pages S3742–84 A unanimous-consent agreement was reached pro- Privilege of the Floor: Page S3861 viding for further consideration of the motion to Adjournment: Senate convened at 10:01 a..m., and proceed to consideration of the bill at 10:45 a.m., on adjourned at 6:29 p.m., until 9:45 a.m., on Wednes- Wednesday, April 7, 2004, with a vote on the mo- day, April 7, 2004. (For Senate’s program, see the tion to invoke cloture thereon, to occur at 2:15 p.m. remarks of the Acting Majority Leader in today’s Page S3862 Record on page S3862.) Jumpstart Our Business Strength (JOBS) Act— Agreement: A unanimous-consent agreement was Committee Meetings reached providing for further consideration of S. 1637, to amend the Internal Revenue Code of 1986 (Committees not listed did not meet) to comply with the World Trade Organization rul- APPROPRIATIONS: DEPARTMENT OF ings on the FSC/ETI benefit in a manner that pre- VETERANS AFFAIRS serves jobs and production activities in the United States, to reform and simplify the international tax- Committee on Appropriations: Subcommittee on VA, ation rules of the United States, on Wednesday, HUD, and Independent Agencies concluded a hear- ing to examine proposed budget estimates for fiscal April 7, 2004, immediately following and not with- year 2005 for the Department of Veterans Affairs, standing the result of the vote on the motion to in- after receiving testimony from Anthony Principi, voke cloture on the motion to proceed to S. 2207 Secretary of Veterans Affairs. (listed above). Page S3862 CHRONIC WASTING DISEASE Appointments: Committee on Environment and Public Works: Sub- HELP Around the Globe Commission: The committee on Fisheries, Wildlife and Water con- Chair, on behalf of the Majority Leader, pursuant to cluded a hearing to examine S. 1366, to authorize Public Law 108–199, Title VI, Section 637, ap- the Secretary of the Interior to make grants to State pointed the following individual to serve as a mem- and tribal governments to assist State and tribal ef- ber of the Helping to Enhance the Livelihood of forts to manage and control the spread of chronic People (HELP) Around the Globe Commission: wasting disease in deer and elk herds, after receiving Steve K. Berry of Washington, D.C. Pages S3861–62 testimony from John Clifford, Associate Deputy Ad- Nominations Received: Senate received the fol- ministrator for National Animal Health Policy and lowing nominations: Programs, Veterinary Services, Animal and Plant D355

VerDate mar 24 2004 03:01 Apr 07, 2004 Jkt 029060 PO 00000 Frm 00001 Fmt 0627 Sfmt 0627 E:\CR\FM\D06AP4.REC D06AP4 D356 CONGRESSIONAL RECORD — DAILY DIGEST April 6, 2004 Health Inspection Services, Department of Agri- Wildlife Agencies, Washington, D.C.; Jack Walther, culture; Charles G. Groat, Director, U.S. Geological Elko, Nevada, on behalf of the American Veterinary Survey, Department of the Interior; Russell George, Medical Association; and Gary J. Wolfe, Chronic Colorado Department of Natural Resources, Denver; Wasting Disease Alliance, Missoula, Montana. Gary J. Taylor, International Association of Fish and h House of Representatives forcement and information technology challenges at the Chamber Action Internal Revenue Service, 10 a.m., SD–138. The House was not in session today. Pursuant to Subcommittee on Military Construction, to hold hear- the provisions of H. Con. Res. 361, providing for a ings to examine proposed budget estimates for fiscal year conditional adjournment of the House of Representa- 2005 for Army and Navy military construction programs, tives and a conditional recess or adjournment of the 2:30 p.m., SD–138. Subcommittee on Agriculture, Rural Development, and Senate, it stands adjourned until 2 p.m. on Tuesday, Related Agencies, to hold hearings to examine proposed April 20, 2004. budget estimates for fiscal year 2005 for certain Depart- ment of Agriculture programs, 3:30 p.m., SD–192. Committee Meetings Committee on Armed Services: Subcommittee on Strategic No Committee meetings were held. Forces, to hold hearings to examine the proposed Defense Authorization Request for fiscal year 2005, focusing on f defense intelligence programs and lessons learned in re- NEW PUBLIC LAWS cent military operations, 10 a.m., SR–222. Committee on Banking, Housing, and Urban Affairs: to (For last listing of Public Laws, see DAILY DIGEST, p. D347) hold hearings to examine the National Bank Preemption H.R. 254, to authorize the President of the Rules, 2 p.m., SD–538. United States to agree to certain amendments to the Committee on Commerce, Science, and Transportation: Sub- Agreement between the Government of the United committee on Science, Technology, and Space, to hold States of America and the Government of the United hearings to examine near earth objects, 2:30 p.m., Mexican States concerning the establishment of a SR–253. Subcommittee on Oceans, Fisheries and Coast Guard, Border Environment Cooperation Commission and a to hold an oversight hearing to examine U.S. Coast North American Development Bank. Signed on Guard activities, 2:30 p.m., SR–428A. April 5, 2004. (Public Law 108–215). Committee on Environment and Public Works: business H.R. 3926, to amend the Public Health Service meeting to consider S. 1814, to transfer federal lands be- Act to promote organ donation. Signed on April 5, tween the Secretary of Agriculture and the Secretary of 2004. (Public Law 108–216). the Interior, S. 441, to direct the Administrator of Gen- H.R. 4062, to provide for an additional temporary eral Services to convey to Fresno County, California, the extension of programs under the Small Business Act existing Federal courthouses in that county, proposed leg- and the Small Business Investment Act of 1958 islation, to designate the Orville Wright Federal Building through June 4, 2004. Signed on April 5, 2004. and the Wilbur Wright Federal Building in Washington, (Public Law 108–217). District of Columbia, and the nominations of Stephen L. Johnson, of Maryland, to be Deputy Administrator, Ann f R. Klee, of Virginia, and Benjamin Grumbles, of Vir- COMMITTEE MEETINGS FOR WEDNESDAY, ginia, each to be an Assistant Administrator of the Envi- ronmental Protection Agency, Charles Johnson, of Utah, APRIL 7, 2004 to be Chief Financial Officer, all of the Environmental (Committee meetings are open unless otherwise indicated) Protection Agency, and Gary Lee Visscher, of Maryland, to be a Member of the Chemical Safety and Hazard Inves- Senate tigation Board, 2 p.m., S–128, Capitol. Committee on Appropriations: Subcommittee on Defense, Subcommittee on Fisheries, Wildlife, and Water, to to hold hearings to examine proposed budget estimates hold an oversight hearing to examine the detection of for fiscal year 2005 for National Guard and Reserve pro- lead in District of Columbia drinking water, focusing on grams, 10 a.m., SD–192. needed improvements in public communications and the Subcommittee on Transportation, Treasury and General status of short- and long-term solutions, 2:30 p.m., Government, to hold hearings to examine tax law en- SD–406.

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Committee on Finance: to hold hearings to examine strat- Committee on Indian Affairs: business meeting to con- egies to improve access to Medicaid home and commu- sider S. 1955, to make technical corrections to laws relat- nity based services, 10 a.m., SD–215. ing to Native Americans, and S. 1529, to amend the In- Committee on Foreign Relations: to hold hearings to exam- dian Gaming Regulatory Act to include provisions relat- ine the United Nations oil-for-food program, 9:30 a.m., ing to the payment and administration of gaming fees, SD–419. 10 a.m., SR–485. Subcommittee on African Affairs, to hold hearings to Committee on the Judiciary: Subcommittee on Adminis- examine fighting HIV/AIDS in Africa; to be followed by trative Oversight and the Courts, to hold hearings to ex- a nominations hearing, 2:30 p.m., SD–419. amine a proposal to split the Ninth Circuit, 10 a.m., Committee on Governmental Affairs: to resume hearings to SD–226. examine U.S. Postal Service reform issues, focusing on the Subcommittee on Antitrust, Competition Policy and chairmen’s perspective on governance and rate-setting, 10 Consumer Rights, to hold hearings to examine crude oil a.m., SD–342. relating to higher gas prices, 2:30 p.m., SD–226. Financial Management, the Budget, and International Select Committee on Intelligence: to hold closed hearings to Security, to hold hearings to examine S. 346, to amend examine certain intelligence matters, 2:30 p.m., SH–219. the Office of Federal Procurement Policy Act to establish a governmentwide policy requiring competition in certain House executive agency procurements, 2 p.m., SD–342. No Committee meetings are scheduled.

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Next Meeting of the SENATE Next Meeting of the HOUSE OF REPRESENTATIVES 9:45 a.m., Wednesday, April 7 2 p.m., Tuesday, April 20

Senate Chamber House Chamber Program for Wednesday: After the transaction of any Program for Tuesday: To be announced. morning business (not to extend beyond 10:45 a.m.), Sen- ate will continue consideration of the motion to proceed to consideration of S. 2207, Pregnancy and Trauma Care Protection Act, with a vote on the motion to invoke clo- ture thereon to occur at 2:15 p.m.; following which, Sen- ate will resume consideration of S. 1637, Jumpstart Our Business Strength (JOBS) Act, with a vote on the motion to invoke cloture on the Frist Motion to Recommit the bill to the Committee on Finance, with instructions. (On Wednesday, Senate will recess from 12:45 p.m. until 2:15 p.m. for their respective party conferences.)

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