Congressional Record, Volume 155 Issue 122 (Thursday, August 6, 2009)

[Congressional Record Volume 155, Number 122 (Thursday, August 6, 2009)]
[Senate]
[Pages S8997-S9044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. WYDEN:
S. 1588. A bill to amend the Internal Revenue Code of 1986 to provide
the same tax treatment for both commercial and noncommercial investors
in oil and natural gas and related commodities, and for other purposes;
to the Committee on Finance.
Mr. WYDEN. Mr. President, businesses like airlines, trucking
companies, and heating oil distributors buy and sell oil and futures
contracts because they need to do so to run their day-to-day business
and hedge their risk against wild swings in oil prices like consumers
saw last year.
But there are also buyers and sellers in the market--financial
speculators--who are simply there to try to make a quick dollar on oil
as an investment strategy. The explosion of speculators into the
marketplace has distorted the oil and gas market and driven up the
price of oil for everybody. When commercial businesses see fuel prices
go up, they try to consume less. But when speculators see prices go up,
they buy more and keep driving up demand. This distorts the normal
supply-demand balance of the markets and digs a huge financial hole for
average Americans.
In 2000, speculative trading in the oil futures markets accounted for
37 percent of crude oil trading on the New York Mercantile Exchange. By
last summer when prices were approaching $150 a barrel, that number had
grown to more than 70 percent. I do not think that is a coincidence.
There are a lot of proposals around to fix the regulatory system to
prevent trading abuses. Oregon's economy really suffered from abusive
energy trading by Enron, and I am all for closing trading loopholes.
But my bill is aimed at something different. It is aimed at the giant
financial bubble that has been created by people who are simply chasing
speculative profits in the commodities markets and creating artificial
demand that is driving up prices.
The legislation I am introducing today--Stop Tax-breaks for Oil
Profiteering, STOP, Act of 2009--will let some of the air out of this
speculative balloon and help create a level playing field among
companies participating in the commodity markets.
Under the tax code, commercial traders, those who truly need to buy,
sell and hedge their purchases of oil, pay taxes on whatever profits
they make on trading at the same rates as ordinary income. Speculators
get a much better deal from the TAX CODE. Some, such as pension funds
or endowments, do not pay any tax whatsoever when they profit on their
oil or futures investments. Others, like hedge or index funds can get
lower tax rates by treating some of their trading profits as capital
gains. Clearly, the deck is stacked against the businesses who really
buy and use oil. That means it is also stacked against the consumer who
needs the services and products those businesses provide.
My proposal removes incentives in the tax code that make such
investments attractive to both tax-exempt and tax-paying investors. It
also makes everyone in the United States who is buying and selling oil
and gas or futures contracts play by essentially the same tax rules
across the board. Tax-paying entities would lose the ability to treat
any of these investments as capital gains and be subject to comparable
tax treatment on oil and gas investments as airlines or trucking
companies or fuel distributors or other businesses that truly need to
be in these markets.
Tax-exempt entities, like pension funds, would be required to pay
``unrelated-business-income-tax'' on their oil and gas trading gains.
UBTI already exists as a well-established tax obligation for income
that is not directly related to the tax exempt purpose of the
organization. UBTI was created precisely to keep tax exempt
organizations from competing unfairly with taxpaying businesses, which
is what they are doing when they enter the commodity markets solely for
investment income purposes. The bill also includes provisions that
would prevent tax exempt organizations from investing in off-shore
funds to try to avoid the new UBTI tax.
By focusing on tax fairness, my bill would realign the profit
incentives that are currently attracting non-commercial actors to the
markets. If speculators are truly in the markets and are wrecking havoc
with oil and gas prices, this bill will do away with their tax
subsidies and cause many to leave. It deflates the speculative balloon
of artificially inflated profits that has made this investment arena so
attractive.

[[Page S8998]]

If speculators are not a problem, then this bill will help prove the
theory that the wild swings in oil prices of the past year truly can be
blamed on supply and demand.
The bill would only cover the oil and natural gas markets, and
related products like gasoline and diesel fuel, and be in effect for
the next 4 years. However, after 3 years, it would require the Treasury
Department to issue a report analyzing the impact of these changes on
these markets, making recommendations on what changes to make.
Other proposals on oil speculation focus on regulation of the market
or limiting the amounts of oil traders could purchase. These approaches
are ``top down'' efforts to prevent trading abuses and financial
investors from swamping the market. This bill approaches the problem
from the bottom line up. Willy Sutton, the bank robber was asked why he
robbed banks, to which he is said to have replied, ``It's where the
money is.'' That is why this bill focuses on the flow of financial
investment funds into the oil and gas markets, it's where the
speculation is.
In these tough economic times, I believe consumers need protection
from people who try to game the system to pad their own pockets. By
putting an end to the imbalances in the tax code that currently feed
oil profiteers, the STOP Act will be good for American businesses and
consumers. I hope my colleagues will join me in protecting our economy
and leveling the playing field in the oil and gas markets by voting in
favor of the STOP Act.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1588

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Stop Tax-breaks for Oil
Profiteering Act'' or the ``STOP Act''.

SEC. 2. CAPITAL GAIN OR LOSS FROM SALE OR EXCHANGE OF OIL OR
NATURAL GAS AND RELATED COMMODITIES TREATED AS
SHORT-TERM CAPITAL GAIN OR LOSS.

(a) Gain or Loss on Applicable Commodities.--
(1) In general.--Part IV of subchapter P of chapter 1 of
the Internal Revenue Code of 1986 (relating to special rules
for determining capital gains and losses) is amended by
adding at the end the following new section:

``SEC. 1261. CAPITAL GAIN OR LOSS FROM SALE OR EXCHANGE OF
OIL OR NATURAL GAS AND RELATED COMMODITIES
TREATED AS SHORT-TERM CAPITAL GAIN OR LOSS.

``(a) General Rule.--If a taxpayer has gain or loss from
the sale or exchange of any applicable commodity which,
without regard to this section, would be treated as long-term
capital gain or loss, such gain or loss shall,
notwithstanding any other provision of this title, be treated
as short-term capital gain or loss.
``(b) Applicable Commodity.--For purposes of this section--
``(1) In general.--The term `applicable commodity' means--
``(A) oil or natural gas (or any primary product of oil or
natural gas) which is actively traded (within the meaning of
section 1092(d)(1)),
``(B) a specified index (within the meaning of section
1221(b)(1)(B)(ii)) a substantial portion of which is, as of
the date the taxpayer acquires its position with respect to
such specified index, based on 1 or more commodities
described in subparagraph (A),
``(C) any notional principal contract with respect to any
commodity described in subparagraph (A) or (B), and
``(D) any evidence of an interest in, or a derivative
instrument in, any commodity described in subparagraph (A),
(B), or (C), including any option, forward contract, futures
contract, short position, and any similar instrument in such
a commodity.
``(2) Exception for certain section 1256 contracts.--Such
term shall not include a section 1256 contract (as defined in
section 1256(b)) which is required to be marked to market
under section 1256(a).
``(c) Special Rule for Certain Partnership Interests.--For
purposes of this section, if a taxpayer recognizes gain or
loss on the sale or exchange of any interest in a
partnership, the portion of such gain or loss which is
attributable to unrecognized gain or loss with respect to 1
or more applicable commodities shall be treated as short-term
capital gain or loss. The preceding sentence shall not apply
if the taxpayer is otherwise required to treat such portion
of gain or loss as ordinary income or loss.
``(d) Application.--This section shall apply to any
applicable commodity acquired after August 31, 2009, and
before January 1, 2014.''.
(2) Conforming amendments.--
(A) Section 1222 of such Code is amended by striking the
last sentence thereof.
(B) The table of sections for part IV of subchapter P of
chapter 1 of such Code is amended by adding at the end the
following new item:

``Sec. 1261. Capital gain or loss from sale or exchange of oil or
natural gas and related commodities treated as short-term
capital gain or loss.''.
(b) Application to Section 1256 Contracts.--
(1) In general.--Section 1256(f) of the Internal Revenue
Code of 1986 (relating to special rules) is amended by adding
at the end the following new paragraph:
``(6) Special rules for certain commodity contracts.--
``(A) All gain or loss from commodity contracts treated as
short-term gain or loss.--In the case of a section 1256
contract which is an applicable commodity, subsection (a)(3)
shall be applied to any gain or loss with respect to such
contract--
``(i) by substituting `100 percent' for `40 percent' in
subparagraph (A) thereof, and
``(ii) without regard to subparagraph (B) thereof.
``(B) Treatment of mixed straddles.--A taxpayer may not
make an election under subsection (d), or an election under
the regulations prescribed pursuant to section 1092(b)(2),
with respect to any mixed straddle if any position forming a
part of such straddle is a section 1256 contract which is an
applicable commodity. For purposes of this subparagraph, if
any section 1256 contract which is part of a straddle is an
applicable commodity, any other section 1256 contract which
is part of such straddle shall be treated as an applicable
commodity.
``(C) Applicable commodity.--For purposes of this
paragraph, the term `applicable commodity' has the meaning
given such term by section 1261(b), except that such section
shall be applied without regard to paragraph (2) thereof.
``(D) Application.--This paragraph shall apply to any
applicable commodity acquired after August 31, 2009, and
before January 1, 2014.''.
(2) Special rule for loss carrybacks.--Section 1212(c) of
such Code (relating to carryback of losses from section 1256
contracts to offset prior gains from such contracts) is
amended by redesignating paragraph (7) as paragraph (8) and
by inserting after paragraph (6) the following new paragraph:
``(7) Special rule for losses all of which are treated as
short-term.--If any portion of the net section 1256 contracts
loss for any taxable year is attributable to a net loss from
contracts to which section 1256(f)(6) applies--
``(A) this subsection shall be applied first to such
portion of such net section 1256 contracts loss and then to
the remainder of such loss, and
``(B) in applying this subsection to such portion--
``(i) notwithstanding paragraph (1)(B), all of the loss
attributable to such portion and allowed as a carryback shall
be treated as a short-term capital loss, and
``(ii) notwithstanding paragraph (6)(A), all of the loss
attributable to such portion and allowed as a carryback shall
be treated for purposes of applying paragraph (6) as a short-
term capital gain for the loss year.''.
(c) Effective Date.--The amendments made by this section
shall apply to applicable commodities acquired after August
31, 2009, in taxable years ending after such date.

SEC. 3. GAINS AND LOSSES FROM OIL AND NATURAL GAS AND RELATED
COMMODITIES TREATED AS UNRELATED BUSINESS
TAXABLE INCOME.

(a) In General.--Section 512(b) of the Internal Revenue
Code of 1986 (relating to modifications to unrelated business
taxable income) is amended by adding at the end the following
new paragraph:
``(20) Treatment of gains or losses from commodities.--
``(A) In general.--Notwithstanding paragraph (5) or any
other provision of this part--
``(i) income, gain, or loss of an organization with respect
to any applicable commodity shall not be excluded but shall
be taken into account as income, gain, or loss from an
unrelated trade or business, and
``(ii) all deductions directly connected with such income
or gain shall be allowed.
``(B) Exception for ordinary income and losses.--
Subparagraph (A) shall not apply to any income, gain, or loss
of an organization which, if not excluded under this title
and without regard to subparagraph (A), would be treated as
ordinary income or loss.
``(C) Look-thru in the case of foreign corporations.--
``(i) In general.--If an organization owns directly or
indirectly stock in a foreign corporation, the organization's
pro rata share of any income, gain, or loss of such
corporation (and any deductions directly connected with such
income or gain) with respect to 1 or more applicable
commodities shall be taken into account under subparagraph
(A) in the same manner as if such commodities were held
directly by the organization. Any such item shall be taken
into account for the taxable year of the organization in
which the item arises without regard to whether there was an
actual distribution to the organization with respect to the
item. For purposes of this clause, the rule under section
1261(c) shall apply in determining the income, gain,

[[Page S8999]]

or loss of the foreign corporation with respect to applicable
commodities.
``(ii) Sale of interests in corporation.--If a taxpayer
recognizes gain or loss on the sale or exchange of any share
of stock in a foreign corporation, the portion of such gain
or loss which is attributable to unrecognized gain or loss
with respect to 1 or more applicable commodities shall be
taken into account under subparagraph (A) in the same manner
as if such commodities were sold or exchanged directly by the
organization.
``(iii) No double counting.--The Secretary shall prescribe
such rules as are necessary to ensure that any item of
income, gain, loss, or deduction described in clause (i) or
(ii) is taken into account only once for purposes of this
paragraph.
``(D) Applicable commodity.--For purposes of this
paragraph, the term `applicable commodity' has the meaning
given such term by section 1261(b), except that such section
shall be applied without regard to paragraph (2) thereof.
``(E) Regulations.--The Secretary shall prescribe such
regulations as are necessary to carry out the provisions of
this paragraph, including regulations--
``(i) to prevent the avoidance of the purposes of this
paragraph through the use of pass-thru entities or tiered
structures, and
``(ii) to provide that this paragraph shall not apply to
ownership interests of organizations in foreign corporations
in cases where the income or gain of the foreign corporation
from any applicable commodity is otherwise subject to tax
imposed by this chapter.
``(F) Application.--This paragraph shall apply to any
applicable commodity acquired after August 31, 2009, and
before January 1, 2014.''.
(b) Effective Date.--The amendment made by this section
shall apply to applicable commodities acquired after August
31, 2009, in taxable years ending after such date.

SEC. 4. STUDY OF TAX TREATMENT OF COMMODITIES AND SECTION
1256 CONTRACTS.

(a) Study.--The Secretary of the Treasury, or the
Secretary's delegate, shall conduct a study of the Federal
income tax treatment of section 1256 contracts under section
1256 of the Internal Revenue Code of 1986 and of applicable
commodities under sections 1261, 1256(f)(6), and 512(b)(20)
of such Code. Such study shall include an analysis of--
(1) the average annual number of sales or exchanges of such
contracts and commodities, including the number of sales and
exchanges involving organizations exempt from Federal income
taxation under such Code,
(2) whether the amendments made by this Act have had any
effect on the number or type of such sales and exchanges,
(3) the effect of tax policy on the operation of the
commodities exchanges and on the demand for, and price of,
commodities, particularly with respect to oil and natural
gas, and
(4) such other matters with respect to such tax treatment
as the Secretary determines appropriate.
(b) Report.--The Secretary shall, not later than January 1,
2012, report the results of the study conducted under
subsection (a) to the Committee on Finance of the Senate and
the Committee on Ways and Means of the House of
Representatives, together with such legislative
recommendations as the Secretary determines appropriate with
respect to the Federal income tax treatment of section 1256
contracts and applicable commodities.
______

By Ms. CANTWELL (for herself and Mr. Grassley):
S. 1589. A bill to amend the Internal Revenue Code of 1986 to modify
the incentives for the production of biodiesel; to the Committee on
Finance.
Ms. CANTWELL. Mr. President, I am pleased to join with my colleague,
Senator Grassley, and introduce an important piece of legislation that
will modernize the tax incentive for domestic biodiesel production. The
Biodiesel Tax Incentive Reform and Extension Act of 2009 will provide
predictability to investors, to producers, and to researchers so we can
move forward and continue to displace imported fossil fuels with low
carbon, renewable biodiesel that is produced here in the United States.
Last year, we all saw the devastating effects that $140 per barrel
oil had on our economy and our constituents. For economic reasons,
national security reasons, and environmental reasons, we cannot allow
ourselves to remain dependent on foreign oil. We have to redouble our
efforts to deploy alternative fuels that can be produced in the United
States and that can help us address the growing crisis of climate
change.
Biodiesel is a diesel replacement fuel that is produced from
vegetable oils, animal fats and waste oils. It is refined to meet a
commercial fuel specification that is readily accepted in the
marketplace. Typically biodiesel is blended with conventional diesel
fuel, and it is not necessary to modify a vehicle's engine to use the
fuel.
There are compelling public policy benefits associated with the
production and use of biodiesel. It is an extremely efficient fuel that
can be produced domestically so we do not have to rely on imported
fuel. Biodiesel creates 3.2 units of energy for every unit of fuel that
is required to produce the fuel and the 690 million gallons of
biodiesel produced in the U.S. in 2008 displaced 38.1 million barrels
of petroleum.
Replacing fossil fuel use with biodiesel also can play a constructive
role in addressing the issue of climate change. When compared to
conventional diesel fuel, pure biodiesel reduces direct carbon
lifecycle emissions by 78 percent, which in 2008 was the equivalent of
removing 980,000 passenger vehicles from the road.
Congress first enacted a tax incentive for biodiesel in 2004 and
since that time, this tax credit has helped encourage the production
and use of this alternative fuel. U.S. production of biodiesel
increased from 25 million gallons in 2004 to 690 million gallons last
year, and the industry has built the commercial scale production
capacity. There currently are 176 plants in operation with the capacity
to produce more than 2.61 billion gallons of biodiesel.
The 39 new plants that are either under construction or being
expanded would add nearly 849.9 million gallons of production capacity.
We have to be sure these plans for expansion go forward. Unfortunately,
limited access to capital, uncertainty surrounding the Federal
commitment to biodiesel, and the current state of the economy threaten
to undermine the progress the U.S. biodiesel industry has made to build
the production capacity and infrastructure needed to aggressively
displace petroleum diesel fuel with renewable, low-carbon biodiesel.
Right now, less than one-third of the industry's facilities are
currently producing fuel.
The 51,893 jobs that are currently supported by the U.S. biodiesel
industry show there is real job growth potential in this industry. Much
of that job growth and economic activity will happen in our rural
communities who continue to be hard hit right now.
The current law tax credit will expire at the end of this year and
Congress must act or we will threaten the future of this promising
domestic industry. The National Biodiesel Board estimates that if
Congress does not provide some predictability to the industry, U.S.
production will likely fall from 690 million gallons in 2008 to 300-350
million gallons in 2009. This could cost the U.S. economy more than
29,000 jobs. These are not jobs we can afford to lose.
In addition to the looming expiration, the current structure of the
tax credit has administrative problems and is subject to abuse that
makes it difficult to ensure that that only qualified fuel benefits
from the incentive. We owe it to taxpayers to make sure that we are
getting the results we want from the tax incentives we enact so in
addition to extending the tax credit we need to make the structural
changes that Sen. Grassley and I are proposing today.
The centerpiece of the bill is changing the incentive from a blender
credit to a production tax credit so that we focus the benefits of the
incentive on building the domestic production industry. Under current
law, the credit was targeted at the blending of biodiesel with
petroleum diesel. While this was helpful in getting us to the point we
are now, it is time we move even farther in the direction of promoting
the production of petroleum fuel alternatives.
In addition, the legislation we are introducing today will simplify
administration of the incentive for both taxpayers and the Internal
Revenue Service, IRS, and will eliminate any remaining opportunity for
abuse of the tax credit through schemes like ``splash and dash'' in
which oil companies add a few drops of biodiesel to their petroleum
diesel just to qualify for the tax credits.
Under our bill, the $1 per gallon tax credit will be provided for the
production of biodiesel, renewable diesel and aviation jet fuel that
complies with established fuel standards and Clean Air Act
requirements.
For small producers, those with an annual production capacity of less
than 60 million gallons, we increase the $1 to $1.10 for the first 15
million gallons of biodiesel produced.
We simplify the definition of biodiesel so that we encourage
production

[[Page S9000]]

from any biomass-based feedstock or recycled oils and fats. Hopefully
this will unleash even more research and commercialization of
alternative fuel sources.
The bill also simplifies the coordination between the income tax
credit and the excise tax liability to, again, tighten up compliance
and reduce administrative burdens on taxpayers. Most importantly, our
bill would extend this tax credit for 5 years, giving needed financial
predictability to the industry.
I thank Senator Grassley for joining with me on this bill and look
forward to working with our colleagues on the Finance Committee to
adopt this worthwhile, commonsense proposal that is consistent with
sound energy and sound tax policy.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1589

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Biodiesel Tax Incentive
Reform and Extension Act of 2009''.

SEC. 2. REFORM OF BIODIESEL INCOME TAX INCENTIVES.

(a) In General.--Section 40A of the Internal Revenue Code
of 1986 is amended to read as follows:

``SEC. 40A. BIODIESEL PRODUCTION.

``(a) In General.--For purposes of section 38, the
biodiesel fuels credit determined under this section for the
taxable year is $1.00 for each gallon of biodiesel produced
by the taxpayer which during the taxable year--
``(1) is sold by such producer to another person--
``(A) for use by such other person's trade or business
(other than casual off-farm production),
``(B) for use by such other person as a fuel in a trade or
business, or
``(C) who sells such biodiesel at retail to another person
and places such biodiesel in the fuel tank of such other
person, or
``(2) is used or sold by such producer for any purpose
described in paragraph (1).
``(b) Increased Credit for Small Producers.--
``(1) In general.--In the case of any eligible small
biodiesel producer, subsection (a) shall be applied by
increasing the dollar amount contained therein by 10 cents.
``(2) Limitation.--Paragraph (1) shall only apply with
respect to the first 15,000,000 gallons of biodiesel produced
by any eligible small biodiesel producer during any taxable
year.
``(c) Coordination With Credit Against Excise Tax.--The
amount of the credit determined under this section with
respect to any biodiesel shall be reduced to take into
account any benefit provided with respect to such biodiesel
solely by reason of the application of section 6426 or
6427(e).
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Biodiesel.--The term `biodiesel' means liquid fuel
derived from biomass which meets--
``(A) the registration requirements for fuels and fuel
additives established by the Environmental Protection Agency
under section 211 of the Clean Air Act (42 U.S.C. 7545), and
``(B) the requirements of the American Society of Testing
and Materials D6751.

Such term shall not include any liquid with respect to which
a credit may be determined under section 40.
``(2) Biodiesel not used for a qualified purpose.--If--
``(A) any credit was determined with respect to any
biodiesel under this section, and
``(B) any person does not use such biodiesel for the
purpose described in subsection (a),

then there is hereby imposed on such person a tax equal to
the product of the rate applicable under subsection (a) and
the number of gallons of such biodiesel.
``(3) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(4) Limitation to biodiesel produced in the united
states.--No credit shall be determined under this section
with respect to any biodiesel unless such biodiesel is
produced in the United States from raw feedstock. For
purposes of this paragraph, the term `United States' includes
any possession of the United States.
``(5) Biodiesel transfers from an irs registered biodiesel
production facility to an irs registered terminal or
refinery.--The credit allowed under subsection (a) shall be
allowed to the terminal or refinery referred to in section
4081(a)(1)(B)(i) in instances where section
4081(a)(1)(B)(iii) is applicable. The credit allowed under
subsection (a) cannot be claimed by a terminal or refinery on
fuel upon which the credit was previously claimed by a
biodiesel producer.
``(e) Definitions and Special Rules for Small Biodiesel
Producers.--
``(1) Eligible small biodiesel producer.--The term
`eligible small biodiesel producer' means a person who at all
times during the taxable year has a productive capacity for
biodiesel not in excess of 60,000,000 gallons.
``(2) Aggregation rule.--For purposes of the 15,000,000
gallon limitation under subsection (b)(2) and the 60,000,000
gallon limitation under paragraph (1), all members of the
same controlled group of corporations (within the meaning of
section 267(f)) and all persons under common control (within
the meaning of section 52(b) but determined by treating an
interest of more than 50 percent as a controlling interest)
shall be treated as 1 person.
``(3) Partnership, s corporation, and other pass-thru
entities.--In the case of a partnership, trust, S
corporation, or other pass-thru entity, the limitations
contained in subsection (b)(2) and paragraph (1) shall be
applied at the entity level and at the partner or similar
level.
``(4) Allocation.--For purposes of this subsection, in the
case of a facility in which more than 1 person has an
interest, productive capacity shall be allocated among such
persons in such manner as the Secretary may prescribe.
``(5) Regulations.--The Secretary may prescribe such
regulations as may be necessary--
``(A) to prevent the credit provided for in subsection (b)
from directly or indirectly benefitting any person with a
direct or indirect productive capacity of more than
60,000,000 gallons of biodiesel during the taxable year, or
``(B) to prevent any person from directly or indirectly
benefitting with respect to more than 15,000,000 gallons
during the taxable year.
``(6) Allocation of small biodiesel credit to patrons of
cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of a cooperative
organization described in section 1381(a), any portion of the
increase determined under subsection (b) for the taxable year
may, at the election of the organization, be apportioned pro
rata among patrons of the organization on the basis of the
quantity or value of business done with or for such patrons
for the taxable year.
``(ii) Form and effect of election.--An election under
clause (i) for any taxable year shall be made on a timely
filed return for such year. Such election, once made, shall
be irrevocable for such taxable year. Such election shall not
take effect unless the organization designates the
apportionment as such in a written notice mailed to its
patrons during the payment period described in section
1382(d).
``(B) Treatment of organizations and patrons.--
``(i) Organizations.--The amount of the credit not
apportioned to patrons pursuant to subparagraph (A) shall be
included in the amount determined under subsection (b) for
the taxable year of the organization.
``(ii) Patrons.--The amount of the credit apportioned to
patrons pursuant to subparagraph (A) shall be included in the
amount determined under such subsection for the first taxable
year of each patron ending on or after the last day of the
payment period (as defined in section 1382(d)) for the
taxable year of the organization or, if earlier, for the
taxable year of each patron ending on or after the date on
which the patron receives notice from the cooperative of the
apportionment.
``(iii) Special rules for decrease in credits for taxable
year.--If the amount of the credit of the organization
determined under such subsection for a taxable year is less
than the amount of such credit shown on the return of the
organization for such year, an amount equal to the excess
of--

``(I) such reduction, over
``(II) the amount not apportioned to such patrons under
subparagraph (A) for the taxable year, shall be treated as an
increase in tax imposed by this chapter on the organization.

Such increase shall not be treated as tax imposed by this
chapter for purposes of determining the amount of any credit
under this chapter or for purposes of section 55.
``(f) Renewable Diesel.--For purposes of this title--
``(1) Treatment in the same manner as biodiesel.--Renewable
diesel shall be treated in the same manner as biodiesel.
``(2) Renewable diesel defined.--The term `renewable
diesel' means liquid fuel derived from biomass which meets--
``(A) the registration requirements for fuels and fuel
additives established by the Environmental Protection Agency
under section 211 of the Clean Air Act (42 U.S.C. 7545), and
``(B) the requirements of the American Society of Testing
and Materials D975 or D396, or other equivalent standard
approved by the Secretary.

Such term shall not include any liquid with respect to which
a credit may be determined under section 40. Such term does
not include any fuel derived from coprocessing biomass with a
feedstock which is not biomass. For purposes of this
paragraph, the term `biomass' has the meaning given such term
by section 45K(c)(3).
``(3) Certain aviation fuel.--Except as provided in the
last 3 sentences of paragraph (2), the term `renewable
diesel' shall include fuel derived from biomass which meets
the requirements of a Department of Defense specification for
military jet fuel or an

[[Page S9001]]

American Society of Testing and Materials specification for
aviation turbine fuel.
``(g) Termination.--This section shall not apply to any
sale or use after December 31, 2014.''.
(b) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of such Code is
amended by striking the item relating to section 40A and
inserting the following new item:

``Sec. 40A. Biodiesel production.''.

SEC. 3. REFORM OF BIODIESEL EXCISE TAX INCENTIVES.

(a) In General.--Subsection (c) of section 6426 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(c) Biodiesel Credit.--
``(1) In general.--For purposes of this section, the
biodiesel credit is $1.00 for each gallon of biodiesel
produced by the taxpayer and which--
``(A) is sold by such producer to another person--
``(i) for use by such other person's trade or business
(other than casual off-farm production),
``(ii) for use by such other person as a fuel in a trade or
business, or
``(iii) who sells such biodiesel at retail to another
person and places such biodiesel in the fuel tank of such
other person, or
``(B) is used or sold by such producer for any purpose
described in subparagraph (A).
``(2) Definitions.--Any term used in this subsection which
is also used in section 40A shall have the meaning given such
term by section 40A.
``(3) Biodiesel transfers from an irs registered biodiesel
production facility to an irs registered terminal.--The
credit allowed under this subsection can be claimed by a
registered terminal or refinery in instances where section
4081(a)(1)(B)(iii) is applicable. The credit allowed under
this subsection cannot be claimed by a terminal or refinery
on fuel upon which the credit was previously claimed by a
biodiesel producer.
``(4) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after December 31,
2014.''.
(b) Payment of Credit.--Subsection (e) of section 6427 of
such Code is amended--
(1) by striking ``or the biodiesel mixture credit'' in
paragraph (1),
(2) by redesignating paragraphs (3) through (6) as
paragraphs (4) through (7), respectively, and by inserting
after paragraph (2) the following new paragraph:
``(3) Biodiesel credit.--If any person produces biodiesel
and sells or uses such biodiesel as provided in section
6426(c), the Secretary shall pay (without interest) to such
person an amount equal to the biodiesel credit with respect
to such biodiesel.'',
(3) by striking ``paragraph (1) or (2)'' each place it
appears in paragraphs (4) and (6), as redesignated by
paragraph (2), and inserting ``paragraph (1), (2), or (3)'',
(4) by striking ``alternative fuel'' each place it appears
in paragraphs (4) and (6), as redesignated by paragraph (2),
and inserting ``fuel'', and
(5) by striking ``biodiesel mixture (as defined in section
6426(c)(3))'' in paragraph (7)(B), as so redesignated, and
inserting ``biodiesel (within the meaning of section 40A)''.
(c) Exemption for Biodiesel Transferred From a Registered
Producer to a Registered Terminal.--Subparagraph (B) of
section 4081(a)(1) of such Code is amended--
(1) by striking ``clause (ii)'' in clause (i) and inserting
``clauses (ii) and (iii)'', and
(2) by adding at the end the following new clause:
``(iii) Exemptions for biodiesel transferred from a
registered producer to a registered terminal.--The tax
imposed by this paragraph shall not apply to any removal or
entry of biodiesel (as defined in section 40A(d)(1))
transferred in bulk (without regard to the manner of such
transfer) to a terminal or refinery if--

``(I) such biodiesel was produced by a person who is
registered under section 4101 as a producer of biodiesel and
who provides reporting under the ExStars fuel reporting
system of the Internal Revenue Service, and
``(II) the operator of such terminal or refinery is
registered under section 4101.''.

(d) Producer Registration Requirement.--Subsection (a) of
section 6426 of such Code is amended by striking
``subsections (d) and (e)'' in the flush sentence at the end
and inserting ``subsections (c), (d), and (e)''.
(e) Recapture.--Subsection (f) of section 6426 of such Code
is amended to read as follows:
``(f) Recapture.--
``(1) Alcohol fuel mixtures.--If--
``(A) any credit was determined under this section with
respect to alcohol used in the production of any alcohol fuel
mixture, and
``(B) any person--
``(i) separates the alcohol from the mixture, or
``(ii) without separation, uses the mixture other than as a
fuel,

then there is hereby imposed on such person a tax equal to
the product of the applicable amount and the number of
gallons of such alcohol.
``(2) Biodiesel.--If any credit was determined under this
section with respect to the production of any biodiesel and
any person does not use such biodiesel for a purpose
described in subsection (c)(1), then there is hereby imposed
on such person a tax equal to $1 for each gallon of such
biodiesel.
``(3) Applicable laws.--All provisions of law, including
penalties, shall, insofar as applicable and not inconsistent
with this section, apply in respect of any tax imposed under
paragraph (1) or (2) as if such tax were imposed by section
4081 and not by this section.''.
(f) Clerical Amendment.--The heading of section 6426 of
such Code (and the item relating to such section in the table
of sections for subchapter B of chapter 65 of such Code) is
amended by striking ``alcohol fuel, biodiesel, and
alternative fuel mixtures'' and inserting ``alcohol fuel
mixtures, biodiesel production, and alternative fuel
mixtures''.
(g) Effective Date.--The amendments made by this section
shall apply to biodiesel sold or used after December 31,
2009.

SEC. 4. BIODIESEL TREATED AS TAXABLE FUEL.

(a) Biodiesel Treated as Taxable Fuel.--Clause (i) of
section 4083(a)(3)(A) of such Code is amended by inserting
``, including biodiesel (as defined in section 6426(c)(3)),''
after ``(other than gasoline)''.
(b) Effective Date.--The amendment made by this section
shall apply to biodiesel removed, entered, or sold after the
date which is 6 months after the date of the enactment of
this Act.
F_____

By Mrs. MURRAY (for herself and Mr. Durbin):
S. 1591. A bill to amend the Foreign Assistance Act of 1961, to
establish the Health Technology Program in the United States Agency for
International Development to research and develop technologies to
improve global health, and for other purposes; to the Committee on
Foreign Relations.
Mrs. MURRAY. Mr. President, for a child in a developing country, very
simple tools, like safe injection technologies for vaccination, can
mean the difference between life and death. But the fact is that many
countries are simply unable to afford such critical health
technologies. Research has given us many promising early-stage
technologies that could make a difference, but tragically, in many
cases the promise of such technologies goes unrealized.
I know that it is sometimes tempting to think of global health as a
distant goal, far removed from the lives of everyday Americans. But, as
the emergence of new pandemic threats such as H1N1 flu reminds us,
global health is public health--and it affects Americans right here at
home. It is impossible to pick up a paper today, watch TV, or use the
internet without realizing that we are more connected than ever before
to people around the world.
As I speak with scientists and leaders in my State, they are excited
about finding new ways to tackle tough global health problems. I hear
the same enthusiasm when I speak with young people who are passionate
about helping others. Of course, this growing support for global health
can be seen not only in my home state, but throughout our country, in
our universities and in community organizations. I know that many of my
colleagues in the Senate are dedicated, tireless advocates for global
health. Last year, the Congress demonstrated its strong commitment by
reauthorizing the President's Emergency Plan for AIDS Relief, PEPFAR, a
huge victory for global health and a strong foundation for future
efforts.
In May, President Obama announced a new, comprehensive global health
strategy, renewing the longstanding U.S. commitment to global health
and building on the successes of programs begun during the Bush
administration like PEPFAR and the President's Malaria Initiative,
programs that have saved countless lives. President Obama has called
for us to continue these efforts and to focus on improving the health
of mothers and children and strengthening health systems in developing
countries.
Developing countries urgently need technologies that will work for
their health care systems, technologies that are easy-to-use,
culturally appropriate, and above all affordable.
Today I am introducing the 21st Century Global Health Technology Act
to support these goals by applying our country's traditional strengths
in research, innovation, and entrepreneurship to global health. My bill
will encourage the development of appropriate global health
technologies by authorizing efforts at the US Agency for International
Development, USAID, to make sure that promising health technologies are
not left to sit on the shelf, but instead are developed and delivered
to those in need.
Developing global health technologies is not easy or glamorous and
the financial incentives for business

[[Page S9002]]

are few. But for many years, the USAID has supported global health
technology development through an innovative model that encourages the
public, non-profit, and private sectors to work together.
I urge my colleagues to support this bill because the USAID has a
long and inspiring track record of success in technology development.
For example, the USAID's HealthTech program meets a wide range of needs
from developing tools to rapidly diagnose infectious diseases to
designing safe delivery kits that keep mothers and newborns healthy.
Working with non-profit and commercial-sector partners, HealthTech has
investigated over 100 technologies, licensed or transferred 21 life-
saving technologies designed for use in low-resource settings, and
moved 10 technologies into global use.
The HealthTech program helps the USAID leverage Federal money to
encourage the private sector to become involved in the fight to improve
global health. In an average year, HealthTech matches the USAID's
funding with cash and in-kind contributions from the private sector.
The average ratio of private sector investment to USAID funding in
HealthTech-developed technologies that have reached commercialization
is about 9 to 1. It's a win-win model that increases the number of
affordable global health technologies and provides new opportunities
for U.S. companies.
Technology development at the USAID is a smart investment. However,
the agency's technology development efforts currently are not
authorized, so funding is often uncertain. That uncertainty prevents
the USAID from pursuing many promising technologies. My bill will
provide $5 million per year over 5 years to support technology
development at the USAID--a small, but steady source of funding that
will bring greater stability to technology development efforts and
encourage more private sector partners to get involved.
Investing in global health technology is the right thing for the
U.S., for our companies, for our bright young people who are pursuing
careers in global health, and for our security since our well-being is
linked to our ability to prevent global pandemics and to reach out to
people around the world. But, most importantly, investing in global
health and in affordable health technologies will save millions of
lives. It is simply the right thing to do.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1591

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``21st Century Global Health
Technology Act''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) The United States has committed to the United Nations
Millennium Development Goals of--
(A) reducing child mortality;
(B) improving maternal health; and
(C) combating HIV/AIDS, malaria, and other diseases.
(2) The goals described in paragraph (1) cannot be reached
without health technologies and devices to diagnose
infectious diseases and reduce disease transmission.
(3) The development, advancement, and introduction of
affordable and appropriate technologies are essential to
efforts by the United States to reduce deaths among the
world's most vulnerable populations, particularly children
and women in the developing world.
(4) A recent report by the Institute of Medicine on the
commitment of the United States to global health--
(A) recommends that United States institutions share
existing knowledge to address prevalent health problems in
low- and middle-income countries;
(B) recommends continued support for partnerships between
the public and private sectors to develop and deliver health
products in low- and middle-income countries; and
(C) urges the United States Government to continue its
support for innovative research models to address unmet
health needs in poor countries.
(5) Investments by the United States in affordable,
appropriate health technologies, such as medical devices for
maternal and child care, vaccine delivery tools, safe
injection devices, diagnostic tests for infectious diseases,
and innovative disease prevention strategies--
(A) reduce the risk of disease transmission; and
(B) accelerate access to life-saving global health
interventions for the world's poor.
(6) Through a cooperative agreement, known as the
Technologies for Health program (referred to in this section
as ``HealthTech''), USAID supports the development of
technologies that--
(A) maximize the limited resources available for global
health; and
(B) ensure that products and medicines developed for use in
low-resource settings reach the people that need such
products and medicines.
(7) The HealthTech cooperative agreement--
(A) facilitates public-private collaboration in the
development of global health technologies;
(B) leverages public sector support for early stage
research and development of health technologies to encourage
private sector investment in late-stage technology
development and product introduction in developing countries;
(C) benefits the United States economy by investing in the
growing United States global health technology sector,
which--
(i) provides skilled jobs for American workers; and
(ii) enhances United States competitiveness in the
increasingly technological and knowledge-based global
economy; and
(D) enhances United States national security by--
(i) reducing the risk of pandemic disease; and
(ii) contributing to economic development and stability in
developing countries.

SEC. 3. PURPOSE.

The purpose of this Act is to authorize a health technology
development program that supports coordinated, long-term
research and development of appropriate global health
technologies--
(1) to improve global health;
(2) to reduce maternal and child mortality rates; and
(3) to reverse the incidence of HIV/AIDS, malaria, and
other diseases.

SEC. 4. ESTABLISHMENT OF THE HEALTH TECHNOLOGY PROGRAM.

Section 107 the Foreign Assistance Act of 1961 (22 U.S.C.
2151e) is amended by adding at the end the following:
``(c) Health Technology Program.--(1) There is established
in the United States Agency for International Development
(referred to in this section as `USAID') the Health
Technology Program, which shall--
``(A) coordinate and lead research and development efforts;
``(B) be funded by USAID on a competitive basis; and
``(C) serve as a national laboratory and technology
development program for global health.
``(2) The Health Technology Program shall develop, advance,
and introduce affordable, available, and appropriate
technologies specifically designed--
``(A) to improve the health and nutrition of developing
country populations;
``(B) to reduce maternal and child mortality; and
``(C) to improve the diagnosis, prevention and reduction of
disease, especially HIV/AIDS, malaria, tuberculosis, and
other major diseases.
``(3) The Health Technology Program shall be located at an
institution with a successful record of--
``(A) advancing the technologies described in paragraph
(2); and
``(B) integrating practical field experience into the
research and development process in order to introduce the
most appropriate technologies.
``(4) The Administrator of USAID, in collaboration with the
Health Technology Program, shall submit an annual report to
Congress and all relevant Federal agencies that describes--
``(A) the relevant activities of the Health Technology
Program that are in the incubation phase;
``(B) the progress made on such activities and on other
projects carried out through the Health Technology Program;
and
``(C) the outlook for future health technology efforts
evaluated by the Health Technology Program to have
significant growth potential.
``(5) There are authorized to be appropriated $5,000,000
for each of the fiscal years 2010 through 2014 to carry out
the Health Technology Program under this subsection.''.
______

By Ms. SNOWE (for herself and Mr. Cardin):
S. 1592. A bill to establish a Federal Board of Certification to
enhance the transparency, credibility, and stability of financial
markets, and for other purposes; to the Committee on Banking, Housing,
and Urban Affairs.
Ms. SNOWE. Mr. President, I rise today to reintroduce legislation
that will increase the trustworthiness of our Nation's mortgage
security market by creating the Federal Board of Certification for
mortgage securities. I would like to thank Senator Cardin for
cosponsoring this vital measure.
The necessity of enacting last fall's Troubled Asset Relief Program,
along with the collapse of Lehman Brothers,

[[Page S9003]]

and the bailouts of American International Group, Fannie Mae, Freddie
Mac, and Bear Stearns, combined with the huge losses suffered
throughout the financial industry, demonstrates a catastrophic failure
to accurately assess the dangers of imprudently made subprime mortgages
to the American public and our financial markets. In hindsight, it
appears that it was the inability to gauge risk in mortgage-backed
securities that caused much of this financial turmoil. For markets to
operate properly, it is imperative that they have effective metrics for
calculating the level of risk securities pose to investors.
The secondary mortgage market has been a largely unregulated
playground where poorly underwritten, low-quality loans were sold as
high-quality investment products. Although mortgage-backed securities
can be a positive market force, which increases the available pool of
credit for borrowers, without an accurate picture of the risk involved
in each mortgage security, buyers have no idea whether they are
purchasing a high-risk investment or a safe, secure investment. The
legislation that I am reintroducing today would work to curb the
excesses of the secondary market, combat future attempts at deception,
and protect investors by making scrutinized mortgage investments more
reliable and trustworthy.
The inability of major corporations to properly assess the risk of
the mortgage securities they were trading is a problem whose effects
have not been confined to Wall Street. To put it simply: when big banks
sneeze, the rest of America gets a cold. This year, more than $1
trillion of the subprime mortgages originated during the housing boom
will reset to higher interest rates.
In my home State of Maine, we are struggling with falling home prices
and a record number of foreclosures. During the first half of 2009
alone, there were 1,696 filings in Maine, a number putting the State on
pace to surpass the 2,851 foreclosure filings registered in 2008.
Moreover, some Maine borrowers, with rising monthly payments, are
unable to refinance out of their predatory loans. Small business
owners, many already hurt by the economic downturn, are also finding
credit tight. Finally, despite gains in recent weeks, the poor economic
climate caused by the subprime credit crunch has also roiled the stock
market, causing Americans to lose billions in their IRAs and retirement
funds.
We must address crisis and make sure it never happens again. Turning
to specifics, my bill creates the Federal Board of Certification, which
would certify that the mortgages within a security instrument meet the
underlying standards they claim in regards to documentation, loan to
value ratios, debt service to income ratios, and borrowers' credit
standards. The purpose of the certification process is to increase the
transparency, predictability, and reliability of securitized mortgage
products. Certification would aid in creating settled investor
expectations and increase transparency by ensuring that the mortgages
within a mortgage security conform to the claims made by the mortgage
product's sellers.
The proposed Federal Board of Certification would not override any
current regulations and would not in any way stifle any attempts by
private business to rate mortgage securities. This legislation would,
however, create incentives for improving industry rating practices.
Open publication of the Board's certification criteria would augment
the efforts of private ratings agencies by providing incentives for
increased transparency in the ratings process. The Board's
certification would also serve as a check on the industry to ensure
that ratings agencies carefully scrutinize the content of mortgage
products before issuing evaluations of mortgage backed securities.
Significantly, the Federal Board of Certification would also be
voluntary and funded by an excise tax. Users could choose to pay the
costs for the Board to rate their security, or they could elect not to
submit their product to the Board.
We must quickly restore confidence in mortgage securities if we are
to stabilize our housing markets. To do so, we must certify the quality
and content of our mortgage securities to enable housing markets to
generate liquidity and spur lending. This is why it is urgent to create
the Federal Board of Certification for mortgage securities. This
legislation would create a ``good housekeeping seal of approval'' for
the mortgage security industry and certify that the mortgage products
are in fact what they claim to be. Accordingly, I call on Congress to
take up and pass this commonsense legislation as expeditiously as
possible, particularly as part of a comprehensive overhaul of our
financial markets that Congress must consider in short order to ensure
that the calamitous events of the past year are never again repeated.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1592

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Federal Board of
Certification Act of 2009''.

SEC. 2. PURPOSE.

It is the purpose of this Act to establish a Federal Board
of Certification, which shall certify that the mortgages
within a security instrument meet the underlying standards
they claim to meet with regards to mortgage characteristics
including but not limited to: documentation, loan to value
ratios, debt service to income ratios, and borrower credit
standards and geographic concentration. The purpose of this
certification process is to increase the transparency,
predictability and reliability of securitized mortgage
products.

SEC. 3. DEFINITIONS.

As used in this Act--
(1) the term ``Board'' means the Federal Board of
Certification established under this Act;
(2) the term ``mortgage security'' means an investment
instrument that represents ownership of an undivided interest
in a group of mortgages;
(3) the term ``insured depository institution'' has the
same meaning as in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1803); and
(4) the term ``Federal financial institutions regulatory
agency'' has the same meaning as in section 1003 of the
Federal Financial Institutions Examination Council Act of
1978 (12 U.S.C. 3302).

SEC. 4. VOLUNTARY PARTICIPATION.

Market participants, including firms that package mortgage
loans into mortgage securities, may elect to have their
mortgage securities evaluated by the Board.

SEC. 5. STANDARDS.

The Board is authorized to promulgate regulations
establishing enumerated security standards which the Board
shall use to certify mortgage securities. The Board shall
promulgate standards which shall certify that the mortgages
within a security instrument meet the underlying standards
they claim to meet with regards to documentation, loan to
value ratios, debt service to income rations and borrower
credit standards. The standards should protect settled
investor expectations, and increase the transparency,
predictability and reliability of securitized mortgage
products.

SEC. 6. COMPOSITION.

(a) Establishment; Composition.--There is established the
Federal Board of Certification, which shall consist of--
(1) the Comptroller of the Currency;
(2) the Secretary of Housing and Urban Development;
(3) a Governor of the Board of Governors of the Federal
Reserve System designated by the Chairman of the Board;
(4) the Undersecretary of the Treasury for Domestic
Finance; and
(5) the Chairman of the Securities and Exchange Commission.
(b) Chairperson.--The members of the Board shall select the
first chairperson of the Board. Thereafter the position of
chairperson shall rotate among the members of the Board.
(c) Term of Office.--The term of each chairperson of the
Board shall be 2 years.
(d) Designation of Officers and Employees.--The members of
the Board may, from time to time, designate other officers or
employees of their respective agencies to carry out their
duties on the Board.
(e) Compensation and Expenses.--Each member of the Board
shall serve without additional compensation, but shall be
entitled to reasonable expenses incurred in carrying out
official duties as such a member.

SEC. 7. EXPENSES.

The costs and expenses of the Board, including the salaries
of its employees, shall be paid for by excise fees collected
from applicants for security certification from the Board,
according to fee scales set by the Board.

SEC. 8. BOARD RESPONSIBILITIES.

(a) Establishment of Principles and Standards.--The Board
shall establish, by rule, uniform principles and standards
and report forms for the regular examination of mortgage
securities.
(b) Development of Uniform Reporting System.--The Board
shall develop uniform

[[Page S9004]]

reporting systems for use by the Board in ascertaining
mortgage security risk. The Board shall assess, and publicly
publish, how it evaluates and certifies the composition of
mortgage securities.
(c) Affect on Federal Regulatory Agency Research and
Development of New Financial Institutions Supervisory
Agencies.--Nothing in this Act shall be construed to limit or
discourage Federal regulatory agency research and development
of new financial institutions supervisory methods and tools,
nor to preclude the field testing of any innovation devised
by any Federal regulatory agency.
(d) Annual Report.--Not later than April 1 of each year,
the Board shall prepare and submit to Congress an annual
report covering its activities during the preceding year.
(e) Reporting Schedule.--The Board shall determine whether
it wants to evaluate mortgage securities at issuance, on a
regular basis, or upon request.

SEC. 9. BOARD AUTHORITY.

(a) Authority of Chairperson.--The chairperson of the Board
is authorized to carry out and to delegate the authority to
carry out the internal administration of the Board, including
the appointment and supervision of employees and the
distribution of business among members, employees, and
administrative units.
(b) Use of Personnel, Services, and Facilities of Federal
Financial Institutions Regulatory Agencies, and Federal
Reserve Banks.--In addition to any other authority conferred
upon it by this Act, in carrying out its functions under this
Act, the Board may utilize, with their consent and to the
extent practical, the personnel, services, and facilities of
the Federal financial institutions regulatory agencies, and
Federal Reserve banks, with or without reimbursement
therefor.
(c) Compensation, Authority, and Duties of Officers and
Employees; Experts and Consultants.--The Board may--
(1) subject to the provisions of title 5, United States
Code, relating to the competitive service, classification,
and General Schedule pay rates, appoint and fix the
compensation of such officers and employees as are necessary
to carry out the provisions of this Act, and to prescribe the
authority and duties of such officers and employees; and
(2) obtain the services of such experts and consultants as
are necessary to carry out this Act.

SEC. 10. BOARD ACCESS TO INFORMATION.

For the purpose of carrying out this Act, the Board shall
have access to all books, accounts, records, reports, files,
memorandums, papers, things, and property belonging to or in
use by Federal financial institutions regulatory agencies,
including reports of examination of financial institutions,
their holding companies, or mortgage lending entities from
whatever source, together with work papers and correspondence
files related to such reports, whether or not a part of the
report, and all without any deletions.

SEC. 11. REGULATORY REVIEW.

(a) In General.--Not less frequently than once every 10
years, the Board shall conduct a review of all regulations
prescribed by the Board, in order to identify outdated or
otherwise unnecessary regulatory requirements imposed on
insured depository institutions.
(b) Process.--In conducting the review under subsection
(a), the Board shall--
(1) categorize the regulations described in subsection (a)
by type; and
(2) at regular intervals, provide notice and solicit public
comment on a particular category or categories of
regulations, requesting commentators to identify areas of the
regulations that are outdated, unnecessary, or unduly
burdensome.
(c) Complete Review.--The Board shall ensure that the
notice and comment period described in subsection (b)(2) is
conducted with respect to all regulations described in
subsection (a), not less frequently than once every 10 years.
(d) Regulatory Response.--The Board shall--
(1) publish in the Federal Register a summary of the
comments received under this section, identifying significant
issues raised and providing comment on such issues; and
(2) eliminate unnecessary regulations to the extent that
such action is appropriate.
(e) Report to Congress.--Not later than 30 days after
carrying out subsection (d)(1) of this section, the Board
shall submit to the Congress a report, which shall include a
summary of any significant issues raised by public comments
received by the Board under this section and the relative
merits of such issues.

SEC. 12. LIABILITY.

Any publication, transmission, or webpage containing an
advertisement for or invitation to buy a mortgage security
shall include the following notice, in conspicuous type:
``Certification by the Federal Board of Certification can in
no way be considered a guarantee of the mortgage security.
Certification is merely a judgment by the Federal Board of
Certification of the degree of risk offered by the security
in question. The Federal Board of Certification is not liable
for any actions taken in reliance on such judgment of
risk.''.
______

By Mr. MERKLEY:
S. 1595. A bill to amend the Truth in Lending Act to prohibit the
distribution of any check or other negotiable instrument as part of a
solicitation by a creditor for an extension of credit, to limit the
liability of consumers in conjunction with such solicitations, and for
other purposes; to the Committee on Banking, Housing, and Urban
Affairs.
Mr. MERKLEY. Mr. President, in recent years, consumer credit has gone
from providing convenience and short-term financing to a game of tricks
and traps that strips families of hard earned resources and locks the
middle class into a vicious cycle of debt. Today, I introduce
legislation to end one of those deceptive practices--the unsolicited
mailing of ``live'' loan checks.
Deceptive loan checks have afflicted consumers, especially seniors,
for far too long. In these schemes, financial institutions send
unsuspecting customers checks made out to them for some amount.
Customers often assume that their financial institutions have sent
refunds or some other business-related sum and unknowingly deposit the
checks. However, fine print on these checks actually makes them high-
cost loans.
Bank regulators have failed for years to rein in these deceptive
products. In Oregon, one of my elderly constituents--a veteran of the
Korean war--ended up in a subprime mortgage because he unknowingly
deposited a deceptive loan check that he never requested. Sadly,
instead of being able to cancel the loan, he was pushed into rolling
this unwanted loan into his mortgage, which was then transformed from a
safe, fixed rate mortgage that had nearly been paid off, into a brand
new, subprime mortgage. As this case shows, deceptive products and
practices lead our consumers into dangerous, high cost debt. If
individuals wish to take out high cost loans, they should have every
right to do so, but financial institutions should make those
transactions plain and straightforward, not tricky and deceptive.
To address this situation, I am introducing the Deceptive Loan Check
Elimination Act. Under the act, financial institutions would be
prohibited from sending a ``live'' loan check unless the consumer
requested such a check in writing. Consumers would not be liable for
any debt incurred in violation of the act. This common sense solution
protects consumers without constricting credit for those who want it.
The legislation is endorsed by Consumer Action, Consumers Federation of
America, Consumers Union, the National Consumer Law Center, on behalf
of its low income clients, and the U.S. Public Interest Research Group.
I am hopeful that the Senate will act quickly to address this
problem. In addition, the next step in restoring a fair playing field
for working families is to move ahead quickly to create the Consumer
Financial Protection Agency, a body with the authority to review and
regulate financial tricks and traps like ``live'' loan checks.
I urge my colleagues to join me in this and future efforts to restore
honesty and plain dealing to our consumer credit markets.
______

By Mrs. BOXER:
S. 1596. A bill to authorize the Secretary of the Interior to acquire
the Gold Hill Ranch in Coloma, California; to the Committee on Energy
and Natural Resources.
Mrs. BOXER. Mr. President, I rise to discuss the Gold Hill-Wakamatsu
Preservation Act. This legislation would authorize the Bureau of Land
Management to acquire and manage the Gold Hill Ranch near Coloma,
California. This site was the location of the Wakamatsu Tea and Silk
Colony from 1869 to 1871, recognized by the State of California and
Japanese American Citizens League as the first Japanese settlement in
the United States.
After Commodore William Perry opened Japanese ports to U.S. trade,
the weakness of Japan's shoguns was exposed, leading to a revolution
and return to imperial rule under the Meiji emperor. In 1869, seven
Japanese individuals and a European expatriate fled the turmoil in
Japan and sailed across the Pacific to San Francisco aboard a side
wheeler called the ``China.'' The group made their way eastwards and
purchased land in Gold Hill. Within 2 years, the colony grew to 22
Japanese settlers and began producing traditional Japanese crops such
as tea, silk, rice, and bamboo. The Japanese colonists and surrounding
community

[[Page S9005]]

learned about each others' culture and agricultural techniques. Local
and San Francisco newspapers wrote about the colony, and the settlers
began to receive acceptance in American society.
Unfortunately, the colony was short-lived--drought and financial
problems forced the group to disperse and settle throughout California
beginning in 1871. The Veerkamp family, which owned neighboring lands,
purchased the property in 1875. Despite the short history of the
colony, it was an important milestone that helped bridge Japanese and
American cultures and paved the way for large-scale emigration of
Japanese settlers to the United States. It also contributed to major
Japanese influences on the agricultural economy of California.
Many of the original structures on the site remain intact, including
a farmhouse, the grave of a young girl named Okei, numerous artifacts,
and agricultural plantings. Japanese-Americans and other visitors come
to see the site and place offerings on Okei's grave. As a testament to
the cultural exchanges that occurred at this site, the Gold Trail
Middle School, located on an in-holding carved out of this site, now
maintains an exchange program with a sister school in Wakamatsu, Japan.
Governor Reagan recognized the property as a State historic site in
1969, and the site is currently being considered for listing on the
National Register of Historic Places.
The 272-acre ranch encompassing the original colony site has been
passed down for generations through the Veerkamp family. Thanks to the
hard work of the American River Conservancy and Wakamatsu Gold Hill
Colony Foundation as well as the generous accommodation of the Veerkamp
family, the site has been preserved for visitors to come and learn
about the history of the Wakamatsu colonists and Japanese-American
culture. The site provides multiple other benefits, including wildlife
habitat, open space with hiking trails and picnic areas, and grazing
and pastureland. The family and non-profit partners agree that federal
acquisition would help guarantee that the site's cultural history,
agricultural character, and open space are permanently preserved for
generations to come. The Bureau of Land Management is well-suited to
manage this site since it has an excellent relationship with the local
community and manages several other sites nearby.
This project is supported by the Japanese American Citizens League,
the National Japanese American Historical Society, the Consul General
of Japan, the Governor of Fukishima Prefecture and the Mayor of
Wakamatsu in Japan, People-to-People International, the El Dorado
County Board of Supervisors, the El Dorado County Chamber of Commerce,
numerous elected officials including Assemblyman Ted Gaines, who
represents this district, and numerous other members of the local
community.
The significance of this site for Japanese Americans has been
compared to the significance of the Mayflower journey and Plymouth Rock
landing for European Americans. This site is testament to Japanese
history, California's agricultural economy, and the American tradition
of bringing together people of diverse cultures in the common pursuit
of freedom and prosperity. I look forward to working with my Senate
colleagues to move this legislation and preserve the story of the
Wakamatsu colonists for future generations.
______

By Mr. LEAHY (for himself, Mr. Chambliss, and Mr. Pryor):
S. 1599. A bill to amend title 36, United States Code, to include in
the Federal charter of the Reserve Officers Association leadership
positions newly added in its constitution and bylaws; to the Committee
on Armed Services.
Mr. LEAHY. Mr. President, today, I am pleased to introduce the
Reserve Officers Association Modernization Act of 2009. I want to thank
Senators Chambliss and Pryor for joining me to introduce this
legislation. As the cochairs of the United States Senate Reserve
Caucus, Senators Chambliss and Pryor have worked hard for the brave men
and women of the United States Reserves.
Over the past decade, our country has relied on the National Guard
and Reserves more than at any other time in recent history. The Guard
and Reserves provide an invaluable contribution to our Nation's
military, our national security, and disaster relief efforts. In recent
years the National Guard and Reserves have demonstrated their position
as a keystone to our military operations, particularly in Iraq and
Afghanistan, and stepped forward repeatedly to answer the call-to-duty
at a tempo not seen in decades. At the same time, the support from the
Guard and Reserves for homeland duties has been at an all time high.
The Guard and Reserves have provided crucial support to our Governors
and States during natural disasters such as the aftermath of Hurricane
Katrina. In addition, they have assumed additional roles in homeland
security as our country has adopted new policies following the attacks
of September 11, 2001. This new era for the Guard and Reserves prompted
Congress and the Department of Defense to review many existing and but
outdated policies.
The 95-member U.S. Senate National Guard Caucus, which I cochair
along with Senator Bond, plays an integral role in the review and
implementation of new policies. I have worked closely with groups like
the Reserve Officers Association, ROA, to ensure that the National
Guard and Reserves have access to more affordable health care, a
greater influence in the military, adequate training facilities and
supplies, and shorter troop deployments in Iraq and Afghanistan.
Since its founding in 1922, the ROA has worked on behalf of the
National Guard and Reserves and their families. For over 85 years, ROA
has remained committed to its original mission, to ``support and
promote the development and execution of a military policy for the
United States that will provide adequate National security.'' The
Reserve Officers Association represents the Reserve Components officers
for the Army, Air Force, Navy, Marine Corps, Coast Guard, the Air and
Army National Guard, Public Health Service, and the officers of the
National Oceanic and Atmospheric Administration.
This legislation would update the Reserve Officers Association's
Federal Charter to reflect two recent changes in the organization.
First, it would add the position of ``president elect'' to its
constitution and bylaws. Second, it would expand the ROA from only
three national executive committee members to include three
representatives from each of the seven branches of the uniformed
services. The Reserve Officers Association's charter has not been
modified since 1998 and this legislation would update it to correctly
reflect the current operation of the organization and enable ROA to
continue its good work.
The Reserve Officers Association has provided a voice to the men and
women that serve our country in the National Guard and Reserves. I urge
Senators on both sides of the aisle to show their support for the brave
members of the National Guard and Reserves by enacting this legislation
swiftly.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1599

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Reserve Officers Association
Modernization Act of 2009''.

SEC. 2. INCLUSION OF NEW LEADERSHIP POSITIONS IN THE FEDERAL
CHARTER OF THE RESERVE OFFICERS ASSOCIATION.

(a) National Executive Committee.--Section 190104(b)(2) of
title 36, United States Code, is amended--
(1) by inserting ``the president elect,'' after ``the
president,'';
(2) by inserting ``a minimum of'' before ``3 national
executive committee members,''; and
(3) by striking ``except the executive director,'' and
inserting ``except the president elect and the executive
director,''.
(b) Officers.--Section 190104(c) of such title is amended--
(1) in paragraph (1)--
(A) by inserting ``a president elect,'' after ``a
president,'';
(B) by inserting ``a minimum of'' before ``3 national
executive committee members,'';
(C) by striking ``a surgeon, a chaplain, a historian, a
public relations officer,''; and
(D) by striking ``as decided at the national convention''
and inserting ``specified in the constitution of the
corporation''; and
(2) in paragraph (2)--
(A) by inserting ``and take office'' after ``be elected'' ;
and

[[Page S9006]]

(B) by striking ``and the national public relations
officer,'' and inserting ``the judge advocate, and any other
national officers specified in the constitution of the
corporation,''.
(c) Vacancies.--Section 190104(d)(1) of such title is
amended by striking ``president and last past president,''
and inserting ``president, president elect, and last past
president,''.
(d) Records and Inspection.--Section 190109(a)(2) of such
title is amended by striking ``national council;'' and
inserting ``other national entities of the corporation;''.
______

Mr. UDALL of Colorado:
S. 1601. A bill to provide for the release of water from the
marketable yield pool of water stored in the Ruedi Reservoir for the
benefit of endangered fish habitat in the Colorado River, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. UDALL of Colorado. Mr. President, today I am introducing along
with my friend and colleague, Senator Bennet, the Ruedi Reservoir Water
Allocation for Recovery of Endangered Fish Act. This bill will help
address endangered fish issues in the Colorado River on Colorado's
western slope by allowing the U.S. Bureau of Reclamation to release the
remaining un-marketed water in Ruedi Reservoir for recovery purposes.
The Ruedi Reservoir is a component of the Fryingpan-Arkansas Project,
a U.S. Bureau of Reclamation project, located on the Fryingpan River in
western Colorado. The primary purposes of Ruedi are to provide storage
of replacement water that allows out-of-priority diversions by the
project to Colorado's east slope, and to provide marketable water for
Colorado's west slope uses. A little more than one-third of Ruedi's
marketable yield is currently under contract with limited prospects for
foreseeable future contracting.
In 1999, the U.S. Fish and Wildlife Service, FWS, issued a
programmatic biological opinion, PBO, for a critical reach of the
Colorado River in Colorado related to recovery efforts for four fish
species listed as endangered under the Endangered Species Act, ESA. The
PBO provides ESA compliance for five Reclamation projects: the
Fryingpan-Arkansas Project, including Ruedi Reservoir, the Colorado-Big
Thompson Project, the Colbran Project, the Grand Valley Project, and
the Silt Project.
The PBO also provides ESA compliance for all existing non-federal
water projects and water users of the Colorado River upstream of the
Gunnison River depleting approximately 1 million acre-feet per year and
for 120,000 acre-feet per year of new depletions. As part of the PBO,
Colorado water users agreed to provide 10,825 acre-feet per year for
fish recovery from interim water sources until 2010, by which time
permanent sources of water must be identified and agreements completed
between water users and the FWS to provide the permanent source or
sources of water.
Water users have identified the required permanent sources of water
for endangered fish. Half of the 10,825 acre-feet per year requirement
will be met from converting a historical agricultural water right and
half from uncontracted, unobligated Ruedi Reservoir water. Reclamation
has initiated NEPA compliance on Federal actions related to providing
10,825 acre-feet per year for endangered fish. This bill provides that
the NEPA process be completed before authorizing Reclamation to apply
the marketable yield to ESA benefits.
In regards to costs, the reimbursable capital costs for the Ruedi
Reservoir were assigned separately in the authorizing legislation to
east and west slope beneficiaries of the project. The east slope's
obligation of $7.6 million was assigned to Southeastern Colorado Water
Conservancy District under a conventional Reclamation master contract
for the 28,000 acre-feet replacement pool. The obligation to repay
Ruedi Reservoir's $9.3 million cost was assigned to the marketable
yield for the west slope's benefit, and this was to be re-paid by water
contracts from this pool for west slope uses. There is no traditional,
master contract with a west slope project ``sponsor'' for this portion
of the project's cost recovery. A little more than one-third of the
available marketable yield pool is currently under contract. Given that
there are limited prospects for foreseeable future contracting,
permanent assignment of 5,412.5 acre-feet of water for endangered fish
recovery is prudent and appropriate.
To effectuate this new arrangement, the bill would amend Public Law
106-392 to permanently assign 5,412.5 acre-feet of water in Ruedi
Reservoir from the west slope's marketable yield pool to endangered
fish recovery and associated cost reallocation to non-reimbursable
purposes. In so doing, the bill would accomplish a number of goals such
as ensure continued ESA compliance for all east and west slope Colorado
River main stem water users upstream of the Gunnison River, provide
water from Ruedi Reservoir at affordable rates for potential future
contracting, and provide consistency with long-standing Congressional
policy and Reclamation law that water dedicated to fish and wildlife
purposes from Reclamation projects is a non-reimbursable cost. The bill
would also ensure compliance with Colorado law regarding the purposes
of Ruedi Reservoir, namely that the marketable yield pool is available
for the benefit of west slope water users by providing ESA compliance
for uses of this water.
As with most issues related to water in the west, and especially in
Colorado, one facility like the Ruedi Reservoir can affect many
interests and values. This bill would provide mutual benefits to water
users throughout the Colorado River. It is an example where we can
reach consensus to continue to provide needed water to communities
while also preserving fish species.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1601

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

SECTION 1. ENDANGERED FISH RECOVERY IMPLEMENTATION PROGRAMS.

(a) Definitions.--Section 2 of Public Law 106-392 (114
Stat. 1602) is amended by adding at the end the following:
``(11) Marketable yield pool.--The term `marketable yield
pool' means the portion of the regulatory capacity that, as
of the date of enactment of this paragraph, is dedicated to
marketing purposes.
``(12) Regulatory capacity.--The term `regulatory capacity'
has the meaning given the term in the publication entitled
`Operating Principles, Fryingpan-Arkansas Project, Adopted by
the State of Colorado, April 30, 1959 (as amended December
30, 1959, and December 9, 1960)', as printed as House
Document No. 130 in accordance with House Resolution 91, 87th
Congress, agreed to March 15, 1961.
``(13) Ruedi reservoir.--The term `Ruedi Reservoir' means
the component of the Fryingpan-Arkansas Project of the Bureau
of Land Management that is located--
``(A) on the Fryingpan River; and
``(B) in western Colorado.''.
(b) Authorization to Fund Recovery Programs.--Section 3 of
Public Law 106-392 (114 Stat. 1603) is amended--
(1) by redesignating subsections (e) through (h) as
subsections (f) through (i), respectively; and
(2) by inserting after subsection (d) the following:
``(e) Allocation of Ruedi Reservoir Marketable Yield
Pool.--
``(1) Release of water.--For fiscal year 2013, and each
fiscal year thereafter, at the request of the Director of the
United States Fish and Wildlife Service (referred to in this
subsection as the `Director'), 5,412.5 acre-feet of water
shall be released from the marketable yield pool of water
stored in the Ruedi Reservoir for the benefit of endangered
fish habitat in the Colorado River.
``(2) Timing of release.--To the maximum extent
practicable, and unless otherwise requested by the Director,
the release of water under paragraph (1) shall occur during
the late summer months to enhance low water flows in areas
that comprise the endangered fish habitat in the Colorado
River.
``(3) No requirement for contract or other agreement.--The
release of water under paragraph (1) may be carried out
without the formation or execution of any contract or other
agreement.
``(4) Reimbursement.--The capital, operational,
maintenance, and replacement costs that arise from the
release of water under paragraph (1) shall not be
reimbursable.
``(5) Effect.--The release of water under paragraph (1)
shall satisfy 50 percent of the obligation of certain water
users to provide 10,825 acre-feet of water, as described in
the document--
``(A) entitled `Final Programmatic Biological Opinion for
Bureau of Reclamation's Operations and Depletions, Other
Depletions, and Funding and Implementation of Recovery
Program Actions in the Upper Colorado River above the
Confluence with the Gunnison River'; and
``(B) published by the Director on December 20, 1999.
``(6) Effective date.--This subsection shall take effect on
the date on which the Secretary complies with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321

[[Page S9007]]

et seq.) regarding the release of water under paragraph
(1).''.
______

By Mr. UDALL, of Colorado (for himself and Mr. Bennet):
S. 1602. A bill to amend title 10, United States Code, to ensure that
excess oil and gas lease revenues are distributed in accordance with
the Mineral Leasing Act, and for other purposes; to the Committee on
Armed Services.
Mr. UDALL of Colorado. Mr. President, today I am introducing a
revised version of the Naval Oil Shale Reserve Mineral Royalty Revenue
Allocation Act that I previously introduced on August 4, 2009. This
bill is the same as the one I previously introduced, but it corrects an
error regarding the allocation of outstanding mineral royalties to four
counties in Colorado instead of two--those four counties being
Garfield, Rio Blanco, Mesa and Moffat. This revised version also makes
it clear that the mineral royalty allocated to these four counties
would not affect the normal allocations to those counties under the
``payment in lieu of taxes'' program. In all other respects, the bill
and its purposes remain the same. It is a bill designed to release
mineral royalty receipts to Colorado where the receipts were generated
from gas development within this reserve on the western slope near
Rifle, Colorado.
By way of background, in 1997, Congress transferred the federal Naval
Oil Shale Reserve lands in western Colorado from the U.S. Department of
Energy, DOE, to the U.S. Bureau of Land Management, BLM, and directed
the BLM to begin leasing the oil and gas resources under these lands.
The Transfer Act also directed that the royalties recouped from this
leasing program be set aside and the state portion not disbursed to
Colorado until the Interior Department and the DOE certified that
enough money from the royalty receipts accrued to satisfy two purposes.
The first was to provide funding to clean up the Anvil Points site on
these lands. Anvil Points was an oil shale research facility that
operated within the Naval Oil Shale Reserve for about 40 years. The
facility was operated by DOE at one point, and private industry
performed research there under contract. Waste material was produced at
this facility from oil shale mining and processing. That waste
accumulated in a pile of about 300,000 cubic yards of spent oil shale
and other material--including arsenic and other heavy metals--which
rests on slopes below the facility.
The second purpose was for the reimbursement of certain costs related
to the transfer.
Following the transfer to the BLM, this area experienced significant
natural gas leasing and, as a result, significant royalty revenue was
generated.
On August 8, 2008, the DOI and DOE certified that adequate funds had
accrued to accomplish the goals of cleanup and cost reimbursement and
subsequently allocated all royalty revenue generated after this date
according to the Mineral Leasing Act, which establishes that Colorado
receive a proportionate share.
However, considerably more revenue accrued than was necessary to
accomplish the cleanup and cost reimbursement goals. This bill would
direct that this additional royalty revenue be allocated to Colorado
according to the formulas and processes established for the
disbursement of federal mineral royalties under the Mineral Leasing
Act.
The bill also directs that the Colorado share of this remaining
royalty revenue be allocated to the four Counties directly impacted by
oil and gas leasing on the Naval Oil Shale Reserve lands--specifically,
Garfield, Rio Blanco, Mesa, and Moffat Counties. Finally, this bill
makes it clear that these royalty payments shall not affect the funds
that these Counties normally receive under the ``payment in lieu of
taxes''--or PILT--program.
Based on figures provided by the BLM, there remains approximately $17
million in these accounts for Colorado's royalty revenue share. This
bill would make Colorado whole and provide it with its rightful share
of the remaining royalty revenue to address critical local needs and
impacts from the very leasing that produced the royalty revenue.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1602

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

SECTION 1. TREATMENT OF OIL SHALE RESERVE RECEIPTS.

Section 7439(f) of title 10, United States Code, is amended
by adding at the end the following:
``(3)(A) The moneys deposited in the Treasury under
paragraph (1) that exceed the amounts described in
subparagraphs (A) and (B) of paragraph (2) shall be
transferred by the Secretary of the Treasury in accordance
with section 35 of the Mineral Leasing Act (30 U.S.C. 191) to
the State of Colorado for use in accordance with subparagraph
(B).
``(B)(i) Of the amounts to be distributed under
subparagraph (A), the Secretary of the Treasury shall
transfer--
``(I) 40 percent to Garfield County, Colorado;
``(II) 40 percent to Rio Blanco County, Colorado;
``(III) 10 percent to Moffat County, Colorado; and
``(IV) 10 percent to Mesa County, Colorado.
``(ii) The amounts provided to the counties under clause
(i) shall be used by the counties, or any cities or political
subdivisions within the counties to which the funds are
transferred by the counties, to mitigate the effects of oil
and gas development activities within the affected counties,
cities, or political subdivisions.
``(iii) Amounts provided to the counties under clause (i)
shall not be considered for the purpose of calculating
payments for the counties under chapter 69 of title 31,
United States Code.''.
______

By Mr. WHITEHOUSE (for himself, Mr. Durbin, and Mr. Sessions):
S. 1606. A bill to require foreign manufacturers of products imported
into the United States to establish registered agents in the United
States who are authorized to accept service of process against such
manufacturers, and for other purposes; to the Committee on Finance.
Mr. WHITEHOUSE. I rise to speak in support of the Foreign
Manufacturers Legal Accountability Act of 2009, which I am introducing
today with the ranking member of the Judiciary Committee, Senator
Sessions, and Senator Durbin. This bipartisan bill is an important step
in protecting American consumers and businesses from injuries caused by
defective products manufactured outside the United States. Those
products hurt American consumers--they lead to serious injuries, and
even death--and they hurt the American businesses that must deal with
angry customers, product recalls, and unusable inventory.
The list of recent examples of Americans injured by defective foreign
products is shocking. Last year, a contaminated blood thinner from a
foreign manufacturer caused severe medical reactions and contributed to
numerous deaths. In 2006, a foreign-made, lead-tainted charm bracelet
claimed the life of a 4-year-old. The autopsy demonstrated that the
charm was 99 percent lead, 1,650 times more than the 0.06 percent lead
limit specified in enforcement guidelines for children's jewelry.
Imported food products from seafood to honey have been contaminated
with unthinkable chemicals, including veterinary drugs banned in
domestic production, potentially harmful antibiotics, and unapproved
food additives. Sixty million packages of pet food contaminated with
tainted wheat gluten have been recalled in the last two years.
Substandard tires have failed, leading to fatalities. Most recently,
defective drywall imported from China has been found to contain
excessively high levels of sulfur, causing houses to smell like rotten
eggs, corroding copper wiring, and making expensive appliances fail.
Thousands of homes may be affected.
At a hearing that I chaired in May, the Subcommittee on
Administrative Oversight and the Courts explored the legal hurdles
facing consumers who are injured by defective foreign products and by
businesses that find that their foreign partners refuse to honor their
contracts. These hurdles allow foreign manufacturers to continue to
injure American businesses and consumers, and also put American
manufacturers at a competitive disadvantage since they allow foreign
manufacturers to offer cheaper products that do not comply with
American safety requirements. Two major hurdles to proper
accountability are the inability to serve

[[Page S9008]]

process on the foreign manufacturer and the ability of that foreign
manufacturer, even if served, to evade the jurisdiction of American
courts. As the witnesses testified at the hearing, legislation that
addresses these issues is necessary and appropriate. The Foreign
Manufacturers Legal Accountability Act addresses both concerns.
The first problem, the inability to serve process on a manufacturer,
essentially means that it is difficult for an American to give a
foreign manufacturer the documents necessary to give it the legally
required notice that it is the subject of a lawsuit. This sounds like a
simple step, and it should be. Unfortunately, however, it is very hard
to serve process on foreign companies abroad. As witnesses explained at
the hearing in May, service abroad is complicated by the Hague
Convention on the Service Abroad of Judicial and Extra Judicial
Documents in Civil and Commercial Matters, to which the United States
is a signatory. Under that convention, a complaint must be translated
into the foreign language, transmitted to the Central Authority in the
foreign country, and then delivered according to the rules of service
in the home country of the defendant. This can cause months and even
years of delay, not to mention great expense for Americans.
The Foreign Manufacturers Legal Accountability Act will allow
Americans to overcome that procedural hurdle by serving legal papers
inside the United States on registered agents of foreign manufacturers.
The bill requires the heads of federal government agencies such as the
Food and Drug Administration to pass regulations requiring that foreign
manufacturers of products regulated by their agencies register an agent
who will accept service of process. It allows regulators to exclude
manufacturers who only import a minimal amount of products into the
United States. It imposes a minimal burden on foreign manufacturers,
since they would only have to appoint one agent to accept service of
process for all state and federal regulatory and civil actions anywhere
in the United States. The bill allows the manufacturer to choose any
location for that agent with a ``substantial connection to the
importation, distribution, or sale of the products of such foreign
manufacturer or producer.'' This clear and straightforward system will
allow Americans to commence their lawsuits fairly and promptly, and
ensure that foreign manufacturers have proper and fair notice of the
proceedings brought against them. It will not conflict with American
obligations under the Hague convention, since that convention applies
to service of process on foreign manufacturers in their home countries,
not in the United States.
The second hurdle, the inability to establish personal jurisdiction
over foreign manufacturers, can end a lawsuit against a foreign
manufacturer before it even begins. Think about how unfair this is. A
foreign manufacturer sells its defective products in the United States,
injures American consumers and businesses, and then argues that it is
not subject to the courts in the state where the American was injured--
in legal parlance, that the courts do not have personal jurisdiction
over it. As witnesses explained at the hearing, foreign manufacturers
raise this technical legal defense to avoid liability even when serious
injuries or even death have been caused by their products--their
defective tires, fireworks, exercise equipment, bikes, and toys.
The Foreign Manufacturers Legal Accountability Act will enable
injured Americans to surmount this hurdle. It will make clear to
foreign manufacturers that by importing their products into the United
States and by registering an agent in the United States, they are
consenting to the jurisdiction of the courts in the state where their
agent is located. By consenting to jurisdiction, the manufacturers will
avert unnecessary and expensive legislation about technical legal
issues and allow courts to settle the merits of disputes. This approach
is fair to foreign manufacturers since all American manufacturers are
subject to the jurisdiction of the courts of at least one state. This
bill therefore complies with the trade principle that we should not
subject foreign manufacturers to burdens not already imposed on
domestic manufacturers.
Indeed, the Foreign Manufacturers Legal Accountability Act is
ultimately about fairness. We all know American manufacturers comply
with regulations that ensure the safety of American consumers and
businesses. When they fail to do so, they must answer to regulators and
are held accountable through the American tort system. Unfortunately,
however, foreign manufacturers are not being held to the same
standards--injuring American consumers and businesses, and putting
American manufacturers at a competitive disadvantage. We must level the
playing field for all manufacturers and provide justice for American
consumers and businesses. The Foreign Manufacturers Legal
Accountability Act will allow us to make a major step in that
direction. It covers major product categories including consumer goods,
drugs, cosmetics, and chemicals, and it requires relevant agencies to
study workable approaches to ensure that foreign food producers also
are brought within the ambit of the American legal system.
Protecting Americans and holding foreign manufacturers accountable
when their products harm American consumers and businesses is a
bipartisan issue. Everyone agrees that we should do what we can to keep
Americans safe from defective products. So too, I think, do we all
agree that American companies should not be at a competitive
disadvantage to their foreign counterparts. The Foreign Manufacturers
Legal Accountability Act builds on those fundamental agreements. I am
grateful to my colleagues Senator Sessions and Senator Durbin for their
hard work on this bill and look forward to working with my colleagues
on both sides of the aisle to see it passed into law.
Mr. SESSIONS. Mr. President, Senator Whitehouse's legislation would
help American consumers bring civil claims against foreign
manufacturers who produce faulty goods and send them into the U.S.
market. Currently, it is nearly impossible for harmed American
consumers to bring a tort action against foreign manufacturers of
products that are flawed or even dangerous. Foreign manufacturers are
often difficult to identify or locate and even if found, the process of
seeking damages against them is extremely costly and burdensome.
Without the threat of litigation, foreign manufacturers have little to
no accountability to their American consumers, resulting in lower
quality and often defective products. Furthermore, American companies
who unknowingly buy shoddy products from foreign manufacturers and then
resell them to consumers become the sole defendant in tort cases filed
against them when foreign defendants cannot be located. According to
the Consumer Product Safety Commission, Chinese manufacturers were
responsible for 69 percent of all product recalls in 2007 and 53
percent in 2008. These numbers demonstrate the need for Congress to
take action to protect American consumers. Senator Whitehouse's
proposal is a positive step in the right direction.
I have witnessed the effects of this problem firsthand in my State.
Mr. Chuck Stefan from Alabama testified before the Subcommittee on
Administrative Oversight and the Courts, which Senator Whitehouse
chairs and I serve as ranking member, about the hardships his business
has faced in seeking damages against a foreign manufacturer. Mr. Stefan
is a Senior Executive Vice President at the The Mitchell Company, a
homebuilder in Alabama, Florida, and Mississippi. Forty-five of the
houses he built have been identified as containing a defective type of
Chinese sheetrock, which produces corrosive gases. These gases are not
merely unpleasant. They damage the copper found in piping and wiring
systems. When the problem was first discovered, The Mitchell Company
could not even determine who manufactured the drywall as it was only
stamped ``made in China.'' When the manufacturing parties were finally
identified as both Chinese and German-based, it was a substantial and
costly burden to serve them properly even though the companies had
extensive operations in the United States. Mr. Stefan emphasized the
fact that when foreign manufacturers cannot be held accountable, it
hurts his company's bottom line and harms U.S. consumers.

[[Page S9009]]

Stores such as Mr. Stefan's are becoming all too common and it is
incumbent upon Congress to work towards ameliorating the burdens that
U.S. businesses and consumers face when seeking damages against foreign
manufacturers. This issue is one that affects consumers nationwide. I
am grateful to Senator Whitehouse for taking the initiative to ensure
that Congress does its part in solving this problem.
______

By Ms. CANTWELL (for herself, Mrs. Murray, Ms. Murkowski, and Mr.
Begich):
S. 1609. A bill to authorize a single fisheries cooperative for the
Bering Sea Aleutian Islands longline catcher processor subsector, and
for other purposes; to the Committee on Commerce, Science, and
Transportation.
Ms. CANTWELL. Mr. President, today I introduce the Longline Catcher
Processor Subsector Single Cooperative Act.
In Washington State, our history is based on a rich maritime
tradition that contributes billions of dollars to the state's economy
each year. There are 3,000 vessels in Washington's fishing fleet that
employ 10,000 fishermen. Seafood processors employ another 3,800
Washingtonians. And fish wholesalers employ an additional 1,000 people.
For many communities along this nation's coastlines, the economy
literally ebbs and flows with the tide. It is important to remember
that the ocean resources these communities depend on are a public trust
and a resource to be both treasured and protected.
As guardians of the ocean and its plentiful resources, it is
necessary that we examine all issues of ``ownership'' with care,
transparency, and fairness. The issue of fishery cooperatives has
proved to be an issue that demands nothing less.
In July of 2008, I chaired a hearing in the Commerce Committee's
Subcommittee on Oceans, Atmosphere, Fisheries and Coast Guard,
examining the impact of fishery management regimes on fishing safety
and conservation. Following that hearing and numerous meetings with
stakeholders to discuss the policy, safety, economic, and environmental
implications of fishing cooperatives, I am here today to introduce the
Longline Catcher Processor Subsector Single Cooperative Act,
legislation that would allow for the formation of a single fishing
cooperative in the Pacific cod catcher processor fleet.
Instead of fishermen racing against each other and the elements to
catch as much as they can, this bill would allow the fishermen to bring
some sanity back to their livelihoods. Under this legislation, the
Pacific cod catcher processor fishery can allocate the catch among
their members, putting an end to the very dangerous ``race for fish.''
The cooperative would empower commercial fishermen with the framework
and incentives to police themselves while still preserving the crucial
regulatory and oversight responsibilities of the federal government and
the North Pacific Fishery Management Council.
By adopting this bill, we can improve fishing safety in the Pacific
cod catcher processor fishery by putting an end to the ``race for
fish.'' Doing so would lessen the fishery's environmental footprint,
and give these fishermen the financial certainty that has worked for
others across this Nation.
Fishing safety is a real concern that must be addressed at the
federal level. In 2006, the Coast Guard reported that in the decade
from 1994 to 2004, 1,398 fishing vessels were lost tragic--reminders of
what can go wrong at sea.
Most of these fishing-related fatalities occur in the North Pacific,
where the fishermen from my home state of Washington make their living.
The difficult waters equate to the highest casualty rates in the
nation, and highest rates of fatality and injury among fisherman.
But the North Pacific's rough waters are not the only factor these
fishermen have to cope with.
It is a tough business--tough for those who work the boats and those
who make the business-end decisions. It's a business that is driven by
incentives and dangerous conditions that work in tandem to place
countless numbers of fishermen at risk.
When things go wrong, it is usually because of failures at multiple
levels. You see, it's not always about vessels. Nor is it all about
inspections, safety equipment, or training. Fishing safety is closely
related to how fisheries are managed and the very foundation fishing
has come to be built upon: competition.
Without legislation such as this, the fisheries will continue to
operate on a foundation of destructive competition, or a ``race for
fish.'' And this race for fish is a very dangerous race.
According to Lieutenant Christopher Woodley, the former fishing
Vessel Safety Coordinator of the 13th U.S. Coast Guard District based
in Seattle:

This race encourages fishermen to operate in all weather
and sea conditions, to operate without rest, and encourages
risk-taking behaviors.

But we can change that.
By instituting a cooperative style of fishery management through this
legislation, we dramatically change the incentives. And by changing the
incentives to put a new premium on safety, we can change the way people
fish and hopefully prevent future tragedies at sea.
Safety is not the only goal of this legislation. This legislation
aims to make environmental and economic improvements to the process of
fishing.
By eliminating the ``race for fish,'' as I mentioned before, we
effectively slow the pace of fishing meaning commercial fishermen can
optimize onboard processing facilities. The result is an increase in
the product recovery rate per pound of fish caught, meaning they can
use more parts of the fish and make wiser and more efficient use of our
precious ocean resources. A slower pace also decreases bycatch and
promotes ownership of the fishery, which will facilitate a conservation
mindset in the fishermen.
We have once again shifted the incentive from reckless speed to doing
things slower, better, smarter, and more environmentally conscious.
Furthermore, the Longline Catcher Processor Subsector Fisheries
Cooperative Act means greater job stability for the Pacific cod freezer
longliner fleet's workers.
When fishermen no longer race, the fishing season lasts longer. This
means more stability and predictability for crew members, and
eliminates the boom and bust cycle that often prevails today.
I want to be clear that this bill is not yet a finished product. I
welcome comments, suggestions, and criticisms to help make this bill
good public policy for everyone involved.
As we discuss issues like safety of our fisherman and environmental
implications to our oceans, it's imperative that we commit to an open
and transparent process that shines the light of accountability.
Both in fisheries management, fishing safety, and those areas where
the two intersect, transparency must be the rule.
We owe it to our coastal communities, our fisherman, and the American
public collectively as stewards of one of our greatest public
resources--our oceans.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1609

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Longline Catcher Processor
Subsector Single Fishery Cooperative Act''.

SEC. 2. AUTHORITY TO APPROVE AND IMPLEMENT A SINGLE FISHERY
COOPERATIVE FOR THE LONGLINE CATCHER PROCESSOR
SUBSECTOR IN THE BSAI.

(a) In General.--Upon the request of eligible members of
the longline catcher processor subsector holding at least 80
percent of the licenses issued for that subsector, the
Secretary is authorized to approve a single fishery
cooperative for the longline catcher processor subsector in
the BSAI.
(b) Limitation.--A single fishery cooperative approved
under this section shall include a limitation prohibiting any
eligible member from harvesting a total of more than 20
percent of the Pacific cod available to be harvested in the
longline catcher processor subsector, the violation of which
is subject to the penalties, sanctions, and forfeitures under
section 308 of the Magnuson-Stevens Act (16 U.S.C. 1858),
except that such limitation shall not apply to harvest
amounts from quota assigned explicitly to a

[[Page S9010]]

CDQ group as part of a CDQ allocation to an entity
established by section 305(i) of the Magnuson-Stevens Act (16
U.S.C. 1855(i)).
(c) Contract Submission and Review.--The longline catcher
processor subsector shall submit to the Secretary--
(1) not later than November 1 of each year, a contract to
implement a single fishery cooperative approved under this
section for the following calendar year; and
(2) not later than 60 days prior to the commencement of
fishing under the single fishery cooperative, any interim
modifications to the contract submitted under paragraph (1).
(d) Department of Justice Review.--Not later than November
1 before the first year of fishing under a single fishery
cooperative approved under this section, the longline catcher
processor sector shall submit to the Secretary a copy of a
letter from a party to the contract under subsection (c)(1)
requesting a business review letter from the Attorney General
and any response to such request.
(e) Implementation.--The Secretary shall implement a single
fishery cooperative approved under this section not later
than 2 years after receiving a request under subsection (a).
(f) Status Quo Fishery.--If the longline catcher processor
subsector does not submit a contract to the Secretary under
subsection (c) then the longline catcher processor subsector
in the BSAI shall operate as a limited access fishery for the
following year subject to the license limitation program in
effect for the longline catcher processor subsector on the
date of enactment of this Act or any subsequent modifications
to the license limitation program recommended by the Council
and approved by the Secretary.

SEC. 3. HARVEST AND PROHIBITED SPECIES ALLOCATIONS TO A
SINGLE FISHERY COOPERATIVE FOR THE LONGLINE
CATCHER PROCESSOR SUBSECTOR IN THE BSAI.

A single fishery cooperative approved under section 2 may,
on an annual basis, collectively--
(1) harvest the total amount of BSAI Pacific cod total
allowable catch, less any amount allocated to the longline
catcher processor subsector non-cooperative limited access
fishery;
(2) utilize the total amount of BSAI Pacific cod prohibited
species catch allocation, less any amount allocated to a
longline catcher processor subsector non-cooperative limited
access fishery; and
(3) harvest any reallocation of Pacific cod to the longline
catcher processor subsector during a fishing year by the
Secretary.

SEC. 4. LONGLINE CATCHER PROCESSOR SUBSECTOR NON-COOPERATIVE
LIMITED ACCESS FISHERY.

(a) In General.--An eligible member that elects not to
participate in a single fishery cooperative approved under
section 2 shall operate in a non-cooperative limited access
fishery subject to the license limitation program in effect
for the longline catcher processor subsector on the date of
enactment of this Act or any subsequent modifications to the
license limitation program recommended by the Council and
approved by the Secretary.
(b) Harvest and Prohibited Species Allocations.--Eligible
members operating in a non-cooperative limited access fishery
under this section may collectively--
(1) harvest the percentage of BSAI Pacific cod total
allowable catch equal to the combined average percentage of
the BSAI Pacific cod harvest allocated to the longline
catcher processor sector and retained by the vessel or
vessels designated on the eligible members license limitation
program license or licenses for 2006, 2007, and 2008,
according to the catch accounting system data used to
establish total catch; and
(2) utilize the percentage of BSAI Pacific cod prohibited
species catch allocation equal to the percentage calculated
under paragraph (1).

SEC. 5. AUTHORITY OF THE NORTH PACIFIC FISHERY MANAGEMENT
COUNCIL.

(a) In General.--Nothing in this Act shall supersede the
authority of the Council to recommend for approval by the
Secretary such conservation and management measures, in
accordance with the Magnuson-Stevens Act (16 U.S.C. 1801 et
seq.) as it considers necessary to ensure that this Act does
not diminish the effectiveness of fishery management in the
BSAI or the Gulf of Alaska Pacific cod fishery.
(b) Limitations.--
(1) Notwithstanding the authority provided to the Council
under this section, the Council is prohibited from altering
or otherwise modifying--
(A) the methodology established under section 3 for
allocating the BSAI Pacific cod total allowable catch and
BSAI Pacific cod prohibited species catch allocation to a
single fishery cooperative approved under this Act; or
(B) the methodology established under section 4 of this Act
for allocating the BSAI Pacific cod total allowable catch and
BSAI Pacific cod prohibited species catch allocation to the
non-cooperative limited access fishery.
(2) No sooner than 7 years after approval of a single
fisheries cooperative under section 2 of this Act, the
Council may modify the harvest limitation established under
section 2(b) if such modification does not negatively impact
any eligible member of the longline catcher processor
subsector.
(c) Protections for the Gulf of Alaska Pacific Cod
Fishery.--The Council may recommend for approval by the
Secretary such harvest limitations of Pacific cod by the
longline catcher processor subsector in the Western Gulf of
Alaska and the Central Gulf of Alaska as may be necessary to
protect coastal communities and other Gulf of Alaska
participants from potential competitive advantages provided
to the longline catcher processor subsector by this Act.

SEC. 6. RELATIONSHIP TO THE MAGNUSON-STEVENS ACT.

(a) In General.--Consistent with section 301(a) of the
Magnuson-Stevens Act (16 U.S.C. 1851(a)), a single fishery
cooperative approved under section 2 of this Act is intended
to enhance conservation and sustainable fishery management,
reduce and minimize bycatch, promote social and economic
benefits, and improve the vessel safety of the longline
catcher processor subsector in the BSAI.
(b) Transition Rule.--A single fishery cooperative approved
under section 2 of this Act is deemed to meet the
requirements of section 303A(i) of the Magnuson-Stevens Act
(16 U.S.C. 1853a(i)) as if it had been approved by the
Secretary within 6 months after the date of enactment of the
Magnuson-Stevens Fishery Conservation and Management
Reauthorization Act of 2006, unless the Secretary makes a
determination, within 30 days after the date of enactment of
this Act, that application of section 303A(i) of the
Magnuson-Stevens Act to the cooperative approved under
section 2 of this Act would be inconsistent with the purposes
for which section 303A was added to the Magnuson-Stevens Act.
(c) Cost Recovery.--Consistent with section 304(d)(2) of
the Magnuson-Stevens Act (16 U.S.C. 1854(d)(2)), the
Secretary is authorized to recover reasonable costs to
administer a single fishery cooperative approved under
section 2 of this Act.

SEC. 7. COMMUNITY DEVELOPMENT QUOTA PROGRAM.

Nothing in this Act shall affect the western Alaska
community development program established by section 305(i)
of the Magnuson-Stevens Act (16 U.S.C. 1855(i)), including
the allocation of fishery resources in the directed Pacific
cod fishery.

SEC. 8. DEFINITIONS.

In this Act:
(1) BSAI.--The term ``BSAI'' has the meaning given that
term in section 219(a)(2) of the Department of Commerce and
Related Agencies Appropriations Act, 2005 (Public Law 108-
447; 118 Stat. 2886).
(2) BSAI pacific cod total allowable catch.--The term
``BSAI Pacific cod total allowable catch'' means the Pacific
cod total allowable catch for the directed longline catcher
processor subsector in the BSAI as established on an annual
basis by the Council and approved by the Secretary.
(3) BSAI pacific cod prohibited species catch allocation.--
The term ``BSAI Pacific cod prohibited species catch
allocation'' means the prohibited species catch allocation
for the directed longline catcher processor subsector in the
BSAI as established on an annual basis by the Council and
approved by the Secretary.
(4) Council.--The term ``Council'' means the North Pacific
Fishery Management Council established under section
302(a)(1)(G) of the Magnuson-Stevens Act (16 U.S.C.
1852(a)(1)(G)).
(5) Eligible member.--The term ``eligible member'' means a
holder of a license limitation program license, or licenses,
eligible to participate in the longline catcher processor
subsector.
(6) Gulf of Alaska.--The term ``Gulf of Alaska'' means that
portion of the Exclusive Economic Zone contained in
Statistical Areas 610, 620, and 630.
(7) Longline catcher processor subsector.--The term
``longline catcher processor subsector'' has the meaning
given that term in section 219(a)(6) of the Department of
Commerce and Related Agencies Appropriations Act, 2005
(Public Law 108-447; 118 Stat. 2886).
(8) Magnuson-Stevens Act.--The term ``Magnuson-Stevens
Act'' means the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1801 et seq.).
(9) Secretary.--The term ``Secretary'' means the Secretary
of Commerce.
______

By Ms. CANTWELL (for herself, Mr. Vitter, Ms. Landrieu, Mrs.
Murray, and Mr. Martinez):
S. 1610. A bill to amend the Internal Revenue Code of 1986 to repeal
the shipping investment withdrawal rules in section 955 and to provide
an incentive to reinvest foreign shipping earnings in the United
States; to the Committee on Finance.
Ms. CANTWELL. Mr. President, I am pleased to join with my colleagues
Senators Vitter, Landrieu, Murray, and Martinez and introduce the
American Shipping Reinvestment Act of 2009. This legislation will build
on work Congress started in 2004 to strengthen the U.S. merchant
marine, create needed jobs in U.S. ship building, and stimulate
economic activity in our maritime sector.
Since our Nation's founding, the maritime sector has been integral to
U.S. national security and economic

[[Page S9011]]

security. American companies own and operate both U.S. flag ships and a
significant number of vessels under international registries. The U.S.
flag fleets of these companies generally are built in the United States
and are manned with U.S. seafarers. These U.S. flag fleets support not
only the shipbuilding industrial base in this country and the pool of
qualified seafarers, but they also create the shipping assets that are
needed for military sealift in time of war or national emergency.
Most people understand commercial shipping and understand that we
maintain a fleet of ships for military purposes. What may not be as
well known is that the international ships of some American-owned
companies are part of what is called the effective U.S.-controlled
fleet, EUSC fleet. The EUSC is the fleet of merchant vessels registered
in certain foreign nations that are available for requisition, use, or
charter by the U.S. Government in the event of war or national
emergency.
For example, U.S. flag commercial vessels and their American crews
transported the majority of the cargo--more than 25 million measurement
tons of cargo--in support of Operations Enduring Freedom and Iraqi
Freedom during the period of 2002-2008.
What people also may not know is that the EUSC fleet has been in
decline for the past quarter century, largely because of U.S. tax
policy. Following enactment of certain 1986 tax law changes, there was
a precipitous decline in American-owned international shipping. To
remain competitive, many American-owned shipping companies either
became foreign companies or simply divested themselves of their foreign
assets.
A 2002 study commissioned by the Department of Defense and performed
by professors at the Massachusetts Institute of Technology found that
the EUSC fleet dropped by 38 percent in terms of numbers of ships and
nearly 55 percent in terms of deadweight tonnage between 1986 and 2000.
Perhaps more importantly, these declines have been largely experienced
in militarily-useful vessel types. For example, the results of a 2002
DOD study found that if the EUSC fleet continues its present decline,
DOD's ability to support U.S. military tanker requirements will
diminish over time.
Fortunately, Congress recognized this problem in 2004 and addressed
it by enacting the tonnage tax regime as part of the American Jobs
Creation Act. Our legislation today builds on that policy by correcting
an oversight in the 2004 act that has continued to stymie the ability
of U.S. shipbuilding companies to invest in new ships in the United
States.
We have very strong economic and national security reasons to support
U.S. owned shipowning companies and to maintain a vibrant maritime
industry in this country. We also have to continue to support needed
changes in our tax code so that we provide operators of U.S. flag
vessels in international trade the opportunity to be competitive with
their tax-advantaged foreign competitors.
Notwithstanding the significant competitive disadvantages between
1986 and 2004 for American companies operating international ships,
there continues to be several U.S. owned shipping companies with
foreign operations, and our legislation is directed as helping them
sustain and grow their U.S. flag fleets and to maintain their EUSC
fleets. This bill will help these companies make needed investment in
the U.S. economy, and create jobs in a way that also will enhance
national security.
Specifically, The American Shipping Reinvestment Act of 2009 would
repeal an outdated section of the Internal Revenue Code and allow U.S.
shipping companies with foreign income earned prior to 1986 to reinvest
it into the U.S. for the purpose of growing their U.S. flag operations.
Congress first included foreign shipping income in Subpart F in 1975,
which meant that all shipping income was taxable at the full U.S.
corporate tax rate no matter whether it was invested abroad or in the
United States. However, a temporary rule, applicable to foreign
shipping income earned from 1975 to 1986, continued to allow for
deferral in cases where this income was reinvested in qualifying
shipping activities. Section 955 of the Internal Revenue Code provided
that this income would be included in gross income, i.e., taxed,
immediately under Subpart F in the event of any net decrease in
qualified shipping investments.
The American Jobs Creation Act of 2004 restored for shipping income
the normal tax rule under which non-Subpart F income of foreign
subsidiaries is not taxed by the United States until it is repatriated,
generally as a dividend. In restoring the potential for deferral for
certain shipping income, Congress in 2004 returned the treatment of
shipping income to where it was prior to 1975.
Unfortunately, Congress did not address the rules under IRC Section
955 that apply to income earned between 1975 and 1986, thus creating a
situation that this income is permanently stranded offshore. Our bill
would repeal IRC Section 955 and will allow these stranded assets to be
reinvested in the United States under the favorable tax terms that were
in effect for other companies and industries in 2004. Specifically, the
legislation provides a one-time opportunity for American-owned shipping
companies to bring foreign source income back into the United States at
a discounted tax rate for the purpose of expanding and growing our
domestic maritime industry. Without the commonsense change in our
legislation, these old, stranded assets will never return to the United
States and never be subject to U.S. taxation.
The bill is guaranteed to create jobs for American workers with the
funds being brought back into the U.S. economy--on the ships, in the
shipyards building the ships, and in supporting businesses. The bill
contains a provision that would recapture any tax benefits if a
shipping company reduces its full-time U.S. employment levels.
This bill also would enhance U.S. national security interests by
supporting shipyards that are vital to our defense industrial base, by
enabling new U.S. flag tanker capacity to transport our Nation's energy
products, and by providing DOD with critical assets--manpower and
ships--necessary to help sustain military sealift.
The bill is strongly supported by maritime labor, shipyards, and ship
owners and operators and can provide a boost to the U.S. maritime
industry at a time when the U.S. is struggling to find its economic
footing. The jobs created by this legislation are well-paying, long-
term jobs in a crucial sector of our Nation's economy. I urge my
colleagues to join me and my other original cosponsors in supporting
this bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1610

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``American Shipping
Reinvestment Act of 2009''.

SEC. 2. REPEAL OF QUALIFIED SHIPPING INVESTMENT WITHDRAWAL
RULES.

(a) In General.--Section 955 of the Internal Revenue Code
of 1986 (relating to withdrawal of previously excluded
subpart F income from qualified investment) is hereby
repealed.
(b) Conforming Amendments.--
(1) Section 951(a)(1)(A) of the Internal Revenue Code of
1986 is amended by adding ``and'' at the end of clause (i)
and by striking clause (iii).
(2) Section 951(a)(1)(A)(ii) is amended by striking ``,
and'' at the end and inserting ``, except that in applying
this clause amounts invested in less developed country
corporations described in section 955(c)(2) (as so in effect)
shall not be treated as investments in less developed
countries.''.
(3) Section 951(a)(3) of such Code (relating to the
limitation on pro rata share of previously excluded subpart F
income withdrawn from investment) is hereby repealed.
(4) Section 964(b) of such Code is amended by striking ``,
955,''.
(5) The table of sections for subpart F of part III of
subchapter N of chapter 1 of such Code is amended by striking
the item relating to section 955.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years of controlled foreign
corporations ending on or after the date of the enactment of
this Act, and to taxable years of United States shareholders
in which or with which such taxable years of controlled
foreign corporations end.

[[Page S9012]]

SEC. 3. ONE-TIME TEMPORARY DIVIDENDS RECEIVED DEDUCTION FOR
PREVIOUSLY UNTAXED FOREIGN BASE COMPANY
SHIPPING INCOME.

(a) In General.--In the case of a corporation which is a
United States shareholder and for which an election under
this section is made for the taxable year, for purposes of
the Internal Revenue Code of 1986, there shall be allowed as
a deduction in computing taxable income under section 63 of
such Code an amount equal to 85 percent of the cash
distributions which are received during such taxable year by
such shareholder from controlled foreign corporations to the
extent that the distributions are attributable to income--
(1) which was derived by the controlled foreign corporation
in taxable years beginning before January 1, 2005, and
(2) which would, without regard to the year earned, be
described in section 954(f) (as in effect before the
enactment of the American Jobs Creation Act of 2004).
(b) Indirect Dividends.--A rule similar to the rule of
section 965(a)(2) of the Internal Revenue Code of 1986 shall
apply, determined by treating cash distributions which are so
attributable as cash dividends.
(c) Limitation.--The amount of dividends taken into account
under this section shall not exceed the amount permitted to
be taken into account under paragraphs (1), (3) (determined
by substituting ``December 31, 2008'' for ``October 3,
2004''), and (4) of section 965(b) of the Internal Revenue
Code of 1986, determined as if such paragraphs applied to
this section.
(d) Taxpayer Election and Designation.--For purposes of
subsection (a), a taxpayer may, on its return for the taxable
year to which this section applies--
(1) elect to apply paragraph (3) of section 959(c) of the
Internal Revenue Code of 1986 before paragraphs (1) and (2)
thereof, and
(2) designate the extent, if any, to which a cash
distribution reduces a controlled foreign corporation's
earnings and profits attributable to--
(A) foreign base company shipping income (determined under
section 954(f) of the Internal Revenue Code of 1986 as in
effect before the enactment of the American Jobs Creation Act
of 2004), or
(B) other earnings and profits.
(e) Election.--
(1) In general.--The taxpayer may elect to apply this
section to--
(A) the taxpayer's last taxable year which begins before
the date of the enactment of this Act, or
(B) the taxpayer's first taxable year which begins during
the 1-year period beginning on such date.
(2) Timing of election and one-time election.--Such
election may be made for a taxable year--
(A) only if made on or before the due date (including
extensions) for filing the return of tax for such taxable
year, and
(B) only if no election has been made under this section or
section 965 of the Internal Revenue Code of 1986 with respect
to the same distribution for any other taxable year of the
taxpayer.
(f) Reduction in Benefits for Failure To Maintain
Employment Levels.--
(1) In general.--If, during the period consisting of the
calendar month in which the taxpayer first receives a
distribution described in subsection (a) and the succeeding
23 calendar months, the taxpayer does not maintain an average
employment level at least equal to the taxpayer's prior
average employment, an additional amount equal to $25,000
multiplied by the number of employees by which the taxpayer's
average employment level during such period falls below the
prior average employment (but not exceeding the aggregate
amount allowed as a deduction pursuant to subsection (a))
shall be taken into account as income by the taxpayer during
the taxable year that includes the final day of such period.
(2) Prior average employment.--For purposes of this
paragraph, the taxpayer's ``prior average employment'' shall
be the average number of full time equivalent employees of
the taxpayer during the period consisting of the 24 calendar
months immediately preceding the calendar month in which the
taxpayer first receives a distribution described in
subsection (a).
(3) Aggregation rules.--In determining the taxpayer's
average employment level and prior average employment, all
domestic members of a controlled group (as defined in section
264(e)(5)(B) of the Internal Revenue Code of 1986) shall be
treated as a single taxpayer.
(g) Special Rules.--Rules similar to the rules of
subsections (d) and (e) and paragraphs (3), (4), and (5) of
subsection (c) of section 965 of the Internal Revenue Code of
1986 shall apply for purposes of this section.
(h) Effective Date.--This section shall apply to taxable
years ending on or after the date of the enactment of this
Act.
______

By Mr. GREGG (for himself, Mr. Kennedy, Ms. Collins, Mr. Dodd,
Mr. Martinez, Mr. Harkin, Ms. Snowe, and Ms. Mikulski):
S. 1611. A bill to provide collective bargaining rights for public
safety officers employed by States or their political subdivisions; to
the Committee on Health, Education, Labor, and Pensions.
Mr. KENNEDY. Mr. President, this morning, 660,000 police officers and
300,000 firefighters across the country will get up and go to work to
protect our homes, our families, and our communities. They will go into
burning buildings, patrol our streets, and put their lives on the line,
because they believe in the importance of what they are doing.
These dedicated workers are in the trenches every day making life-or-
death decisions, and their experiences give them tremendous knowledge
about how to protect our country. We need to listen to their
recommendations and consider their advice. Unfortunately, however, all
too often, our first responders have no voice in the decisions that
affect their lives and their livelihoods. Their input is disregarded
because they don't have the same rights as other workers.
Workers in the private sector who want a voice on the job have the
right to form and join a union. They can fight for a safer, fairer
workplace. But 300,000 police and 70,000 firefighters live in States
in which their State governments deny them the fundamental right to a
voice on the job. Even if these workers overwhelmingly agree that they
want to form and join a union, their State government says they can't
have one.

That is not fair. We are asking these workers to do so much for their
communities--the least we can do in return is give them a voice at the
table in the life-and-death discussions and decisions that affect their
families and their futures. They deserve the opportunity to choose for
themselves whether they want the advantages that unions bring.
That is why it is an honor to join Senator Gregg and Senator Dodd in
sponsoring the Public Safety Employer-Employee Cooperation Act to
guarantee that our first responders will have a path they can use to
decide if they want a union. If the workers don't want a union, they
don't have to follow that path. But the State has to make it available
and let the workers choose.
It won't be difficult for States to create this path. All they have
to do is provide four basic rights: the right to form and join a union;
the right to sit down at the table and talk; the right to sign a
contract if both parties agree; and the right to go to a neutral third
party when there are disputes.
Apart from these four rights, all the other details of the collective
bargaining system are left up to the States. They have the flexibility
to decide whether to exempt small communities. They decide how workers
can select a union. They can also decide how workers and employers
should resolve disputes--through arbitration, mediation, factfinding,
or some other mechanism.
This bipartisan bill has been carefully drafted to preserve a balance
between the interests of State and local governments and the rights of
the workers they employ. It has been the product of years of careful
negotiations, including a hearing and two markups in the HELP
Committee. It was passed by the House of Representatives in the last
Congress with an overwhelming bipartisan margin, including 98
Republican votes. No it is time to get it across the finish line and
give our dedicated first responders the fair treatment they deserve. It
is a matter of fundamental fairness and an urgent matter of public
safety.
I commend Senator Gregg for his leadership on this very important
issue, and I urge my colleagues to show these heroes the respect they
deserve by supporting the Public Safety Employer-Employee Cooperation
Act.
______

By Mr. BENNET:
S. 1613. A bill to reduce the Federal budget deficit in a responsible
manner; to the Committee on the Budget.
Mr. BENNET. Mr. President, I cannot tell you how much I appreciated
your remarks--I was sitting in the chair--and those of Chairman Dodd as
well. The hour is late. The idea that you would be here at that hour to
talk about something as important as health care is appreciated, I
know, by the people in your State, but also by the people in my State
as well. So I say thank you for that.
I also want to talk about health care. I want to talk about health
care in the context of fiscal discipline in this country. As you know,
our Nation's annual deficits are staggering, and our

[[Page S9013]]

national debt is absolutely unsustainable. For the future of our
country and for our children's sake, as we recover from this
devastating blow to our economy, we have to stand together and begin to
start the difficult, but essential, work of putting our fiscal house in
order.
Health care reform must help solve this Nation's fiscal problems, not
make them worse. To accomplish this, effective reform must bend the
cost curve in health care spending both in the private and public
sectors.
In part because of years of neglect and inaction, this Congress has
reached a defining moment of reckoning. Rising health care costs,
especially Medicare costs, are now the largest driver of our deficits.
Our Nation's health care spending, as you were just saying, is 17
percent of our Nation's gross domestic product and is expected to grow
to over 20 percent of GDP in 10 years, on its way, as you said, to 35
percent.
Health care alone--just health care--will soon account for one-fifth
of our economy. This represents a greater share of the GDP than our
manufacturing, agricultural, forestry, mining, and construction
industries combined.
As we emerge from this terrible recession, the worst since the Great
Depression, we cannot commit one-fifth of our economy to health care
and expect to compete effectively in the global marketplace.
Adding to the urgency of the problem, this recession has made
rocketing health care costs even more painful for families and
businesses in the last 15 months. Both large businesses and small
businesses have cut some 5.1 million jobs, and 2.4 million of these
newly unemployed workers have lost the health coverage their jobs once
provided. Now the same people must try to find insurance in the
individual market where they can be rejected by private insurance
companies for preexisting conditions such as asthma, diabetes, or even
cancer.
Health care costs are strangling opportunities for working families
and small businesses all over my State and the country. As health care
costs rise, families are forced to make choices no one should have to
make between insuring their families or their employees and sending
their kids to college, taking lower paying jobs with less
responsibility just for the medical benefits and defaulting on their
mortgage payments to pay for their medical bills.
Every one of these examples springs from the experiences of people in
my State. And it is no mystery why people are having to make these
terrible choices. Middle-class wages are not even close to keeping up
with these rising insurance costs. While median family income in this
country fell by $300 during the last decade--staggering, by the way;
over a decade in real dollars, median family income in the United
States actually declined by $300--health care costs increased over the
same period by 80 percent.
The cost of health insurance is eating into family budgets faster and
faster. Over the past decades, premiums for Colorado families, as this
chart shows us, have more than doubled, growing four times faster than
wage increases. The cost of premiums for a Colorado family is over
$13,000 today. If we do nothing, by 2016, Colorado families will be
spending over $25,000 on their premiums, a 90-percent increase. We have
come out of a period with an 85-percent increase, and if we do nothing,
we are going to end up in a period with a 90-percent increase, with no
real increase in wages.
Left unaddressed, this imbalance, which is the creation of our
catastrophically inefficient health care system, will destroy the
middle class in this country. If we do nothing, if we continue on with
the status quo, by 2016, just 7 years from now--and I believe these
numbers are very similar to the ones you quoted for Rhode Island--by
2016, 40 cents of every dollar a typical Colorado family earns will be
eaten up by health care costs, leaving just 60 cents for everything
else.
Think about it. That is almost half an average family's income. Money
spent not to educate their children, not to feed them or house them,
but just to cover the cost of the family health care plan. And that is
just paying for coverage. Never mind if you actually get sick.
In 2007, 62 percent of the personal bankruptcies in this country were
due to medical costs. Traditionally, most people's employers help pay
for cost increases. That has been the case for over many years. But I
heard from employers all over Colorado having to make tough choices--
cutting back on benefits and laying off more costs to their employees.
In the coming years, copays for Coloradans will go up double digits.
More Coloradans are being forced into health plans with higher
deductibles, and more employers are getting out of the business of
providing health insurance for their employees altogether.
Mr. President, we won't be able to completely flatten the health care
cost curve in the short run, and we should be careful not to
overpromise, but we have to make the rising cost of health care
something our economy can plausibly absorb.
Part of the solution is reducing waste and curbing overpayments to
insurance companies, and part of the answer is encouraging patients to
seek preventive care. Small businesses may not see health costs go down
immediately, but we sure can slow their rise. And we have to work hard
to make sure they do not rise this quickly. Reforming our health care
system could save over 100,000 small business jobs in the coming years
that would otherwise be lost if we do nothing.
I agree with bipartisan voices saying that our first health care goal
has to be to drive down costs, and we must start with Medicare. As I
travel throughout Colorado, I have met countless physicians, nurses,
and hospital workers who tell me about the perverse incentives in
Medicare. Instead of being paid to spend time with patients and produce
better quality care, doctors and nurses are paid for the number of
patients they see in the shortest amount of time and the number of
procedures they perform. This is no way to produce patient-centered
care, and it is no way to reduce cost.
Medicare doesn't just influence, as you know, the care of the elderly
and disabled. As the largest health care program in the United States,
Medicare influences every level of health care. Private insurance and
employer-based health care look to Medicare as they make decisions on
what to pay doctors, nurses, and hospitals. Owing to the perverse
incentives in Medicare, however, since 1970--since 1970--every year for
almost 40 years, year-in and year-out, Medicare spending per person has
risen by over 8 percent each year, and private insurance spending per
person has risen by over 9 percent each year.
If we expect reform to begin to gain any traction, we must drive cost
down at the Federal level first. We can start by paying doctors and
nurses to actually do what they are supposed to do and what they want
to do--be focused on patients. We have to reform the system so that we
are paying for quality and not volume. We must improve care, produce
savings, and slow down cost growth by bundling payments, paying for
performance and outcomes, and providing better coordinated care for
patients and providers.
The burden is on us to meet the public expectation that we will drive
down costs in the health care system and make it more efficient, that
we will make the health care marketplace more competitive, and that we
will provide affordable, stable health care coverage to the American
people that can't be taken away because they lose a job, have a
preexisting condition, or have reached some arbitrary cap.
Controlling health care costs would help our fiscal situation a great
deal, and that is one of the fundamental reasons health care reform is
needed. But this alone will not be enough to fill the deepening hole of
national debt that threatens America's prosperity. The fiscal decisions
we make today matter so much because they will dictate the well-being
and range of choices of the generations that follow us.
Sometimes, with the daily hail of press clippings, these issues may
seem overly complex, but I like to use a pretty simple analogy. The way
we run our government is not different than if you or I were to buy a
house--probably a bigger one than we reasonably could afford--and then
we tell the bank to please send the mortgage documents to our kids.
Imagine how that burden--paying for mom and dad's house--would
constrain our children's choices. What dreams would they have to defer

[[Page S9014]]

because their first obligation was a debt they didn't even incur.
My three daughters, ages 9, 8 and 5, have never had an economics
class, but I can tell you that as much as they love their mom and dad,
if asked, they would never do that deal--especially my 5-year-old,
Anne. Whether we are taking her blanket away or telling her to stop
sucking her thumb or putting a mountain of debt on her, she knows a raw
deal when she sees one.
We in Congress owe the next generation much more than this, as the
chairman, Senator Dodd, was saying. We ought to be able to build on our
roles as parents and community leaders to respect our children, come
together, and plan America's way back to fiscal health. The longer we
wait, the more difficult the choices become. If we wait 10 years, we
will face a massive gap between our spending and the revenue the
government collects. If we wait 10 years to take action, we would have
to increase individual income taxes by almost 90 percent to keep pace.
That is an unacceptable outcome for Colorado's families. If you don't
like tax increases, fine, then we would have to slash Federal spending
by almost one-half. That would mean massive cuts to Medicare, our
Nation's defense, and other critical initiatives that keep our country
strong. No one wants to be put in a position to make those kinds of
choices either. These outcomes are unacceptable, yet we can see them
coming. That is why inaction is so unacceptable on health care and also
on returning to policies of fiscal discipline. It is long past time to
put in place the policies that will reverse this condition. And as with
any deep hole, the first order of business is to stop digging.
The good news is that we have a tried-and-true way to stop making
matters worse. In the 1990s, we had Pay-Go, which effectively forced
the shovel from Congress's hands and made Congress stop digging. Pay-Go
means that before Congress can create new spending on permanent
programs, it needs to figure out how to pay for that new spending, just
as every family in the States we represent.
Pay-Go helped turn 1980s deficits into 1990s surpluses, and we
actually began to pay down our debt. Pay-Go is commonsense budgeting.
It is not any different, as I just said, than what a family does when
its spending gets out of hand. When that bad credit card statements
comes in the mail, a parent knows it is time to sit down at the kitchen
table and plan how to stop the spending. Pay-Go is what Congress and
President Clinton did to respond to Washington's bad credit card bill.
Pay-Go was smart lawmaking because it imposed a culture of fiscal
responsibility--and I would say discipline--on the Congress. Yet, for
some reason, early in this decade a new administration let Pay-Go
expire. That played a part in how these surpluses all of a sudden
turned back into big annual deficits. This is how America incurred
years of new debt.
The frustrating reality is that we are not getting enough out of
borrowing all this money in the end--fighting an expensive war with
tremendous unseen long-term costs to follow, ignoring the staggering
costs of our health care system and entitlements, paying huge interest
costs on our debt, in large part to foreign countries. These are hardly
worthy uses of deficit spending.
In 2003, the Bush administration and Congress passed a new
entitlement program called Medicare Part D. It is very popular, but we
never paid a dime for it. They also chose two tax cuts for people who
needed them least over fiscal discipline. They ignored skyrocketing
mandatory spending. They created a brandnew bureaucracy and just
saddled all of this heavy new weight on America's national debt.
In short, Washington was unwilling to ask the American people to pay
for any of its investments--they put it on our children's shoulders
instead.
And the tragedy of this incredible mismanagement is, it didn't work.
Our economy plunged into its deepest hole since the Great Depression.
Fortunately, earlier this year, the House rightly passed new
statutory Pay-Go. The Senate should pass Pay-Go too. That's why today,
Senator McCaskill and I introduced Pay-Go. We believe that Pay-Go is
one important way to make sure that our fiscal situation doesn't get
any worse. Pay-Go is not a magic bullet, but it is part of the answer
to our fiscal woes.
Once Pay-Go is in place though, we cannot stop there. Pay-Go will
help us stop digging. But we also need to budget for the future, stop
running large deficits and fill this fiscal hole completely. I am
optimistic that this can be done, and it will take bipartisan
commitment and discipline.
One place to start is with the growth of our yearly spending. Like
Pay-Go, the yearly spending of Congress has also been done before, and
it has worked.
That is why today I am introducing separate legislation, the Deficit
Reduction Act of 2009, that would create yearly limits on discretionary
spending. By pairing these discretionary spending limits with Pay-Go,
we can start to make a substantial change in how Washington does
business.
But it is not enough just to limit new spending across the board.
Much of the reason that we are running such large deficits, is that we
have made long-term spending commitments, called mandatory spending. To
truly reverse the totality of our disastrous fiscal course, we must be
willing to address rapidly expanding mandatory commitments too.
The best way--you know, it is funny, when you use the word
``mandatory.'' It is the word that should be used to express what this
debt burden is we are putting on our kids. It will be mandatory that
they pay that back before they make decisions about how to educate
their own children; before they make decisions about how to provide
individual health care in this country or make other kinds of
investments all across the United States, in transportation or in new
economies. What will be mandatory as we fall farther and farther behind
in this global economy--what will be mandatory for them is to pay the
bill left behind by their mothers and fathers.
The best way to get Congress to take a hard look at mandatory
spending, is to place a flexible cap on our annual deficits. That's the
other main component of what my new legislation would do. The cap in
the Deficit Reduction Act is realistic--it would impose limits that are
consistent with what economists believe we can sustain. This deficit
limit is flexible--providing an exception when we are in a recession.
Here is how the deficit limit would work. Whatever the gross domestic
product is in a given year, Congress must limit the deficit to 3
percent of the GDP or less. Economists tell us that this 3 percent
number is sustainable over time, and that is a reasonably healthy
ceiling. Now of course we should push to do better than running a
deficit that is 3 percent of GDP. But this is a good starting point at
setting and adhering to a budget. We would all clap if the deficits of
today--12 or 13 percent of GDP--were 3 percent, and no one would clap
louder than our children.
Under my legislation, if Congress failed to meet these deficit
control requirements, the government would have to impose an across the
board cut called a sequestration. Certain programs such as Social
Security and veterans programs would not be subject to cuts. Yet most
of the government's functions would be. The goal, of course, is to
avoid this drastic measure by forcing Congress to plan ahead, and
forcing Congress to pay attention to the deficit when it makes its
spending choices.
Deficit limits make perfect sense during most years. But, as we have
learned during this recession, an infusion of public funds can jolt a
frozen economy and help turn that economy around. Running temporary
deficits can kickstart a stagnant economy. But this only works if
during healthy economic times, you also reduce government spending. The
deficit limits I am proposing in this legislation would put Congress on
a gradual track back to solid fiscal footing.
We should immediately enact budget reform proposals like Pay-Go
discretionary spending limits and deficit limits. The CBO has concluded
that after 2019, the rate at which we accumulate debt will continue to
accelerate due to the aging of the population and increased health care
costs. As angry as we all are with the excessive leverage in the
private marketplace over the past decade that contributed to the market
crashing, it is also obvious that Washington set a very bad example.

[[Page S9015]]

Let's put an end to these unsound fiscal practices. Let's not put our
kids in the kind of situation we have inherited. Let's not make matters
even worse, and the policy decisions regarding the national debt even
harder for our kids.
What we need now is leadership and cooperation; not more shifting
costs to our kids. The Congressional Budget Office estimates that if we
remain on our current course, the total debt owed by the public will
stand at over $17 trillion by the end of fiscal year 2019--only 10
years from today.
The point is that linked with our growing debt are the dreams and the
plans of millions of American families. There is nothing fun about
tightening our belt and cutting popular programs. I don't like it any
more than anyone else who is here. Yet there are plenty of encouraging
signs that this Congress and this President can stand together and do
exactly that. Recently, just a couple of weeks ago, the Senate stood
with the President for fiscal discipline and slashed nearly $2 billion
from an outdated weapons system. That is a good start that I gladly
supported. But so much more is left to do.
Coloradans already know we are in a bad way. People in my State are
well aware that the excesses in recent years are catching up to us, and
they know that Congress and the President have to make hard fiscal
choices, reform health care before it eats up our entire budget, and
pay for our reform efforts.
This challenging outlook may be just what it takes to bring both
political parties to the negotiating table. Paired with Pay-Go, it is
my hope that this new legislation can be a real starting point for
meaningful fiscal negotiations. It is time we come up with an
intelligent framework of fiscal management, that keeps Congress
thinking ahead each time it makes a decision, and each time it puts
together an annual budget, and each time it is faced with America's
long-term fiscal trajectory.
Washington's fiscal mess was created over many years, and we won't
solve the problem overnight. But this bill would give Congress and the
President a guidepost to make the decisions necessary to get our budget
under control. It would set a strong and binding standard for us to act
responsibly.
We must start with what unites us. When I worry about what type of
country we will leave my daughters and all of our young people, I know
that others who vote differently than I do have the same worries. We
owe more to our kids than to leave them a huge national debt and no
plan to get out of it.
If we don't start making difficult decisions soon, we will be
limiting our children's ability to make our country a better place,
before they even get started. We will be limiting their ability to
invest in education, life-saving scientific research, or new
technologies that form the foundation of economic growth. We will be
limiting their ability to defend the Nation during future times of war
that we can't even think of today. And we will be limiting their
chances of having a quality of life even better than what our parents
and grandparents left to us.
If we fail to confront the tough issues so we can control the cost of
health care, we will have squandered this narrow window of opportunity.
If we fail to step up to the plate and pass a fiscally sound health
care reform bill, this Congress will be remembered for years to come as
having let down the country. If we fail--not just to stop digging this
deep fiscal hole, but to put a process in place for climbing back up to
solid fiscal footing--we will have failed to perform as the stewards of
our children's dreams.
Let's stand together, with our President and with American families.
Let's get health care reform done responsibly, let's take action to
reduce the deficit and debt, and let's put this economy back on track.
______

By Ms. SNOWE:
S. 1615. A bill to amend the Small Business Act and the Small
Business Investment Act of 1958 to stop the small business credit
crunch, and for other purposes; to the Committee on Small Business and
Entrepreneurship.
Ms. SNOWE. Mr. President, the state of small business lending in the
United States is still dire, as was shown during CIT's recent close
brush with bankruptcy. One area of lending which has historically
helped small firms has been Small Business Administration backed
lending, but while the SBA traditionally guarantees $20 billion in
loans annually, before the passage of the stimulus, new lending this
year was on track to fall below $10 billion. In fact, in the first
quarter of fiscal year 2009, the number of SBA 7(a) loans dropped by 57
percent when compared with the first quarter of fiscal year 2008.
Last year, to help address the frozen credit market and the drop in
SBA lending I introduced the 10 Steps for a Main Street Economic
Recovery Act. Many of the provisions in 10 Steps were included in the
American Recovery and Reinvestment Act and several have already been
credited with helping to increase SBA volume. These include fee
reductions for 7(a) and 504 loans and allowing for the refinancing of
504 loans. To ensure that SBA lending remains a critical source of
capital for small businesses, we must continue to bolster this program
and help it to evolve and grow.
In order to maintain this momentum we must take steps to further
reform and improve SBA-backed lending. The legislation I am
introducing, the Next Step, builds on the 10 Steps for a Main Street
Economic Recovery Act and makes the SBA's lending programs more vital
and responsive to the needs of today's small business borrower.
The Next Step includes provisions that would allow borrowers to take
out larger 7(a) and 504 loans up to $5 million. This bill would help
satisfy the capital needs of small businesses, looking to start or
expand their operations. The bill would also allow for the refinancing
of 7(a) loans. Finally, SBA borrowers must have the ability to shop and
compare SBA loan rates online. My legislation would establish an online
platform through the SBA that would allow borrowers to compare SBA loan
rates and make an informed choice, giving borrowers a chance to save
time and money.
These targeted reforms included in the Next Step for Main Street
Credit Availability Act of 2009 will help bring SBA lending into the
future, make the SBA's lending programs competitive with traditional
small businesses' borrowing, and help to increase SBA lending volume.
I urge my colleagues to support this critical legislation to help
improve small business lending.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1615

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Next Step for Main Street
Credit Availability Act of 2009''.

SEC. 2. MAXIMUM AMOUNTS FOR 7(A) LOANS.

Section 7(a)(3)(A) of the Small Business Act (15 U.S.C.
636(a)(3)(A)) is amended by striking ``$1,500,000 (or if the
gross loan amount would exceed $2,000,000'' and inserting
``$4,000,000 (or if the gross loan amount would exceed
$5,000,000''.

SEC. 3. REFINANCING EXISTING 7(A) LOANS.

(a) In General.--Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended by adding at the end the following:
``(34) Refinancing existing loans.--A borrower that has
received a loan under this subsection may refinance the
balance of the loan by applying for a loan from the lender
that made the original loan or with another lender.''.
(b) Technical Amendment.--Section 7(a) of the Small
Business Act (15 U.S.C. 636(a)) is amended by striking ``(32)
Increased'' and inserting ``(33) Increased''.

SEC. 4. MAXIMUM LOAN AMOUNTS UNDER 504 PROGRAM.

Section 502(2)(A) of the Small Business Investment Act of
1958 (15 U.S.C. 696(2)(A)) is amended--
(1) in clause (i), by striking ``$1,500,000'' and inserting
``$4,000,000'';
(2) in clause (ii), by striking ``$2,000,000'' and
inserting ``$5,000,000''; and
(3) in clause (iii), by striking ``$4,000,000'' and
inserting ``$5,500,000''.

SEC. 5. MAXIMUM LOAN LIMITS UNDER MICROLOAN PROGRAM.

Section 7(m) of the Small Business Act (15 U.S.C. 636(m))
is amended--
(1) in paragraph (1)(B)(iii), by striking ``$35,000'' and
inserting ``$50,000'';
(2) in paragraph (3)(E), by striking ``$35,000'' each place
it appears and inserting ``$50,000''; and
(3) in paragraph (11)(B), by striking ``$35,000'' and
inserting ``$50,000''.

[[Page S9016]]

SEC. 6. ONLINE LENDING PLATFORM.

It is the sense of the Congress that the Administrator of
the Small Business Administration should establish a website
that--
(1) lists each lender that makes loans guaranteed by the
Small Business Administration and provides information about
the loan rate of each such lender; and
(2) allows prospective borrowers--
(A) to compare rates on loans guaranteed by the Small
Business Administration; and
(B) to apply online for loans guaranteed by the Small
Business Administration.
______

By Ms. CANTWELL:
S. 1616. A bill to authorize assistance to small- and medium-sized
businesses to promote exports to the People's Republic of China, and
for other purposes; to the Committee on Banking, Housing, and Urban
Affairs.
Ms. CANTWELL. Mr. President, I rise today to introduce the U.S.-China
Market Engagement and Export Promotion Act of 2009. For many small- and
medium-sized businesses across this country, some of which are in my
home State of Washington, getting access to the Chinese market proves
difficult at best. However, to establish a foothold in the ever
expanding Chinese market can prove pivotal in achieving financial
success. China is a tremendous market for U.S. goods and services.
According to the U.S.-China Business Council, despite the global
economic downturn, 85 percent of congressional districts increased
their exports to China in 2008. In addition, exports to China in almost
every congressional district grew more than exports to anywhere else
from 2000 to 2008.
In 2008, U.S. total exports to China equaled $71.5 billion. During
the same time, however, our imports from China equaled $337.8 billion.
That means our trading balance with China in 2008 was a $266.3 billion
deficit. This bill would help States establish export promotion offices
in China and create a new China Market Advocate Program at U.S. Export
Assistance Centers around the Nation. The bill also provides assistance
to small businesses for China trade missions and authorizes grants for
Chinese business education programs.
I support this bill because of the enormous role that small
businesses play in our economy. Small- and medium-sized businesses are
a great potential engine of growth. Between 2004 and 2005, small
businesses created 78.9 percent of the Nation's net new jobs, and with
expanded export opportunities that number will be able to increase in
the near future. Considering the huge impact that small- and medium-
sized businesses have on our economy, I urge all my colleagues to
support this bill and give the business owners the assistance they need
to succeed in the Chinese export market.
The U.S.-China Market Engagement and Promotion Act will build the
infrastructure necessary to connect American small- and medium-sized
businesses with export opportunities in China.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1616

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``United
States-China Market Engagement and Export Promotion Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title and table of contents.

TITLE I--PROGRAMS OF THE DEPARTMENT OF COMMERCE

Sec. 101. Grants to States to establish and operate offices to promote
exports to China.
Sec. 102. Program to establish China market advocate positions in
United States Export Assistance Centers.
Sec. 103. Assistance to small- and medium-sized businesses for trade
missions to China.
Sec. 104. Plan to consolidate fees for Gold Key matching services in
China.

TITLE II--PROGRAMS OF THE SMALL BUSINESS ADMINISTRATION

Sec. 201. Trade outreach at the Office of International Trade of the
Small Business Administration.
Sec. 202. Grants for Chinese business education programs.

TITLE I--PROGRAMS OF THE DEPARTMENT OF COMMERCE

SEC. 101. GRANTS TO STATES TO ESTABLISH AND OPERATE OFFICES
TO PROMOTE EXPORTS TO CHINA.

(a) Grants.--The Secretary of Commerce, acting through the
Assistant Secretary for Trade Promotion and Director of the
United States and Foreign Commercial Service, shall provide
grants to States to establish and operate State offices in
the People's Republic of China to provide assistance to
United States exporters for the promotion of exports to
China, with a particular focus on establishment of offices in
locations in addition to Beijing and Shanghai.
(b) Amount.--The amount of a grant under subsection (a)
shall not exceed 33 percent of the total costs to establish
and operate a State office described in such subsection.
(c) Regulations.--Not later than 270 days after the date of
the enactment of this Act, the Secretary of Commerce shall
promulgate such regulations as may be necessary to carry out
this section.
(d) Definitions.--In this section:
(1) State.--The term ``State'' has the meaning given the
term in section 2301(j)(5) of the Export Enhancement Act of
1988 (15 U.S.C. 4721(j)(5)).
(2) United states exporter.--The term ``United States
exporter'' has the meaning given the term in section
2301(j)(3) of the Export Enhancement Act of 1988 (15 U.S.C.
4721(j)(3)).
(e) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Secretary of Commerce $10,000,000 for each of the fiscal
years 2010 through 2014 to carry out this section.
(2) Availability.--Amounts appropriated pursuant to the
authorization of appropriations under paragraph (1) shall
remain available until expended.

SEC. 102. PROGRAM TO ESTABLISH CHINA MARKET ADVOCATE
POSITIONS IN UNITED STATES EXPORT ASSISTANCE
CENTERS.

(a) Program Authorized.--The Secretary of Commerce, in the
Secretary's role as chairperson of the Trade Promotion
Coordinating Committee, shall establish a program to provide
comprehensive assistance to small- and medium-sized
businesses in the United States for purposes of facilitating
exports to China.
(b) China Market Advocates.--
(1) Positions authorized.--
(A) In general.--The Secretary of Commerce shall create not
fewer than 50 China market advocate positions in United
States Export Assistance Centers.
(B) Appointment and training.--The China market advocates
authorized under subparagraph (A) shall be appointed by the
Secretary from among individuals with expertise in matters
relating to trade with China and shall receive the training
authorized under paragraph (2).
(C) Rate of pay.--China market advocates shall be paid at a
rate equal to the rate of basic pay for grades GS-10 through
GS-13 of the General Schedule under section 5332 of title 5,
United States Code.
(D) Geographic distribution.--To the maximum extent
practicable, China market advocates shall be assigned to
United States Export Assistance Centers in a manner that
achieves an equitable geographic distribution of China market
advocates among United States Export Assistance Centers.
(2) Training authorized.--The Secretary shall provide
training to China market advocates in the business culture of
China, the market of China, and the evolving political,
cultural, and economic environment in China.
(c) Services Provided by Advocates.--China market advocates
authorized under subsection (b) shall provide comprehensive
assistance to small- and medium-sized businesses in the
United States for purposes of facilitating exports of United
States goods to China. Such assistance may include--
(1) assistance to find and utilize Federal and private
resources to facilitate entering into the market of China;
(2) continuous direct and personal contact with businesses
that have entered the market of China;
(3) assistance to resolve disputes with the Government of
the United States or China relating to intellectual property
rights violations, export restrictions, and additional trade
barriers; and
(4) to the extent practicable, locating and recruiting
businesses to enter the market of China.
(d) Advertising of Program.--The Secretary of Commerce
shall make available to the public through advertising and
other appropriate methods information about services offered
by China market advocates under the program authorized under
subsection (a).
(e) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Commerce to carry out
this section $15,000,000 for each of the fiscal years 2010
through 2014, of which--
(1) $5,000,000 are authorized to be appropriated to carry
out subsection (b)(2); and
(2) $2,000,000 are authorized to be appropriated to carry
out subsection (d).

SEC. 103. ASSISTANCE TO SMALL- AND MEDIUM-SIZED BUSINESSES
FOR TRADE MISSIONS TO CHINA.

(a) Assistance Authorized.--The Secretary of Commerce, in
the Secretary's role as chairperson of the Trade Promotion
Coordinating Committee, shall provide assistance through
United States Export Assistance Centers to eligible small-
and medium-sized businesses in the United States for
business-related expenses for trade missions to China.
(b) Selection Process.--The Secretary of Commerce shall--

[[Page S9017]]

(1) develop a transparent and competitive scoring system
for selection of small- and medium-sized businesses to
receive assistance authorized under subsection (a) that
focuses on the feasibility of exporting goods and services to
China; and
(2) develop specific criteria for a definition of
``business-related expenses'', as the term is used in
subsection (a), that is compatible with best business
practices.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Commerce $2,000,000
for each of the fiscal years 2010 through 2014 to carry out
this section.

SEC. 104. PLAN TO CONSOLIDATE FEES FOR GOLD KEY MATCHING
SERVICES IN CHINA.

(a) Plan Required.--As soon as is practicable after the
date of the enactment of this Act, the Secretary of Commerce,
acting through the Assistant Secretary for Trade Promotion
and Director of the United States and Foreign Commercial
Service, shall submit to Congress a plan to consolidate fees
charged by the Department of Commerce for Gold Key matching
services provided to small- and medium-sized businesses that
export goods or services produced in the United States to
more than one market in China.
(b) Gold Key Matching Services Defined.--In this section,
the term ``Gold Key matching services'' means the Gold Key
Service program of the Department of Commerce and includes--
(1) the arrangement of business meetings with pre-screened
contacts, representatives, distributors, professional
associations, government contacts, or licensing or joint
venture partners in a foreign country;
(2) customized market and industry briefings with trade
specialists of the Department of Commerce;
(3) timely and relevant market research;
(4) appointments with prospective trade partners in key
industry sectors;
(5) post-meeting debriefing with trade specialists of the
Department of Commerce and assistance in developing
appropriate follow-up strategies; and
(6) assistance with travel, accommodations, interpreter
service, and clerical support.

TITLE II--PROGRAMS OF THE SMALL BUSINESS ADMINISTRATION

SEC. 201. TRADE OUTREACH AT THE OFFICE OF INTERNATIONAL TRADE
OF THE SMALL BUSINESS ADMINISTRATION.

Section 22 of the Small Business Act (15 U.S.C. 649) is
amended by adding at the end the following new subsections:
``(h) Promotion of Exports to China.--The Office shall
provide strategic guidance to small business concerns with
respect to exporting goods and services to China.
``(i) Director of China Program Grants.--
``(1) In general.--There shall be in the Office a Director
of China Program Grants (in this subsection referred to as
the `Director').
``(2) Appointment.--The Director shall be appointed by the
Administrator and shall be an individual with demonstrated
successful experience in matters relating to international
trade and administering government contracts.
``(3) Rate of pay.--The Director shall be paid at a rate
equal to or greater than the rate of basic pay for grade GS-
14 of the General Schedule under section 5332 of title 5,
United States Code.
``(4) Duties.--The Director shall be responsible for
administering the grant program authorized under section 202
of the United States-China Market Engagement and Export
Promotion Act (relating to Chinese business education
programs) and any other similar or related program of the
Office.''.

SEC. 202. GRANTS FOR CHINESE BUSINESS EDUCATION PROGRAMS.

(a) Grants Authorized.--The Administrator of the Small
Business Administration, acting through the Director of China
Program Grants in the Office of International Trade, shall
make grants to institutions of higher education, or
combinations of such institutions, to pay the Federal share
of the cost of planning, establishing, and operating
education programs described in subsection (b) to--
(1) develop and enhance student skills, awareness, and
expertise relating to business in China; and
(2) prepare students to promote the competitiveness of and
opportunities for United States small business concerns in
China.
(b) Education Programs Described.--Education programs
described in this subsection are academic programs of study
relating to business in China, including undergraduate and
graduate level degrees, courses, or seminars on--
(1) the economy of China;
(2) trade and commerce in China;
(3) new and expanding export opportunities for United
States small business concerns in China; and
(4) the economic, commerce, and trade relations between the
United States and China.
(c) Application.--A small business concern desiring a grant
under this section shall submit an application at such time,
in such manner, and containing such information as the
Director of China Program Grants may require.
(d) Duration of Grants.--A grant under this section shall
be for an initial period not to exceed 2 years. The Director
of China Program Grants may renew such grant for additional
2-year periods.
(e) Federal Share.--
(1) Federal share.--The Federal share of the cost of an
education program described in subsection (b) shall not
exceed 50 percent of the cost of such program.
(2) Non-federal share.--The non-Federal share of the cost
of an education program described in subsection (b) may be
provided either in cash or in-kind.
(f) Definition.--In this section, the term ``institution of
higher education'' has the meaning given the term in section
101 of the Higher Education Act of 1965 (20 U.S.C. 1001).
______

By Mr. DODD (for himself, Mr. Menendez, Mr. Merkley, Mr. Bennet,
Mr. Akaka, and Mr. Schumer):
S. 1619. A bill to establish the Office of Sustainable Housing and
Communities, to establish the Interagency Council on Sustainable
Communities, to establish a comprehensive planning grant program, to
establish a sustainability challenge grant program, and for other
purposes; to the Committee on Banking, Housing, and Urban Affairs.
Mr. DODD. Mr. President, I rise to introduce the Livable Communities
Act.
Our communities are growing and changing. And the way we plan for
their futures needs to evolve, as well. At stake is whether or not we
will be able to enjoy the places where we live and work without
excessive traffic, skyrocketing fuel costs, and sprawling development
patterns that eat up our open space.
As our communities grow, people are living farther from jobs,
commuting longer distances on more crowded roadways, paying more at the
pump at a time when family budgets are stretched thin and putting more
greenhouse gases into the air at a time when climate change has emerged
as an urgent threat.
We are losing our rural land and open spaces. Transportation costs
are making housing less affordable. Even though our communities are
growing in size, we are losing the community spirit that makes American
towns and cities so great.
It is clear that current trends simply cannot continue.
Sustainable development will cut down on the traffic that has long
plagued my home State of Connecticut and connect people with good-
paying jobs. Done right, it will protect the environment and help us
meet energy goals; protect rural areas and green spaces; revitalize our
Main Streets and urban centers; create and preserve affordable housing;
and make our communities better places to live, work, and raise
families.
But does that mean sustainable development is a transportation issue?
An energy issue? A housing issue? An environmental issue?
The answer, of course, is ``all of the above,'' and unfortunately,
that tends to short some circuits here in Washington. Our policy has
long been stovepiped within the various agencies responsible for each
of the issues affected by planning and development.
In February, I wrote a letter to President Obama urging him to
establish a White House Office of Sustainable Development to coordinate
housing, transportation, energy, and environmental policies.
I felt confident I would find a partner in the White House. The
President has been a strong leader on these issues, and he has shown a
willingness to shake up a Federal Government that hasn't always
succeeded when it comes to thinking outside the box and addressing
related issues in a comprehensive, effective way.
Sure enough, last month I brought together Secretary of
Transportation Ray LaHood, Secretary of Housing and Urban Development
Shaun Donovan, and Environmental Protection Agency Administrator Lisa
Jackson at a Banking Committee hearing--three public servants who don't
often find themselves in the same hearing room at the same time.
They brought with them a pledge that the administration would work
across agency lines to take a holistic look at development policy--and
a firm commitment to livability principles that would serve as the
foundation for that policy going forward.
The administration's principles demonstrate a true understanding of
the best way forward.
Sustainable development, as grounded in these principles, provides
more transportation choices for families, expands access to affordable
housing, enhances economic competitiveness by

[[Page S9018]]

connecting families with jobs and services, targets funding towards
existing communities to spur revitalization and protect our open
spaces, values the unique character of both our cities and our small
towns, and improves collaboration between different government agencies
to better leverage our investments.
As Secretary LaHood said at the hearing, we are now all working off
the same playbook. But now it is time to snap the ball and move down
the field.
Last month the White House announced the selection of Shelley Poticha
to head up these efforts. If the Livable Communities Act becomes law,
as I hope it will, Ms. Poticha will head a new HUD Office of
Sustainable Housing and Communities.
This new office will serve as a clearinghouse for best practices, so
that successful initiatives can be easily replicated. And it will give
HUD Secretary Donovan, Deputy Secretary Ron Simms, and Ms. Poticha the
tools and authority they need to really dig in and become a partner to
our communities in creating a sustainable future.
One successful play from our playbook could be modeled after a
project in my home State of Connecticut. It links housing and
transportation policy, encourages smart land use, generates economic
growth, and will reduce our carbon footprint around what's known as the
Tri-City Corridor in Connecticut. This proposal would provide commuter
and 110-mile-per-hour intercity rail service between New Haven,
Hartford, and Springfield, MA, and feature 12 stops, creating ``transit
villages'' and revitalizing local economies.
Already, we are seeing how this proposed service is serving as a
catalyst: attracting new business, commuters, and residents, and
transforming struggling local economies.
Along the corridor is Meriden, a small city of nearly 60,000
residents located roughly halfway between New Haven and Hartford. In
anticipation of a commuter stop on the rail line, the city would like
to transform 15 acres of brownfields into new commercial and
residential developments, including a public green that doubles as a
flood buffer.
Immediately north of that site is the Mills Memorial public housing
complex, providing 140 units of affordable housing to low income
residents.
By linking transit, housing, and commercial planning, the city of
Meriden will be able to transform its downtown into a bustling economic
center ready to support a wide range of residents.
The vision of Meriden and so many communities throughout the country
needs the support and planning tools to take these initiatives from
idea to action.
So, today, I offer for your consideration legislation that encourages
communities across the country to begin planning for more prosperous
and livable futures.
In addition to creating the new HUD Office of Sustainable Housing and
Communities I mentioned earlier, this bill creates a competitive grant
program that States and localities can use to better integrate
transportation, housing, land use, and economic development when making
long-term planning decisions.
In addition, it provides funding for communities to implement these
comprehensive regional plans through a challenge grant program. This
program will help communities invest in public transportation,
affordable housing, complete streets, transit-oriented development, and
redeveloping brownfields.
Finally, this bill creates an Interagency Council on Sustainable
Communities to break down the ``stovepiping'' that exists within the
Federal Government and coordinate Federal policies to encourage
sustainable development.
In my home State of Connecticut, integrated planning and sustainable
development is critical to growing stronger communities.
We have a state-level program called HOMEConnecticut that provides
grants to plan Incentive Housing Zones. In these zones, mixed-income
housing is built near jobs and transit centers, in downtowns and in
redeveloped brownfields. More than 50 cities and towns have either
applied for grants or already received them. The investment will pay
off in affordable homes, good jobs, and more livable communities.
Like bragging on Connecticut, but I would love to see this success
replicated in communities around the Nation. The Obama administration
has indicated its commitment to encouraging sustainable development and
helping local authorities build a better future. It is time for us to
do the same.
I urge my colleagues to join me in support of this important
legislation.
______

By Mr. BINGAMAN (for himself, Ms. Snowe, Mr. Kerry, and Mr.
Lugar):
S. 1620. A bill to amend the Internal Revenue Code of 1986 to provide
tax incentives and fees for increasing motor vehicle fuel economy, and
for other purposes; to the Committee on Finance.
Mr. BINGAMAN. Mr. President, as the success of the Cash for Clunkers
Program that we are working to extend today makes clear, there is
substantial interest among consumers in upgrading the fuel efficiency
of their vehicles. In fact, maybe the most surprising thing about the
program thus far has been the higher-than-expected appetite by
consumers for the most fuel-efficient vehicles.
It is an encouraging sign, but it remains surprising because it is
extraordinarily difficult for a consumer to take into account the real
benefits, or costs, of fuel economy. The value of fuel efficiency
depends on the unknowable fact of what the price of gasoline is likely
to be in future years as well as requiring a calculation to make and
apples-to-apples comparison of the costs of ownership at different
efficiency levels. This explains why study after study demonstrates
that consumers don't fully account for the fuel costs of ownership when
they make buying decisions. Decisions that many people regretted making
only a few years earlier as gas prices climbed near $4 per gallon last
fall.
This isn't only a problem for consumers. Improving the fuel economy
of a vehicle requires significant engineering and new technologies,
often adding hundreds or thousands to the manufacturer price of a
vehicle; costs consumers have proved unwilling to bear. Faced with this
reality, and the uncertainty of recovering their costs from consumers
who are unsure of the value of fuel efficiency, car makers have
generally thought it is in their best business interests to meet the
fuel economy requirements of CAFE but go no further. Even when
manufacturers want to go further than the CAFE requirements and produce
more efficient vehicles, they are faced with giving up a cost advantage
to their competitors by putting on expensive new technologies. For this
reason, and to attempt to take into account the very real costs in oil
and climate insecurity by our undervaluation of efficiency, Congress
has put in a series of incentives for specific technologies such as
hybrids, electric-drive, and hydrogen fuel cell vehicles. We have also
recently made significant investments in battery manufacturing and
vehicle electrification to try and close the significant gap with our
global competitors in these technologies.
Although I support those investments to increase our competitiveness
in the clean energy technology manufacturing race, unless the domestic
marketplace will support them over the long term, they simply won't be
enough. I believe the best path to both support our climate and energy
goals and enhance our economic competitiveness is to create a set of
clear, technology-neutral incentives that can achieve our goals and
then let the market and consumers sort out the best technologies.
The Efficient Vehicle Leadership Act of 2009 that I am introducing
today with Senators Snowe, Kerry, and Lugar provides a long-term
pathway forward that will allow consumers to afford the most fuel
efficient vehicles and a clear signal to the manufacturers that they
can succeed in the marketplace by incorporating the most advanced fuel
efficiency technologies into their new offerings. The bill would
provide for fuel performance rebates that would decrease the cost of
efficient cars and pay for it by assessing a fuel performance fee to
manufacturers for inefficient vehicles to pay for the program.
The rebates and fees would be calculated based on how much more or

[[Page S9019]]

less fuel-efficient a vehicle is relative to the CAFE standard. The
CAFE standard is based on the size, or ``footprint''--the interior
dimensions of the four wheels of the motor vehicle, so each vehicle
would compete with other vehicles of a similar size. The CAFE standard
itself becomes more stringent over time, based on the ``maximum
feasible'' fuel efficiency as determined by NHTSA, so the incentives
are recast yearly against a higher target. Calculating the rebates and
fees based on the CAFE standard allows them to net out, making the
overall system revenue neutral and providing a continuing incentive
each subsequent year. Thus, the purchasers of fuel efficiency laggards
for each size pay to make the most fuel-efficient equivalent vehicles
more affordable. The rebate amount must appear on the fuel efficiency
sticker and consumers can choose if they want to receive their rebate
directly in their tax returns or they can transfer the credit to
dealer, as long as the dealer certifies they have given the rebate to
the consumer at the point of purchase.
In sum, this bill provides a long-term structure for the automotive
sector that provides certainty to manufacturers that the technologies
that they must employ to meet the new fuel efficiency requirements will
be valued by consumers and, beyond that, rewards and incentivizes
innovation in vehicle efficiency to go beyond the CAFE requirements.
The technological acumen of the auto industry will be harnessed, with
no net impact on safety or comfort, and without distorting the
marketplace. Consumers would benefit for years to come from a smaller
hit on their wallet at the pump. The United States would benefit
overall as we began to curb our appetite for oil.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1620

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

(a) Short Title.--This Act may be cited as the ``Efficient
Vehicle Leadership Act of 2009''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.

SEC. 2. TAX CREDIT FOR FUEL-EFFICIENT MOTOR VEHICLES.

(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 (relating to other credits) is amended by inserting
after section 30D the following new section:

``SEC. 30E. FUEL PERFORMANCE REBATE.

``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
an amount equal to the amount determined under paragraph (2)
with respect to any new qualified fuel-efficient motor
vehicle placed in service by the taxpayer during the taxable
year.
``(2) Credit amount.--With respect to each new qualified
fuel-efficient motor vehicle, the amount determined under
this paragraph shall be equal to the product of--
``(A) the absolute value of the difference between the
fuel-economy rating and the reference fuel-economy rating for
such motor vehicle for the model year, and
``(B) 100, and
``(C) the applicable amount.
``(3) Applicable amount.--For purposes of paragraph (2)(C),
the applicable amount is equal to--
``(A) in the case of model year 2011--
``(i) $1,000, or
``(ii) $2,000, if the fuel-economy rating for such motor
vehicle is at least 50 percent more efficient than the
reference fuel-economy rating for such motor vehicle as
determined under paragraph (2)(A), and
``(B) in the case of any succeeding model year--
``(i) $1,500, or
``(ii) $2,500, if the fuel-economy rating for such motor
vehicle is at least 50 percent more efficient than the
reference fuel-economy rating for such motor vehicle as
determined under paragraph (2)(A), or
``(iii) $3,500, if the fuel-economy rating for such motor
vehicle is at least 75 percent more efficient than the
reference fuel-economy rating for such motor vehicle as
determined under paragraph (2)(A).
``(b) New Qualified Fuel-Efficient Motor Vehicle.--For
purposes of this section, the term `new qualified fuel-
efficient motor vehicle' means a passenger automobile or
light truck--
``(1) which is treated as a motor vehicle for purposes of
title II of the Clean Air Act,
``(2) which achieves a fuel-economy rating that is more
efficient than the reference fuel-economy rating for such
motor vehicle for the model year,
``(3) for which standards are prescribed pursuant to
section 32902 of title 49, United States Code,
``(4) the original use of which commences with the
taxpayer,
``(5) which is acquired for use or lease by the taxpayer
and not for resale,
``(6) the purchase price of which, less the amount
allowable under subsection (a) with respect to such vehicle,
does not exceed $50,000, and
``(7) which is made by a manufacturer beginning with model
year 2011.
``(c) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without
regard to this subsection) that is attributable to property
of a character subject to an allowance for depreciation shall
be treated as a credit listed in section 38(b) for such
taxable year (and not allowed under subsection (a)).
``(2) Refundable personal credit.--
``(A) In general.--For purposes of this title, the credit
allowed under subsection (a) for any taxable year (determined
after application of paragraph (1)) shall be treated as a
credit allowable under subpart C for such taxable year (and
not allowed under subsection (a)).
``(B) Refundable credit may be transferred.--
``(i) In general.--A taxpayer may, in connection with the
purchase of a new qualified fuel-efficient motor vehicle,
transfer any refundable credit described in subparagraph (A)
to any person who is in the trade or business of selling new
qualified fuel-efficient motor vehicles and who sold such
vehicle to the taxpayer, but only if such person clearly
discloses to such taxpayer, through the use of a window
sticker attached to the new qualified fuel-efficient
vehicle--

``(I) the amount of the refundable credit described in
subparagraph (A) with respect to such vehicle, and
``(II) a notification that the taxpayer will not be
eligible for any credit under section 30, 30B, or 30D with
respect to such vehicle unless the taxpayer elects not to
have this section apply with respect to such vehicle.

``(ii) Certification.--A transferee of a refundable credit
described in subparagraph (A) may not claim such credit
unless such claim is accompanied by a certification to the
Secretary that the transferee reduced the price the taxpayer
paid for the new qualified fuel-efficient motor vehicle by
the entire amount of such refundable credit.
``(iii) Consent required for revocation.--Any transfer
under clause (i) may be revoked only with the consent of the
Secretary.
``(iv) Regulations.--The Secretary may prescribe such
regulations as necessary to ensure that any refundable credit
described in clause (i) is claimed once and not retransferred
by a transferee.
``(d) Other Definitions.--For purposes of this section--
``(1) Fuel-economy rating.--The term `fuel-economy rating'
means, with respect to any motor vehicle, the combined fuel-
economy rating for such motor vehicle, expressed in gallons
per mile, determined in accordance with section 32904 of
title 49, United States Code.
``(2) Model year.--The term `model year' has the meaning
given such term under section 32901(a) of such title 49.
``(3) Motor vehicle.--The term `motor vehicle' means any
vehicle which is manufactured primarily for use on public
streets, roads, and highways (not including a vehicle
operated exclusively on a rail or rails) and which has at
least 4 wheels.
``(4) Reference fuel-economy rating.--The term `reference
fuel-economy rating' means, with respect to any motor
vehicle, the fuel economy standard for such motor vehicle,
expressed in gallons per mile, calculated by applying the
relevant vehicle attributes to the mathematical function
published pursuant to section 32902(b)(3)(A) of title 49,
United States Code.
``(5) Other terms.--The terms `automobile', `passenger
automobile', `light truck', and `manufacturer' have the
meanings given such terms in regulations prescribed by the
Administrator of the Environmental Protection Agency for
purposes of the administration of title II of the Clean Air
Act (42 U.S.C. 7521 et seq.).
``(e) Special Rules.--
``(1) Basis reduction.--For purposes of this subtitle, the
basis of any property for which a credit is allowable under
subsection (a) shall be reduced by the amount of such credit
so allowed (determined without regard to subsection (c)).
``(2) No double benefit.--No other credit shall be
allowable under this chapter for a new qualified fuel-
efficient motor vehicle with respect to which a credit is
allowed under this section.
``(3) Property used by tax-exempt entity.--In the case of a
vehicle whose use is described in paragraph (3) or (4) of
section 50(b) and which is not subject to a lease, the person
who sold such vehicle to the person or entity using such
vehicle shall be treated as the taxpayer that placed such
vehicle in service, but only if such person clearly discloses
to such person or entity in a document the amount of any
credit allowable

[[Page S9020]]

under subsection (a) with respect to such vehicle (determined
without regard to subsection (c)). For purposes of subsection
(c), property to which this paragraph applies shall be
treated as of a character subject to an allowance for
depreciation.
``(4) Property used outside united states, etc., not
qualified.--No credit shall be allowable under subsection (a)
with respect to any property referred to in section 50(b)(1)
or with respect to the portion of the cost of any property
taken into account under section 179.
``(5) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any property which
ceases to be property eligible for such credit (including
recapture in the case of a lease period of less than the
economic life of a vehicle).
``(6) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(7) Interaction with air quality and motor vehicle safety
standards.--A motor vehicle shall not be considered eligible
for a credit under this section unless such vehicle is in
compliance with--
``(A) the applicable provisions of the Clean Air Act for
the applicable make and model year of the vehicle (or
applicable air quality provisions of State law in the case of
a State which has adopted such provisions under a waiver
under section 209(b) of the Clean Air Act), and
``(B) the motor vehicle safety provisions of sections 30101
through 30169 of title 49, United States Code.
``(8) Inflation adjustment.--In the case of any model year
beginning in a calendar year after 2010, each dollar amount
in subsection (a)(3)(B) shall be increased by an amount equal
to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the model year
begins, determined by substituting `2009' for `1992' in
subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $100.
``(f) Regulations.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall promulgate such regulations as necessary to
carry out the provisions of this section.
``(2) Coordination in prescription of certain
regulations.--The Secretary of the Treasury, in coordination
with the Secretary of Transportation and the Administrator of
the Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle
meets the requirements to be eligible for a credit under this
section.''.
(b) Credit Allowed Against Alternative Minimum Tax.--
(1) Business credit.--Section 38(c)(4)(B) is amended by
redesignating clauses (i) through (viii) as clauses (ii)
through (ix), respectively, and by inserting before clause
(ii) (as so redesignated) the following new clause:
``(i) the credit determined under section 30E,''.
(2) Personal credit.--
(A) Section 24(b)(3)(B) is amended by striking ``and 30D''
and inserting ``30D, and 30E''.
(B) Section 25(e)(1)(C)(ii) is amended by inserting
``30E,'' after ``30D,''.
(C) Section 25B(g)(2) is amended by striking ``and 30D''
and inserting ``30D, and 30E''.
(D) Section 26(a)(1) is amended by striking `` and 30D''
and inserting ``30D, and 30E''.
(E) Section 904(i) is amended by striking ``and 30D'' and
inserting ``30D, and 30E''.
(c) Display of Credit.--Section 32908(b)(1) of title 49,
United States Code, is amended--
(1) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), nad
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) the amount of the fuel-efficient motor vehicle credit
allowable with respect to the sale of the automobile under
section 30E of the Internal Revenue Code of 1986 (26 U.S.C.
30E).''.
(d) Conforming Amendments.--
(1) Section 38(a) is amended by striking ``plus'' at the
end of paragraph (34), by striking the period at the end of
paragraph (35) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(36) the portion of the fuel performance rebate to which
section 30E(c)(1) applies.''.
(2) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (36), by striking the period at the end of
paragraph (37) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(38) to the extent provided in section 30E(e)(1).''.
(3) Section 6501(m) is amended by inserting ``30E(e)(6),''
after ``30D(e)(4),''.
(4) The table of section for subpart C of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 30D the following new item:

``Sec. 30E. Fuel performance rebate.''.

(e) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act.

SEC. 3. FUEL PERFORMANCE FEE.

(a) In General.--Section 4064 is amended to read as
follows:

``SEC. 4064. FUEL PERFORMANCE FEE.

``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed on the sale by
the manufacturer of each fuel guzzler motor vehicle a tax
equal to the product of--
``(A) the absolute value of the difference between the
fuel-economy rating and the reference fuel-economy rating for
such motor vehicle for the model year, and
``(B) 100, and
``(C) the applicable amount.
``(2) Applicable amount.--For purposes of paragraph (1)(C),
the applicable amount is equal to--
``(A) $1,500, or
``(B) $2,500, if the fuel-economy rating for such motor
vehicle is more than 50 percent less efficient than the
reference fuel-economy rating for such motor vehicle as
determined under paragraph (1)(A), or
``(C) $3,500, if the fuel-economy rating for such motor
vehicle is more than 75 percent less efficient than the
reference fuel-economy rating for such motor vehicle as
determined under paragraph (1)(A).
``(b) Fuel Guzzler Motor Vehicle.--For purposes of this
section--
``(1) In general.--The term `fuel guzzler motor vehicle'
means a passenger automobile or light truck--
``(A) which is treated as a motor vehicle for purposes of
title II of the Clean Air Act,
``(B) which achieves a fuel-economy rating that is less
efficient than the reference fuel-economy rating for such
motor vehicle for the model year,
``(C) which has a gross vehicle weight rating of not more
than 8,500 pounds, and
``(D) which is made by a manufacturer beginning with model
year 2013.
``(2) Exception for emergency vehicles.--The term `fuel
guzzler motor vehicle' does not include any vehicle sold for
use and used--
``(A) as an ambulance or combination ambulance-hearse,
``(B) by the United States or by a State or local
government for police or other law enforcement purposes, or
``(C) for other emergency uses prescribed by the Secretary
by regulations.
``(c) Other Definitions.--For purposes of this section--
``(1) Fuel-economy rating.--The term `fuel-economy rating'
means, with respect to any motor vehicle, the combined fuel-
economy rating for such motor vehicle, expressed in gallons
per mile, determined in accordance with section 32904 of
title 49, United States Code.
``(2) Model year.--The term `model year' has the meaning
given such term under section 32901(a) of such title 49.
``(3) Motor vehicle.--The term `motor vehicle' means any
vehicle which is manufactured primarily for use on public
streets, roads, and highways (not including a vehicle
operated exclusively on a rail or rails) and which has at
least 4 wheels.
``(4) Reference fuel-economy rating.--The term `reference
fuel-economy rating' means, with respect to any motor
vehicle, the fuel economy standard for such motor vehicle,
expressed in gallons per mile, calculated by applying the
relevant vehicle attributes to the mathematical function
published pursuant to section 32902(b)(3)(A) of title 49,
United States Code.
``(5) Other terms.--The terms `automobile', `passenger
automobile', `light truck', and `manufacturer' have the
meanings given such terms in regulations prescribed by the
Administrator of the Environmental Protection Agency for
purposes of the administration of title II of the Clean Air
Act (42 U.S.C. 7521 et seq.).
``(d) Inflation Adjustment.--In the case of any model year
beginning in a calendar year after 2010, each dollar amount
in subsection (a)(2) shall be increased by an amount equal
to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the model year
begins, determined by substituting `2009' for `1992' in
subparagraph (B) thereof.

Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $100.''.
(b) Conforming Amendments.--
(1) The heading for part I of subchapter A of chapter 32 is
amended by striking ``GAS'' and inserting ``FUEL''.
(2) The table of parts for subchapter A of chapter 32 is
amended by striking ``Gas'' in the item relating to part I
and inserting ``Fuel''.
(3) The table of sections for part I of subchapter A of
chapter 32 is amended by striking ``Gas'' in the item
relating to section 4064 and inserting ``Fuel''.
(4) The heading for subsection (d) of section 1016 is
amended by striking ``Gas Guzzler Tax'' and inserting ``Fuel
Performance Fee''.
(5) The heading for subsection (e) of section 4217 is
amended by striking ``Gas Guzzler Tax'' and inserting ``Fuel
Performance Fee''.
(6) The heading for subparagraph (B) of section 4217(e)(3)
is amended by striking ``gas guzzler tax'' and inserting
``fuel performance fee''.
(7) Section 4217(e) is amended by striking ``gas guzzler
tax'' each place it appears and inserting ``fuel performance
fee''.
(c) Effective Date.--The amendments made by this section
shall apply to sales of vehicles beginning with model year
2013.
______

By Mr. SANDERS (for himself and Mr. Merkley):

[[Page S9021]]

S. 1621. A bill to improve thermal energy efficiency and use, and for
other purposes; to the Committee on Energy and Natural Resources.
Mr. SANDERS. Mr. President, today I am pleased to introduce the
Thermal Energy Efficiency Act, which I believe can play an important
role in moving our Nation toward green job creation and greenhouse gas
emissions reductions. I thank Senator Merkley for being an original
cosponsor on this bill. I also thank the International District Energy
Association, the Biomass Energy Resource Center, the American Council
for an Energy-Efficient Economy, Sustainable Northwest, and the U.S.
Clean Heat and Power Association for working with us to ensure that as
we consider comprehensive global warming legislation, we do not forget
about energy efficiency and thermal energy.
This legislation addresses two ways of producing and distributing
thermal energy, which is a technical term for heat. The legislation
focuses on combined heat and power and district energy. Combined heat
and power is simple to understand and has great capacity to transform
our use of energy and increase large-scale efficiency. It is a fully
developed technology, and there is nothing experimental about it.
Combined heat and power means that one source of energy can produce
electricity and then capture and use the resulting heat for a second
purpose: heating homes, schools, offices, and factories. Combined heat
and power gets both heat and power from one energy source and can work
with fossil fuels or biomass or even waste. Combined heat and power can
offer huge efficiency gains and lower carbon footprints for our
powerplants.
District energy can be used together with combined heat and power, or
separate from it, in systems designed purely for heating. What district
energy does is use heat not just for one building or location but for
multiple locations. Just as homes or businesses share electric lines or
telephone lines, they can also share a heat source. And sharing a heat
source can often be a major source of efficiency.
For too long, Federal energy policy has not focused enough on thermal
energy or energy efficiency. We know we can do more. According to the
Department of Energy, combined heat and power represents roughly 9
percent of our existing electric power capacity today, but if we moved
to 20 percent by 2030, we could avoid 60 percent of the projected
growth in carbon dioxide emissions in this country, equivalent to
taking more than half of the current passenger vehicles off the road in
the United States. Additionally, we could create 1 million new jobs and
generate $234 billion in new investments.
We are talking about real technology that is deployable today. In
Copenhagen, district energy provides clean heating to 97 percent of the
city. In our own country, in St. Paul, MN, district energy and combined
heat and power provide 65 megawatts of thermal energy and 25 megawatts
of electricity from renewable urban wood waste. Jamestown, NY, started
their district heating project in 1981, and today the system provides
16 megawatts of thermal energy heating. Jamestown's public school
district uses district energy and has saved more than 16 percent of
their energy use over a 30-month period and saved more than $500,000
dollars for taxpayers in the process.
We have opportunities to expand this technology all around our
Nation. For example, in my home State of Vermont, several of our cities
and towns are looking at district energy. In Burlington, VT, we have 50
megawatt powerplant that uses wood chips and wood waste for power. Yet
approximately 60 percent of the energy produced by this plant is lost
as wasted heat. This is typical of many conventional power plants. If
Burlington implemented a district energy system it could use the wasted
thermal energy to heat and cool many buildings downtown. The hurdle for
Burlington, and many cities and towns, is the upfront capital
investment required to build a district energy system.
That is why today I am introducing the Thermal Energy Efficiency Act.
We need a stable, long-term funding source for district energy and
combined heat and power. This bill would use 2 percent of the revenues
derived from auctioning emissions permits under global warming
legislation to support hospitals, cities and towns, schools and
universities, businesses and industries, and even Federal facilities
and military bases as they implement efficient thermal energy systems.
This bill would recognize the important role that efficiency and
thermal energy can play in helping our Nation meet our energy security,
emissions reduction, and economic goals. As a member of both the Energy
and Natural Resources Committee and the Environment and Public Works
Committee, I look forward to working with my colleagues to ensure that
combined heat and power and district energy are included in
comprehensive energy and global warming legislation.
______

By Mr. FEINGOLD (for himself, Mr. Dodd, and Mr. Menendez):
S. 1623. A bill to prohibit the Secretary of the Interior from
issuing new Federal oil and gas leases to holders of existing leases
who do not diligently develop the land subject to the existing leases
or relinquish the leases, and for other purposes; to the Committee on
Energy and Natural Resources.
Mr. FEINGOLD. Mr. President, today I am reintroducing legislation
that seeks to answer a question more and more Americans are asking in
light of our economic woes and our struggle toward energy independence:
Why aren't the oil companies developing 65 million acres, or nearly 75
percent, of land that they are leasing from the U.S. Government? Those
same companies and some of my colleagues continue to argue that we need
to open more Federal lands to drilling and recently have been insisting
on opening up part of the Gulf of Mexico off Florida's coast that
Congress agreed to keep closed during debate in 2005 for military and
security purposes. I would first like to know why the oil companies are
not producing on most of the Federal lands they already have under
lease.
Last year, at a Senate Judiciary Committee hearing, I had the chance
to ask top oil executives just that question. They couldn't come up
with a good explanation. In fact, one of the executives told me that
they have the manpower and infrastructure to put all their existing
leases of Federal lands into oil production.
I find this troubling. No one is talking about pulling oil out of a
hat. But with nearly 75 percent of currently leased Federal lands and
waters not producing oil and gas, Congress must insist on some
accountability. This is why today I am introducing--along with Senators
Dodd and Menendez--the Responsible Federal Oil and Gas Lease Act, also
known as ``Use It or Lose It'' legislation. This bill says that if oil
and gas companies want to lease additional Federal lands, they must
either be producing or diligently developing their existing Federal
leases, or they have to first give up those leases. Under my bill, the
Department of the Interior is required to establish diligent
development benchmarks, which will encourage leaseholders to
demonstrate they are taking steps that may lead to oil and gas
production. This is a responsible way to increase production and keep
the private sector accountable for production of existing Federal
resources.
Last fall, the Government Accountability Office issued a report,
``Oil and Gas Leasing: Interior Could Do More to Encourage Diligent
Development,'' that looked at whether enough is being done to ensure
oil companies are taking steps to develop Federal oil and gas leases.
The report found that the Department of the Interior--whose Minerals
Management Service manages offshore leases and Bureau of Land
Management manages onshore and National Petroleum Reserve leases--lags
behind State and private landowner efforts to encourage development of
land leased for oil and gas development. The GAO recommends that the
Secretary of the Interior ``develop a strategy to evaluate options to
encourage faster development of its oil and gas leases.''
Though both MMS and BLM require ``reasonable diligence'' in
developing and producing oil and gas on Federal leases, the GAO found
that the Interior Department has not clearly defined what activities or
timeframes constitute reasonable diligence--something my bill requires
the agency to do. Currently, the GAO concludes that leaseholders, in
general, are not required to take actions to develop a

[[Page S9022]]

lease during the primary term. The only specific diligent development
requirement that Interior officials identified to the GAO applies only
to lessees of 8-year leases in the Gulf of Mexico and requires drilling
to occur before the end of the fifth year or else the lease terminates.
However, these leases represent less than 1 percent of the total lease
universe.
In addition to the GAO evaluation, the Department of the Interior's
Office of the Inspector General issued a report in February 2009 on its
investigation of whether oil and gas companies were adequately
developing Federal leases and whether the Department of the Interior
was ensuring companies bring their leases into production. The
inspector general concluded that, while there is no guarantee that a
particular lease contains oil and gas in commercial quantities, there
are no requirements to ensure lessees are taking steps to reach this
conclusion and to ensure the development of leases capable of
production. Specifically, the inspector general found there are no
requirements for the Department to monitor production progress or
compel companies to develop leases and there is no requirement to
detail activity on nonproducing leases. My bill will ensure the Federal
Government develops diligent development requirements for oil and gas
leases.
With over 100 billion barrels of oil under Federal lands and waters
that are being leased or are available for leasing, Congress must
properly encourage their development. This won't solve our energy
problems--the unfortunate truth is that in today's global market, gas
prices are dictated less by our domestic production and more by OPEC's
actions. Nevertheless, Congress must ensure appropriate oversight of
our Federally leased lands and waters, as we simultaneously reduce our
dependence on foreign oil through continuing to be a world leader in
oil and gas production, decreasing our demand of oil and gas since we
are the No. 1 consumer of both in the world, and pursuing alternative
energy sources especially in the transportation sector.
______

By Mr. WHITEHOUSE:
S. 1624. A bill to amend title 11 of the United States Code, to
provide protection for medical debt homeowners, to restore bankruptcy
protections for individuals experiencing economic distress as
caregivers to ill, injured, or disabled family members, and to exempt
from means testing debtors whose financial problems were caused by
serious medical problems, and for other purposes; to the Committee on
the Judiciary.
Mr. WHITEHOUSE. Mr. President, I rise today to introduce legislation
that would help families struggling with medical debts overcome hurdles
that under current law make it difficult for them to find relief in the
bankruptcy system. With medical costs at an all-time high and the
unemployment rate hovering near 10 percent nationwide--and 12.4 percent
in my home State of Rhode Island--too many individuals and families
struck with injury and illness have no other option but to file for
bankruptcy. According to a recent Harvard University study, health
care-related costs have been a primary driver of personal bankruptcy
filings, contributing to over 62 percent of filings in 2007.
The statistics are as shocking as the personal stories are
heartbreaking. Countless Rhode Islanders have written to me during my
time in office asking for help with crippling medical costs, and I want
to share just two of their stories with you today.
Adam, a 23-year-old from Bristol, recently underwent surgery for
cancer. Adam's treatment plan requires him to undergo a CT scan every 2
months. While his insurance initially paid for his health costs, he
received word not long after his surgery that his policy was ``maxed
out'' and that he would have to pay $6,700 out of pocket for an
upcoming CT scan. As of today, Adam, a young man just starting his
adult life, has $20,000 in medical debt and reports that he ``cannot
see any light at the end of the tunnel.''
Robert, a veteran and retiree also from Warwick, suffered a major
heart attack in November of 2004. Although he had health insurance,
Robert was responsible for paying a $2,000 deductible plus 20 percent
of the cost of his care. After 40 years of working and saving, these
medical costs wiped him out, and he had to sell his home.
Adam and Robert have both suffered unexpected medical costs that have
turned their lives upside down. These Rhode Islanders, like millions of
others nationwide, may be forced to file for bankruptcy to get a clean
start--but when they do, they will learn that the bankruptcy process
can be time consuming and costly and ultimately may not allow them to
stay in their homes.
The legislation that I am introducing today, the Medical Bankruptcy
Fairness Act of 2009, would help people who because of medical costs
have no other choice but to file for bankruptcy. The bill would waive
procedural hurdles so that Adam and Robert would have the option of a
speedier, less expensive, and more efficient bankruptcy. To begin with,
it would waive credit counseling requirements for these debtors. Such
requirements have little relevance to people whose debt stems not from
poor budgeting but, rather, from uncontrollable medical expenses. The
bill would also waive the so-called ``means test,'' making the filing
process quicker and less costly and making sure that people have the
ability to file to have their debts discharged in chapter 7, as opposed
to a chapter 13 plan under which they would have made debt payments for
3 to 5 years.
In addition to removing these procedural hurdles, the Medical
Bankruptcy Fairness Act would give people with high levels of medical
debt the ability to retain at least $250,000 in home value through the
bankruptcy process. The ``homestead exemption'' is one of many aspects
of bankruptcy law that looks to the laws of the individual States.
While filers in some States already have the ability to preserve home
equity at this level, a number of States offer homestead exemptions of
$5,000 or less. With the average home price nationwide around $200,000,
the $250,000 exemption included in this bill will allow the majority of
individuals and families crushed by medical debt to keep their homes.
Finally, the bill would eliminate an obstacle that prevents many
bankruptcy filers from accessing the chapter 7 bankruptcy system, which
as I mentioned earlier is the simplest and most efficient form of
bankruptcy. Because attorneys' fees are ``discharged'' at the end of a
chapter 7 bankruptcy, attorneys generally require the upfront payment
of fees in chapter 7 proceedings. Many debtors who would be better off
filing for a quicker and less costly bankruptcy in chapter 7 are forced
to file in chapter 13 because they don't have enough cash to pay the
attorney. The Medical Bankruptcy Fairness Act would make attorneys'
fees nondischargeable in chapter 7 bankruptcies, as in chapter 13
bankruptcies, making it easier for debtors to elect the more efficient
chapter 7 proceeding.
Before I conclude, I want to acknowledge the hard work of my
colleague from Massachusetts, Senator Kennedy, on the issue of medical
debt. Senator Kennedy offered amendments during the consideration of
the 2005 bankruptcy reforms that would have given people struggling
with medical debts treatment similar to that which they would get under
the Medical Bankruptcy Fairness Act. Unfortunately, those amendments
were voted down. I look forward to working with Senator Kennedy to make
sure that we don't miss another opportunity to help Americans
struggling with medical debt.
There are people in every State suffering from medical hardship and
related debts who would benefit from this legislation. I urge my
colleagues to work with me to pass it to Adam and Robert and the
millions like them nationwide a clean start in bankruptcy.
______

By Mr. DODD (for himself and Mr. Bingaman):
S. 1625. A bill to amend title II of the Public Health Service Act to
provide for an improved method to measure poverty so as to enable a
better assessment of the effects of programs under the Public Health
Service Act and the Social Security Act, and for other purposes; to the
Committee on Health, Education, Labor, and Pensions.
Mr. DODD. Mr. President, I wish to speak about poverty and,
specifically, how we measure it and its influence on millions of
Americans.
When we return from the August recess, the Census Bureau will release
its

[[Page S9023]]

annual report documenting the number of Americans living in poverty.
But these numbers will provide a flawed picture of poverty in America
since they are based almost exclusively on 50-year-old food prices. The
bill I am introducing today, the Measuring American Poverty, or MAP,
Act, directs the Census to develop a new poverty measure that is based
on a more comprehensive definition of need. Improving the poverty
measure is not just an academic exercise for statisticians, it is
essential in helping us identify and implement effective policies that
address this crisis.
Even with an inaccurate measurement, the picture of poverty in
America is startling. In 2007, the year for which we have the most
recent data, one in eight Americans--and nearly one in five children--
didn't have the resources to meet their basic needs: food, clothing,
and shelter. Think about that. One in five children in America in 2007
went to bed without even the most basic elements that we take for
granted. In my home State of Connecticut, more than 85,000 kids lived
in poverty. And that was before the economic downturn in which we now
find ourselves. The Center for American Progress estimates that the
cost to our Nation of persistent child poverty is $\1/2\ trillion each
year. Every year a child stays in poverty reduces future productivity
over the course of his or her working life by nearly $12,000.
But the cost is more than just financial--it is moral. We are judged,
Hubert Humphrey famously said, by how we treat those in the shadows of
life. And every child who goes to bed hungry, every American who lacks
the basic necessities of life, is a mark on our national conscience. As
we struggle with the great challenges of our time, the crisis of
poverty is growing. More and more Americans find that shadow creeping
toward them. The Center on Budget and Policy Priorities estimated that
if unemployment were to rise to 9 percent--our current unemployment
rate is 9.5 percent, the highest rate in 26 years--the number of
Americans in poverty would increase by as many as 10.3 million, and the
number of children in poverty would rise by as many as 3.3 million.
To put those numbers in perspective, this recession will add a number
of Americans equivalent to the population of Michigan to the current
number who live in poverty, which is already equivalent to the
population of California. In my home State of Connecticut and across
this country, people who have long worked hard to get ahead are falling
further behind. Folks who have worked two jobs with an eye toward
sending their kids to college are having to choose between purchasing
food and medications. They are hoping that a child's hacking cough
doesn't turn into something more serious because they can't afford to
see a doctor. They are staying up late staring at unpaid bills,
wondering how to pay their mortgage when their only incomes from their
meager savings and unemployment insurance, wondering what happened to
their America dream.
The vast majority of people who are poor do not lack the desire for a
better life for themselves and their family. They are not poor in their
work ethic, their love for their country and their communities. They
are in poverty, but they are not poor in the qualities that we so
admire in America. The truth is, many are unlucky and face
insurmountable hurdles. For some that hurdle is their inability to pay
for higher education. For others it is that they work two jobs and
can't read to their kids at night like they want to. And far too many
others are struggling to pay their mortgage and are spending all their
retirement savings just to keep a roof over their heads.

As many hard-working Americans are engulfed by the shadow of poverty,
we remember Hubert Humphrey's admonition, but too often we can't even
see into those shadows because the way we measure poverty in America is
badly outdated. It is that challenge to which I today urge this body to
rise.
Currently, we measure poverty by comparing two numbers: the money a
family has, which the census refers to as an ``income measure,'' and
the money a family needs to meet its basic needs, which experts call
the ``poverty threshold.'' If a family's income measure is less than
the threshold, they are counted as poor. It is a simple calculation.
But unfortunately both elements--the income measure and the threshold--
are flawed.
The poverty threshold was created using data from the 1950s and
1960s. Currently, it is calculated by taking the 1950s cost of
emergency foodstuffs--food only for temporary use when funds are low--
and multiplying that number by three because in the 1960s, food
represented one-third of a family budget. But today, food represents
one-sixth or one-seventh of a family's budget. Similarly, a family's
cash income before taxes was once an accurate and straightforward way
to measure a family's resources. But today, many Americans are subject
to both State and Federal income taxes and may face exorbitant health
costs or other critical needs which drain their resources. In addition,
many women now work outside the home, meaning they now need pay for
childcare and for getting to and from work.
And on the other side of the ledger, we now provide many benefits to
low income workers that are not cash payments--they are provided
through our Tax Code, or like energy assistance programs, paid directly
to providers. I have fought throughout my career for programs that lift
people out of poverty. Think of the earned-income tax credit, food
assistance, housing assistance, home energy assistance, child care
assistance--hundreds of billions of dollars spent to help Americans
that aren't accounted for when we calculate whether our efforts are
working. So, we need a new way to measure both what a family needs and
what a family has.
When Mayor Bloomberg decided to tackle poverty in New York City, he
started by doing what any successful businessman would--he surveyed the
problem. But he discovered that our outdated system of measuring
poverty simply didn't allow him to see what was really happening. So
the mayor charged his Center for Economic Opportunity with creating a
system that would better represent that threshold, as well as a
family's resources. They followed the recommendation of the National
Academy of Sciences 1995 panel described in ``Measuring Poverty: An
Improved Approach.'' The legislation I offer today also follows these
guidelines.
Specifically, this bill--the Measuring American Poverty Act--updates
the calculations for both threshold and resources in the Federal
poverty measure. The poverty threshold would be based on the current
prices of food, clothing, shelter, utilities, and a few basic household
expenses. And it would revise the current measurement of income to
better reflect the reality that Americans not only must pay taxes but
also certain unavoidable expenses like transportation to and from work,
childcare, and medical expenses. This revised measure would also
include the value of near-cash benefits like energy assistance, food
stamps, section 8 housing vouchers, and tax credits such as the earned-
income tax credit.
Let me be very clear: this isn't a bill to change eligibility for
programs or the allocation of Federal funds. In fact, the bill's text
is explicit about that. The MAP Act creates a new measurement. It does
not replace the Federal Poverty Line. It does not change eligibility
for programs. It will not lead to an unprecedented automatic increase
in spending.
What the MAP Act will do is help us to understand the scope of the
poverty crisis in America, and to better evaluate the effectiveness of
our solutions to it. We have a difficult job ahead of us, as we look to
lift Americans out of poverty, provide middle-class families with a
strong safety net, and restore the American Dream for working men and
women. But we must begin by facing unafraid the true nature and scope
of the poverty crisis. I urge my colleagues to join me in support of
this legislation.
______

By Mr. HARKIN:
S. 1627. A bill to improve choices for consumers for vehicles and
fuel, and for other purposes; to the Committee on Commerce, Science,
and Transportation.
Mr. HARKIN. Mr. President, our national energy situation continues to
deteriorate. Volatile petroleum and gasoline prices threaten our
economy, and our oil imports are responsible for an incredibly large
wealth transfer

[[Page S9024]]

from America to global oil producers. Our most immediate and visible
energy challenge is our dependence on petroleum-derived fuels for
transportation, but we also face the need to reduce the greenhouse
gases that result principally from fossil fuel production and use.
Because our global warming challenge is fundamentally linked to our
energy systems, their resolution has a common strategy--to transform
our energy sector to one far less dependent on fossil fuels and far
more reliant on energy efficiency and domestic renewable energy
supplies. This energy transformation strategy also represents a crucial
economic recovery and development opportunity because millions of jobs
will be created as we carry out this strategy.
Americans recognize the magnitude and the urgency of our energy
challenges. They rightfully expect us to adopt policies to move this
energy transition forward. In particular, we need to reduce dependence
on oil in transportation, and we have broad agreement on two
fundamental approaches--increasing efficiency of vehicles and
increasing use of alternative fuels. We mandated more efficient
vehicles by passing the Energy Independence and Security Act of 2007,
EISA. That bill also mandates a brisk expansion of biofuels production
under the renewable fuels standard. However, we also need to expand the
number of vehicles that can use these alternative fuels and the number
of filling stations selling these biofuels.
Today I am joined by my esteemed colleague, Senator Lugar of Indiana,
in introducing the Consumer Fuels and Vehicles Choice Act of 2009. This
bill will expand the number of alternative fuel automobiles at a rapid
pace while not imposing undue production cost challenges for our auto
manufacturers. It calls for 50 percent of all automobiles manufactured
for sale in the United States to be dual-fuel automobiles by 2011. It
increases that to 90 percent of all automobiles manufactured for U.S.
sales by 2013. These requirements are reasonable because it is known
that gasoline automobiles require relatively minor changes in fuel
system designs to be able to use blends of gasoline and ethanol which
qualify them for dual fuel designation.
This bill also requires that major fuel distributors install blender
pumps in increasing numbers of the retail fueling stations carrying
their brand name. These blender pumps will be capable of dispensing
ethanol and gasoline blends ranging from 0 percent ethanol to 85
percent ethanol. This flexibility in blend choice is expected to be
attractive to consumers, including those who want to use regular
gasoline for non-automotive engines. This bill also authorizes grants
of up to 50 percent of the cost for installing blender pumps and tanks
and other infrastructure needed for selling ethanol fuel blends.
Mr. President, the requirements established and assistance authorized
in this bill will ensure that the number of dual fuel automobiles and
the availability of ethanol fuel blends are expanding apace with the
expansion of ethanol production and use in our national fuel supply
over the next 15 years and beyond. Taken together, our increasing
production of biofuels, our incentives for installation of alternative
fuel infrastructure, and this automobile requirement will provide
Americans the option of choosing clean, domestically produced fuels for
their personal transportation needs in the future. These steps
represent critical components in the transition of our energy systems
away from fossil and imported fuels toward the benefits of greater
reliance on sustainable domestic fuel sources.
Today I urge my Senate colleagues to join us in taking action to
boost the transition to a cleaner, more resilient, and more secure
energy economy. I urge their support for this bill and its rapid
enactment.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1627

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Consumer Fuels and Vehicle
Choice Act of 2009''.

SEC. 2. ENSURING THE AVAILABILITY OF DUAL FUELED AUTOMOBILES
AND LIGHT DUTY TRUCKS.

(a) In General.--Chapter 329 of title 49, United States
Code, is amended by inserting after section 32902 the
following:

``Sec. 32902A. Requirement to manufacture dual fueled
automobiles and light duty trucks

``(a) In General.--For each model year listed in the
following table, each manufacturer shall ensure that the
percentage of automobiles and light duty trucks manufactured
by the manufacturer for sale in the United States that are
dual fueled automobiles and light duty trucks is not less
than the percentage set forth for that model year in the
following table:

``Model Year Percentage

Model years 2011 and 2012.............. 50 percent
Model year 2013 and each subsequent 90 percent
model year.

``(b) Exception.--Subsection (a) shall not apply to
automobiles or light duty trucks that operate only on
electricity.''.
(b) Clerical Amendment.--The table of sections for chapter
329 of title 49, United States Code, is amended by inserting
after the item relating to section 32902 the following:

``32902A. Requirement to manufacture dual fueled automobiles and light
duty trucks.''.
(c) Rulemaking.--Not later than 1 year after the date of
the enactment of this Act, the Secretary of Transportation
shall prescribe regulations to carry out the amendments made
by this Act.

SEC. 3. BLENDER PUMP PROMOTION.

(a) Blender Pump Grant Program.--
(1) Definitions.--In this subsection:
(A) Blender pump.--The term ``blender pump'' means an
automotive fuel dispensing pump capable of dispensing at
least 3 different blends of gasoline and ethanol, as selected
by the pump operator, including blends ranging from 0 percent
ethanol to 85 percent denatured ethanol, as determined by the
Secretary.
(B) E-85 fuel.--The term ``E-85 fuel'' means a blend of
gasoline approximately 85 percent of the content of which is
ethanol.
(C) Ethanol fuel blend.--The term ``ethanol fuel blend''
means a blend of gasoline and ethanol, with a minimum of 0
percent and maximum of 85 percent of the content of which is
denatured ethanol.
(D) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(2) Grants.--The Secretary shall make grants under this
subsection to eligible facilities (as determined by the
Secretary) to pay the Federal share of--
(A) installing blender pump fuel infrastructure, including
infrastructure necessary--
(i) for the direct retail sale of ethanol fuel blends
(including E-85 fuel), including blender pumps and storage
tanks; and
(ii) to directly market ethanol fuel blends (including E-85
fuel) to gas retailers, including inline blending equipment,
pumps, storage tanks, and loadout equipment; and
(B) providing subgrants to direct retailers of ethanol fuel
blends (including E-85 fuel) for the purpose of installing
fuel infrastructure for the direct retail sale of ethanol
fuel blends (including E-85 fuel), including blender pumps
and storage tanks.
(3) Federal share.--The Federal share of the cost of a
project carried out under this subsection shall be 50 percent
of the total cost of the project.
(4) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary to carry out this
subsection, to remain available until expended--
(A) $50,000,000 for fiscal year 2010;
(B) $100,000,000 for fiscal year 2011;
(C) $200,000,000 for fiscal year 2012;
(D) $300,000,000 for fiscal year 2013; and
(E) $350,000,000 for fiscal year 2014.
(b) Installation of Blender Pumps by Major Fuel
Distributors at Owned Stations and Branded Stations.--Section
211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended by
adding at the end the following:
``(13) Installation of blender pumps by major fuel
distributors at owned stations and branded stations.--
``(A) Definitions.--In this paragraph:
``(i) E-85 fuel.--The term `E-85 fuel' means a blend of
gasoline approximately 85 percent of the content of which is
ethanol.
``(ii) Ethanol fuel blend.--The term `ethanol fuel blend'
means a blend of gasoline and ethanol, with a minimum of 0
percent and maximum of 85 percent of the content of which is
denatured ethanol.
``(iii) Major fuel distributor.--

``(I) In general.--The term `major fuel distributor' means
any person that owns a refinery and directly markets the
output of a refinery.
``(II) Exclusion.--The term `major fuel distributor' does
not include any person that owns less than 50 retail fueling
stations.

``(iv) Secretary.--The term `Secretary' means the Secretary
of Energy, acting in consultation with the Administrator of
the Environmental Protection Agency and the Secretary of
Agriculture.
``(B) Regulations.--The Secretary shall promulgate
regulations to ensure that each major fuel distributor that
sells or introduces gasoline into commerce in the United
States through majority-owned stations or branded stations
installs or otherwise makes available 1 or more blender pumps
that dispense E-85 fuel and ethanol fuel blends (including
any other equipment necessary, such

[[Page S9025]]

as tanks, to ensure that the pumps function properly) for a
period of not less than 5 years at not less than the
applicable percentage of the majority-owned stations and the
branded stations of the major fuel distributor specified in
subparagraph (C).
``(C) Applicable percentage.--For the purpose of
subparagraph (B), the applicable percentage of the majority-
owned stations and the branded stations shall be determined
in accordance with the following table:

``Applicable percentage of majority-owned stations and branded statio
Calendar year: Percent:
2011..............................................................10
2013..............................................................20
2015..............................................................35
2017 and each calendar year thereafter............................50.
``(D) Geographic distribution.--
``(i) In general.--Subject to clause (ii), in promulgating
regulations under subparagraph (B), the Secretary shall
ensure that each major fuel distributor described in that
subparagraph installs or otherwise makes available 1 or more
blender pumps that dispense E-85 fuel and ethanol fuel blends
at not less than a minimum percentage (specified in the
regulations) of the majority-owned stations and the branded
stations of the major fuel distributors in each State.
``(ii) Requirement.--In specifying the minimum percentage
under clause (i), the Secretary shall ensure that each major
fuel distributor installs or otherwise makes available 1 or
more blender pumps described in that clause in each State in
which the major fuel distributor operates.
``(E) Financial responsibility.--In promulgating
regulations under subparagraph (B), the Secretary shall
ensure that each major fuel distributor described in that
subparagraph assumes full financial responsibility for the
costs of installing or otherwise making available the blender
pumps described in that subparagraph and any other equipment
necessary (including tanks) to ensure that the pumps function
properly.
``(F) Production credits for exceeding blender pumps
installation requirement.--
``(i) Earning and period for applying credits.--If the
percentage of the majority-owned stations and the branded
stations of a major fuel distributor at which the major fuel
distributor installs blender pumps in a particular calendar
year exceeds the percentage required under subparagraph (C),
the major fuel distributor shall earn credits under this
paragraph, which may be applied to any of the 3 consecutive
calendar years immediately after the calendar year for which
the credits are earned.
``(ii) Trading credits.--Subject to clause (iii), a major
fuel distributor that has earned credits under clause (i) may
sell the credits to another major fuel distributor to enable
the purchaser to meet the requirement under subparagraph (C).
``(iii) Exception.--A major fuel distributor may not use
credits purchased under clause (ii) to fulfill the geographic
distribution requirement in subparagraph (D).''.
______

By Mr. UDALL, of Colorado (for himself and Mrs. Hagan):
S. 1628. A bill to amend title VII of the Public Health Service Act
to increase the number of physicians who practice in underserved rural
communities; to the Committee on Health, Education, Labor, and
Pensions.
Mr. UDALL of Colorado. Mr. President, I rise today to introduce an
important piece of legislation on behalf of myself and Senator Kay
Hagan of North Carolina, the Rural Physician Pipeline Act of 2009.
In making my way across my home State, I have listened to rural
constituents from all over Colorado, and their message is clear: rural
communities are being hit hard by America's health care crisis.
The life expectancy for women in many rural counties across the
Nation has declined significantly over the past several decades, and
health outcomes for Hispanic, Native American, and other minority
populations are at unacceptable levels. Low-income rural Americans in
these areas have very few options for affordable access to health care,
if they have any at all.
Just over 2 weeks ago, I reached out to health care providers and
professionals in rural regions of Colorado that have been most impacted
by our ailing health system to hear directly from those on health
care's front lines. While there are many factors contributing to the
lower health outcomes we are seeing in these regions, including
regulatory hurdles and low reimbursement rates for rural clinics and
hospitals, the physicians and health professionals I spoke with were
pretty clear about the overwhelming culprit: lack of primary care
doctors.
Invoking imagery of the black bag toting doctor from decades ago
making house calls to treat all that ailed you and your family, primary
care physicians are still the lynchpin of our health care system. These
physicians are the most familiar to Americans--they are the family
doctor, general practitioner, and pediatrician, and they are many times
the only point of contact that people have with the health care system.
They are the first line of defense for keeping our families healthy.
Unfortunately, as the entire Nation suffers from a shortage of
primary care doctors, our rural areas are hit the hardest. For a
variety of socioeconomic and resource-related reasons, rural
communities struggle to compete with big cities in recruiting from an
already scarce pool of doctors. Some of these barriers are inherent to
these areas--lack of job opportunities for spouses or a general lack of
desire to live the lifestyle offered by our rural communities. But some
barriers can be overcome if we use our resources wisely and work toward
solutions to break them down, particularly with respect to how we as a
nation train and compensate our front line doctors.
Medical school is where we develop and educate our new doctors, yet
the 4 years of training they provide more often than not nudge students
into more lucrative specialty care or toward practice in higher paying
cities. While we certainly rely on our cardiologists, orthopedists,
neurologists, and the many other medical specialists to provide the
top-notch care that only they are trained to provide, we cannot
continue to push students into these areas to the detriment of primary
care. A balance needs to be found.
Today, I am proud to introduce, along with Senator Kay Hagan of North
Carolina, the Rural Physician Pipeline Act of 2009, a bill that I hope
can be part of the solution to our rural physician shortage. This
legislation would make grants available to medical schools across the
country for establishing programs designed to recruit students from
rural areas who have a desire to practice in their hometowns. These
programs would cultivate and strengthen the rural commitment of these
future ``homegrown'' doctors, provide them the specialized training
necessary to excel in the unique environment of sparsely populated
regions, and assist them in finding postgraduate training programs that
specialize in training doctors for practice in underserved rural
communities.
Primary care doctors in rural areas face challenges that urban
doctors do not. When a physician is the only health care provider for
an entire county, he or she cannot refer patients down the hall to a
specialist. The rural training programs encouraged by this bill would
give students additional training in pediatrics, emergency medicine,
obstetrics, and behavioral health, among other areas, which will allow
them to better serve their communities and hopefully lower the
disturbing disparities of health outcomes we have seen over the years.
I was prompted to write this bill after seeing the promising results
of a similar program at the University of Colorado School of Medicine.
Faculty like associate dean for rural health, Dr. Jack Westfall, and
rural health track director, Dr. Mark Deutchman, have found that
reaching out to rural communities for student recruitment and
reinforcing their rural commitment throughout their training is the
best way to get them back into the communities that need them most.
My hope is that an expansion of similar programs nationwide will
provide a ``one, two punch'' for the rural physician workforce--it will
train more rural doctors, and it will train them better.
I recognize that this legislation would play only a modest role in
tackling the immense workforce challenges our health care system faces.
We need more equitable payments for low-paid primary care doctors,
loan-forgiveness programs must be expanded to allow medical graduates
to practice primary care without going into budget-crushing debt, and
graduate medical education dollars need to be more flexible so that
rural residency programs can be established to train graduates.
Health care reform needs to address these areas.
As my fellow Senators and I depart Washington for our home States to
listen to the ideas, needs, and concerns of our constituents over the
remainder of the month, We do so with the knowledge that there is much
to accomplish

[[Page S9026]]

upon our return. And as Congress continues working toward a health
reform bill that puts the patient in charge of his or her health care
choices, brings costs down, ensures financial sustainability, and
brings security and stability for all Americans, there is one other
thing we must also insist: health reform will not leave rural America
behind.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1628

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Rural Physician Pipeline Act
of 2009''.

SEC. 2. RURAL PHYSICIAN TRAINING GRANTS.

Part C of Title VII of the Public Health Service Act (42
U.S.C. 293k et seq.) is amended--
(1) after the part heading, by inserting the following:

``Subpart I--Medical Training Generally''; and

(2) by inserting at the end the following:

``Subpart II--Training in Underserved Communities

``SEC. 749. RURAL PHYSICIAN TRAINING GRANTS.

``(a) In General.--The Secretary, acting through the
Administrator of the Health Resources and Services
Administration, shall establish a program to make grants to
eligible entities for the purposes of--
``(1) assisting eligible entities in recruiting students
most likely to practice medicine in underserved rural
communities;
``(2) providing rural-focused training and experience; and
``(3) increasing the number of recent allopathic and
osteopathic medical school graduates who practice in
underserved rural communities.
``(b) Eligible Entities.--In order to be eligible to
receive a grant under this section, an entity shall--
``(1) be a school of allopathic or osteopathic medicine
accredited by a nationally recognized accrediting agency or
association approved by the Secretary for this purpose, or
any combination or consortium of such schools; and
``(2) submit an application to the Secretary at such time,
in such form, and containing such information as the
Secretary may require, including a certification that such
entity--
``(A) will use amounts provided to the institution to--
``(i) establish and carry out a Rural Physician Training
Program described in subsection (d);
``(ii) improve an existing rural-focused training program
to meet the requirements described in subsection (d) and
carry out such program; or
``(iii) expand and carry out an existing rural-focused
training program that meets the requirements described in
subsection (d); and
``(B) employs, or will employ within a timeframe sufficient
to implement the Program (as described by a timetable and
supporting documentation in the application of the eligible
entity), faculty with experience or training in rural
medicine or with experience in training rural physicians.
``(c) Priority.--In awarding grant funds under this
section, the Secretary shall give priority to eligible
entities that--
``(1) demonstrate a record of successfully training
students, as determined by the Secretary, who practice
medicine in underserved rural communities;
``(2) demonstrate that an existing academic program of the
eligible entity produces a high percentage, as determined by
the Secretary, of graduates from such program who practice
medicine in underserved rural communities;
``(3) demonstrate rural community institutional
partnerships, though such mechanisms as matching or
contributory funding, documented in-kind services for
implementation, or existence of training partners with
interprofessional expertise (such as dental, vision, or
mental health services) in community health center training
locations or other similar facilities; or
``(4) submit, as part of the application of the entity
under subsection (b), a plan for the long-term tracking of
where the graduates of such entity are practicing medicine.
``(d) Use of Funds.--
``(1) Establishment.--An eligible entity receiving a grant
under this section shall use the funds made available under
such grant to--
``(A) establish and carry out a `Rural Physician Training
Program' (referred to in this section as the `Program');
``(B) improve an existing rural-focused training program to
meet the Program requirements described in this subsection
and carry out such program; or
``(C) expand and carry out an existing rural-focused
training program that meets the Program requirements
described in this subsection.
``(2) Structure of program.--An eligible entity shall--
``(A) enroll no fewer than 10 students per class year into
the Program; and
``(B) develop criteria for admission to the Program that
gives priority to students--
``(i) who have originated from or lived for a period of 2
or more years in an underserved rural community; and
``(ii) who express a commitment to practice medicine in an
underserved rural community.
``(3) Curricula.--The Program shall require students to
enroll in didactic coursework and clinical experience
particularly applicable to medical practice in underserved
rural communities, including--
``(A) clinical rotations in underserved rural communities,
and in specialties including family medicine, internal
medicine, pediatrics, surgery, psychiatry, and emergency
medicine;
``(B) in addition to core school curricula, additional
coursework or training experiences focused on medical issues
prevalent in underserved rural communities, including in
areas such as trauma, obstetrics, ultrasound, oral health,
and behavioral health; and
``(C) any coursework or clinical experience that--
``(i) may be developed as a result of the Symposium
described in subsection (f); or
``(ii) the Secretary finds appropriate.
``(4) Residency placement assistance.--Where available, the
Program shall assist all students of the Program in obtaining
clinical training experiences in locations with postgraduate
programs offering residency training opportunities in
underserved rural communities, or in local residency training
programs that support and train physicians to practice in
underserved rural communities, as well as assist all students
of the Program in obtaining postgraduate residency training
in such programs.
``(5) Program student cohort support.--The Program shall
provide and require all students of the Program to
participate in social, educational, and other group
activities designed to further develop, maintain, and
reinforce the original commitment of such students to
practice in an underserved rural community.
``(e) Annual Reporting Requirement.--On an annual basis, an
eligible entity receiving a grant under this section shall
submit a report to the Secretary on--
``(1) the overall success of the Program established by the
entity, based on criteria the Secretary determines
appropriate;
``(2) the number of students participating in the Program;
``(3) the number of graduating students who participated in
the Program;
``(4) the residency program selection of graduating
students who participated in the Program;
``(5) the number of graduates who participated in the
Program who are practicing in underserved rural communities
not less than one year after completing residency training;
and
``(6) the number of graduates who participated in the
Program who are not practicing in underserved rural
communities not less than one year after completing residency
training.
``(f) Rural Training Program Symposium.--
``(1) Purposes of symposium.--To assist the Secretary in
carrying out the Program and making grant determinations
under this section, the Secretary shall convene a Rural
Training Program Symposium (referred to in this section as
the `Symposium') to--
``(A) develop best practices that may be incorporated into
consideration of applications under subsection (b); and
``(B) establish a network of allopathic and osteopathic
medical schools that have developed or will develop rural
training programs in accordance with subsection (d).
``(2) Composition.--The Symposium shall include--
``(A) representatives from eligible entities with existing
rural training programs;
``(B) representatives from all eligible entities interested
in developing the Program;
``(C) representatives from area health education centers;
``(D) representatives from the Health Resources and
Services Administration; and
``(E) any other experts or individuals with experience in
practicing medicine in underserved rural communities the
Secretary determines appropriate.
``(g) Regulations.--Not later than 60 days after the date
of enactment of this section, the Secretary shall by
regulation define `underserved rural community' for purposes
of this section.
``(h) Supplement Not Supplant.--Any eligible entity
receiving funds under this section shall use such funds to
supplement, not supplant, any other Federal, State, and local
funds that would otherwise be expended by such entity to
carry out the activities described in this section.
``(i) Maintenance of Effort.--With respect to activities
for which funds awarded under this section are to be
expended, the entity shall agree to maintain expenditures of
non-Federal amounts for such activities at a level that is
not less than the level of such expenditures maintained by
the entity for the fiscal year preceding the fiscal year for
which the entity receives a grant under this section.
``(j) Authorization of Appropriations.--There are
authorized to be appropriated--
``(1) to carry out this section (other than subsection
(f))--
``(A) $4,000,000 for fiscal year 2010;
``(B) $8,000,000 for fiscal year 2011;
``(C) $12,000,000 for fiscal year 2012;
``(D) $16,000,000 for fiscal year 2013; and
``(2) to carry out subsection (f), such sums as may be
necessary.''.

[[Page S9027]]

______

By Mr. ROCKEFELLER (for himself and Mr. Franken):
S. 1630. A bill to amend title XVIII of the Social Security Act of
improve prescription drug coverage under Medicare part D and to amend
the Public Health Service Act, the Employee Retirement Income Security
Act of 1974, and the Internal Revenue Code of 1986 to improve
prescription drug coverage under private health insurance, and for
other purposes; to the Committee on Finance.
Mr. ROCKEFELLER. Mr. President, I rise today with the newest esteemed
Member of this Chamber, Senator Al Franken, to introduce the Affordable
Access to Prescription Medications Act of 2009. I think this is the
first bill we have introduced together, and I look forward to working
with him again in the future. The legislation we are introducing today
is a critically important bill--one that protects all Americans from
high out-of-pocket spending on prescription drugs.
With each passing year, Americans are paying more for their health
care. Rising out-of-pocket costs are problematic for all patient
populations, but are particularly burdensome for chronically ill and
low-income individuals. The health insurance premiums and out-of-pocket
costs for those below the federal poverty level are huge, with 28
percent paying more than ten percent of their income. Overall, out-of-
pocket spending for individuals insured in the private insurance market
is large and rapidly growing, with an increase of 45 percent between
2001 and 2006.
Prescription drugs represent the highest out-of-pocket cost for
patients, comprising almost 31 percent of total out-of-pocket spending.
The higher the out-of-pocket cost, the fewer individuals fill their
needed medications. In fact, about 20 percent of individuals with out-
of-pocket spending greater than $250 a month do not fill their
prescriptions and, thereby further exacerbate their conditions. Out-of-
pocket expenses are only getting worse, especially as prescription drug
costs increase. A 2009 survey found that 53 percent of Americans have
cut back on health care spending in the last twelve months, as the
economy has worsened.
In Medicare specifically, beneficiaries enrolled in a prescription
drug plan in 2007 spent $38 a month, on average, for prescription drug
co-payments. However, for those on high-cost medications, the cost
burden can be enormous. Ninety percent of Medicare prescription drug
plans and ten percent of private insurance plans include what is
referred to as a specialty tier for medications costing over $600 a
month. For these medications, enrollees can be asked to pay up to 33
percent of the drug's cost in copayments.
The high cost of treatment, particularly for life-saving and life-
sustaining treatment, poses an unreasonable and devastating barrier for
sick patients that can force them to delay or entirely forgo necessary
treatment. For one West Virginian, the chemotherapy drug he needs to
treat his cancer is more than $13,500 for a 90-day supply. Under his
Medicare prescription drug plan, he would have to pay $4000 of that
cost. He didn't have $4000, so he chose not to be treated.
Another West Virginian with multiple sclerosis contacted my office
recently, and told me that the drug to treat her disease, which allows
her to continue to work, costs $1900 a month. Her private insurer
changed its policy from a $20 flat copayment for each prescription to
25 percent co-insurance for each prescription, creating a financial
burden for her of $475 per month. It should come as no surprise that
she is struggling to pay this amount every month.
These West Virginians are just a couple of examples of the millions
of Americans who pay their health insurance premiums every month for
coverage that is supposed to protect them from such enormous financial
losses--but, sadly, it does not. Providing access to affordable
prescription drugs for the treatment of chronic diseases is critical to
improving our nation's health care system, which is why we are
introducing this legislation today. The Affordable Access to
Prescription Medications Act will go a long way to address the growing
problem of catastrophic prescription drug expenses.
First, this bill will establish a $200 cap on the amount a person
could be charged for any one prescription, and a $500 cap on the total
amount an individual could be charged for all prescriptions in any
given month. These caps apply to all private and public insurance
plans, including Medicare prescription drug plans.
Second, this bill establishes an exceptions process for specialty
drugs. Currently, the most expensive prescription drugs in the Medicare
prescription drug program that are included on specialty tiers are not
subject to beneficiary exemption requests, but for all other Medicare-
covered prescription drugs, a beneficiary can request an exemption to
allow them access to needed drugs. High-cost, specialty drugs can be
difficult to access and this bill will allow any beneficiary to request
any needed prescription drug, including those in specialty tiers,
through the exemption process.
Third, this bill requires the Medicare Payment Advisory Commission,
MedPAC, to conduct two studies regarding discrimination and cost-
sharing. The first study will review Medicare Part B, Part C, and Part
D prescription drug polices to make sure they do not violate the non-
discrimination rules passed as part of the 2003 Medicare law. Under
2003 law, plans are prohibited from discriminating against individuals
based on medical condition. The second study will examine the impact of
prescription drug cost-sharing on beneficiaries and their health,
particularly for those who have already paid their way through the so-
called doughnut hole.
If enacted, this legislation will protect Americans from high out-of-
pocket spending on prescription drugs. Based on studies that explain
the problem, this bill could potentially lower copayments for 2.5 to 10
percent of Americans with the highest prescription costs. It will
protect all Americans from the risk of incurring extraordinarily high
prescription drug costs.
The national cap on out-of-pocket spending for prescription drugs
will reduce costs for the most vulnerable populations by over 50
percent. Given the rising costs of drugs, the prevalence of new drugs
on the market, and the current economic recession, addressing the
affordability of prescriptions drugs is vitally important.
We must act now to make prescription drugs more affordable for all
Americans, but especially those with chronic diseases. I urge my
colleagues to join me in support of this important bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1630

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Affordable Access to
Prescription Medications Act of 2009''.

SEC. 2. MEDICARE PART D PRESCRIPTION DRUG PLANS.

(a) In General.--Section 1860D-2(b)(4) of the Social
Security Act (42 U.S.C. 1395w-102(b)(4)) is amended by adding
at the end the following new subparagraph:
``(E) Additional protections.--
``(i) In general.--Notwithstanding any other provision of
this part, effective for plan years beginning on or after
January 1, 2011, a PDP sponsor of a prescription drug plan
and an MA organization offering an MA-PD plan shall, with
respect to any co-payment or coinsurance requirements
applicable to covered part D drugs under the plan, ensure
that--

``(I) such required co-payment or coinsurance does not
exceed the base cost of the covered part D drug (as
determined by the Secretary);
``(II) such required co-payment or coinsurance does not
exceed $200 per month for any single covered part D drug (30-
day supply); and
``(III) such required co-payment or coinsurance does not
exceed, in the aggregate for all covered part D drugs, $500
per month.

``(ii) Adjustments.--The amounts described in clauses (II)
and (III) of clause (i) shall be annually adjusted to reflect
the average of the percentage increase or decrease in the
Consumer Price Index for all urban consumers (U.S. city
average) and the percentage increase or decrease in the
medical care component of such Consumer Price Index during
the calendar year preceding the year for which the adjustment
is being made.''.
(b) Expansion of Exceptions Process.--Effective for plan
years beginning on or after January 1, 2011, the Secretary
shall expand the formulary tier exception request process
under sections 423.560 through 423.636 of title 42, Code of
Federal Regulations (as in effect

[[Page S9028]]

on the date of enactment of this Act), to allow individuals
enrolled in a prescription drug plan under part D of title
XVIII of the Social Security Act or an MA-PD plan under part
C of such title to request an exception for a specialty
prescription drug to a plan's designation of a covered part D
drug (as defined in section 1860D-2(e) of such Act (42 U.S.C.
1395w-102(e)) as a non-preferred prescription drug.
(c) MedPAC Studies and Reports.--
(1) Study and report on the medicare part d anti-
discrimination clause.--
(A) Study.--The Medicare Payment Advisory Commission shall
conduct a study on various aspects of the prescription drug
program under part D of title XVIII of the Social Security
Act and, to the greatest extent practicable, the interaction
of such program with Medicare beneficiary access to covered
drugs under part B of such title. Such study shall include
the following:
(i) An analysis of--

(I) the use of specialty tiers for covered part D drugs
under prescription drug plans and MA-PD plans; and
(II) the effect of such specialty tiers on access to care
for Medicare beneficiaries.

(ii) Consideration of the mechanisms described in
subparagraph (B) in the context of the provisions of section
1860D-11(e)(2)(D) of the Social Security Act (42 U.S.C.
1395w-111(e)(2)(D)) (in this paragraph referred to as the
``Medicare part D anti-discrimination clause'').
(B) Mechanisms described.--The following mechanisms are
described in this subparagraph:
(i) The use of specialty tiers for covered part D drugs
under prescription drug plans and MA-PD plans.
(ii) The application of segmented coinsurance or copayment
structures to covered part D drugs based on certain
categories of such drugs or diagnoses.
(iii) The utilization of other differential benefit
structures based on certain conditions and Medicare
beneficiaries under prescription drug plans and MA-PD plans,
including an analysis of the interaction between such
utilization and the effects of such utilization with the
Medicare part D anti-discrimination clause.
(C) Report.--Not later than 1 year after the date of
enactment of this Act, the Medicare Payment Advisory
Commission shall submit to Congress a report containing the
results of the study conducted under subparagraph (A),
together with recommendations for such legislation and
administrative action as the Commission determines
appropriate.
(D) Revised guidance.--Based on the results of the study
conducted under subparagraph (A), the Secretary shall issue
revised guidance regarding the use of mechanisms described in
subparagraph (B) to all PDP sponsors offering prescription
drug plans under part D of title XVIII of the Social Security
Act and Medicare Advantage organizations offering MA-PD plans
under part C of such title.
(2) Study and report on cost-sharing for prescription drugs
under parts b and d.--
(A) Study.--The Medicare Payment Advisory Commission shall
conduct a study on cost-sharing for prescription drugs under
parts B and D of title XVIII of the Social Security Act. Such
study shall include an analysis of the impact of eliminating
cost-sharing for covered part D drugs for Medicare
beneficiaries who--
(i) incur annual out-of-pocket cost-sharing after the
initial coverage limit under section 1860D-2(b)(3) of such
Act (42 U.S.C. 1395w-102) that exceeds 5 percent of the
income of the beneficiary (as determined under section 1860D-
14(a)(3)(C) of such Act (42 U.S.C. 1395w-114(a)(3)(C)); and
(ii) do not otherwise qualify for an income-related subsidy
under section 1860D-14(a) of such Act (42 U.S.C. 1395w-
114(a)) or other extra help or cost-sharing relief.
(B) Report.--Not later than 6 months after the date of
enactment of this Act, the Medicare Payment Advisory
Commission shall submit to Congress a report containing the
results of the study conducted under subparagraph (A),
together with recommendations for such legislation and
administrative action as the Commission determines
appropriate.
(3) Definitions.--In this section:
(A) Covered part d drug.--The term ``covered part D drug''
has the meaning given such term in section 1860D-2(e) of the
Social Security Act (42 U.S.C. 1395w-102(e)).
(B) MA-PD plan.--The term ``MA-PD'' plan has the meaning
given such term in paragraph (9) of section 1860D-41(a) of
such Act (42 U.S.C. 1395w-151(a)).
(C) Medicare advantage organization.--The term ``Medicare
Advantage organization'' has the meaning given such term in
section 1859(a)(1) of such Act (42 U.S.C. 1395w-28(a)(1)).
(D) PDP sponsor.--The term ``PDP sponsor'' has the meaning
given such term in paragraph (13) of such section 1860D-
41(a).
(E) Prescription drug plan.--The term ``prescription drug
plan'' has the meaning given such term in paragraph (14) of
such section.

SEC. 3. PRIVATE HEALTH INSURANCE.

(a) Group Health Plans.--
(1) Public health service act amendments.--
(A) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at the end the
following new section:

``SEC. 2708. PROVISIONS RELATING TO PRESCRIPTION DRUGS.

``(a) In General.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
that provides coverage for prescription drugs shall, with
respect to any co-payment or coinsurance requirements
applicable to such drug coverage, ensure that--
``(1) such required co-payment or coinsurance does not
exceed the base cost of the prescription drug (as determined
by the Secretary);
``(2) such required co-payment or coinsurance does not
exceed $200 per month for any single prescription drug (30-
day supply); and
``(3) such required co-payment or coinsurance does not
exceed, in the aggregate for all prescription drugs, $500 per
month.
``(b) Adjustments.--The amounts described in paragraphs (2)
and (3) of subsection (a) shall be annually adjusted to
reflect the average of the percentage increase or decrease in
the Consumer Price Index for all urban consumers (U.S. city
average) and the percentage increase or decrease in the
medical care component of such Consumer Price Index during
the calendar year preceding the year for which the adjustment
is being made.
``(c) Notice.--A group health plan under this part shall
comply with the notice requirement under section 714(b) of
the Employee Retirement Income Security Act of 1974 with
respect to the requirements of this section as if such
section applied to such plan.''.
(B) Conforming amendment.--Section 2723(c) of such Act (42
U.S.C. 300gg-23(c)) is amended by striking ``section 2704''
and inserting ``sections 2704 and 2708''.
(2) ERISA amendments.--
(A) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following new section:

``SEC. 715. PROVISIONS RELATING TO PRESCRIPTION DRUGS.

``(a) In General.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
that provides coverage for prescription drugs shall, with
respect to any co-payment or coinsurance requirements
applicable to such drug coverage, ensure that--
``(1) such required co-payment or coinsurance does not
exceed the base cost of the prescription drug (as determined
by the Secretary of Health and Human Services);
``(2) such required co-payment or coinsurance does not
exceed $200 per month for any single prescription drug (30-
day supply); and
``(3) such required co-payment or coinsurance does not
exceed, in the aggregate for all prescription drugs, $500 per
month.
``(b) Adjustments.--The amounts described in paragraphs (2)
and (3) of subsection (a) shall be annually adjusted to
reflect the average of the percentage increase or decrease in
the Consumer Price Index for all urban consumers (U.S. city
average) and the percentage increase or decrease in the
medical care component of such Consumer Price Index during
the calendar year preceding the year for which the adjustment
is being made.
``(c) Notice.--A group health plan under this part shall
comply with the notice requirement under section 714(b) with
respect to the requirements of this section as if such
section applied to such plan.''.
(B) Table of contents.--The table of contents in section 1
of such Act is amended by inserting after the item relating
to section 714 the following new item:

``Sec. 715. Provisions relating to prescription drugs.''.
(3) Internal revenue code amendments.--
(A) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new section:

``SEC. 9813. PROVISIONS RELATING TO PRESCRIPTION DRUGS.

``(a) In General.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
that provides coverage for prescription drugs shall, with
respect to any co-payment or coinsurance requirements
applicable to such drug coverage, ensure that--
``(1) such required co-payment or coinsurance does not
exceed the base cost of the prescription drug (as determined
by the Secretary of Health and Human Services);
``(2) such required co-payment or coinsurance does not
exceed $200 per month for any single prescription drug (30-
day supply); and
``(3) such required co-payment or coinsurance does not
exceed, in the aggregate for all prescription drugs, $500 per
month.
``(b) Adjustments.--The amounts described in paragraphs (2)
and (3) of subsection (a) shall be annually adjusted to
reflect the average of the percentage increase or decrease in
the Consumer Price Index for all urban consumers (U.S. city
average) and the percentage increase or decrease in the
medical care component of such Consumer Price Index during
the calendar year preceding the year for which the adjustment
is being made.
``(c) Notice.--A group health plan under this part shall
comply with the notice requirement under section 714(b) of
the Employee Retirement Income Security Act of 1974 with
respect to the requirements of this section as if such
section applied to such plan.''.
(B) Clerical amendment.--The table of sections for such
subchapter is amended by adding at the end the following new
item:

[[Page S9029]]

``Sec. 9813. Provisions relating to prescription drugs.''.
(b) Individual Health Insurance.--
(1) In general.--Part B of title XXVII of the Public Health
Service Act is amended by inserting after section 2752 the
following new section:

``SEC. 2754. PROVISIONS RELATING TO PRESCRIPTION DRUGS.

``The provisions of section 2708 shall apply to health
insurance coverage offered by a health insurance issuer in
the individual market in the same manner as they apply to
health insurance coverage offered by a health insurance
issuer in connection with a group health plan in the small or
large group market.''.
(2) Conforming amendment.--Section 2762(b)(2) of such Act
(42 U.S.C. 300gg-62(b)(2)) is amended by striking ``section
2751'' and inserting ``sections 2751 and 2754''.
(c) Application to FEHBP.--The amendments made by this
section shall apply to the administration of chapter 89 of
title 5, United States Code.
______

By Ms. CANTWELL:
S. 1633. A bill to require the Secretary of Homeland Security, in
consultation with the Secretary of State, to establish a program to
issue Asia-Pacific Economic Cooperation Business Travel Cards, and for
other purposes; to the Committee on Foreign Relations.
Ms. CANTWELL. Mr. President, I rise today to introduce the Asia-
Pacific Economic Cooperation, APEC, Business Travel Cards Act of 2009.
This bill would authorize the Secretary of Homeland Security and State
Department to issue APEC Business Travel Cards, ABTC's, to business
leaders from APEC countries and senior government officials who are
actively engaged in APEC business.
The ABTC program has 18 nations participating, including China, Japan
and Australia, which are among the world's larger economies. The United
States currently recognizes foreign issued ABTC travel cards.
Cardholders from non-Visa Waiver Program countries need to present
valid passports and those from other countries must still obtain U.S.
visas as required by United States law. However, ABTC card holders are
allowed to benefit from expedited visa interview scheduling at U.S.
embassies and consulates, and expedited immigration processing through
airline crew and diplomat immigration lanes upon arrival at U.S.
international airports. However, under current law U.S. passport
holders are not yet eligible to apply for the ABTC program and
therefore do not enjoy these same benefits in Asia-Pacific countries.
This bill would require the Secretary of Homeland Security to issue
ABTCs to United States citizen business leaders and senior government
officials actively engaged in APEC business no later than January 1,
2010.
I support the Asia-Pacific Economic Cooperation Business Travel Cards
Act because I have long supported increased free trade with the Asia-
Pacific region. International business travel is an essential part of
selling goods and services around the world. The 21 member economies of
APEC together account for around 53 percent of world GDP and
approximately 48 percent of global trade. This bill would help
facilitate international cooperation and trade by allowing business
leaders within the participating countries to enter countries on an
expedited basis for the length of the program, currently three years.
The success of the program has been shown by the amount of
applications for travel cards since inception of the program in 1997.
From 1997, applications received by participating countries have grown
by more than 100 percent each year. By March of last year, there were
more than 34,000 cards being used by APEC countries. The Asia-Pacific
Economic Cooperation Business Travel Cards Act of 2009 will help
facilitate global trade within the Asia-Pacific, and create expanded
export opportunities for U.S. businesses. Working to grow U.S. exports
will get our economy to grow again and create and maintain U.S. jobs.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1633

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Asia-Pacific Economic
Cooperation Business Travel Cards Act of 2009''.

SEC. 2. ASIA-PACIFIC ECONOMIC COOPERATION BUSINESS TRAVEL
CARDS.

(a) In General.--Not later than January 1, 2010, the
Secretary of Homeland Security, in consultation with the
Secretary of State, shall establish a program called the
``APEC Business Travel Program'' to issue Asia-Pacific
Economic Cooperation Business Travel Cards (ABTC) to eligible
United States citizen business leaders and senior United
States Government officials actively engaged in Asia-Pacific
Economic Cooperation (APEC) business.
(b) Integration With Existing Travel Programs.--The
Secretary of Homeland Security shall integrate application
procedures for and issuance of ABTC with other appropriate
international registered traveler programs of the Department
of Homeland Security, such as Global Entry, NEXUS, and
SENTRI.
(c) Cooperation With Private Entities.--In carrying out
this section, the Secretary of Homeland Security shall work
in conjunction with appropriate private sector entities to
ensure that applicants for ABTC satisfy ABTC requirements.
The Secretary of Homeland Security may utilize such entities
to enroll and issue ABTC to qualified applicants.
(d) Fee.--
(1) In general.--The Secretary of Homeland Security may
impose a fee for the issuance of ABTC, and may modify such
fee from time to time as the Secretary determines
appropriate.
(2) Limitation.--The Secretary of Homeland Security shall
ensure that the total amount of any fees imposed under
paragraph (1) in any fiscal year does not exceed the costs
associated with carrying out this section in such fiscal
year.
(3) Crediting to appropriate account.--Fees collected under
paragraph (1) shall be credited to the appropriate account of
the Department of Homeland Security and are authorized to
remain available until expended.
______

By Mr. ROCKEFELLER (for himself, Mr. Akaka, and Mr. Brown):
S. 1634. A bill to amend titles XVIII and XIX of the Social Security
Act to protect and improve the benefits provided to dual eligible
individuals under the Medicare and Medicaid programs; to the Committee
on Finance.
Mr. ROCKEFELLER. Mr. President, I rise today with my colleagues,
Senator Akaka and Senator Brown, to introduce the Medicare Prescription
Drug Coverage Improvement Act, legislation that makes long overdue
improvements to the Medicare prescription drug program, particularly
for Medicare beneficiaries who are simultaneously enrolled in Medicaid.
Know as ``dual eligibles,'' these individuals are among our nation's
most vulnerable populations--and they have been overlooked for far too
long.
Approximately 8.8 million Americans are simultaneously enrolled in
Medicare and Medicaid, and they are among the sickest and poorest
individuals covered by either program. Most dual eligibles are very
low-income, in poor health, and have substantial health care needs.
Seventy-one percent of dual eligibles have annual incomes below
$10,000. Over half of all elderly dual eligibles are limited in
activities of daily living and, in comparison to other Medicare
beneficiaries, are three times more likely to be disabled. Dual
eligibles also have higher rates of heart disease, pulmonary disease,
diabetes, and Alzheimer's disease than the general Medicare population.
After passage of the Medicare prescription drug law, Members of
Congress and health care advocates alike tried for more than a year to
work with the Bush Administration to prevent prescription drug coverage
barriers for dual eligibles and other low-income Medicare
beneficiaries. I introduced the Medicare Dual Eligible Prescription
Drug Coverage Act of 2005, S. 566. and the Requiring Emergency
Pharmaceutical Access for Individual Relief, REPAIR, Act of 2006, S.
2183, to prevent disruptions in coverage for vulnerable seniors and
individuals with disabilities.
Unfortunately, effective fail-safe mechanisms were not put into place
by the previous Administration to address the transition of the dual
eligibles to Medicare prescription drug coverage. Consequently,
millions of elderly and disabled Medicare recipients continue to
experience significant barriers to care.
Health care problems persist for the dually eligible largely because
of poor coordination between Medicare and Medicaid--which have two
different sets of providers, two different sets of benefits, and two
different sets of enrollment policies. The legislation we

[[Page S9030]]

are introducing today will go a long way to provide dual eligibles with
the right care, in the right setting, and at the right time.
Additionally, the Medicare Prescription Drug Coverage Improvement Act
will provide more affordable and comprehensive prescription drug
coverage for all Medicare beneficiaries.
First, this bill will create a new Federal Coordinated Health Care
Office within the Centers for Medicare and Medicaid Services, CMS. The
purpose of this new office will be to provide a much more integrated
model of care for dual eligibles by coordinating their Medicare and
Medicaid benefits.
Second, this bill contains two provisions to help make prescription
drugs more affordable and accessible for all Medicare beneficiaries--it
allows the Secretary of Health and Human Services to negotiate directly
with pharmaceutical companies to lower prescription drug prices and it
creates a Medicare-operated prescription drug plan.
The Secretary would be required to implement two or more of the
following strategies on an annual basis to reduce the cost of
prescription drugs covered by Medicare: direct price negotiation with
pharmaceutical manufacturers, additional rebate agreements for Medicare
prescription drugs that are consistent with the rebate agreements
provided to states for Medicaid, comparative clinical effectiveness
data, or prescription drug rates negotiated under the Federal Supply
Schedule.
A Medicare-operated prescription drug plan would be created by the
Secretary of HHS. This plan would be a stable and affordable option
available to all Medicare beneficiaries. This plan would create a
robust prescription drug formulary based on patient safety, efficacy
and value. The formulary incentive process would be transparent and
uniform. An advisory committee would be created to review petitions for
drug inclusion and recommend formulary changes. This Medicare-operated
plan will create fair-market competition and lead to less costly drug
choices for Medicare recipients.
Third, this bill contains significant new requirements for Medicare
Advantage Special Needs Plans. These plans serve extremely vulnerable
populations, including dual eligibles; yet, they have very few
standards that they are required to abide by. The Medicare Prescription
Drug Improvement Act will require special needs plans to be accredited
by the National Committee for Quality Assurance. Additionally, our
legislation requires special needs plans to provide more robust
prescription drug coverage, meet uniform standards for data collection
and reporting, and offer better care coordination.
Finally, this bill will implement a number of technical fixes to
facilitate enrollment in the Medicare prescription drug benefit for
those who qualify. State and Federal officials will be required to
clearly identify dual eligibles in all databases and electronically
file eligibility information, so that these beneficiaries will not
continue to fall through the cracks. Pharmacies will use a facilitated
point-of-sale enrollment process and automatically enroll certain dual
eligible individuals in the Medicare-operated prescription drug plan.
New limits on cost-sharing and resource requirements for low-income
beneficiaries will also be put into place. Prescription drug cost-
sharing for dual eligibles who are using home and community-based
services, instead of institutionalized care, will be eliminated.
We are in the midst of discussing sweeping changes to our health care
system. In addition to provisions to help the uninsured, health care
reform must also include provisions to improve the coverage that people
have today. This is especially true for seniors and individuals with
disabilities. The Medicare prescription drug program is extremely
difficult to navigate and many enrollees are still denied access to the
prescription drugs that they need. This legislation will make the
Medicare prescription drug program much more manageable for seniors and
individuals with disabilities, particularly those dually eligible for
Medicare and Medicaid.
The time for action is now, and I urge my colleagues to join us in
support of this important legislation.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1634

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Medicare
Prescription Drug Coverage Improvement Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--MEDICARE AND MEDICAID IMPROVEMENTS

Sec. 101. Providing Federal coverage and payment coordination for low-
income Medicare beneficiaries.
Sec. 102. Creating a Medicare operated prescription drug plan option.
Sec. 103. Accreditation requirement for all specialized Medicare
Advantage plans and revisions relating to specialized
Medicare Advantage plans for special needs individuals.
Sec. 104. Providing better care coordination for low-income
beneficiaries in Medicare part D.
Sec. 105. Improving transition of new dual eligible individuals to
medicare prescription drug coverage and presumptive
eligibility for low-income subsidies.
Sec. 106. Required information on transition from skilled nursing
facilities and nursing facilities to part D plans.
Sec. 107. Streamlined pharmacy compliance packaging.
Sec. 108. Lowering covered part D drug prices on behalf of Medicare
beneficiaries.
Sec. 109. Correction of flaws in determination of phased-down State
contribution for Federal assumption of prescription drug
costs for dually eligible individuals.
Sec. 110. No impact on eligibility for benefits under other programs.
Sec. 111. Quality indicators for dual eligible individuals.

TITLE II--ADDITIONAL MEDICARE AND MEDICAID IMPROVEMENTS

Subtitle A--Improving the Financial Assistance Available to Low-Income
Medicare Beneficiaries

Sec. 201. Improving assets tests for Medicare Savings Program and low-
income subsidy program.
Sec. 202. Eliminating barriers to enrollment.
Sec. 203. Elimination of part D cost-sharing for certain non-
Institutionalized full-benefit dual eligible individuals.
Sec. 204. Exemption of balance in any pension or retirement plan from
resources for determination of eligibility for low-income
subsidy.
Sec. 205. Cost-sharing protections for low-income subsidy-eligible
individuals.

Subtitle B--Other Improvements

Sec. 211. Enrollment improvements under Medicare parts C and D.
Sec. 212. Medicare plan complaint system.
Sec. 213. Uniform exceptions and appeals process.
Sec. 214. Prohibition on conditioning Medicaid eligibility for
individuals enrolled in certain creditable prescription
drug coverage on enrollment in the Medicare part D drug
program.
Sec. 215. Office of the Inspector General annual report on part D
formularies' inclusion of drugs commonly used by dual
eligibles.
Sec. 216. HHS ongoing study and annual reports on coverage for dual
eligibles.
Sec. 217. Authority to obtain information.

TITLE I--MEDICARE AND MEDICAID IMPROVEMENTS

SEC. 101. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINATION
FOR LOW-INCOME MEDICARE BENEFICIARIES.

(a) Establishment of Federal Coordinated Health Care
Office.--
(1) Establishment.--
(A) In general.--Not later than October 1, 2009, the
Secretary of Health and Human Services (in this section
referred to as the ``Secretary'') shall establish a Federal
Coordinated Health Care Office.
(B) Establishment and reporting to cms administrator.--The
Federal Coordinated Health Care Office shall--
(i) be established within the Centers for Medicare &
Medicaid Services; and
(ii) report directly to the Administrator of the Centers
for Medicare & Medicaid Services.
(2) Purpose.--The purpose of the Federal Coordinated Health
Care Office is to bring together officials of the Medicare
and Medicaid programs at the Centers for Medicare & Medicaid
Services in order to--
(A) more effectively integrate benefits under the Medicare
program under title XVIII of the Social Security Act and the
Medicaid program under title XIX of such Act; and
(B) improve the coordination between the Federal Government
and States for individuals eligible for benefits under both
such

[[Page S9031]]

programs in order to ensure that such individuals get full
access to the items and services to which they are entitled
under titles XVIII and XIX of the Social Security Act.
(3) Goals.--The goals of the Federal Coordinated Health
Care Office are as follows:
(A) Providing dual eligible individuals full access to the
benefits to which such individuals are entitled under the
Medicare and Medicaid programs.
(B) Simplifying the processes for dual eligible individuals
to access the items and services they are entitled to under
the Medicare and Medicaid programs
(C) Improving the quality of health care and long-term
services for dual eligible individuals.
(D) Increasing beneficiary understanding of and
satisfaction with coverage under the Medicare and Medicaid
programs.
(E) Eliminating regulatory conflicts between rules under
the Medicare and Medicaid programs.
(F) Improving care continuity and ensuring safe and
effective care transitions.
(G) Eliminating cost-shifting between the Medicare and
Medicaid program and among related health care providers.
(H) Improving the quality of performance of providers of
services and suppliers under the Medicare and Medicaid
programs.
(4) Specific responsibilities.--The specific
responsibilities of the Federal Coordinated Health Care
Office are as follows:
(A) Providing States, specialized MA plans for special
needs individuals (as defined in section 1859(b)(6) of the
Social Security Act (42 U.S.C. 1395w-28(b)(6)), physicians
and other relevant entities or individuals with the education
and tools necessary for developing programs that align
benefits under the Medicare and Medicaid programs for dual
eligible individuals.
(B) Working with the Director of the Congressional Budget
Office and the Director of the Office of Management and
Budget, and in consultation with the Medicare Payment
Advisory Commission and the Medicaid and CHIP Payment and
Access Commission, to, not later than January 1, 2011,
establish dynamic scoring for benefits for dual eligible
individuals to account for total spending and savings for
comparable risk groups under the Medicare program.
(C) Supporting State efforts to coordinate and align acute
care and long-term care services for dual eligible
individuals with other items and services furnished under the
Medicare program.
(D) Providing support for coordination of contracting and
oversight by States and the Centers for Medicare & Medicaid
Services with respect to the integration of the Medicare and
Medicaid programs in a manner that is supportive of the goals
described in paragraph (3).
(5) Report.--The Secretary shall, as part of the budget
transmitted under section 1105(a) of title 31, United States
Code, submit to Congress an annual report containing
recommendations for legislation that would improve care
coordination and benefits for dual eligible individuals.
(b) Addition of Medicaid Representatives to Medicare
Payment Advisory Commission and Consultation With Medicaid
and CHIP Payment and Access Commission.--
(1) Addition of medicaid representative to medicare payment
advisory commission.--Section 1805(c)(2)(B) of the Social
Security Act (42 U.S.C. 1395b-6(c)(2)(B)) is amended by
adding at the end the following sentence: ``Such membership
shall also include at least 2 individuals who are nationally
recognized for their expertise in financing, benefits, and
provider payment policies under the program under title
XIX.''.
(2) Consultation with medicaid and chip payment and access
commission.--Section 1805(b) of the Social Security Act (42
U.S.C. 1395b-6(b)) is amended by adding at the end the
following new paragraph:
``(9) Consultation with medicaid and chip payment and
access commission.--In carrying out the duties of the
Commission under this subsection, the Commission shall
consult with the Medicaid and CHIP Payment and Access
Commission established under section 506 of the Children's
Health Insurance Program Reauthorization Act of 2009 (Public
Law 111-3) on an ongoing basis.''.
(c) MACPAC Funding and Technical Amendments.--
(1) Funding.--Section 1900(f) of the Social Security Act
(42 U.S.C. 1396(f)) is amended--
(A) in the subsection heading, by striking ``Authorization
of Appropriations'' and inserting ``Funding'';
(B) in paragraph (1), by inserting ``(other than for fiscal
year 2009)'' before ``in the same manner''; and
(C) by striking paragraph (2) and inserting the following:
``(2) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to MACPAC
$11,403,000 for fiscal year 2009 to carry out the provisions
of this section.
``(3) Authorization.--In addition to amounts made available
under paragraph (2), there are authorized to be appropriated
for fiscal years beginning with fiscal year 2010, such sums
as may be necessary to carry out the provisions of this
section.
``(4) Availability.--Amounts made available under
paragraphs (2) and (3) to carry out the provisions of this
section shall remain available until expended.''.
(2) Technical amendments.--Section 1900(b) of such Act (42
U.S.C. 1396) is amended--
(A) in paragraph (1)(D), by striking ``June 1'' and
inserting ``June 15''; and
(B) by adding at the end the following:
``(10) Consultation with medpac.--
``(A) In general.--MACPAC shall regularly consult with the
Medicare Payment Advisory Commission (in this paragraph
referred to as `MedPAC') established under section 1805 in
carrying out its duties under this section.
``(B) Data sharing.--MACPAC and MedPAC shall have
unrestricted access to all deliberations, records, and
nonproprietary data of the other such entity, respectively,
immediately upon the request of the either such entity.''.
(d) Rule of Construction.--Nothing in this section--
(1) requires mandatory integrated care under the Medicare
or Medicaid programs under titles XVIII and XIX,
respectively, of the Social Security Act;
(2) promotes enrollment in specialized MA plans for special
needs individuals (as defined in section 1859(b)(6) of the
Social Security Act (42 U.S.C. 1395w-28(b)(6));
(3) promotes the development of Medicaid managed care for
dual eligible individuals; or
(4) prevents dual eligible individuals from electing to
remain in the original Medicare fee-for-service option, or
the right to make such election being protected.

SEC. 102. CREATING A MEDICARE OPERATED PRESCRIPTION DRUG PLAN
OPTION.

(a) Medicare Operated Prescription Drug Plan Option.--
(1) In general.--Subpart 2 of part D of the Social Security
Act is amended by inserting after section 1860D-11 (42 U.S.C.
1395w-111) the following new section:

``medicare operated prescription drug plan option

``Sec. 1860D-11A. (a) In General.--Notwithstanding any
other provision of this part, for each year (beginning with
2011), in addition to any plans offered under section 1860D-
11, the Secretary shall offer one or more Medicare operated
prescription drug plans (as defined in subsection (b)) with a
service area that consists of the entire United States and
shall enter into negotiations in accordance with section
1860D-11A(i) with pharmaceutical manufacturers to reduce the
purchase cost of covered part D drugs for eligible part D
individuals who enroll in such a plan.
``(b) Medicare Operated Prescription Drug Plan Defined.--
For purposes of this part, the term `Medicare operated
prescription drug plan' means a prescription drug plan that
offers qualified prescription drug coverage and access to
negotiated prices described in section 1860D-2(a)(1)(A).
``(c) Monthly Beneficiary Premium.--
``(1) Qualified prescription drug coverage.--The monthly
beneficiary premium for qualified prescription drug coverage
and access to negotiated prices described in section 1860D-
2(a)(1)(A) to be charged under a Medicare operated
prescription drug plan shall be uniform nationally. Such
premium for months in 2010 and each succeeding year shall be
equal to the product of--
``(A) the beneficiary premium percentage (as specified in
section 1860D-13(a)(3)); and
``(B) the average monthly per capita actuarial cost of
offering the Medicare operated prescription drug plan for the
year involved, including administrative expenses.
``(2) Premium subsidy for applicable subsidy eligible
individuals.--
``(A) Full subsidy eligible individuals.--In the case of an
applicable subsidy eligible individual described in paragraph
(4)(A), the individual is entitled under this section to an
income-related premium subsidy equal to 100 percent of the
monthly beneficiary premium of the Medicare operated
prescription drug plan.
``(B) Other subsidy eligible individuals.--In the case of
an applicable subsidy eligible individual described in
paragraph (4)(B), the individual is entitled under this
section to an income-related premium subsidy determined on a
linear sliding scale as follows:
``(i) One hundred percent of the amount described in
subparagraph (A) for individuals with incomes at or below 135
percent of such level.
``(ii) Seventy-five percent of such amount for individuals
with incomes above 135 percent of such level and at or below
140 percent of such level.
``(iii) Fifty percent of such amount for individuals with
incomes above 140 percent of such level and at or below 145
percent of such level.
``(iv) Twenty-five percent of such amount for individuals
with incomes above 145 percent of such level and below 150
percent of such level.
``(v) Zero percent of such amount for individuals with
incomes at 150 percent of such level.
``(3) Cost-sharing for applicable subsidy eligible
individuals.--
``(A) Full-subsidy eligible individuals.--In the case of an
applicable subsidy eligible individual described in paragraph
(4)(A), the provisions of section 1860D-14(a)(1) shall apply,
except the premium subsidy under paragraph (2)(A) shall be
substituted for the premium subsidy under subparagraph (A) of
such section 1860D-14(a)(1); and
``(B) Other subsidy eligible individuals.--In the case of
an applicable subsidy eligible individual described in
paragraph (4)(B), the provisions of section 1860D-14(a)(2)
shall apply, except the premium subsidy under paragraph
(2)(B) shall be substituted

[[Page S9032]]

for the premium subsidy under subparagraph (A) of such
section 1860D-14(a)(2).
``(4) Definition of applicable subsidy eligible
individuals.--For purposes of paragraphs (2) and (3), the
term `applicable subsidy eligible individual' means the
following:
``(A) Full-subsidy eligible individuals.--
``(i) Individuals with income below 135 percent of poverty
line.--Any individual who--

``(I) is enrolled in a Medicare operated prescription drug
plan;
``(II) is determined to have income that is below 135
percent of the poverty line applicable to a family of the
size involved; and
``(III) meets the resources requirement described in
section 1860D-14(a)(3)(E), as amended by section 201 of the
Medicare Prescription Drug Coverage Improvement Act.

``(ii) Certain other individuals.--Any individual who is
enrolled in a Medicare operated prescription drug plan who--

``(I) is a full-benefit dual eligible individual (as
defined in section 1935(c)(6));
``(II) receives benefits under the supplemental security
income program under title XVI; or
``(III) is eligible for medical assistance under clause
(i), (iii), or (iv) of section 1902(a)(10)(E).

``(B) Other subsidy eligible individuals.--Any individual
who--
``(i) is not described in paragraph (1);
``(ii) is enrolled in a Medicare operated prescription drug
plan;
``(iii) is determined to have income that is below 150
percent of the poverty line applicable to a family of the
size involved; and
``(iv) meets the resources requirement described in section
1860D-14(a)(3)(E), as amended by section 201 of the Medicare
Prescription Drug Coverage Improvement Act.
``(d) Use of a Formulary and Formulary Incentives.--
``(1) Use of a formulary.--
``(A) In general.--With respect to the operation of a
Medicare operated prescription drug plan, the Secretary shall
establish and apply a formulary (and may include formulary
incentives described in paragraph (5)(C)(ii)) in accordance
with this subsection in order to--
``(i) increase patient safety;
``(ii) increase appropriate use and reduce inappropriate
use of drugs; and
``(iii) reward value.
``(B) Default initial formulary.--Until such time as the
Secretary establishes and applies the initial formulary under
paragraph (5), a Medicare operated prescription drug plan
shall be required to include all drugs approved for safety
and effectiveness as a prescription drug under the Federal
Food, Drug, and Cosmetic Act that are covered part D drugs
(and may include formulary incentives described in paragraph
(5)(C)(ii)).
``(2) Requirements for formularies.--The Secretary shall
establish a formulary that meets the following requirements:
``(A) Except as provided in subparagraph (B), the formulary
includes the covered outpatient drugs of any manufacturer
which has entered into and complies with an agreement with
the Secretary under this section.
``(B) A covered outpatient drug may be excluded with
respect to the treatment of a specific disease or condition
for an identified population (if any) only if, based on the
drug's labeling (or, in the case of a drug the prescribed use
of which is not approved under the Federal Food, Drug, and
Cosmetic Act but is a medically accepted indication (as
defined in section 1860D-2(e)(4)), the excluded drug does not
have a significant, clinically meaningful therapeutic
advantage in terms of safety, effectiveness, or clinical
outcome of such treatment for such population over other
drugs included in the formulary and there is a written
explanation (available to the public) of the basis for the
exclusion.
``(C) The Secretary permits coverage of a drug excluded
from the formulary pursuant to a prior authorization program
that is consistent with paragraph (3).
``(D) The formulary meets such other requirements as the
Secretary may impose in order to achieve program savings
consistent with protecting the health of program
beneficiaries.
A prior authorization program established under paragraph (3)
is not a formulary subject to the requirements of this
paragraph.
``(3) Requirements of prior authorization programs.--The
Secretary may require, with respect to drugs dispensed on or
after July 1, 1991, the approval of the drug before its
dispensing for any medically accepted indication (as defined
in section 1860D-2(e)(4)) only if the system providing for
such approval--
``(A) provides response by telephone or other
telecommunication device within 24 hours of a request for
prior authorization; and
``(B) provides for the dispensing of at least a 72-hour
supply of a covered outpatient prescription drug in an
emergency situation (as defined by the Secretary).
``(4) Other permissible restrictions.--The Secretary may
impose limitations, with respect to all such drugs in a
therapeutic class, on the minimum or maximum quantities per
prescription or on the number of refills, if such limitations
are necessary to improve patient safety, discourage waste, or
address instances of fraud or abuse by individuals in any
manner authorized under this Act.
``(5) Development of initial formulary.--
``(A) In general.--In selecting covered part D drugs for
inclusion in a formulary, the Secretary shall consider
clinical benefit and price.
``(B) Role of ahrq.--The Director of the Agency for
Healthcare Research and Quality shall be responsible for
assessing the clinical benefit of covered part D drugs and
making recommendations to the Secretary regarding which drugs
should be included in the formulary. In conducting such
assessments and making such recommendations, the Director
shall--
``(i) consider safety concerns including those identified
by the Federal Food and Drug Administration;
``(ii) use available data and evaluations, with priority
given to randomized controlled trials, to examine clinical
effectiveness, comparative effectiveness, safety, and
enhanced compliance with a drug regimen;
``(iii) use the same classes of drugs developed by United
States Pharmacopeia for this part;
``(iv) consider evaluations made by--

``(I) the Director under section 1013 of Medicare
Prescription Drug, Improvement, and Modernization Act of
2003;
``(II) other Federal entities, such as the Secretary of
Veterans Affairs; and
``(III) other private and public entities, such as the Drug
Effectiveness Review Project and Medicaid programs; and

``(v) recommend to the Secretary--

``(I) those drugs in a class that provide a greater
clinical benefit, including fewer safety concerns or less
risk of side-effects, than another drug in the same class
that should be included in the formulary;
``(II) those drugs in a class that provide less clinical
benefit, including greater safety concerns or a greater risk
of side-effects, than another drug in the same class that
should be excluded from the formulary; and
``(III) drugs in a class with same or similar clinical
benefit for which it would be appropriate for the Secretary
to competitively bid (or negotiate) for placement on the
formulary.

``(C) Consideration of ahrq recommendations.--
``(i) In general.--Not later than January 1, 2011, the
Secretary, after taking into consideration the
recommendations under subparagraph (B)(v), shall establish a
formulary, and formulary incentives, to encourage use of
covered part D drugs that--

``(I) have a lower cost and provide a greater clinical
benefit than other drugs;
``(II) have a lower cost than other drugs with same or
similar clinical benefit; and
``(III) drugs that have the same cost but provide greater
clinical benefit than other drugs.

``(ii) Formulary incentives.--The formulary incentives
under clause (i) may be in the form of one or more of the
following:

``(I) Tiered copayments.
``(II) Prior authorization.
``(III) Step therapy.
``(IV) Medication therapy management.
``(V) Generic drug substitution.

``(iii) Flexibility.--In applying such formulary incentives
the Secretary may decide not to impose any cost-sharing for a
covered part D drug for which--

``(I) the elimination of cost sharing would be expected to
increase compliance with a drug regimen; and
``(II) compliance would be expected to produce savings
under part A or B or both.

``(iv) Development of transparent process to explain
formulary incentives.--Not later than January 1, 2011, the
Secretary shall develop and implement a transparent process
to identify and explain to beneficiaries formulary incentives
under clause (i). Such process shall be designed to assist
beneficiaries in understanding how prior authorization
requests and other formulary incentives will be evaluated.
``(6) Limitations on formulary.--In any formulary
established under this subsection, the formulary may not be
changed during a year, except--
``(A) to add a generic version of a covered part D drug
that entered the market;
``(B) to remove such a drug for which a safety problem is
found; and
``(C) to add a drug that the Secretary identifies as a drug
which treats a condition for which there has not previously
been a treatment option or for which a clear and significant
benefit has been demonstrated over other covered part D
drugs.
``(7) Adding drugs to the initial formulary.--
``(A) Use of advisory committee.--The Secretary shall
establish and appoint an advisory committee (in this
paragraph referred to as the `advisory committee')--
``(i) to review petitions from drug manufacturers, health
care provider organizations, patient groups, and other
entities for inclusion of a drug in, or other changes to,
such formulary; and
``(ii) to recommend any changes to the formulary
established under this subsection.
``(B) Composition.--The advisory committee shall be
composed of 9 members and shall include representatives of
physicians, pharmacists, and consumers and others with
expertise in evaluating prescription drugs. The Secretary
shall select members based on their knowledge of
pharmaceuticals and the Medicare and Medicaid populations.
Members shall be deemed to be special Government employees
for purposes of applying the conflict of interest provisions
under section 208 of title 18, United States Code, and no
waiver of such provisions for such a member shall be
permitted.

[[Page S9033]]

``(C) Consultation.--The advisory committee shall consult,
as necessary, with physicians who are specialists in treating
the disease for which a drug is being considered.
``(D) Request for studies.--The advisory committee may
request the Agency for Healthcare Research and Quality or an
academic or research institution to study and make a report
on a petition described in subparagraph (A)(ii) in order to
assess--
``(i) clinical effectiveness;
``(ii) comparative effectiveness;
``(iii) safety; and
``(iv) enhanced compliance with a drug regimen.
``(E) Recommendations.--The advisory committee shall make
recommendations to the Secretary regarding--
``(i) whether a covered part D drug is found to provide a
greater clinical benefit, including fewer safety concerns or
less risk of side-effects, than another drug in the same
class that is currently included in the formulary and should
be included in the formulary;
``(ii) whether a covered part D drug is found to provide
less clinical benefit, including greater safety concerns or a
greater risk of side-effects, than another drug in the same
class that is currently included in the formulary and should
not be included in the formulary; and
``(iii) whether a covered part D drug has the same or
similar clinical benefit to a drug in the same class that is
currently included in the formulary and whether the drug
should be included in the formulary.
``(F) Limitations on review of manufacturer petitions.--The
advisory committee shall not review a petition of a drug
manufacturer under subparagraph (A)(ii) with respect to a
covered part D drug unless the petition is accompanied by the
following:
``(i) Raw data from clinical trials on the safety and
effectiveness of the drug.
``(ii) Any data from clinical trials conducted using active
controls on the drug or drugs that are the current standard
of care.
``(iii) Any available data on comparative effectiveness of
the drug.
``(iv) Any other information the Secretary requires for the
advisory committee to complete its review.
``(G) Response to recommendations.--The Secretary shall
review the recommendations of the advisory committee and if
the Secretary accepts such recommendations the Secretary
shall modify the formulary established under this subsection
accordingly. Nothing in this section shall preclude the
Secretary from adding to the formulary a drug for which the
Director of the Agency for Healthcare Research and Quality or
the advisory committee has not made a recommendation.
``(H) Notice of changes.--The Secretary shall provide
timely notice to beneficiaries and health professionals about
changes to the formulary or formulary incentives.
``(I) Stability of benefit.--Once a covered part D drug has
been added to the formulary established under this
subsection, the drug may not be removed from the formulary
for at least a 3-year period, unless the Secretary determines
there are safety or efficacy concerns with respect to the
drug.
``(8) Non-excludable drugs.--The following drugs or classes
of drugs shall not be excluded from the default initial
formulary (as described in paragraph (1)(B)) or the initial
formulary established by the Secretary (as described in
paragraph (5)):
``(A) Barbiturates.
``(B) Benzodiazepines.
``(e) Informing Beneficiaries.--
``(1) In general.--The Secretary shall take steps to inform
beneficiaries about the availability of a Medicare operated
prescription drug plan or plans including providing
information in the annual handbook distributed to all
beneficiaries and adding information to the official public
Medicare website related to prescription drug coverage
available through this part.
``(2) Sole responsibility for marketing by the secretary.--
``(A) In general.--The Secretary shall have sole
responsibility for marketing Medicare operated prescription
drug plans.
``(B) Authorization.--There is authorized to be
appropriated to the Secretary such sums as are necessary to
carry out such marketing.
``(f) Application of All Other Requirements for
Prescription Drug Plans.--Except as specifically provided in
this section, any Medicare operated drug plan shall meet the
same requirements as apply to any other prescription drug
plan, including the requirements of section 1860D-4(b)(1)
relating to assuring pharmacy access.
``(g) Automatic Enrollment.--The Secretary shall establish
procedures to provide for the automatic enrollment of subsidy
eligible individuals (as defined in section 1860D-14(a)(3))
in a Medicare operated prescription drug plan in the case
where such individuals lose their current prescription drug
coverage, become part D eligible individuals, or in instances
where the amount of the monthly beneficiary premium under the
prescription drug plan the individual is enrolled in is
greater than the premium subsidy amount described in section
1860D-14(b).
``(h) Rule of Construction Regarding Eligibility for
Medical Assistance.--In no case may enrollment in a Medicare
operated prescription drug plan affect the eligibility of an
individual to receive medical assistance under a State plan
under title XIX.''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the enactment of section
101 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003.
(b) Conforming Amendments.--
(1) In general.--
(A) Section 1860D-3(a) of the Social Security Act (42
U.S.C. 1395w-103(a)) is amended by adding at the end the
following new paragraph:
``(4) Availability of the medicare operated prescription
drug plan.--A Medicare operated prescription drug plan (as
defined in section 1860D-11A(c)) shall be offered nationally
in accordance with section 1860D-11A.''.
(B)(i) Section 1860D-3 of the Social Security Act (42
U.S.C. 1395w-103) is amended by adding at the end the
following new subsection:
``(c) Provisions Only Applicable in 2006, 2007, 2008, and
2009.--The provisions of this section shall only apply with
respect to 2006, 2007, 2008, and 2009.''.
(C) Section 1860D-11(g) of such Act (42 U.S.C. 1395w-
111(g)) is amended by adding at the end the following new
paragraph:
``(8) No authority for fallback plans after 2009.--A
fallback prescription drug plan shall not be available after
December 31, 2009.''.
(D) Section 1860D-13(c)(3) of such Act (42 U.S.C. 1395w-
113(c)(3)) is amended--
(i) in the heading, by inserting ``and medicare operated
prescription drug plans'' after ``Fallback plans''; and
(ii) by inserting ``or a Medicare operated prescription
drug plan'' after ``a fallback prescription drug plan''.
(E) Section 1860D-14(a) of the Social Security Act (42
U.S.C. 1395w-114(a)) is amended--
(i) in paragraph (1), by striking ``In the'' and inserting
``Subject to section 1860D-11A(c)(2)(A), in the''; and
(ii) in paragraph (2), by striking ``In the'' and inserting
``Subject to section 1860D-11A(c)(2)(B), in the''.
(F) Section 1860D-16(b)(1) of such Act (42 U.S.C.1395w-
116(b)(1)) is amended--
(i) in subparagraph (C), by striking ``and'' after the
semicolon at the end;
(ii) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(G) by adding at the end the following new subparagraph:
``(E) payments for expenses incurred with respect to the
operation of Medicare operated prescription drug plans under
section 1860D-11A.''.
(H) Section 1860D-41(a) of such Act (42 U.S.C. 1395w-
151(a)) is amended by adding at the end the following new
paragraph:
``(19) Medicare operated prescription drug plan.--The term
`Medicare operated prescription drug plan' has the meaning
given such term in section 1860D-11A(c).''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in the enactment of section
101 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003.

SEC. 103. ACCREDITATION REQUIREMENT FOR ALL SPECIALIZED
MEDICARE ADVANTAGE PLANS AND REVISIONS RELATING
TO SPECIALIZED MEDICARE ADVANTAGE PLANS FOR
SPECIAL NEEDS INDIVIDUALS.

(a) Accreditation Requirement.--Section 1859(f) of the
Social Security Act (42 U.S.C. 1395w-28(f)) is amended--
(1) in paragraphs (2)(B), (3)(B), and (4)(B), by striking
``paragraph (5)'' and inserting ``paragraphs (5) and (6)(B)''
each place it appears; and
(2) by adding at the end the following new paragraph:
``(6) Accreditation requirement for all snps.--
``(A) Establishment of accreditation program.--Not later
than January 1, 2011, the Secretary, acting through the
Director of the Agency for Healthcare Research and Quality
and the Administrator of the Centers for Medicare & Medicaid
Services, shall enter into a contract with the National
Committee for Quality Assurance under which the National
Committee for Quality Assurance shall develop an
accreditation (and reaccreditation) program for all
specialized MA plans for special needs individuals (as
defined in subsection (b)(6)), including specialized MA plans
for special needs individuals described in subsection
(b)(6)(B)(ii).
``(B) Requirement.--The requirement described in this
subparagraph is that, effective for plan years beginning on
or after January 1, 2012, a specialized MA plan for special
needs individuals (as so defined) meet the accreditation
standards developed by the National Committee for Quality
Assurance under the contract under subparagraph (A).''.
(b) Revisions Relating to Specialized Medicare Advantage
Plans for Special Needs Individuals.--Section 1859 of the
Social Security Act (42 U.S.C. 1395w-28) is amended--
(1) in subsection (f)(3)--
(A) in subparagraph (D), in the first sentence, by
inserting ``and the plan provides for the coordination of
coverage for benefits under this title (including this part)
and such medical assistance'' before the period at the end;
and
(B) by adding at the end the following new subparagraph:
``(E) The plan meets the requirements described in
subsection (g).''; and
(2) by adding at the end the following new subsection:
``(g) Additional Requirements for Dual SNPS.--The following
requirements are described in this subsection:
``(1) Provision of information.--The plan provides special
needs individuals described

[[Page S9034]]

in subsection (b)(6)(B)(ii) up-front information about
formularies and utilization management strategies under the
plan as part of the information disclosed under section
1852(c)(1).
``(2) Premium.--The premium under the plan does not exceed
the premium subsidy amount described in section 1860D-14(b).
``(3) Formulary.--
``(A) In general.--Subject to subparagraph (B), the plan
has a formulary that, based on the most recent data
available, covers at least--
``(i) 95 percent of the 200 most commonly prescribed non-
duplicative generic covered part D drugs for the population
of individuals entitled to (or enrolled for) benefits under
part A or enrolled under part B; and
``(ii) 95 percent of the 200 most commonly prescribed non-
duplicative brand name covered part D drugs for such
population.
``(B) Inclusion of drugs in certain categories and
classes.--The plan formulary shall include all covered part D
drugs in the categories and classes identified by the
Secretary under section 1860D-4(b)(3)(G)(i).
``(4) Pharmacy access.--The plan secures participation in
its network of a sufficient number of pharmacies that
dispense (other than by mail order) drugs directly to
patients to ensure convenient access by at least 90 percent
of enrollees who are residing in long-term care facilities
within the region.
``(5) Operation of a dedicated customer assistance phone
line.--The plan shall maintain a toll-free number or numbers
for inquiries concerning the plan that is solely for the use
of such individuals, the designated representatives of such
individuals (including designated family members), advocates
of such individuals, providers of services, and suppliers.
``(6) E-prescribing.--The plan adopts electronic
prescribing for enrollees, in accordance with section 1860D-
4(e), to coordinate care.
``(7) Demonstrate experience and expertise.--The plan
demonstrates, to the satisfaction of the Secretary, with
input from the States, sufficient experience and expertise in
serving low-income, publicly insured, or previously uninsured
populations.
``(8) Reducing health disparities.--The plan has
established and implemented systems and processes which have
been approved by the Secretary to address and reduce health
disparities based on race, ethnicity, gender, age, and socio-
economic status.
``(9) Proficiency in care coordination.--The plan
demonstrates, to the satisfaction of the Secretary,
proficiency in care coordination for the purpose of
providing, or arranging for the provision of, services to
assist individuals enrolled in the plan in obtaining access
to other public and private benefits, including services to
address non-medical and psycho-social needs.''.
(c) Effective Date.--The amendments made by this section
shall apply to plan year beginning on or after January 1,
2011.

SEC. 104. PROVIDING BETTER CARE COORDINATION FOR LOW-INCOME
BENEFICIARIES IN MEDICARE PART D.

(a) Continuous Updating of Eligibility and Enrollment Data
for Dual Eligible Individuals.--
(1) State requirement.--Section 1935(a) of the Social
Security Act (42 U.S.C. 1396u-5(a)) is amended by adding at
the end the following new paragraph:
``(4) Updating of eligibility and enrollment information on
a rolling basis.--Beginning not later than October 1, 2011,
the State shall update information with respect to the
eligibility and enrollment of individuals receiving any kind
of medical assistance under the State plan, including medical
assistance for payment of Medicare cost-sharing described in
section 1905(p)(3), in MA plans and prescription drug plans
under parts C and D, respectively, of title XVIII (including
eligibility determinations under paragraph (2) and screening
and enrollment under paragraph (3)) not less frequently than
on a weekly basis.''.
(2) Secretarial requirements.--Section 1935(d) of the
Social Security Act (42 U.S.C. 1396u-5(d)) is amended by
adding at the end the following new paragraph:
``(3) Updating of eligibility and enrollment information on
a rolling basis.--The Secretary shall update information with
respect to the eligibility and enrollment of individuals
receiving any kind of medical assistance under this title,
including medical assistance for payment of Medicare cost-
sharing described in section 1905(p)(3), in MA plans and
prescription drug plans under parts C and D, respectively, of
title XVIII as it is received, but not less frequently than
on a weekly basis.''.
(b) Identifying Dual Eligible Individuals in Data
Records.--
(1) In general.--Section 1859 of the Social Security Act
(42 U.S.C. 1305w-28), as amended by section 103, is amended
by adding at the end the following new subsection:
``(h) Identifying Dual Eligible Individuals in Data
Records.--
``(1) Identification by the secretary.--Beginning on
January 1, 2010, the Secretary shall clearly identify all
dual eligible individuals that are enrolled in MA plans and
prescription drug plans for the current plan year and reflect
the low-income subsidy status of such individuals for each
plan year in every data record file maintained in the
Medicare electronic database and every such file that is used
to enroll or adjudicate claims for such individuals.
``(2) Identification by ma plans and prescription drug
plans.--Beginning on January 1, 2010, each MA plan and
prescription drug plan shall clearly identify all dual
eligible individuals that are enrolled in the plan for the
current plan year and reflect the low-income subsidy status
of such individuals for the plan year in every data record
file maintained by the plan that is used to enroll or
adjudicate claims for such individuals under the plan.
``(3) Regulations.--The Secretary shall establish
regulations to carry out this subsection. Such regulations
shall require that--
``(A) for each plan year and each dual eligible individual,
the Secretary identify on the Medicare enrollment database
dual eligible status that has been verified with a State or
the District of Columbia;
``(B) for each plan year and each dual eligible individual,
the Secretary identify on the Medicare enrollment database
the low-income subsidy level of the individual; and
``(C) each data file that is necessary to ensure that such
dual eligible status is transmitted to an MA plan or a
prescription drug plan, at the time the Secretary certifies
the enrollment of the dual eligible individual in the plan.
``(4) Definition of dual eligible individual.--The term
`dual eligible individual' means a special needs individual
described in subsection (b)(6)(B)(ii).''.
(2) Conforming amendment.--Section 1860D-42 of the Social
Security Act (42 U.S.C. 1395w-152) is amended by adding at
the end the following new subsection:
``(c) Identifying Dual Eligible Individuals in Data
Records.--For provisions regarding the identification by
prescription drug plans of dual eligible individuals in data
records, see section 1859(h).''.
(c) Assuring Continuity of Prescription Drug Coverage for
Dual Eligibles.--
(1) In general.--Section 1935(d)(1) of the Social Security
Act (42 U.S.C. 1396u-5(d)(1)) is amended--
(A) by inserting ``on and after the date described in
subparagraph (B),'' after ``notwithstanding any other
provision of this title,'';
(B) by striking ``In the case of'' and inserting the
following:
``(A) In general.--In the case of''; and
(C) by adding at the end the following:
``(B) Date described.--For purposes of subparagraph (A),
the date described in this subparagraph is the date on which
the State confirms with a Medicare Advantage plan under part
C of title XVIII or a prescription drug plan under part D of
such title (including a Medicare operated prescription drug
plan under section 1860D-11A), as applicable--
``(i) that the part D eligible individual (as so defined)
who is described in subsection (c)(6)(A)(ii) is enrolled with
such plan; and
``(ii) the cost-sharing and premiums applicable for the
individual for such plan.''.
(2) Effective date.--The amendments made by paragraph (1)
take effect on January 1, 2011.
(d) Collection and Sharing of Drug Utilization Data and
Formulary Information for Full-Benefit Dual Eligible
Individuals.--
(1) In general.--Section 1860D-42 of the Social Security
Act, as amended by subsection (b), is amended by adding at
the end the following new subsection:
``(d) Collection and Sharing of Drug Utilization Data and
Formulary Information for Full-Benefit Dual Eligible
Individuals.--
``(1) Plan requirement.--A PDP sponsor of a prescription
drug plan (including a Medicare operated prescription drug
plan under section 1860D-11A) and an MA organization offering
an MA-PD plan shall submit to the Secretary such information
regarding the drug utilization of enrollees in such plans who
are full-benefit dual eligible individuals (as defined in
section 1935(c)(6)) and any formularies under the plans such
individuals are enrolled in as the Secretary determines
appropriate to carry out paragraph (2). Such information
shall be submitted--
``(A) on a rolling basis (as determined appropriate by the
Secretary); and
``(B) using a single, uniform reporting process.
``(2) Collection and sharing of data.--The Secretary shall
collect data on the drug utilization of full-benefit dual
eligible individuals (as so defined) and on any formularies
under the plans such individuals are enrolled in. The
Secretary shall share such data with the States and the
District of Columbia on as close to a real-time basis as
possible.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on January 1, 2010.

SEC. 105. IMPROVING TRANSITION OF NEW DUAL ELIGIBLE
INDIVIDUALS TO MEDICARE PRESCRIPTION DRUG
COVERAGE AND PRESUMPTIVE ELIGIBILITY FOR LOW-
INCOME SUBSIDIES.

(a) Updating the Point of Sale Facilitated Enrollment
Process.--
(1) Providing better initial protection for dual eligible
individuals.--Beginning January 1, 2011, each contractor
under the Point of Sale Facilitated Enrollment process of the
Department of Health and Human Services shall enroll full-
benefit dual eligible individuals (as defined in section
1935(c)(6)) into a Medicare operated prescription drug plan
under section 1860D-11A of the Social Security Act, as added
by section 102.

[[Page S9035]]

(2) Competitive bidding of point of sale contract.--The
Secretary of Health and Human Services shall establish
procedures to ensure that each contract entered into under
such process on or after January 1, 2010, under the Medicare
program under title XVIII of the Social Security Act is rebid
every 3 years through a competitive bidding process.
(3) Requiring better education about point of sale
facilitated enrollment process.--Not later than January 1,
2010, the Secretary of Health and Human Services shall have a
comprehensive plan in place for proactively educating
beneficiaries under the Medicare prescription drug program
under part D of title XVIII of the Social Security Act,
pharmacists, skilled nursing facilities (as defined in
section 1819(a) of such Act (42 U.S.C. 1395i-3(a)), nursing
facilities (as defined in section 1919(a) of such Act (42
U.S.C. 1396r(a)), counselors under State health insurance
assistance programs (SHIPs), and other advocacy organizations
(including disability organizations) about the Point of Sale
Facilitated Enrollment process. Under such plan--
(A) information about the Point of Sale Facilitated
Enrollment process shall be included in all mailers to the
entities and individuals described in the preceding sentence
prior to the annual, coordinated election period described in
section 1851(e)(3) of the Social Security Act (42 U.S.C.
1395w-21(e)(3)); and
(B) a description of such process and other relevant
information shall be prominently displayed on the Medicare
Internet website throughout the year.
(4) Mandatory use of point of sale facilitated enrollment
process.--Section 1860D-4(b)(1) of the Social Security Act
(42 U.S.C. 1395w-104(b)(1)) is amended by adding at the end
the following new subparagraph:
``(F) Mandatory use of point of sale facilitated enrollment
process.--Notwithstanding any other provision of law,
beginning January 1, 2011, the terms and conditions under
subparagraph (A) shall require participating pharmacies to
use the Point of Sale Facilitated Enrollment process of the
Department of Health and Human Services.''.
(b) Presumptive Eligibility and Mandatory Transition Period
for Subsidy Eligible Individuals.--Section 1860D-14 of the
Social Security Act (42 U.S.C. 1395w-104) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following new
subsection:
``(d) Presumptive Eligibility and Mandatory Transition
Period.--
``(1) Presumptive eligibility.--An individual shall be
presumed to be a subsidy eligible individual (as defined in
section 1860D-14(a)(3)) if the individual presents at the
pharmacy with--
``(A) reliable evidence of--
``(i) Medicaid enrollment, such as a Medicaid card, recent
history of Medicaid billing in the pharmacy patient profile,
a copy of a current Medicaid award letter, or confirmation
from a Medicaid enrollment database; or
``(ii) eligibility for an income-related subsidy under
section 1860D-14, such as a low-income subsidy notice from
the Secretary or the Commissioner of Social Security, or
confirmation from a Social Security enrollment database; and
``(B) reliable evidence of Medicare enrollment, such as a
Medicare identification card, a Medicare enrollment approval
letter, a Medicare Summary Notice, or confirmation from an
official Medicare hotline or Medicare database.
``(2) Making subsidy eligible individuals whole.--
``(A) In general.--In the case of a subsidy eligible
individual (as so defined) who, between November 15, 2005 and
December 31, 2009, has wrongly been forced to pay higher co-
payments, premiums, and deductibles than those applicable
under this part and part C for such individual, the subsidy
eligible individual shall be eligible for compensation under
the program under this title.
``(B) Establishment of process for refund of amount
incorrectly paid.--The Secretary shall establish a process
under which--
``(i) prescription drug plans and MA-PD plans are billed
for copayments and deductibles inappropriately charged to
subsidy eligible individuals during retroactive coverage
periods;
``(ii) the amounts incorrectly paid by the subsidy eligible
individual as a result of those inappropriate charges are
refunded directly to the individual, either through a rebate
on future payments of premiums under part B or through a
direct payment to the individual; and
``(iii) prescription drug plans and MA-PD plans are
required to provide detailed accounting to the Secretary of
the basis for any rebate or payment to a subsidy eligible
individual under this subparagraph, including the applicable
period of retroactive coverage for the subsidy eligible
individual and whether the rebate or credit is with respect
to an inappropriately charged copayment or deductible,
``(C) Notification.--Subsidy eligible individuals shall be
notified of the requirements of this subsection in their 2010
plan year materials.
``(D) No effect on eligibility for other benefits.--Amounts
refunded to a subsidy eligible individual under this
subsection shall be disregarded for purposes of determining
or continuing the beneficiary's eligibility for receipt of
benefits under any other Federal, State, or locally funded
assistance program, including benefits paid under titles II,
XVI, XVIII, XIX, or XXI.''.

SEC. 106. REQUIRED INFORMATION ON TRANSITION FROM SKILLED
NURSING FACILITIES AND NURSING FACILITIES TO
PART D PLANS.

(a) Skilled Nursing Facilities.--Section 1819(b) of the
Social Security Act (42 U.S.C. 1395i-3(b)) is amended by
adding at the end the following new paragraph:
``(9) Information on transition to prescription drug
coverage.--A skilled nursing facility must provide
information to residents and the families of residents on how
to transition to prescription drug coverage under MA-PD plans
under part C and prescription drug plans under part D upon
discharge from the facility.''.
(b) Nursing Facilities.--Section 1919(b) of the Social
Security Act (42 U.S.C. 1395i-3(b)) is amended by adding at
the end the following new paragraph:
``(9) Information on transitioning to prescription drug
coverage.--A nursing facility must provide information to
residents and the families of residents on how to transition
to prescription drug coverage under MA-PD plans under part C
and prescription drug plans under part D upon discharge from
the facility.''.
(c) Effective Date.--The amendments made by this section
shall take effect on January 1, 2011.

SEC. 107. STREAMLINED PHARMACY COMPLIANCE PACKAGING.

(a) In General.--Section 1860D-4(b)(3) of the Social
Security Act (42 U.S.C. 1395w--104(b)(3) is amended by adding
at the end the following new subparagraph:
``(G) Streamlined pharmacy compliance packaging for dual
eligible individuals.--A PDP sponsor of a prescription drug
plan shall streamline pharmacy compliance packaging for
individuals enrolled in the plan who--
``(i) are entitled to medical assistance under a State plan
under title XVIII; and
``(ii) reside in a nursing home.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to drugs dispensed on or after January 1, 2010.

SEC. 108. LOWERING COVERED PART D DRUG PRICES ON BEHALF OF
MEDICARE BENEFICIARIES.

(a) Repeal of Prohibition.--Section 1860D-11 of the Social
Security Act (42 U.S.C. 1395w-111) is amended by striking
subsection (i) and inserting the following:
``(i) Lowering Covered Part D Drug Prices.--
``(1) In general.--The Secretary shall reduce the purchase
cost of covered part D drugs by implementing 2 or more of the
following strategies on an annual basis (beginning with
2011):
``(A) Negotiating directly with pharmaceutical
manufacturers for additional discounts, rebates, and other
price concessions that may be made available to Medicare
operated prescription drug plans under section 1860D-11A for
covered part D drugs.
``(B) Entering into rebate agreements with manufacturers to
provide to the Secretary a rebate for any covered outpatient
drug of a manufacturer dispensed during a rebate period
specified in the agreement to a subsidy eligible individual
described (or treated as described) in section 1860D-
14(a)(1)) for which payment was made by a PDP sponsor under
part D of title XVIII or an MA organization under part C of
such title for such period in an amount determined in the
same manner as the rebate amount for such drug would have
been determined under subsection (c) of section 1927 if the
dispensing of the drug to such individual was paid for by a
State and subject to a rebate agreement entered into under
such section (and allocating any such rebates received among
the prescription drug plans of such PDP sponsors and MA-PD
plans offered by such organizations based on the enrollment
of such individuals in such plans).
``(C) In consultation with the Director of the Agency for
Healthcare Research and Quality, using data from relevant and
unbiased studies on the comparative clinical effectiveness of
covered part D drugs to--
``(i) educate physicians and pharmacists; and
``(ii) provide information to PDP sponsors of prescription
drug plans and MA organizations offering MA-PD plans for use
in making decisions regarding plan formularies.
``(D) Instituting prescription drug prices negotiated under
the Federal Supply Schedule of the General Services
Administration for the reimbursement of covered part D drugs.
``(2) Rule of construction.--Nothing in this subsection
shall be construed as preventing the PDP sponsor of a
prescription drug plan or an MA organization offering an MA-
PD plan from obtaining a discount or reduction of the price
for a covered part D drug below the price negotiated by the
Secretary for a Medicare-operated plan under paragraph
(1)(A).
``(3) Annual reports to congress.--Not later than January
1, 2012, and annually thereafter, the Secretary shall submit
to the Committee on Finance of the Senate and to the
Committee on Ways and Means, the Committee on Energy and
Commerce, and the Committee on Oversight and Government
Reform of the House of Representatives a report on the
strategies implemented by the Secretary under paragraph (1)
to achieve lower prices on covered part D drugs

[[Page S9036]]

for beneficiaries, including the prices of such covered part
D drugs and any price concessions achieved by the Secretary
as a result of such implementation.''.

SEC. 109. CORRECTION OF FLAWS IN DETERMINATION OF PHASED-DOWN
STATE CONTRIBUTION FOR FEDERAL ASSUMPTION OF
PRESCRIPTION DRUG COSTS FOR DUALLY ELIGIBLE
INDIVIDUALS.

Section 1935(c) of the Social Security Act (42 U.S.C.
1396u-5(c)) is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by striking ``Each'' and inserting ``Subject to
paragraph (7), each''; and
(2) by adding at the end the following new paragraph:
``(7) Modification of determination of amount of state
contribution.--Not later than January 1, 2011, the Secretary
of Health and Human Services (in this section referred to as
the `Secretary'), acting through the Director of the Federal
Coordinated Health Care Office established under section 101
of the Medicare Prescription Drug Reform Act of 2009, shall
promulgate regulations for modifying the factors used to
determine the product under paragraph (1)(A) for each State
and month that take into account the following with respect
to each State:
``(A) Factoring into the determination of base year State
Medicaid per capita expenditures for covered part D drugs for
full-benefit dual eligible individuals under paragraph (3)
all payments collected by a State under agreements under
section 1927 for outpatient prescription drugs purchased in
2003 (not just for such payments that were collected by the
State in 2003).
``(B) Pharmacy cost savings measures implemented by the
State during the period that begins with 2003 and ends with
2006.
``(C) Substituting under paragraph (4) a State-specific
growth factor in lieu of the national applicable growth
factor for 2004 and succeeding years based on the annual
percentage increase in the State's average per capita
aggregate expenditures for covered outpatient drugs.

Such regulations shall include procedures for adjusting
payments to States under section 1903(a) to take into account
any overpayments or underpayments which the Secretary
determines on the basis of such modifications were made by
States under this subsection for 2004 and succeeding
years.''.

SEC. 110. NO IMPACT ON ELIGIBILITY FOR BENEFITS UNDER OTHER
PROGRAMS.

(a) In General.--Section 1860D-14(a)(3) of the Social
Security Act (42 U.S.C. 1395w-114(a)(3)), is amended--
(1) in subparagraph (A), in the matter preceding clause
(i), by striking ``subparagraph (F)'' and inserting
``subparagraphs (F) and (H)''; and
(2) by adding at the end the following new subparagraph:
``(H) No impact on eligibility for benefits under other
programs.--The availability of premium and cost-sharing
subsidies under this section shall not be treated as benefits
or otherwise taken into account in determining an
individual's eligibility for, or the amount of benefits
under, any other Federal program.''.
(b) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of this Act.

SEC. 111. QUALITY INDICATORS FOR DUAL ELIGIBLE INDIVIDUALS.

Section 1154(a) of the Social Security Act (42 U.S.C.
1320c-3(a)) is amended by inserting after paragraph (11) the
following new paragraph:
``(12) For all contracts entered into on or after August 1,
2011, the organization shall produce a statistically valid
subsample of quality indicators applicable to dual eligible
beneficiaries under titles XVIII and XIX.''.

TITLE II--ADDITIONAL MEDICARE AND MEDICAID IMPROVEMENTS

Subtitle A--Improving the Financial Assistance Available to Low-Income
Medicare Beneficiaries

SEC. 201. IMPROVING ASSETS TESTS FOR MEDICARE SAVINGS PROGRAM
AND LOW-INCOME SUBSIDY PROGRAM.

(a) Application of Highest Level Permitted Under LIS.--
(1) To full-premium subsidy eligible individuals.--Section
1860D-14(a) of the Social Security Act (42 U.S.C. 1395w-
114(a)) is amended--
(A) in paragraph (1), in the matter before subparagraph
(A), by inserting ``(or, beginning with 2010, paragraph
(3)(E))'' after ``paragraph (3)(D)''; and
(B) in paragraph (3)(A)(iii), by striking ``(D) or''.
(2) Annual increase in lis resource test.--Section 1860D-
14(a)(3)(E)(i) of the Social Security Act (42 U.S.C. 1395w-
114(a)(3)(E)(i)) is amended--
(A) by striking ``and'' at the end of subclause (I);
(B) in subclause (II), by inserting ``(before 2010)'' after
``subsequent year'';
(C) by striking the period at the end of subclause (II) and
inserting a semicolon;
(D) by inserting after subclause (II) the following new
subclauses:

``(III) for 2010, $27,500 (or $55,000 in the case of the
combined value of the individual's assets or resources and
the assets or resources of the individual's spouse); and
``(IV) for a subsequent year, the dollar amounts specified
in this subclause (or subclause (III)) for the previous year
increased by the annual percentage increase in the consumer
price index (all items; U.S. city average) as of September of
such previous year.''; and

(E) in the last sentence, by inserting ``or (IV)'' after
``subclause (II)''.
(3) Application of lis test under medicare savings
program.--Section 1905(p)(1)(C) of the Social Security Act
(42 U.S.C. 1396d(p)(1)(C)) is amended by striking
``subparagraph (D)'' and all that follows through the period
at the end and inserting the following: ``section 1860D-
14(a)(3)(E) applicable to an individual or to the individual
and the individual's spouse (as the case may be)''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to eligibility determinations for income-related
subsidies and Medicare cost-sharing furnished for periods
beginning on or after January 1, 2010.

SEC. 202. ELIMINATING BARRIERS TO ENROLLMENT.

(a) Encouraging Application of Procedures Under Medicare
Savings Program.--Section 1905(p) of the Social Security Act
(42 U.S.C. 1396d(p)) is amended by adding at the end the
following new paragraph:
``(7) The Secretary shall take all reasonable steps to
encourage States to provide for administrative verification
of income and automatic reenrollment (as provided under
subparagraphs (C)(iii) and (G) of section 1860D-14(a)(3) in
the case of the low-income subsidy program).''.
(b) Ensuring That SSA and States Can Electronically Process
All Low-Income Subsidy Program Applications.--Section 1860D-
14(a)(3)(B)(i) of the Social Security Act (42 U.S.C. 1395w-
114(a)(3)(B)(i)) is amended by inserting after the first
sentence the following new sentence: ``Not later than January
1, 2012, the State plan and the Commissioner shall have in
place procedures to ensure the capacity to process all
applications for determinations (including all applications
that are not in English) electronically.''.

SEC. 203. ELIMINATION OF PART D COST-SHARING FOR CERTAIN NON-
INSTITUTIONALIZED FULL-BENEFIT DUAL ELIGIBLE
INDIVIDUALS.

(a) In General.--Section 1860D-14(a)(1)(D)(i) of the Social
Security Act (42 U.S.C. 1395w-114(a)(1)(D)(i)) is amended--
(1) in the heading, by striking ``Institutionalized
individuals.--In'' and inserting ``Elimination of cost-
sharing for certain full-benefit dual eligible individuals.--

``(I) Institutionalized individuals.--In''; and

(2) by adding at the end the following new subclauses:

``(II) Certain other individuals.--In the case of an
individual who is a full-benefit dual eligible individual and
who is being provided medical assistance for home and
community-based services under subsection (c), (d), (e), (i),
or (j) of section 1915 or pursuant to section 1115, the
elimination of any beneficiary coinsurance described in
section 1860D-2(b)(2) (for all amounts through the total
amount of expenditures at which benefits are available under
section 1860D-2(b)(4)).''.

(b) Effective Date.--The amendments made by subsection (a)
shall apply to drugs dispensed on or after January 1, 2010.

SEC. 204. EXEMPTION OF BALANCE IN ANY PENSION OR RETIREMENT
PLAN FROM RESOURCES FOR DETERMINATION OF
ELIGIBILITY FOR LOW-INCOME SUBSIDY.

(a) In General.--Section 1860D-14(a)(3) of the Social
Security Act (42 U.S.C. 1395w-114(a)(3)) is amended--
(1) in subparagraph (D), in the matter before clause (i),
by striking ``life insurance policy exclusion provided under
subparagraph (G)''and inserting ``additional exclusions
provided under subparagraphs (G) and (H)'';
(2) in subparagraph (E)(i), in the matter before subclause
(I), by striking ``life insurance policy exclusion provided
under subparagraph (G)''and inserting ``additional exclusions
provided under subparagraphs (G) and (H)''
(3) by adding at the end the following new subparagraph:
``(H) Pension or retirement plan exclusion.--In determining
the resources of an individual (and the eligible spouse of
the individual, if any) under section 1613 for purposes of
subparagraphs (D) and (E), no balance in any pension or
retirement plan shall be taken into account.''.
(b) Effective Date.--The amendments made by this section
shall take effect on January 1, 2010, and shall apply to
determinations of eligibility for months beginning with
January 2010.

SEC. 205. COST-SHARING PROTECTIONS FOR LOW-INCOME SUBSIDY-
ELIGIBLE INDIVIDUALS.

(a) In General.--Section 1860D-14(a) of the Social Security
Act (42 U.S.C. 1395w-114(a)) is amended--
(1) in paragraph (1)(D), by adding at the end the following
new clause:
``(iv) Overall limitation on cost-sharing.--In the case of
all such individuals, a limitation on aggregate cost-sharing
under this part for a year not to exceed 2.5 percent of
income.''; and
(2) in paragraph (2), by adding at the end the following
new subparagraph:
``(F) Overall limitation on cost-sharing.--A limitation on
aggregate cost-sharing under this part for a year not to
exceed 2.5 percent of income.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply as of January 1, 2010.

[[Page S9037]]

Subtitle B--Other Improvements

SEC. 211. ENROLLMENT IMPROVEMENTS UNDER MEDICARE PARTS C AND
D.

(a) Special Election Period During First 60 Days of
Enrollment in a New Plan.--
(1) In general.--Section 1851(e)(4) of the Social Security
Act (42 U.S.C. 1395w(e)(4)) is amended--
(A) in subparagraph (C), by striking ``or'' at the end;
(B) by redesignating subparagraph (D) as subparagraph (E);
and
(C) by inserting after subparagraph (C) the following new
subparagraph:
``(D) the individual has been enrolled in such plan for
fewer than 60 days; or''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect on the date that is 90 days after the date
of enactment of this Act.
(b) Extension of the Annual, Coordinated Election Period.--
(1) In general.--Section 1851(e)(3)(B)(iv) of the Social
Security Act (42 U.S.C. 1395w-1(e)(3)(B)(iv)) is amended by
striking ``November 15'' and inserting ``October 1''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to annual, coordinated election periods beginning
after the date of enactment of this Act.
(c) Coordination Under Parts C and D of the Continuous Open
Enrollment and Disenrollment Period for the First 3 Months of
the Year.--
(1) In general.--Section 1860D-1(b)(1)(B)(iii) of the
Social Security Act (42 U.S.C. 1395w-101(b)(1)(B)(iii)) is
amended by striking ``, (C),''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on January 1, 2010.

SEC. 212. MEDICARE PLAN COMPLAINT SYSTEM.

(a) System.--Section 1808 of the Social Security Act (42
U.S.C. 1395b-9) is amended--
(1) in subsection (c)(2)--
(A) in subparagraph (B)(iii), by striking ``adjustment;
and'' and inserting ``adjustment);'';
(B) in subparagraph (C), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new subparagraph:
``(D) develop and maintain the plan complaint system under
subsection (d).''; and
(2) by adding at the end the following new subsection:
``(d) Plan Complaint System.--
``(1) System.--
``(A) In general.--The Secretary shall develop and maintain
a plan complaint system, (in this subsection referred to as
the `system') to--
``(i) collect and maintain information on plan complaints;
``(ii) track plan complaints from the date the complaint is
logged into the system through the date the complaint is
resolved; and
``(iii) otherwise improve the process for reporting plan
complaints.
``(B) Timeframe.--The Secretary shall have the system in
place by not later than the date that is 6 months after the
date of enactment of this subsection.
``(C) Plan complaint defined.--In this subsection, the term
`plan complaint' means a complaint that is received
(including by telephone, letter, e-mail, or any other means)
by the Secretary (including by a regional office, the
Medicare Beneficiary Ombudsman, a subcontractor, a carrier, a
fiscal intermediary, and a Medicare administrative
contractor) from a Medicare Advantage eligible individual or
a Part D eligible individual (or an individual representing
such an individual) regarding a Medicare Advantage
organization, a Medicare Advantage plan, a prescription drug
plan sponsor, or a prescription drug plan, including, but not
limited to, complaints relating to marketing, enrollment,
covered drugs, premiums and cost-sharing, and plan customer
service, grievances and appeals, participating providers.
Such term also includes plan complaints that are received by
the Secretary directly from the organization offering the
plan relating to complaints by such individuals.
``(2) Process criteria.--In developing the system, the
Secretary shall establish a process for reporting plan
complaints. Such process shall meet the following criteria:
``(A) Accessible.--The process is widely known and easy to
use.
``(B) Investigative capacity.--The process involves the
appropriate experts, resources, and methods to assess
complaints and determine whether they reflect an underlying
pattern.
``(C) Intervention and follow-through.--The process
triggers appropriate interventions and monitoring based on
substantiated complaints.
``(D) Quality improvement orientation.--The process guides
quality improvement.
``(E) Responsiveness.--The process routinely provides
consistent, clear, and substantive responses to complaints.
``(F) Timelines.--Each process step is completed within a
reasonable, established timeframe, and mechanisms exist to
deal quickly with complaints of an emergency nature requiring
immediate attention.
``(G) Objective.--The process is unbiased, balancing the
rights of each party.
``(H) Public accountability.--The process makes complaint
information available to the public.
``(3) Standard data reporting requirements.--
``(A) In general.--The Secretary shall establish standard
data reporting requirements for reporting plan complaints
under the system.
``(B) Model electronic complaint form.--The Secretary shall
develop a model electronic complaint form to be used for
reporting plan complaints under the system. Such form shall
be prominently displayed on the front page of the
Medicare.gov Internet website and on the Internet website of
the Medicare Beneficiary Ombudsman.
``(4) All complaints required to be logged into the
system.--Every plan complaint shall be logged into the
system.
``(5) Casework notations.--The system shall provide for the
inclusion of any casework notations throughout the complaint
process on the record of a plan complaint.
``(6) Medicare beneficiary ombudsman.--The Secretary shall
carry out this subsection acting through the Medicare
Beneficiary Ombudsman.''.
(b) Funding.--There are authorized to be appropriated such
sums as may be necessary for the costs of carrying out
section 1808(d) of the Social Security Act, as added by
subsection (a).
(c) Reports.--
(1) Secretary.--
(A) Ongoing study.--The Medicare Beneficiary Ombudsman
(under subsection (c) of section 1808) of the Social Security
Act (42 U.S.C. 1395b-9) shall conduct an ongoing study of the
plan complaint system established under subsection (d) of
such section (as added by subsection (a)), in this subsection
referred to as the ``system''. Such study shall include an
analysis of--
(i) the numbers and types of complaints reported under the
system;
(ii) geographic variations in such complaints;
(iii) the timeliness of agency or plan responses to such
complaints; and
(iv) the resolution of such complaints.
(B) Quarterly reports.--Not later than 6 months after the
implementation of the system, and every 3 months thereafter,
the Secretary of Health and Human Services shall submit to
Congress a report on the study conducted under subparagraph
(A), together with recommendations for such legislation and
administrative actions as the Secretary determines
appropriate.
(2) Inspector general.--The Inspector General of the
Department of Health and Human Services shall conduct an
evaluation of the system. Not later than 1 year after the
implementation of the system, the Inspector General shall
submit to Congress a report on such evaluation, together with
recommendations for such legislation and administrative
actions as the Inspector General determines appropriate.

SEC. 213. UNIFORM EXCEPTIONS AND APPEALS PROCESS.

(a) In General.--Section 1860D-4(b)(3) of the Social
Security Act (42 U.S.C. 1395w--104(b)(3), as amended by
section 107, is amended by adding at the end the following
new subparagraph:
``(G) Use of single, uniform exceptions and appeals
process.--Notwithstanding any other provision of this part, a
PDP sponsor of a prescription drug plan or an MA organization
offering an MA-PD plan shall--
``(i) use a single, uniform exceptions and appeals process
with respect to the determination of prescription drug
coverage for an enrollee under the plan; and
``(ii) provide instant access to such process by enrollees
through a toll-free telephone number and an Internet
website.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to exceptions and appeals on or after January 1,
2011.

SEC. 214. PROHIBITION ON CONDITIONING MEDICAID ELIGIBILITY
FOR INDIVIDUALS ENROLLED IN CERTAIN CREDITABLE
PRESCRIPTION DRUG COVERAGE ON ENROLLMENT IN THE
MEDICARE PART D DRUG PROGRAM.

(a) In General.--Section 1935 of the Social Security Act
(42 U.S.C. 1396v) is amended by adding at the end the
following:
``(f) Prohibition on Conditioning Eligibility for Medical
Assistance for Individuals Enrolled in Certain Creditable
Prescription Drug Coverage on Enrollment in Medicare
Prescription Drug Benefit.--
``(1) In general.--A State shall not condition eligibility
for medical assistance under the State plan for a part D
eligible individual (as defined in section 1860D-1(a)(3)(A))
who is enrolled in creditable prescription drug coverage
described in any of subparagraphs (C) through (H) of section
1860D-13(b)(4) on the individual's enrollment in a
prescription drug plan under part D of title XVIII or an MA-
PD plan under part C of such title.
``(2) Coordination of benefits with part d for other
individuals.--Nothing in this subsection shall be construed
as prohibiting a State from coordinating medical assistance
under the State plan with benefits under part D of title
XVIII for individuals not described in paragraph (1).''.

SEC. 215. OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT ON
PART D FORMULARIES' INCLUSION OF DRUGS COMMONLY
USED BY DUAL ELIGIBLES.

(a) Ongoing Study.--The Inspector General of the Department
of Health and Human Services shall conduct an ongoing study
of the extent to which formularies used by prescription drug
plans and MA-PD plans under part D include drugs commonly
used by full-benefit dual eligible individuals (as defined in
section 1935(c)(6) of the Social Security Act (42 U.S.C.
1396u-5(c)(6)).

[[Page S9038]]

(b) Annual Reports.--Not later than July 1 of each year
(beginning with 2010), the Inspector General shall submit to
Congress a report on the study conducted under paragraph (1),
together with such recommendations as the Inspector General
determines appropriate.

SEC. 216. HHS ONGOING STUDY AND ANNUAL REPORTS ON COVERAGE
FOR DUAL ELIGIBLES.

(a) Ongoing Study.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
conduct an ongoing study to track--
(A) how many of the new full benefit dual eligible
individuals (as defined in section 1935(c)(6) of the Social
Security Act (42 U.S.C. 1395u-5(c)(6))) enroll in a plan
under part D of title XVIII of such Act and receive
retroactive prescription drug coverage under the plan; and
(B) if such retroactive coverage is provided to such
individuals--
(i) the number of months of coverage provided; and
(ii) the amount of reimbursements to individuals and to
individuals that made payments for prescription drugs on
their behalf for costs incurred during retroactive coverage
periods.
(2) Data to use.--In conducting the study with respect to
the requirements under paragraph (1)(B), the Secretary shall
examine prescription drug utilization data reported by
Medicare part D plans.
(b) Annual Reports on Ongoing Study.--Not later than March
1 of each year (beginning with 2010), the Secretary shall
submit a report to Congress containing the results of the
study conducted under subsection (a), together with
recommendations for such legislation and administrative
action as the Secretary determines appropriate.
(c) Annual Reports on Spending and Outcomes.--Not later
than January 1 of each year (beginning with 2013), the
Secretary shall collect data and submit a report to Congress
that includes the following information:
(1) Annual total expenditures (disaggregated by Federal and
State expenditures) for dually eligible beneficiaries under
title XVIII and under State plans and waivers under title
XIX.
(2) An analysis of health outcomes for dually eligible
beneficiaries, disaggregated by subtypes of beneficiaries (as
determined by the Secretary).
(3) An analysis of the extent to which dually eligible
beneficiaries are able to access benefits under title XVIII
and under State plans and waivers under title XIX.

SEC. 217. AUTHORITY TO OBTAIN INFORMATION.

Title XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.) is amended by adding at the end the following new
section:

``authority of the comptroller general to obtain information

``Sec. 1899. No provision in this Act in effect on the
date of enactment of this section or enacted after such date
shall be construed to limit, amend, or supersede the
authority of the Comptroller General of the United States to
obtain agency records pursuant to section 716 of title 31,
United States Code, including any information obtained by, or
disclosed to, the Secretary under part C or D of this title,
except to the extent that such provision expressly and
specifically refers to this section and provides for such
limitation, amendment, or supersession.''.
______

By Mr. DORGAN (for himself, Mr. Johanns, Mr. Baucus, Mr. Johnson,
Mr. Thune, Mr. Tester, and Mr. Udall of New Mexico):
S. 1635. A bill to establish an Indian Youth telemental health
demonstration project, to enhance the provision of mental health care
services to Indian youth, to encourage Indian tribes, tribal
organizations, and other mental health care providers serving residents
of Indian country to obtain the services of predoctoral psychology and
psychiatry interns, and for other purposes; to the Committee on Indian
Affairs.
Mr. DORGAN. Mr. President, today I introduced a bill entitled 7th
Generation Promise: Indian Youth Suicide Prevention Act, to address the
crisis of youth suicide in Indian Country. I introduce this legislation
on behalf of myself and Senators Johanns, Johnson, Udall of New Mexico,
Baucus, and Tester, in hopes that it will help provide prevention and
intervention services to Native American youth.
Over the past 25 years, youth suicides in Native American communities
have reached epidemic levels. Suicide ranks as the second leading cause
of death for Native American youth ages 15 to 35--a rate 3.5 times
higher than the national average. In fact, adolescent Native American
males have the highest suicide rate of any population group in the
United States.
Over the years, the Indian Affairs Committee, which I chair, has held
a series of hearings on the issue of Indian youth suicide. This past
February, the Committee explored the progress made in youth suicide
prevention in Indian Country. We heard from agencies and organizations,
such as the Indian Health Service and the Substance Abuse and Mental
Health Services Administration, SAMHSA, who provide worthy prevention
and emergency response services.
During the February hearing, we also heard from a courageous 16-year-
old young woman named Dana Lee Jetty who testified about the loss of
her 14-year-old sister, Jami Rose Jetty. Her story illustrates the
continued need for suicide prevention.
In November 2008, Dana Lee found her beautiful little sister, Jami
Rose, hanging in her bedroom, on the Spirit Lake Reservation in North
Dakota. Dana and Jami's Mom had done all the right things--noticing
Jami was troubled, they took her to the doctor at the Indian Health
Service clinic. The doctors dismissed the mom's concern and said Jami
was just being a ``typical teenager.'' Dana told me that she believes
her sister would be alive if there had been adequate mental health
professionals to diagnose and treat Jami's depression. Jami Rose Jetty
serves as a tragic example of the inadequate mental health services in
Indian Country and why we need legislation like the one I introduced
today.
This year, the Standing Rock Sioux Reservation, located in North
Dakota and South Dakota, is experiencing epidemic levels of youth
suicide. There have already been 10 suicides and an additional 53
attempted suicides. The majority of these suicides have been among
tribal members under the age of 24. Clearly, we must do more for the
mental health and suicide prevention in our Native American communities
across the United States.
The bill I introduced includes three main sections to improve youth
suicide prevention services in Indian Country: a youth telemental
health demonstration project; language to streamline and improve the
process by which Tribes apply for grants through SAMHSA; and
encouragement of post-doctoral mental health intern programs in an
effort to increase the availability of services in Indian Country.
The Indian Youth Telemental Health Demonstration Project Act has been
introduced in previous Congresses. This project would authorize the
Secretary of Health and Human Services to carry out a four-year
demonstration project for the use of telemental health services in
youth suicide prevention, intervention and treatment. Telemental health
services refer to those health care services provided from a remote
location through technological means. These types of services are
especially important in remote, isolated communities like those in my
home state of North Dakota where mental health professionals are
scarce.
The bill also includes new language to enhance available mental
health resources by addressing the many issues and barriers Tribes and
tribal organizations face when applying for federal assistance through
SAMHSA. For example, this provision requires SAMHSA to monitor the
incidence of youth suicide in Indian Country, accept non-electronic
grant applications from Tribes, give priority to disadvantaged tribal
applicants with high rates of suicide, prohibit cost-sharing
requirements, and prevent Tribes and tribal organizations from being
required to apply through a state. In addition, this section requires
states that apply for a SAMHSA grant using Tribal data to consult with
Tribes and include them in any implemented programs.
Lastly, the bill includes encouragement for Tribes to use post-
doctoral mental health professionals. Post-doctoral psychology and
psychiatry interns are able to see patients and provide mental health
services under the supervision of a certified mental health
professional. The Veterans Administration is currently utilizing post-
doctoral psychology intern programs, which have been successful in
expanding the availability of mental health services to veterans. We
need to promote innovative programs like this to increase the mental
health services available in Indian Country.
The 7th Generation Promise in the bill's title is the Native American
concept that we need to consider the impacts of our actions on our
descendants seven generations in the future. Suicide is devastating our
current generation of Native Americans, and we need to do something to
protect them and

[[Page S9039]]

our Native Americans seven generations down the road.
I would like to thank Senator Johanns for working with me on this
important piece of legislation. Health care, and especially mental
health issues, remain a top priority for me as Chairman of the Indian
Affairs Committee. I look forward to continuing this important work so
that we may stop the high levels of youth suicide and other health
disparities among Native Americans.
I would like to end by saying that one youth suicide is one tragedy
too many. My hope is that passage of this bill will bring some aid to
our Native American communities experiencing this crisis.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1635

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``7th Generation Promise:
Indian Youth Suicide Prevention Act of 2009''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress finds that--
(1)(A) the rate of suicide of American Indians and Alaska
Natives is 1.9 times higher than the national average rate;
and
(B) the rate of suicide of Indian and Alaska Native youth
aged 15 through 24 is--
(i) 3.5 times the national average rate; and
(ii) the highest rate of any population group in the United
States;
(2) many risk behaviors and contributing factors for
suicide are more prevalent in Indian country than in other
areas, including--
(A) history of previous suicide attempts;
(B) family history of suicide;
(C) history of depression or other mental illness;
(D) alcohol or drug abuse;
(E) health disparities;
(F) stressful life events and losses;
(G) easy access to lethal methods;
(H) exposure to the suicidal behavior of others;
(I) isolation; and
(J) incarceration;
(3) according to national data for 2005, suicide was the
second-leading cause of death for Indians and Alaska Natives
of both sexes aged 10 through 34;
(4)(A) the suicide rates of Indians and Alaska Natives aged
15 through 24, as compared to suicide rates of any other
racial group, are--
(i) for males, up to 4 times greater; and
(ii) for females, up to 11 times greater; and
(B) data demonstrates that, over their lifetimes, females
attempt suicide 2 to 3 times more often than males;
(5)(A) Indian tribes, especially Indian tribes located in
the Great Plains, have experienced epidemic levels of
suicide, up to 10 times the national average; and
(B) suicide clustering in Indian country affects entire
tribal communities;
(6) death rates for Indians and Alaska Natives are
statistically underestimated because many areas of Indian
country lack the proper resources to identify and monitor the
presence of disease;
(7)(A) the Indian Health Service experiences health
professional shortages, with physician vacancy rates of
approximately 17 percent, and nursing vacancy rates of
approximately 18 percent, in 2007;
(B) 90 percent of all teens who die by suicide suffer from
a diagnosable mental illness at time of death;
(C) more than \1/2\ of teens who commit suicide have never
been seen by a mental health provider; and
(D) \1/3\ of health needs in Indian country relate to
mental health;
(8) often, the lack of resources of Indian tribes and the
remote nature of Indian reservations make it difficult to
meet the requirements necessary to access Federal assistance,
including grants;
(9) the Substance Abuse and Mental Health Services
Administration and the Service have established specific
initiatives to combat youth suicide in Indian country and
among Indians and Alaska Natives throughout the United
States, including the National Suicide Prevention Initiative
of the Service, which has worked with Service, tribal, and
urban Indian health programs since 2003;
(10) the National Strategy for Suicide Prevention was
established in 2001 through a Department of Health and Human
Services collaboration among--
(A) the Substance Abuse and Mental Health Services
Administration;
(B) the Service;
(C) the Centers for Disease Control and Prevention;
(D) the National Institutes of Health; and
(E) the Health Resources and Services Administration; and
(11) the Service and other agencies of the Department of
Health and Human Services use information technology and
other programs to address the suicide prevention and mental
health needs of Indians and Alaska Natives.
(b) Purposes.--The purposes of this Act are--
(1) to authorize the Secretary to carry out a demonstration
project to test the use of telemental health services in
suicide prevention, intervention, and treatment of Indian
youth, including through--
(A) the use of psychotherapy, psychiatric assessments,
diagnostic interviews, therapies for mental health conditions
predisposing to suicide, and alcohol and substance abuse
treatment;
(B) the provision of clinical expertise to, consultation
services with, and medical advice and training for frontline
health care providers working with Indian youth;
(C) training and related support for community leaders,
family members, and health and education workers who work
with Indian youth;
(D) the development of culturally relevant educational
materials on suicide; and
(E) data collection and reporting;
(2) to encourage Indian tribes, tribal organizations, and
other mental health care providers serving residents of
Indian country to obtain the services of predoctoral
psychology and psychiatry interns; and
(3) to enhance the provision of mental health care services
to Indian youth through existing grant programs of the
Substance Abuse and Mental Health Services Administration.

SEC. 3. DEFINITIONS.

In this Act:
(1) Administration.--The term ``Administration'' means the
Substance Abuse and Mental Health Services Administration.
(2) Demonstration project.--The term ``demonstration
project'' means the Indian youth telemental health
demonstration project authorized under section 4(a).
(3) Indian.--The term ``Indian'' means any individual who
is--
(A) a member of an Indian tribe; or
(B) eligible for health services under the Indian Health
Care Improvement Act (25 U.S.C. 1601 et seq.).
(4) Indian country.--The term ``Indian country'' has the
meaning given the term in section 1151 of title 18, United
States Code.
(5) Indian tribe.--The term ``Indian tribe'' has the
meaning given the term in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(7) Service.--The term ``Service'' means the Indian Health
Service.
(8) Telemental health.--The term ``telemental health''
means the use of electronic information and
telecommunications technologies to support long-distance
mental health care, patient and professional-related
education, public health, and health administration.
(9) Tribal organization.--The term ``tribal organization''
has the meaning given the term in section 4 of the Indian
Self-Determination and Education Assistance Act (25 U.S.C.
450b).

SEC. 4. INDIAN YOUTH TELEMENTAL HEALTH DEMONSTRATION PROJECT.

(a) Authorization.--
(1) In general.--The Secretary, acting through the Service,
is authorized to carry out a demonstration project to award
grants for the provision of telemental health services to
Indian youth who--
(A) have expressed suicidal ideas;
(B) have attempted suicide; or
(C) have mental health conditions that increase or could
increase the risk of suicide.
(2) Eligibility for grants.--Grants under paragraph (1)
shall be awarded to Indian tribes and tribal organizations
that operate 1 or more facilities--
(A) located in an area with documented disproportionately
high rates of suicide;
(B) reporting active clinical telehealth capabilities; or
(C) offering school-based telemental health services to
Indian youth.
(3) Grant period.--The Secretary shall award grants under
this section for a period of up to 4 years.
(4) Maximum number of grants.--Not more than 5 grants shall
be provided under paragraph (1), with priority consideration
given to Indian tribes and tribal organizations that--
(A) serve a particular community or geographic area in
which there is a demonstrated need to address Indian youth
suicide;
(B) enter into collaborative partnerships with Service or
other tribal health programs or facilities to provide
services under this demonstration project;
(C) serve an isolated community or geographic area that has
limited or no access to behavioral health services; or
(D) operate a detention facility at which Indian youth are
detained.
(5) Consultation with administration.--In developing and
carrying out the demonstration project under this subsection,
the Secretary shall consult with the Administration as the
Federal agency focused on mental health issues, including
suicide.
(b) Use of Funds.--
(1) In general.--An Indian tribe or tribal organization
shall use a grant received under subsection (a) for the
following purposes:
(A) To provide telemental health services to Indian youth,
including the provision of--
(i) psychotherapy;
(ii) psychiatric assessments and diagnostic interviews,
therapies for mental health conditions predisposing to
suicide, and treatment; and

[[Page S9040]]

(iii) alcohol and substance abuse treatment.
(B) To provide clinician-interactive medical advice,
guidance and training, assistance in diagnosis and
interpretation, crisis counseling and intervention, and
related assistance to Service or tribal clinicians and health
services providers working with youth being served under the
demonstration project.
(C) To assist, educate, and train community leaders, health
education professionals and paraprofessionals, tribal
outreach workers, and family members who work with the youth
receiving telemental health services under the demonstration
project, including with identification of suicidal
tendencies, crisis intervention and suicide prevention,
emergency skill development, and building and expanding
networks among those individuals and with State and local
health services providers.
(D) To develop and distribute culturally appropriate
community educational materials regarding--
(i) suicide prevention;
(ii) suicide education;
(iii) suicide screening;
(iv) suicide intervention; and
(v) ways to mobilize communities with respect to the
identification of risk factors for suicide.
(E) To conduct data collection and reporting relating to
Indian youth suicide prevention efforts.
(2) Traditional health care practices.--In carrying out the
purposes described in paragraph (1), an Indian tribe or
tribal organization may use and promote the traditional
health care practices of the Indian tribes of the youth to be
served.
(c) Applications.--
(1) In general.--Subject to paragraph (2), to be eligible
to receive a grant under subsection (a), an Indian tribe or
tribal organization shall prepare and submit to the Secretary
an application, at such time, in such manner, and containing
such information as the Secretary may require, including--
(A) a description of the project that the Indian tribe or
tribal organization will carry out using the funds provided
under the grant;
(B) a description of the manner in which the project funded
under the grant would--
(i) meet the telemental health care needs of the Indian
youth population to be served by the project; or
(ii) improve the access of the Indian youth population to
be served to suicide prevention and treatment services;
(C) evidence of support for the project from the local
community to be served by the project;
(D) a description of how the families and leadership of the
communities or populations to be served by the project would
be involved in the development and ongoing operations of the
project;
(E) a plan to involve the tribal community of the youth who
are provided services by the project in planning and
evaluating the mental health care and suicide prevention
efforts provided, in order to ensure the integration of
community, clinical, environmental, and cultural components
of the treatment; and
(F) a plan for sustaining the project after Federal
assistance for the demonstration project has terminated.
(2) Efficiency of grant application process.--The Secretary
shall carry out such measures as the Secretary determines to
be necessary to maximize the time and workload efficiency of
the process by which Indian tribes and tribal organizations
apply for grants under paragraph (1).
(d) Collaboration.--The Secretary, acting through the
Service, shall encourage Indian tribes and tribal
organizations receiving grants under this section to
collaborate to enable comparisons regarding best practices
across projects.
(e) Annual Report.--Each grant recipient shall submit to
the Secretary an annual report that--
(1) describes the number of telemental health services
provided; and
(2) includes any other information that the Secretary may
require.
(f) Reports to Congress.--
(1) Initial report.--
(A) In general.--Not later than 2 years after the date on
which the first grant is awarded under this section, the
Secretary shall submit to the Committee on Indian Affairs of
the Senate and the Committee on Natural Resources and the
Committee on Energy and Commerce of the House of
Representatives a report that--
(i) describes each project funded by a grant under this
section during the preceding 2-year period, including a
description of the level of success achieved by the project;
and
(ii) evaluates whether the demonstration project should be
continued during the period beginning on the date of
termination of funding for the demonstration project under
subsection (g) and ending on the date on which the final
report is submitted under paragraph (2).
(B) Continuation of demonstration project.--On a
determination by the Secretary under clause (ii) of
subparagraph (A) that the demonstration project should be
continued, the Secretary may carry out the demonstration
project during the period described in that clause using such
sums otherwise made available to the Secretary as the
Secretary determines to be appropriate.
(2) Final report.--Not later than 270 days after the date
of termination of funding for the demonstration project under
subsection (g), the Secretary shall submit to the Committee
on Indian Affairs of the Senate and the Committee on Natural
Resources and the Committee on Energy and Commerce of the
House of Representatives a final report that--
(A) describes the results of the projects funded by grants
awarded under this section, including any data available that
indicate the number of attempted suicides;
(B) evaluates the impact of the telemental health services
funded by the grants in reducing the number of completed
suicides among Indian youth;
(C) evaluates whether the demonstration project should be--
(i) expanded to provide more than 5 grants; and
(ii) designated as a permanent program; and
(D) evaluates the benefits of expanding the demonstration
project to include urban Indian organizations.
(g) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $1,500,000 for
each of fiscal years 2010 through 2013.

SEC. 5. SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES
ADMINISTRATION GRANTS.

(a) Grant Applications.--
(1) Efficiency of grant application process.--The
Secretary, acting through the Administration, shall carry out
such measures as the Secretary determines to be necessary to
maximize the time and workload efficiency of the process by
which Indian tribes and tribal organizations apply for grants
under any program administered by the Administration,
including by providing methods other than electronic methods
of submitting applications for those grants, if necessary.
(2) Priority for certain grants.--
(A) In general.--To fulfill the trust responsibility of the
United States to Indian tribes, in awarding relevant grants
pursuant to a program described in subparagraph (B), the
Secretary shall give priority consideration to the
applications of Indian tribes or tribal organizations, as
applicable, that serve populations with documented high
suicide rates, regardless of whether those Indian tribes or
tribal organizations possess adequate personnel or
infrastructure to fulfill all applicable requirements of the
relevant program.
(B) Description of grant programs.--A grant program
referred to in subparagraph (A) is a grant program--
(i) administered by the Administration to fund activities
relating to mental health, suicide prevention, or suicide-
related risk factors; and
(ii) under which an Indian tribe is an eligible recipient.
(3) Clarification regarding indian tribes and tribal
organizations.--Notwithstanding any other provision of law,
in applying for a grant under any program administered by the
Administration, no Indian tribe or tribal organization shall
be required to apply through a State or State agency.
(4) Requirements for affected states.--
(A) Definitions.--In this paragraph:
(i) Affected state.--The term ``affected State'' means a
State--

(I) the boundaries of which include 1 or more Indian
tribes; and
(II) the application for a grant under any program
administered by the Administration of which includes
statewide data.

(ii) Indian population.--The term ``Indian population''
means the total number of residents of an affected State who
are members of 1 or more Indian tribes located within the
affected State.
(B) Requirements.--As a condition of receipt of a grant
under any program administered by the Administration, each
affected State shall--
(i) describe in the grant application--

(I) the Indian population of the affected State; and
(II) the contribution of that Indian population to the
statewide data used by the affected State in the application;
and

(ii) demonstrate to the satisfaction of the Secretary
that--

(I) of the total amount of the grant, the affected State
will allocate for use for the Indian population of the
affected State an amount equal to the proportion that--

(aa) the Indian population of the affected State; bears to
(bb) the total population of the affected State; and

(II) the affected State will offer to enter into a
partnership with each Indian tribe located within the
affected State to carry out youth suicide prevention and
treatment measures for members of the Indian tribe.

(C) Report.--Not later than 1 year after the date of
receipt of a grant described in subparagraph (B), an affected
State shall submit to the Secretary a report describing the
measures carried out by the affected State to ensure
compliance with the requirements of subparagraph (B)(ii).
(b) No Non-Federal Share Requirement.--Notwithstanding any
other provision of law, no Indian tribe or tribal
organization shall be required to provide a non-Federal share
of the cost of any project or activity carried out using a
grant provided under any program administered by the
Administration.
(c) Outreach for Rural and Isolated Indian Tribes.--Due to
the rural, isolated nature of most Indian reservations and
communities (especially those reservations and communities in
the Great Plains region), the

[[Page S9041]]

Secretary shall conduct outreach activities, with a
particular emphasis on the provision of telemental health
services, to achieve the purposes of this Act with respect to
Indian tribes located in rural, isolated areas.
(d) Provision of Other Assistance.--
(1) In general.--The Secretary, acting through the
Administration, shall carry out such measures (including
monitoring and the provision of required assistance) as the
Secretary determines to be necessary to ensure the provision
of adequate suicide prevention and mental health services to
Indian tribes described in paragraph (2), regardless of
whether those Indian tribes possess adequate personnel or
infrastructure--
(A) to submit an application for a grant under any program
administered by the Administration, including due to problems
relating to access to the Internet or other electronic means
that may have resulted in previous obstacles to submission of
a grant application; or
(B) to fulfill all applicable requirements of the relevant
program.
(2) Description of indian tribes.--An Indian tribe referred
to in paragraph (1) is an Indian tribe--
(A) the members of which experience--
(i) a high rate of youth suicide;
(ii) low socioeconomic status; and
(iii) extreme health disparity;
(B) that is located in a remote and isolated area; and
(C) that lacks technology and communication infrastructure.
(3) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary such sums as the
Secretary determines to be necessary to carry out this
subsection.
(e) Early Intervention and Assessment Services.--
(1) Definition of affected entity.--In this subsection, the
term ``affected entity'' means any entity--
(A) that receives a grant for suicide intervention,
prevention, or treatment under a program administered by the
Administration; and
(B) the population to be served by which includes Indian
youth.
(2) Requirement.--The Secretary, acting through the
Administration, shall ensure that each affected entity
carrying out a youth suicide early intervention and
prevention strategy described in section 520E(c)(1) of the
Public Health Service Act (42 U.S.C. 290bb-36(c)(1)), or any
other youth suicide-related early intervention and assessment
activity, provides training or education to individuals who
interact frequently with the Indian youth to be served by the
affected entity (including parents, teachers, coaches, and
mentors) on identifying warning signs of Indian youth who are
at risk of committing suicide.

SEC. 6. USE OF PREDOCTORAL PSYCHOLOGY AND PSYCHIATRY INTERNS.

The Secretary shall carry out such activities as the
Secretary determines to be necessary to encourage Indian
tribes, tribal organizations, and other mental health care
providers serving residents of Indian country to obtain the
services of predoctoral psychology and psychiatry interns--
(1) to increase the quantity of patients served by the
Indian tribes, tribal organizations, and other mental health
care providers; and
(2) for purposes of recruitment and retention.
______

By Mr. BINGAMAN (for himself, Ms. Snowe, and Mrs. Feinstein):
S. 1639. A bill to amend the Internal Revenue Code of 1986 to improve
and extend certain energy-related tax provisions, and for other
purposes; to the Committee on Finance.
Mr. BINGAMAN. Mr. President, I rise today to introduce the Expanding
Industrial Energy Efficiency Incentives Act of 2009. I am pleased to be
joined by my Finance Committee colleague, Senator Snowe, in introducing
the Act, which creates the first direct tax-based incentives for
industrial energy efficiency. As such, the Act helps our industrial
sector adopt advanced energy technologies and processes, enabling
American industry to reduce fuel dependency, cut costs, reduce
greenhouse gas emissions, add jobs, and enhance global competitiveness.
Even though the industrial sector represents 32 percent of our
domestic energy consumption, there are currently no significant tax
credits that directly promote industrial energy efficiency. But as a
recent study by McKinsey & Company found, the industrial sector
represents the largest potential for end-use energy efficiency in the
U.S. and could save $47 billion per year on energy costs through
efficiency improvements. The time to make this investment is now.
The act creates incentives in the three critical areas: water reuse,
advanced motors, and CFC chillers. It also enhances incentives for
combined heat and power systems. Energy efficiency organizations
estimate that these incentives together will save over 92 terawatt
hours of energy--the equivalent of four months' worth of total U.S.
energy consumption.
First, the act adds a new investment tax credit for reuse, recycling,
and/or efficiency measures related to process, sanitary, and cooling
water, as well as for blowdown from cooling towers and steam systems
used by utility-scale thermo-electric generators. The U.S. currently
reuses only 6 percent of its water, and there is significant potential
for gains in this area. The industrial sector, which is responsible for
45 percent of domestic freshwater withdrawals, is an ideal place to
introduce transformative water reuse and water saving technologies.
Approximately 3 percent of U.S. electricity use is for pumping,
treating and transporting water. The ``water-watts connection'' is
well-recognized. For instance, the California Energy Commission
estimates that 95 percent of the energy savings of proposed energy-
efficiency programs could be achieved through water-efficiency
programs, at 58 percent of the cost. Water conservation is therefore a
cost-effective way to achieve significant energy savings.
Second, the bill establishes a $120-per-horsepower tax credit for
efficient motor systems with adjustable speed capability. On average,
motors account for 65 percent of an industrial energy user's
electricity use, a percentage that is even higher in certain
industries, such as water supply, mining, and oil and gas extraction.
In fact, industrial motors are expected to be responsible for 7 percent
of total global carbon emissions by 2020.
New advances in power electronics and controls over the past five
years have advanced the potential for new smart motor technologies to
provide a significant energy savings potential if these new motors are
placed widely into service. By reducing the initial design and added
component costs, this new credit will accelerate the adoption of
advanced motor technologies into higher volume production, helping to
make the technology available economy-wide.
Third, the bill adds a new incentive for replacing CFC chillers.
Large water-cooled chillers are the engines of air-conditioning systems
for almost all large buildings. The bill establishes a credit of $150
per ton, plus an additional incentive of $100 for each ton downsized
during replacement. The incentive extends only to pre-1993, post-1980
water-cooled chillers that use the refrigerants CFC-11 and CFC-12.
While chillers that use CFC-11 and CFC-12 refrigerants have been banned
for new installations because their refrigerant breakdown products
attack the ozone layer, some 30,000 chillers that still use these
refrigerants remain in both public and private facilities across the
country. Replacing these obsolete systems would allow for the recovery
of 37 million pounds of ozone depleting CFCs--or 64 million metric tons
of carbon dioxide equivalents. Additionally, the improvement in new
chiller efficiency that would be achieved by replacing these old
systems would save 17.2 million metric tons of carbon dioxide from
reduced electricity consumption--the equivalent of taking 3.3 million
cars off the road.
While CFC chiller replacement is cost-effective over the long-term,
the high up-front costs mean that many building owners do not make
these investments. This moderate tax incentive improves the economics
and reduces the up-front cost, substantially increasing the number of
systems replaced.
Collaterally, but just as significantly, this bill is a jobs bill.
For instance, if all CFC chillers are replaced, we expect that
approximately 10,500 American jobs can be directly created or preserved
in the manufacturing, removal and installation of new chillers.
Additional jobs will be created by the engineering services required to
take advantage of these incentives, adding up to a potential 60,000
jobs.
Finally, the bill improves the combined heat and power incentive,
which was enacted last October as part of the tax extenders package.
The package added a 10 percent investment tax credit for combined heat
and power systems. The expansion of the combined heat and power tax
credit would increase the credit's applicability from the first 15
megawatts to the first 25 megawatts of system capacity and remove the
overall system size cap of 50 megawatts, allowing a greater number

[[Page S9042]]

of combined heat and power projects to be financially viable and move
forward. A recent Department of Energy study estimates that ramping up
total U.S. combined heat and power to account for twenty percent of
electricity capacity, a percentage that is within our reach, would
eliminate over sixty percent of the expected increase in carbon dioxide
emissions from today to 2030--the equivalent of taking more than half
of current passenger vehicles in the U.S. off the road.
Together, these four industrial energy efficiency incentives capture
a large portion of the energy efficiency potential in the industrial
sector. These incentives will catalyze the deployment of new
technologies that will decrease carbon emissions and protect our
natural resources, all while saving money on energy costs and creating
jobs.
I look forward to working with Senator Snowe to see these provisions
enacted into law.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 1639

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

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

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

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Modifications in credit for combined heat and power system
property.
Sec. 3. Motor energy efficiency improvement tax credit.
Sec. 4. Credit for replacement of CFC refrigerant chiller.
Sec. 5. Qualifying efficient industrial process water use project
credit.

SEC. 2. MODIFICATIONS IN CREDIT FOR COMBINED HEAT AND POWER
SYSTEM PROPERTY.

(a) Modification of Certain Capacity Limitations.--Section
48(c)(3)(B) is amended--
(1) by striking ``15 megawatts'' in clause (ii) and
inserting ``25 megawatts'',
(2) by striking ``20,000 horsepower'' in clause (ii) and
inserting ``34,000 horsepower'', and
(3) by striking clause (iii).
(b) Nonapplication of Certain Rules.--Section 48(c)(3)(C)
is amended by adding at the end the following new clause:
``(iv) Nonapplication of certain rules.--For purposes of
determining if the term `combined heat and power system
property' includes technologies which generate electricity or
mechanical power using back-pressure steam turbines in place
of existing pressure-reducing valves or which make use of
waste heat from industrial processes such as by using organic
rankine, stirling, or kalina heat engine systems,
subparagraph (A) shall be applied without regard to clause
(ii).''.
(c) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).

SEC. 3. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:

``SEC. 45R. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

``(a) In General.--For purposes of section 38, the motor
energy efficiency improvement tax credit determined under
this section for the taxable year is an amount equal to $120
multiplied by the motor horsepower of an appliance, machine,
or equipment--
``(1) manufactured in such taxable year by a manufacturer
which incorporates an advanced motor system into a newly
designed appliance, machine, or equipment or into a
redesigned appliance, machine, or equipment which did not
previously make use of the advanced motor system, or
``(2) placed back into service in such taxable year by an
end user which upgrades an existing appliance, machine, or
equipment with an advanced motor system.

For any advanced motor system with a total horsepower of less
than 10, such motor energy efficiency improvement tax credit
is an amount which bears the same ratio to $120 as 1
horsepower bears to such total horsepower.
``(b) Advanced Motor System.--For purposes of this section,
the term `advanced motor system' means a motor and any
required associated electronic control which--
``(1) offers variable or multiple speed operation, and
``(2) uses permanent magnet technology, electronically
commutated motor technology, switched reluctance motor
technology, or such other motor systems technologies as
determined by the Secretary of Energy.
``(c) Aggregate Per Taxpayer Limitation.--
``(1) In general.--The amount of the credit determined
under this section for any taxpayer for any taxable year
shall not exceed the excess (if any) of $2,000,000 over the
aggregate credits allowed under this section with respect to
such taxpayer for all prior taxable years.
``(2) Aggregation rules.--For purposes of this section, all
persons treated as a single employer under subsections (a)
and (b) of section 52 shall be treated as 1 taxpayer.
``(d) Special Rules.--
``(1) Basis reduction.--For purposes of this subtitle, the
basis of any property for which a credit is allowable under
subsection (a) shall be reduced by the amount of such credit
so allowed.
``(2) No double benefit.--No other credit shall be
allowable under this chapter for property with respect to
which a credit is allowed under this section.
``(3) Property used outside united states not qualified.--
No credit shall be allowable under subsection (a) with
respect to any property referred to in section 50(b)(1).
``(e) Application.--This section shall not apply to
property manufactured or placed back into service before the
date which is 6 months after the date of the enactment of
this section or after December 31, 2013.''.
(b) Conforming Amendments.--
(1) Section 38(b) is amended by striking ``plus'' at the
end of paragraph (34), by striking the period at the end of
paragraph (35) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(36) the motor energy efficiency improvement tax credit
determined under section 45R.''.
(2) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (36), by striking the period at the end of
paragraph (37) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(38) to the extent provided in section 45R(d)(1).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:

``Sec. 45R. Motor energy efficiency improvement tax credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to property manufactured or placed back into
service after the date which is 6 months after the date of
the enactment of this Act.

SEC. 4. CREDIT FOR REPLACEMENT OF CFC REFRIGERANT CHILLER.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by this Act, is amended by adding at
the end the following new section:

``SEC. 45S. CFC CHILLER REPLACEMENT CREDIT.

``(a) In General.--For purposes of section 38, the CFC
chiller replacement credit determined under this section for
the taxable year is an amount equal to--
``(1) $150 multiplied by the tonnage rating of a CFC
chiller replaced with a new efficient chiller that is placed
in service by the taxpayer during the taxable year, plus
``(2) if all chilled water distribution pumps connected to
the new efficient chiller include variable frequency drives,
$100 multiplied by any tonnage downsizing.
``(b) CFC Chiller.--For purposes of this section, the term
`CFC chiller' includes property which--
``(1) was installed after 1980 and before 1993,
``(2) utilizes chlorofluorocarbon refrigerant, and
``(3) until replaced by a new efficient chiller, has
remained in operation and utilized for cooling a commercial
building.
``(c) New Efficient Chiller.--For purposes of this section,
the term `new efficient chiller' includes a water-cooled
chiller which is certified to meet efficiency standards
effective on January 1, 2010, as defined in table 6.8.1c in
Addendum M to Standard 90.1-2007 of the American Society of
Heating, Refrigerating, and Air Conditioning Engineers.
``(d) Tonnage Downsizing.--For purposes of this section,
the term `tonnage downsizing' means the amount by which the
tonnage rating of the CFC chiller exceeds the tonnage rating
of the new efficient chiller.
``(e) Energy Audit.--As a condition of receiving a tax
credit under this section, an energy audit shall be performed
on the building prior to installation of the new efficient
chiller, identifying cost-effective energy-saving measures,
particularly measures that could contribute to chiller
downsizing. The audit shall satisfy criteria that shall be
issued by the Secretary of Energy.
``(f) Property Used by Tax-Exempt Entity.--In the case of a
CFC chiller replaced by a new efficient chiller the use of
which is described in paragraph (3) or (4) of section 50(b),
the person who sold such new efficient chiller to the entity
shall be treated as the taxpayer that placed in service the
new efficient chiller that replaced the CFC chiller, but only
if such person clearly discloses to such entity in a document
the amount of any credit allowable under subsection (a) and
the

[[Page S9043]]

person certifies to the Secretary that the person reduced the
price the entity paid for such new efficient chiller by the
entire amount of such credit.
``(g) Termination.--This section shall not apply to
replacements made after December 31, 2012.''.
(b) Conforming Amendments.--
(1) Section 38(b), as amended by this Act, is amended by
striking ``plus'' at the end of paragraph (35), by striking
the period at the end of paragraph (36) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(37) the CFC chiller replacement credit determined under
section 45S.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by adding at the end the following new item:

``Sec. 45S. CFC chiller replacement credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to replacements made after the date of the
enactment of this Act.

SEC. 5. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE
PROJECT CREDIT.

(a) In General.--Section 46 is amended by striking ``and''
at the end of paragraph (4), by striking the period at the
end of paragraph (5), and by adding at the end the following
new paragraph:
``(6) the qualifying efficient industrial process water use
project credit.''.
(b) Amount of Credit.--Subpart E of part IV of subchapter A
of chapter 1 is amended by inserting after section 48C the
following new section:

``SEC. 48D. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE
PROJECT CREDIT.

``(a) In General.--
``(1) Allowance of credit.--For purposes of section 46, the
qualifying efficient industrial process water use project
credit for any taxable year is an amount equal to the
applicable percentage of the qualified investment for such
taxable year with respect to any qualifying efficient
industrial process water use project of the taxpayer.
``(2) Applicable percentage.--For purposes of subsection
(a), the applicable percentage is--
``(A) 10 percent in the case of a qualifying efficient
industrial process water use project which achieves a net
energy consumption of less than 3,000 kilowatt hours per
million gallons of water, and is placed in service before
January 1, 2013,
``(B) 20 percent in the case of a qualifying efficient
industrial process water use project which achieves a net
energy consumption of less than 2,000 kilowatt hours per
million gallons of water, and
``(C) 30 percent in the case of a qualifying efficient
industrial process water use project which achieves a net
energy consumption of less than 1,000 kilowatt hours per
million gallons of water.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
eligible property placed in service by the taxpayer during
such taxable year which is part of a qualifying efficient
industrial process water use project.
``(2) Exceptions.--Such term shall not include any portion
of the basis related to--
``(A) permitting,
``(B) land acquisition, or
``(C) infrastructure associated with sourcing or water
discharge.
``(3) Certain qualified progress expenditures rules made
applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(4) Special rule for subsidized energy financing.--Rules
similar to the rules of section 48(a)(4) (without regard to
subparagraph (D) thereof) shall apply for purposes of this
section.
``(5) Limitation.--The amount which is treated for all
taxable years with respect to any qualifying efficient
industrial process water use project with respect to any site
shall not exceed $10,000,000.
``(c) Definitions.--
``(1) Qualifying efficient industrial process water use
project.--The term `qualifying efficient industrial process
water use project' means, with respect to any site, a
project--
``(A) which replaces or modifies a system for the use of
water or steam in the production of goods in the trade or
business of manufacturing (including any system for the use
of water derived from blow-down from cooling towers and steam
systems in the generation of electric power at a site also
used for the production of goods in the trade or business of
manufacturing), and
``(B) which is designed to achieve--
``(i) a reduction of not less than 20 percent in water
withdrawal and a reduction of not less than 10 percent of
water discharge when compared to the existing water use at
the site, or
``(ii) a reduction of not less than 10 percent in water
withdrawal and a reduction of not less than 20 percent of
water discharge when compared to the existing water use at
the site, and
``(2) Eligible property.--The term `eligible property'
means any property--
``(A) which is part of a qualifying efficient industrial
process water use project and which is necessary for the
reduction in withdrawals or discharge described in paragraph
(1)(B),
``(B)(i) the construction, reconstruction, or erection of
which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the original
use of such property commences with the taxpayer, and
``(C) with respect to which depreciation (or amortization
in lieu of depreciation) is allowable.
``(3) Net energy consumption.--The term `net energy
consumption' means the energy consumed , both on-site and
off-site, with respect to the water described in paragraph
(1)(A). Net energy consumption shall be normalized per unit
of industrial output and measured under rules and procedures
established by the Secretary, in consultation with the
Administrator of the Environmental Protection Agency.
``(4) Water discharge.--The term `water discharge' means
all water leaving the site via permitted or unpermitted
surface water discharges, discharges to publicly owned
treatment works, and shallow- or deep-injection (whether on-
site or off-site).
``(5) Water withdrawal.--The term `water withdrawal' means
all water taken for use at the site from on-site ground and
surface water sources together with any water supplied to the
site by a public water system.
``(d) Termination.--This section shall not apply to periods
after December 31, 2014, under rules similar to the rules of
section 48(m) (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (iv), by striking the period at the end of
clause (v) and inserting ``, and'', and by adding after
clause (v) the following new clause:
``(vi) the basis of any property which is part of a
qualifying efficient industrial use water project under
section 48D.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 48B the following new item:

``Sec. 48D. Qualifying efficient industrial process water use project
credit.''.
(d) Effective Date.--The amendments made by this section
shall apply to periods after January 1, 2011, under rules
similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
______

By Mr. WYDEN (for himself, Mr. Cornyn, and Mr. Harkin):
S. 1640. A bill to amend title XVIII of the Social Security Act to
provide coverage of intensive lifestyle treatment; to the Committee on
Finance.
Mr. WYDEN. Mr. President, I rise today to introduce the Take Back
Your Health Act of 2009. I want to thank my friends Senator Cornyn and
Senator Harkin for joining as original cosponsors of this bill.
This bill is another example of how Democrats and Republicans can
come together on health reform. This bill incorporates ideas that
bridge the philosophies of both parties: prevention, individual
responsibility, and paying for health care services that provide value.
These days, health care reformers talk about bending the cost curve
down and focusing on delivery system ``game changers''. Often my
friends and I have talked about how pevention--preventing disease or
illness before it happens--does both, but is not scored as bending the
cost curve by the Congressional Budget Office.
Over the last year, I have worked with some of the brightest minds in
prevention--Doctors Dean Ornish, Mike Roizen, and Mark Hyman--on how to
design a program that will change the focus of medicine from treating
medical problems to preventing them while delivering savings. The road
that took us to this bill has not been an easy one, but I believe this
bill achieves all of our goals when it comes to encouraging healthier
behaviors that will help prevent disease, especially chronic diseases.
The heart of this bill is what's called an intensive lifestyle
treatment program. This program is an individualized health plan
prescribed by a doctor that gets people living healthier and getting
healthier through exercise, nutrition counseling, care coordination,
medication management, and stopping smoking.
This type of program has been proven to help or even reverse the
progression of many chronic diseases. A Highmark Blue Cross Blue Shield
study found that their costs went down 50 percent after their patients
took part in an intensive lifestyle program. That can mean big savings
for Medicare and for seniors.
Even a CMS Medicare demonstration--which notoriously does not score

[[Page S9044]]

savings for anything--found that people who went through a lifestyle
program had the same or lower costs over three years than as Medicare
beneficiaries who didn't go through the program.
In times like these, the American people want to know that the
Medicare program is going to get their money's worth. The Take Back
Your Health Act embraces a pay-for-performance type system. Doctors are
paid a bundled payment to encourage efficiency and teamwork, and they
are held responsible for their success. If a patient's health status
does not improve according to at least two measures, the doctor doesn't
get paid. In addition, if a patient goes through the program for
diabetes, but still has problems and has to go to the hospital, the
lifestyle treatment doctor doesn't get paid.
The last innovation in this program is that it gives individuals a
financial incentive for getting healthier. Every person who goes
through this treatment program and improves his or her health status
gets a one-time $200 reward.
The beauty of this bill is that everyone has skin in the game: the
doctor, the patient, and the government. That will be the secret of its
success. It is just this kind of innovative program that can be a real
game-changer for Medicare and for our entire health care system, by
bringing the focus of our health care system back to the basics of
making us healthier.
I look forward to working with Chairman Baucus and Senator Grassley
on including this bill in health reform. I urge my colleagues to join
me as cosponsors on this bill.
______

By Ms. SNOWE (for herself and Mr. Bingaman):
S. 1643. A bill to amend the Internal Revenue Code of 1986 to allow a
credit for the conversion of heating using oil fuel to using natural
gas or biomass feedstocks, and for other purposes; to the Committee on
Finance.
Mr. BINGAMAN. Mr. President, addressing our Nation's dependence on
imported oil and our greenhouse gas emissions will require policies
that extend across the economy, as well as policies that are more
narrowly tailored to specific sectors. Today, I rise with my colleague
from Maine, Senator Snowe, to offer a bill that would enhance energy
security and reduce greenhouse gas emissions associated with heating
our nation's homes and buildings. Our bill, the Cleaner, Secure and
Affordable Thermal Energy Act, creates significant incentives for
consumers, businesses, and tax-exempt entities that now rely on heating
oil to convert to energy-efficient natural gas or biomass heating
systems.
Across the country, and particularly in the Northeast and Midwest,
many homes and buildings still derive heat from oil-burning furnaces.
According to the Energy Information Administration, in 2007, our Nation
consumed nearly 160 million barrels of oil for heating fuel. This use
of heating oil continues despite the existence of widely available
alternatives that are cleaner, more secure, and more affordable.
On April 22, I held a hearing in the Energy and Natural Resources
Committee on the Energy Efficiency Resource Standards. The Committee
heard from several witnesses about the advantages of and efforts to
convert residential, business, and public users from fuel oil to
natural gas and biomass heating systems. For each household that
converts from fuel oil to a natural gas heating system, we avoid 2.1
metric tons of greenhouse gas emissions. For each commercial building,
we avoid 9.9 metric tons, and for each industrial facility, we avoid as
much as 2,984 metric tons. These emission reductions are even more
significant for conversions to heating systems that are fired by
biomass resources.
Besides being cleaner, natural gas and biomass are far more secure
resources. Ninety-eight percent of domestically consumed natural gas is
produced in North America, and domestic reserves of natural gas are
estimated at 100 years based on current consumption.
Finally, since the price of natural gas and biomass is lower and less
volatile than the price oil, converting offers significant short- and
long-term cost savings to consumers. For instance, while the average
annual cost of using fuel oil for home heating averages $1,734, the
average annual cost of operating a natural gas furnace is $1,004.
But significant up-front costs prevent many families and businesses
from converting their heating systems.
The Cleaner, Secure and Affordable Thermal Energy Act will make these
conversions more affordable for American families, businesses, and tax-
exempt entities.
First, for residential consumers, the Act establishes a 30 percent
tax credit for costs associated with converting from a fuel oil to
natural gas or biomass heating system. The credit is capped at $3,500,
$4,000 in the case of biomass stoves. To qualify, the replacement
equipment must be energy efficient; a natural gas boiler must have an
AFUE rating of at least 85 percent, a replacement natural gas furnace
must have an AFUE rating of at least 92 percent, and a replacement
biomass appliance must have a thermal efficiency rating of more than 75
percent.
For business taxpayers, the act authorizes bonus depreciation for
property installed before 2012. This would enable business taxpayers to
expense--that is, immediately write-off--half of the cost of qualifying
property, and depreciate the remaining balance over the typical cost-
recovery period.
Many of the Nation's heating oil systems are used by public entities,
particularly school systems. To help public entities finance their
conversions to natural gas and biomass heating, the Act adds conversion
programs as an activity eligible for Qualified Energy Conservation
Bonds.
Finally, to encourage expansion of natural gas service capabilities,
the act includes a two-year extension of the 15-year depreciation
schedule created for distribution facilities under the Energy Policy
Act of 2005.
The act would move us significantly in the direction of a low-carbon
economy while enhancing energy security and reducing heating costs. I
look forward to working with Senator Snowe to enacting our bill into
law.

____________________