[Pages S7296-S7318]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

Mr. McCAIN:
S. 1291. A bill to provide for the acquisition of subsurface mineral
interests in land owned by the Pascua Yaqui Tribe and land held in
trust for the Tribe; to the Committee on Indian Affairs.
Mr. McCAIN. Mr. President, I am pleased to introduce the Pascua Yaqui
Mineral Rights Act of 2005 to provide for acquisition of subsurface
mineral interests in land owned by the Pascua Yaqui tribe and land held
in trust for the Tribe.
The Pascua Yaqui tribe has purchased in fee four parcels of land,
totaling approximately 436 acres, from the State of Arizona. These
parcels are adjacent to the Tribe's reservation near Tucson, AZ. The
Tribe subsequently applied to have these lands taken into trust
pursuant to the 25 CFR Part 151 process. The Bureau of Indian Affairs
approved the trust application. However, the State of Arizona objected
because it still owns the subsurface mineral rights when it conveys its
Trust lands. Based on the State of Arizona's objection, the Tribe's
trust application was stayed pending resolution of the mineral rights
title issue. Arizona law prevents the State from selling these mineral
interests and I understand that the only way they can be acquired is
through an act of condemnation brought by the United States pursuant to
40 U.S.C. Sec. 3113. The State of Arizona has conditionally consented
to a condemnation action.
It has since been discovered that an additional 140 acres of the
reservation was also former State of Arizona trust land that was
purchased in fee by the Tribe and taken into trust without obtaining
the mineral estate. The State of Arizona has also conditionally
consented to a condemnation action with regard to these additional 140
acres.
In additional to the mineral interests condemnation, this legislation
covers another subject. Under 360 acres of the reservation, the United
States owns the mineral interests for itself, rather than in trust for
the tribe. Although that acreage was originally purchased in fee, it
was previously patented by the U.S. and the U.S. retained the mineral
interests to that property for its own benefit, currently administered
by the Bureau of Land Management. This legislation would authorize the
Bureau of Land Management to transfer those mineral interests to the
U.S., to be held in trust for the Pascua Yaqui tribe.
The result of the legislation I introduce today would be to allow the
United States to obtain and/or consolidate ownership of the mineral
interest only, in its name, in trust for the Pascua Yaqui tribe. These
mineral interests are under the surface of land already either owned by
the Pascua Yaqui tribe, or held in trust for the Tribe by the United
States.
Finally, under the terms of its current gaming compact with the State
of Arizona, the Tribe has already constructed the maximum number of
casinos it can operate on its reservation at this time. This bill will
not authorize additional reservation casinos.
I look forward to working with my colleagues to enact this
legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1291

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 ``Pascua Yaqui Mineral Rights
Act of 2005''.

SEC. 2. DEFINITIONS.

In this Act:
(1) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(2) State.--The term ``State'' means the State of Arizona.
(3) Tribe.--The term ``Tribe'' means the Pascua Yaqui
Tribe.

SEC. 3. ACQUISITION OF SUBSURFACE MINERAL INTERESTS.

(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary, in coordination with
the Attorney General of the United States and with the
consent of the State, shall acquire through eminent domain
the following:
(1) All subsurface rights, title, and interests (including
subsurface mineral interests) held by the State in the
following tribally-owned parcels:
(A) Lot 2, sec. 13, T. 15 S., R. 12 E., Gila and Salt River
Meridian, Pima County Arizona.
(B) Lot 4, W\1/2\SE\1/4\, sec. 13, T. 15 S., R. 12 E., Gila
and Salt River Base & Meridian, Pima County, Arizona.
(C) NW\1/4\NW\1/4\, N\1/2\NE\1/4\NW\1/4\, SW\1/4\NE\1/
4\NW\1/4\, sec. 24, T. 15 S., R. 12 E., Gila and Salt River
Base & Meridian, Pima County Arizona.
(D) Lot 2 and Lots 45 through 76, sec. 19, T. 15 S., R. 13
E., Gila and Salt River Base & Meridian, Pima County,
Arizona.
(2) All subsurface rights, title, and interests (including
subsurface mineral interests) held by the State in the
following parcels held in trust for the benefit of Tribe:
(A) Lots 1 through 8, sec. 14, T. 15 S., R. 12 E., Gila and
Salt River Base & Meridian, Pima County, Arizona.
(B) NE\1/4\SE\1/4\, E\1/2\NW\1/4\SE\1/4\, SW\1/4\NW\1/
4\SE\1/4\, N\1/2\SE\1/4\SE\1/4\, SE\1/4\SE\1/4\SE\1/4\, sec.
14, T. 15 S., R. 12 E., Gila and Salt River Base & Meridian,
Pima County, Arizona.
(b) Consideration.--Subject to subsection (c), as
consideration for the acquisition of subsurface mineral
interests under subsection (a), the Secretary shall pay to
the State an amount equal to the market value of the
subsurface mineral interests acquired, as determined by--
(1) a mineral assessment that is--
(A) completed by a team of mineral specialists agreed to by
the State and the Tribe; and
(B) reviewed and accepted as complete and accurate by a
certified review mineral examiner of the Bureau of Land
Management;
(2) a negotiation between the State and the Tribe to
mutually agree on the price of the subsurface mineral
interests; or
(3) if the State and the Tribe cannot mutually agree on a
price under paragraph (2), an appraisal report that is--
(A)(i) completed by the State in accordance with subsection
(d); and
(ii) reviewed by the Tribe; and
(B) on a request of the Tribe to the Bureau of Indian
Affairs, reviewed and accepted as complete and accurate by
the Office of the Special Trustee for American Indians of the
Department of the Interior.
(c) Conditions of Acquisition.--The Secretary shall acquire
subsurface mineral interests under subsection (a) only if--
(1) the payment to the State required under subsection (b)
is accepted by the State in full consideration for the
subsurface mineral interests acquired;
(2) the acquisition terminates all right, title, and
interest of any party other than the United States in and to
the acquired subsurface mineral interests; and
(3) the Tribe agrees to fully reimburse the Secretary for
costs incurred by the Secretary relating to the acquisition,
including payment to the State for the acquisition.
(d) Determination of Market Value.--Notwithstanding any
other provision of law, unless the State and the Tribe
otherwise agree to the market value of the subsurface mineral
interests acquired by the Secretary under this section, the
market value of those subsurface mineral interests shall be
determined in accordance with the Uniform Appraisal Standards
for Federal Land Acquisition, as published by the Appraisal
Institute in 2000, in cooperation with the Department of
Justice and the Office of Special Trustee for American
Indians of the Department of Interior.

[[Page S7297]]

(e) Additional Terms and Conditions.--The Secretary may
require such additional terms and conditions with respect to
the acquisition of subsurface mineral interests under this
section as the Secretary considers to be appropriate to
protect the interests of the United States and any valid
existing right.

SEC. 4. INTERESTS TAKEN INTO TRUST.

(a) Land Transferred.--Subject to subsections (b) and (c),
notwithstanding any other provision of law, not later than
180 days after the date on which the Tribe makes the payment
described in subsection (c), the Secretary shall take into
trust for the benefit of the Tribe the subsurface rights,
title, and interests, formerly reserved to the United States,
to the following parcels:
(1) E\1/2\NE\1/4\, SW\1/4\NE\1/4\, sec. 14, T. 15 S., R. 12
E., Gila and Salt River Base & Meridian, Pima County,
Arizona.
(2) W\1/2\SE\1/4\, SW\1/4\, sec. 24, T. 15 S., R. 12 E.,
Gila and Salt River Base & Meridian, Pima County, Arizona.
(b) Exceptions.--The parcels taken into trust under
subsection (a) shall not include--
(1) NE\1/4\SW\1/4\, sec. 24, except the southerly 4.19 feet
thereof;
(2) NW\1/4\SE\1/4\, sec. 24, except the southerly 3.52 feet
thereof; or
(3) S\1/2\SE\1/4\, sec. 23, T. 15 S., R. 12 E., Gila and
Salt River Base & Meridian, Pima County, Arizona.
(c) Consideration and Costs.--The Tribe shall pay to the
Secretary only the transaction costs relating to the
assessment, review, and transfer of the subsurface rights,
title, and interests taken into trust under subsection (a).
______

By Mr. SANTORUM:
S. 1292. A bill to amend the Internal Revenue Code of 1986 to allow a
credit against income tax for expenses incurred in tele-working; to the
Committee on Finance.
Mr. SANTORUM. Mr. President, I rise to introduce legislation that
would help people who ``telework'' or work from home, to receive a tax
credit. Teleworkers are people who work on-line from home--whether a
few days a week or their entire work schedule--using computers and
other information technology tools. Nearly 40 million Americans
telework today, and according to experts, 40 percent of the nation's
jobs are compatible with telework.
I am introducing the Telework Tax Incentive Act to provide a $500 tax
credit for telework. The legislation provides an incentive to encourage
more employers to consider telework for their employees. Telework
should be a regular part of the 21st century workplace.
The best part of telework is that it improves the quality of life for
everyone--both the employee, the employer and the community. Telework
reduces traffic congestion and air pollution. It reduces gas
consumption and our dependency on foreign oil. Encouraging telework is
good for families--giving working parents the flexibility to meet
everyday demands. Telework provides people with disabilities greater
job opportunities. It can also be a good option for retirees and others
who choose to work part-time.
A task force on telework initiated by former Virginia Governor James
Gilmore recommended the establishment of a tax credit toward the
purchase and installation of electronic and computer equipment that
allow an employee to telework. For example, the cost of a computer, fax
machine, modem, phone, printer, software, copier, and other expenses
necessary to enable telework could count toward a tax credit, provided
the person worked at home a minimum number of days per year.
My legislation would provide a $500 tax credit ``for expenses paid or
incurred under a teleworking arrangement for furnishings and electronic
information equipment which are used to enable an individual to
telework.'' An employee must telework a minimum of 75 days per year to
qualify for the tax credit. Both the employer and employee are eligible
for the tax credit, but the tax credit goes to whomever absorbs the
expense for setting up the at-home worksite.
On October 9, 1999, President Clinton signed into law legislation
that I introduced in coordination with Representative Frank Wolf from
Virginia as part of the annual Department of Transportation
appropriations bill for Fiscal Year 2000. S. 1521, the National
Telecommuting and Air Quality Act, created a pilot program to study the
feasibility of providing incentives for companies to allow their
employees to telework in five major metropolitan areas including
Philadelphia, Washington, D.C., Los Angeles, Houston and Denver.
President Bush signed legislation on July 14, 2000, that included an
additional $2 million to continue telework efforts in the 5 pilot
cities, including Philadelphia, to market, implement, and evaluate
strategies for awarding telecommuting, emissions reduction, and
pollution credits established through the National Telecommuting and
Air Quality Act. I am excited that Philadelphia continues to use this
opportunity to help to get the word out about the benefits of
telecommuting for many employees and employers.
Telecommuting improves air quality by reducing pollutants, provides
employees and families flexibility, reduces traffic congestion, and
increases productivity and retention rates for businesses while
reducing their overhead costs. It's a growing opportunity and option
which we should all include in our effort to maintain and improve
quality of life issues in Pennsylvania and around the Nation. According
to statistics available from 1996, the Greater Philadelphia area ranked
number 10 in the country for annual person-hours of delay due to
traffic congestion. Because of this reality, all options including
telecommuting should be pursued to address this challenge.
The 1999 Telework America National Telework Survey, conducted by Joan
H. Pratt Associates, found that today's 19.6 million teleworkers
typically work 9 days per month at home with an average of 3 hours per
week during normal business hours. Teleworkers seek a blend of job-
related and personal benefits to enable them to better handle their
work and life responsibilities; however these research findings
demonstrate the impact on the bottom line for employers as well.
Employers may save more than $10,000 per telework employee simply from
reduced absenteeism and increased employee retention. Thus an
organization with 100 employees, 20 of whom telework, could potentially
realize a savings of $200,000 annually, or more, when productivity
gains are added.
When I introduced this legislation in the 107th Congress, it was
endorsed by a number of groups including including the International
Telework Association and Council (ITAC), Covad Communications, National
Town Builders Association, Litton Industries, Orbital Sciences
Corporation, Consumer Electronic Association, Capnet, BTG Corporation,
Electonic Industries Alliance, Telecommunications Industry Association,
American Automobile Association Mid-Atlantic, Dimensions International
Inc., Capunet, TManage, Science Applications International Corporation,
AT&T, Northern Virginia Technology Council, Computer Associates
Incorporated, and Dyn Corp.
Work is something you do, not someplace you go. There is nothing
magical about strapping ourselves into a car and driving sometimes up
to an hour and a half, arriving at a workplace and sitting before a
computer, when we can access the same information from a computer in
our homes. Wouldn't it be great if we could replace the evening rush
hour commute with time spent with the family, coaching little league or
volunteering at a local charity?
I urge my colleagues to consider cosponsoring this legislation that
promotes telework and helps encourage additional employee choices for
the workplace.
6_____

By Mr. BUNNING (for himself, Mr. Conrad, Mr. Lott, Mr. Smith, and
Mrs. Lincoln):
S. 1293. A bill to amend the Internal Revenue Code of 1986 to permit
the consolidation of life insurance companies with other companies; to
the Committee on Finance.
Mr. BUNNING. Mr. President, I rise today to introduce legislation to
allow affiliated life and non-life insurance companies to file
consolidated tax returns. The current outdated rules do not allow such
consolidation.
Consolidated return provisions under current law were enacted so that
the members of an affiliated group of corporations could file a single
tax return. The right to file a ``consolidated'' return is generally
available to businesses of all natures conducted by the affiliated
corporations. The purpose behind consolidated returns is simply to tax
a complete business as a whole rather than its component parts
individually. Whether an enterprise's businesses are operated as
divisions within

[[Page S7298]]

one corporation or as subsidiary corporations with a common parent
company, a business entity should generally be taxed as a single entity
and be allowed to file its return accordingly.
Corporate groups which include life insurance companies are denied
the ability to file a single consolidated return until they have been
affiliated for at least 5 years. Even after this 5-year period, they
are subject to two additional limitations that are not applicable to
any other type of group. First, non-life insurance companies must be
members of the affiliated group for five years before their losses may
be used to offset life insurance company income. Second, non-life
insurance affiliate losses, including current year losses and any
carryover losses, that may offset life insurance company taxable income
are limited to the lesser of 35 percent of life insurance company's
taxable income or 35 percent of the non-life insurance company's
losses.
There are no clear reasons why affiliated groups that include life
insurance companies are denied the same unrestricted ability to file
consolidated returns that is available to other financial
intermediaries, and corporations in general. Allowing members of an
affiliated group of corporations to file a consolidated return prevents
the business enterprise's structure from obscuring the fact that the
true gain or loss of the business enterprise is the conglomeration of
each of the members of the affiliated group. The limitations contained
in current law are clearly without policy justification and should be
repealed.
Our legislation will repeal the two 5-year limitations for taxable
years beginning after this year, and it will phase out the 35 percent
limitation over 7 years. The staff of the Joint Committee on Taxation
has recommended repeal of two of the three limitations addressed by my
bill on the grounds of needless complexity. The third limitation is, in
effect, merely a minimum tax on life insurance company income. That
limitation should have been repealed when the alternative minimum tax
was enacted, and certainly has no place in the current tax laws. I
should also note that Congress included in the tax cut vetoed by then-
President Clinton in 1999 much of what is contained in this
legislation.
I thank Senators Conrad, Lott, Smith and Lincoln for joining me in
sponsoring this legislation. We hope you will join us as cosponsors of
this bipartisan, much-needed legislation.
______

By Mr. LAUTENBERG (for himself and Mr. McCain):
S. 1294. A bill to amend the Telecommunications Act of 1996 to
preserve and protect the ability of local governments to provide
broadband capability and services; to the Committee on Commerce,
Science, and Transportation.
Mr. LAUTENBERG. Mr. President, I rise to introduce the ``Community
Broadband Act of 2005.'' I am pleased to be joined in this effort by
Senator McCain of Arizona.
This legislation will promote economic development, enhance public
safety, increase educational opportunities, and improve the lives of
citizens in areas of the country that either do not have access to
broadband or live in a location where the cost for broadband is simply
not affordable.
A recent study by the Organization for Economic Cooperation and
Development shows that the United States has dropped to 12th place
worldwide in the percentage of people with broadband connections. Many
of the countries ahead of the United States have successfully combined
public and private efforts to deploy municipal networks that connect
their citizens and businesses with high-speed Internet services.
It is in this context that President Bush has called for universal
and affordable broadband in the United States by the year 2007. If we
are going to meet President Bush's goals, we must not enact barriers to
broadband development and access. Unfortunately, fourteen States have
passed legislation to prohibit or significantly restrict the ability of
local municipalities and communities to offer high-speed Internet to
their citizens. More States are considering such legislation. The
``Community Broadband Act'' is in response to those efforts by States
to tell local communities that they cannot establish networks for their
citizens even in communities that either have no access to broadband or
where access is prohibitively expensive.
The ``Community Broadband Act'' is a simple bill. It says that no
State can prohibit a municipality from offering high-speed Internet to
its citizens; and when a municipality is a provider, it cannot abuse
its governmental authority as regulator to discriminate against private
competitors. Furthermore, a municipality must comply with Federal and
state telecommunications laws.
Mr. President, this bill will allow communities to make broadband
decisions that could: Improve their economy and create jobs by serving
as a medium for development, particularly in rural and underserved
urban areas; aid public safety and first responders by ensuring access
to network services while on the road and in the community; strengthen
our country's international competitiveness by giving businesses the
means to compete more effectively locally, nationally, and
internationally; encourage long-distance education through video
conferencing and other means of sharing knowledge and enhancing
learning via the Internet; and create incentives for public-private
partnerships.
A century ago, there were efforts to prevent local governments from
offering electricity. Opponents argued that local governments didn't
have the expertise to offer something as complex as electricity. They
also argued that businesses would suffer if they faced competition from
cities and towns. But local community leaders recognized that their
economic survival depended on electrifying their communities. They knew
that it would take both private investment and public investment to
bring electricity to all Americans.
We face a similar situation today. Municipal networks can play an
essential role in making broadband access universal and affordable. We
must not put up barriers to this possibility of municipal involvement
in broadband deployment.
Some local governments will decide to do this; others will not. Let
me be clear this is not going to be the right decision for every
municipality. But there are clearly examples of municipalities that
need to provide broadband, and those municipalities should have the
power to do so.
Today's Wall Street Journal notes the small town of Granbury, TX,
population 6,400, that initiated a wireless network after waiting years
for private industry to take an interest. In Scottsburg, IN, a city and
its 6000 residents north of Louisville, KY, could not get broadband
from an incumbent telephone company. When two important businesses
threatened to leave unless they could obtain broadband connectivity,
municipal officials stepped forward to provide wireless broadband
throughout the town. The town retained the two businesses and gained
much more. There are many Granburys and Scottsburgs across the country.
There are also underserved urban areas, where private providers may
exist, but many in the community simply cannot afford the high prices.
Dianah Neff, Philadelphia's chief information officer, knows this all
too well. ``The digital divide is local,'' Neff has said, commenting
that while 90 percent Philadelphia's affluent neighborhoods have
broadband, just 25 percent in low-income areas have broadband. When the
city of Philadelphia announced plans for wireless access, it
immediately faced opposition and the Pennsylvania legislature passed
legislation to counter this municipal power.
Community broadband networks have the potential to create jobs, spur
economic development, and bring a 21st century utility to everyone. I
hope my colleagues will join Senator McCain and me in our effort to
enact the Community Broadband Act of 2005.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1294

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 ``Community Broadband Act of
2005''.

[[Page S7299]]

SEC. 2. COMMUNITY BROADBAND CAPABILITY AND SERVICES.

Section 706 of the Telecommunications Act of 1996 (47
U.S.C. 157 note) is amended--
(1) by redesignating subsection (c) as subsection (d) and
inserting after subsection (b) the following:
``(c) Local Government Provision of Advanced
Telecommunications Capability and Services.--
``(1) In general.--No State statute, regulation, or other
State legal requirement may prohibit or have the effect of
prohibiting any public provider from providing, to any person
or any public or private entity, advanced telecommunications
capability or any service that utilizes the advanced
telecommunications capability provided by such provider.
``(2) Antidiscrimination safeguards.--To the extent any
public provider regulates competing private providers of
advanced telecommunications capability or services, it shall
apply its ordinances and rules without discrimination in
favor of itself or any advanced telecommunications services
provider that it owns.
``(3) Savings clause.--Nothing in this section shall exempt
a public provider from any Federal or State
telecommunications law or regulation that applies to all
providers of advanced telecommunications capability or
services using such advanced telecommunications
capability.''; and
(2) by adding at the end of subsection (d), as
redesignated, the following:
``(3) Public provider.--The term `public provider' means a
State or political subdivision thereof, any agency,
authority, or instrumentality of a State or political
subdivision thereof, or an Indian tribe (as defined in
section 4(e) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b(e)), that provides advanced
telecommunications capability, or any service that utilizes
such advanced telecommunications capability, to any person or
public or private entity.''.
Mr. McCAIN. Mr. President, I am pleased to join in sponsoring the
Community Broadband Act of 2005. In the simplest of terms, this bill
would ensure that any town, city, or county that wishes to offer high-
speed Internet services to its citizens can do so. The bill also would
ensure fairness by requiring municipalities that offer high-speed
Internet services do so in compliance with all Federal and State
telecommunications laws and in a nondiscriminatory manner.
This bill is needed if we are to meet President Bush's call for
``universal, affordable access for broadband technology by the year
2007.'' When President Bush announced this nationwide goal in 2004, the
country was ranked 10th in the world for high-speed Internet
penetration. Today, the country is ranked 16th. This is unacceptable
for a country that should lead the world in technical innovation,
economic development, and international competitiveness.
Many of the countries outpacing the United States in the deployment
of high-speed Internet services, including Canada, Japan, and South
Korea, have successfully combined municipal systems with privately
deployed networks to wire their countries. As a country, we cannot
afford to cut off any successful strategy if we want to remain
internationally competitive.
I recognize that our Nation has a long and successful history of
private investment in critical communications infrastructure. That
history must be respected, protected, and continued. However, when
private industry does not answer the call because of market failures or
other obstacles, it is appropriate and even commendable, for the people
acting through their local governments to improve their lives by
investing in their own future. In many rural towns, the local
government's high-speed Internet offering may be its citizens only
option to access the World Wide Web.
Despite this situation, a few incumbent providers of traditional
telecommunications services have attempted to stop local government
deployment of community high speed Internet services. The bill would do
nothing to limit their ability to compete. In fact, the bill would
provide them an incentive to enter more rural areas and deploy services
in partnership with local governments. This partnership will not only
reduce the costs to private firms, but also ensure wider deployment of
rural services. Additionally, the bill would aid private providers by
prohibiting a municipality when acting as both ``regulator'' and
``competitor'' from discriminating against competitors in favor of
itself.
Several newspapers have endorsed the concept of allowing
municipalities to choose whether to offer high speed Internet services.
USA Today rightfully questioned in an editorial, ``Why shouldn't
citizens be able to use their own resources to help themselves?'' The
Washington Post editorialized that the offering of high speed Internet
services by localities is, ``. . . the sort of municipal experiment we
hope will spread.'' The San Jose Mercury News stated that a ban on
localities ability to offer such services is ``bad for consumers, bad
for technology and bad for America's hopes of catching up to other
countries in broadband deployment.'' Finally, the Tampa Tribune
lectured Federal and State legislators, ``don't prohibit local elected
officials from providing a service their communities need.''
My home State of Arizona boasts the largest approved municipal
broadband system in the United States, for example. The city of Tempe's
wireless system will serve all of the city's 40 square miles and a
population of 159,000, including the campus of Arizona State
University. Citizens will have Internet access from anywhere at any
time, and police, fire, water and traffic services personnel will use
the system to enhance their efficiency.
In addition to Tempe, several Native American tribal governments
offer high-speed Internet access services to their citizens. This bill
would ensure that such offerings could continue to assist Indian
country and their ability to connect to the Internet.
Our country faces some real challenges. We need to find ways to use
technology to help our citizens better compete. We need to help our
businesses capitalize on their ingenuity so that they can become more
internationally competitive. That is why we need to do all we can to
eliminate barriers to competition and create incentives for the
delivery of high-speed Internet services for public suppliers of
broadband services, private suppliers of broadband services, and
public-private partnerships as well.
I hope my colleagues will join us in sponsoring the Community
Broadband Act of 2005.
______

By Mr. McCAIN:
S. 1295. A bill to amend the Indian Gaming Regulatory Act to provide
for accountability and funding of the National Indian Gaming
Commission; to the Committee on Indian Affairs.
Mr. McCAIN. Mr. President, I am pleased to introduce the National
Indian Gaming Commission Accountability Act of 2005 to amend provisions
of the Indian Gaming Regulatory Act regarding NIGC funding and
accountability.
The Indian gaming industry has undergone tremendous growth since the
enactment of the Indian Gaming Regulatory Act in 1988. The regulatory
responsibilities of the NIGC, the Federal agency responsible for
oversight of the industry, has likewise grown. In recent years the
NIGC's budgeting needs have consistently exceeded the $8 million
statutory cap, necessitating short-term authorizations to exceed the
cap to enable it to adequately enforce the Act.
Rather than merely raising the cap on funding, this legislation
amends IGRA's equation for funding the NIGC by allowing the funding to
adjust in direct proportion to the revenues of the Indian gaming
industry, with funding expanding or contracting as the Indian gaming
industry grows or recedes. Under that equation--which provides that
fees cannot exceed .08 percent of gross gaming revenues--the NIGC's
budget for fiscal 2007 would be capped at approximately $14.5 million.
As the agency's needs have grown, so has the scrutiny of the
regulated community and affected parties. It is therefore appropriate
that the agency's budgetary choices and program plans be subject to
transparency. Therefore, this legislation increases not only the
agency's funding, but also its accountability by directing that the
NIGC be subject to the Government Performance and Results Act (GPRA).
As a result, the agency would be required to develop a Strategic Plan,
and annual performance plans and performance reports, all of which will
provide critical information to the regulated stakeholders.
I look forward to working with my colleagues on both sides of the
aisle to enact this timely and balanced legislation. I ask unanimous
consent that the full text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

[[Page S7300]]

S. 1295

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 ``National Indian Gaming
Commission Accountability Act of 2005''.

SEC. 2. COMMISSION ACCOUNTABILITY AND FUNDING.

(a) Powers of the Commission.--Section 7 of the Indian
Gaming Regulatory Act (25 U.S.C. 2706) is amended by adding
at the end the following:
``(d) Application of Government Performance and Results
Act.--
``(1) In general.--In carrying out any action under this
Act, the Commission shall be subject to the Government
Performance and Results Act of 1993 (Public Law 1030962; 107
Stat. 285).
``(2) Plans.--In addition to any plan required under the
Government Performance and Results Act of 1993 (Public Law
1030962; 107 Stat. 285), the Commission shall submit a plan
to provide technical assistance to tribal gaming operations
in accordance with that Act.''.
(b) Commission Funding.--Section 18(a)(2) of the Indian
Gaming Regulatory Act (25 U.S.C. 2717(a)(2)) is amended by
striking subparagraph (B) and inserting the following:
``(B) The total amount of all fees imposed during any
fiscal year under the schedule established under paragraph
(1) shall not exceed 0.080 percent of the gross gaming
revenues of all gaming operations subject to regulation under
this Act.''.
______

By Ms. MURKOWSKI (for herself, Mr. Stevens, Mr. Burns, Mr. Craig,
Mr. Crapo, Mr. Kyl, and Mr. Smith):
S. 1296. A bill to amend title 28, United States Code, to provide for
the appointment of additional Federal circuit judges, to divide the
Ninth Judicial Circuit of the United States into 2 circuits, and for
other purposes; to the Committee on the Judiciary.
Ms. MURKOWSKI. Mr. President, I ask unanimous consent that my bill,
the Ninth Circuit Judgeship and Reorganization Act of 2005, be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S, 1296

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 ``Ninth Circuit Judgeship and
Reorganization Act of 2005''.

SEC. 2. DEFINITIONS.

In this Act:
(1) Former ninth circuit.--The term ``former ninth
circuit'' means the ninth judicial circuit of the United
States as in existence on the day before the effective date
of this Act.
(2) New ninth circuit.--The term ``new ninth circuit''
means the ninth judicial circuit of the United States
established by the amendment made by section 3(2)(A).
(3) Twelfth circuit.--The term ``twelfth circuit'' means
the twelfth judicial circuit of the United States established
by the amendment made by section 3(2)(B).

SEC. 3. NUMBER AND COMPOSITION OF CIRCUITS.

Section 41 of title 28, United States Code, is amended--
(1) in the matter preceding the table, by striking
``thirteen'' and inserting ``fourteen''; and
(2) in the table--
(A) by striking the item relating to the ninth circuit and
inserting the following:

California, Guam, Hawaii, Northern Marianas Islands.'';................

and
(B) by inserting after the item relating to the eleventh
circuit the following:

Alaska, Arizona, Idaho, Montana, Nevada, Oregon, Washington.''.........

SEC. 4. JUDGESHIPS.

(a) New Judgeships.--The President shall appoint, by and
with the advice and consent of the Senate, 5 additional
circuit judges for the new ninth circuit court of appeals,
whose official duty station shall be in California. The
judges authorized by this paragraph shall not be appointed
before January 21, 2006.
(b) Temporary Judgeships.--
(1) Appointment of judges.--The President shall appoint, by
and with the advice and consent of the Senate, 2 additional
circuit judges for the former ninth circuit court of appeals,
whose official duty stations shall be in California.
(2) Effect of vacancies.--The first 2 vacancies occurring
on the new ninth circuit court of appeals 10 years or more
after judges are first confirmed to fill both temporary
circuit judgeships created by this subsection shall not be
filled.
(c) Effective Date.--This section shall take effect on the
date of the enactment of this Act.

SEC. 5. NUMBER OF CIRCUIT JUDGES.

The table contained in section 44(a) of title 28, United
States Code, is amended--
(1) by striking the item relating to the ninth circuit and
inserting the following:

``Ninth.......................................................19'';....

and
(2) by inserting after the item relating to the eleventh
circuit the following:

``Twelfth.....................................................14''.....

SEC. 6. PLACES OF CIRCUIT COURT.

The table contained in section 48(a) of title 28, United
States Code, is amended--
(1) by striking the item relating to the ninth circuit and
inserting the following:

Honolulu, San Francisco.'';............................................

and
(2) by inserting after the item relating to the eleventh
circuit the following:

Phoenix, Portland, Missoula.''.........................................

SEC. 7. LOCATION OF TWELFTH CIRCUIT HEADQUARTERS.

The offices of the Circuit Executive of the Twelfth Circuit
and the Clerk of the Court of the Twelfth Circuit shall be
located in Phoenix, Arizona.

SEC. 8. ASSIGNMENT OF CIRCUIT JUDGES.

Each circuit judge of the former ninth circuit who is in
regular active service and whose official duty station on the
day before the effective date of this Act--
(1) is in California, Guam, Hawaii, or the Northern
Marianas Islands shall be a circuit judge of the new ninth
circuit as of such effective date; and
(2) is in Alaska, Arizona, Idaho, Montana, Nevada, Oregon,
or Washington shall be a circuit judge of the twelfth circuit
as of such effective date.

SEC. 9. ELECTION OF ASSIGNMENT BY SENIOR JUDGES.

Each judge who is a senior circuit judge of the former
ninth circuit on the day before the effective date of this
Act may elect to be assigned to the new ninth circuit or the
twelfth circuit as of such effective date and shall notify
the Director of the Administrative Office of the United
States Courts of such election.

SEC. 10. SENIORITY OF JUDGES.

The seniority of each judge--
(1) who is assigned under section 8, or
(2) who elects to be assigned under section 9,

shall run from the date of commission of such judge as a
judge of the former ninth circuit.

SEC. 11. APPLICATION TO CASES.

The following apply to any case in which, on the day before
the effective date of this Act, an appeal or other proceeding
has been filed with the former ninth circuit:
(1) Except as provided in paragraph (3), if the matter has
been submitted for decision, further proceedings with respect
to the matter shall be had in the same manner and with the
same effect as if this Act had not been enacted.
(2) If the matter has not been submitted for decision, the
appeal or proceeding, together with the original papers,
printed records, and record entries duly certified, shall, by
appropriate orders, be transferred to the court to which the
matter would have been submitted had this Act been in full
force and effect at the time such appeal was taken or other
proceeding commenced, and further proceedings with respect to
the case shall be had in the same manner and with the same
effect as if the appeal or other proceeding had been filed in
such court.
(3) If a petition for rehearing en banc is pending on or
after the effective date of this Act, the petition shall be
considered by the court of appeals to which it would have
been submitted had this Act been in full force and effect at
the time that the appeal or other proceeding was filed with
the court of appeals.

SEC. 12. TEMPORARY ASSIGNMENT OF CIRCUIT JUDGES AMONG
CIRCUITS.

Section 291 of title 28, United States Code, is amended by
adding at the end the following:
``(c) The chief judge of the Ninth Circuit may, in the
public interest and upon request by the chief judge of the
Twelfth Circuit, designate and assign temporarily any circuit
judge of the Ninth Circuit to act as circuit judge in the
Twelfth Circuit.
``(d) The chief judge of the Twelfth Circuit may, in the
public interest and upon request by the chief judge of the
Ninth Circuit, designate and assign temporarily any circuit
judge of the Twelfth Circuit to act as circuit judge in the
Ninth Circuit.''.

SEC. 13. TEMPORARY ASSIGNMENT OF DISTRICT JUDGES AMONG
CIRCUITS.

Section 292 of title 28, United States Code, is amended by
adding at the end the following:
``(f) The chief judge of the United States Court of Appeals
for the Ninth Circuit may in the public interest--
``(1) upon request by the chief judge of the Twelfth
Circuit, designate and assign 1 or more district judges
within the Ninth Circuit to sit upon the Court of Appeals of
the Twelfth Circuit, or a division thereof, whenever the
business of that court so requires; and
``(2) designate and assign temporarily any district judge
within the Ninth Circuit to hold a district court in any
district within the Twelfth Circuit.
``(g) The chief judge of the United States Court of Appeals
for the Twelfth Circuit may in the public interest--
``(1) upon request by the chief judge of the Ninth Circuit,
designate and assign 1 or more

[[Page S7301]]

district judges within the Twelfth Circuit to sit upon the
Court of Appeals of the Ninth Circuit, or a division thereof,
whenever the business of that court so requires; and
``(2) designate and assign temporarily any district judge
within the Twelfth Circuit to hold a district court in any
district within the Ninth Circuit.
``(h) Any designations or assignments under subsection (f)
or (g) shall be in conformity with the rules or orders of the
court of appeals of, or the district within, as applicable,
the circuit to which the judge is designated or assigned.''.

SEC. 14. ADMINISTRATION.

The court of appeals for the ninth circuit as constituted
on the day before the effective date of this Act may take
such administrative action as may be required to carry out
this Act and the amendments made by this Act. Such court
shall cease to exist for administrative purposes 2 years
after the date of enactment of this Act.

SEC. 15. EFFECTIVE DATE.

Except as provided in section 4(c), this Act and the
amendments made by this Act shall take effect 12 months after
the date of enactment of this Act.
______

By Mr. CORZINE (for himself, Mr. Bingaman, and Ms. Landrieu):
S. 1297. A bill to amend title XVIII of the Social Security Act to
reduce the work hours and increase the supervision of resident
physicians to ensure the safety of patients and resident-physicians
themselves; to the Committee on Finance.
Mr. CORZINE. Mr. President, I rise today to reintroduce my
legislation, the Patient and Physician Safety and Protection Act of
2005, to limit medical resident work hours to 80 hours a week and to
provide real protections for patients and resident physicians who are
negatively affected by excessive work hours. I feel strongly that as
Congress begins to consider proposals to reduce medical malpractice
premiums and improve quality of care, we must consider the role that
excessive work hours play in exacerbating medical liability problems
and reducing quality of care.
It is very troubling that hospitals across the Nation are requiring
young doctors to work 36 hour shifts and as many as 120 hours a week in
order to complete their residency programs. These long hours lead to a
deterioration of cognitive function similar to the effects of blood
alcohol levels of 0.1 percent. This is a level of cognitive impairment
that would make these doctors unsafe to drive--yet these physicians are
not only allowed but in fact are required to care for patients and
perform procedures on patients under these conditions. In fact, a study
by Harvard Medical School researchers published in the October 28, 2004
issue of the New England Journal of Medicine found that medical
residents made 35.9 percent more serious medical errors when they
worked extended shifts of more than 24 hours.
The Patient and Physician Safety and Protection Act of 2005 will
limit medical resident work hours to 80 hours a week. Not 40 hours or
60 hours--80 hours a week. It is hard to argue that this standard is
excessively strict. In fact, it is unconscionable that we now have
resident physicians, or any physicians for that matter, caring for very
sick patients 120 hours a week and 36 hours straight with fewer than 10
hours between shifts. This is an outrageous violation of a patient's
right to quality care.
In addition to limiting work hours to 80 hours week, my bill limits
the length of any one shift to 24 consecutive hours, while allowing for
up to three hours of patient transition time, and limits the length of
an emergency room shift to 12 hours. The bill also ensures that
residents have at least one out of seven days off and `on-call' shifts
no more often than every third night.

Since I first introduced the Patient and Physician Safety and
Protection Act in the 107th Congress, the medical community and the
Accreditation Council for Graduate Medical Education, ACGME,
specifically have taken critical steps to address the problem of
excessive work hours. On July 1, 2003, the ACGME issued resident work-
hour guidelines aimed at addressing this important issue. While I
commend ACGME leadership for taking the initiative, I remain very
concerned that the ACGME's policy lacks the enforcement mechanisms that
are essential to ensure compliance with the new work hour rules. The
ACGME's only sanction against hospitals that overwork residents or
provide inadequate supervision is the threat of lost accreditation of
residency programs. Medical residents who have already ``matched'' into
a program and invested years there are understandably reluctant to
report violations that might result in the closure of their residency.
Furthermore, the ACGME usually gives hospital administrators 90-100
days notice before inspecting a residency program. While the ACGME
policy establishes more stringent work hours regulations, it fails to
create effective enforcement and oversight tools. These rules are
meaningless without enforcement mechanisms.
That is why Federal legislation is necessary. The Patient and
Physician Safety and Protection Act of 2005 not only recognizes the
problem of excessive work hours, but also creates strong enforcement
mechanisms. The bill also provides funding support to teaching
hospitals to implement new work hour standards. Without enforcement and
financial support, efforts to reduce work hours are not likely to be
successful.
Finally, my legislation provides meaningful enforcement mechanisms
that will protect the identity of resident physicians who file
complaints about work hour violations. The ACGME's guidelines do not
contain any whistleblower protections for residents that seek to report
program violations. Without this important protection, residents will
be reluctant to report these violations, which in turn will weaken
enforcement.
My legislation also makes compliance with these work hour
requirements a condition of Medicare participation. Each year, Congress
provides $8 billion to teaching hospitals to train new physicians.
While Congress must continue to vigorously support adequate funding so
that teaching hospitals are able to carryout this important public
service, these hospitals must also make a commitment to ensuring safe
work conditions for these physicians and providing the highest quality
of care to the patients they treat.
In closing I would like to read a quote from an Orthopedic Surgery
Resident from Northern California, which I think illustrates why we
need this legislation.
I quote, ``I was operating post-call after being up for over 36 hours
and was holding retractors. I literally fell asleep standing up and
nearly face-planted into the wound. My upper arm hit the side of the
gurney, and I caught myself before I fell to the floor. I nearly put my
face in the open wound, which would have contaminated the entire field
and could have resulted in an infection for the patient.''
This is a very serious problem that must be addressed before medical
errors like this occur. I hope every member of the Senate will consider
this legislation and the potential it has to reduce medical errors,
improve patient care, and create a safer working environment for the
backbone of our Nation's healthcare system.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1297

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 ``Patient and Physician Safety
and Protection Act of 2005''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) The Federal Government, through the medicare program,
pays approximately $8,000,000,000 per year solely to train
resident-physicians in the United States, and as a result,
has an interest in assuring the safety of patients treated by
resident-physicians and the safety of resident-physicians
themselves.
(2) Resident-physicians spend as much as 30 to 40 percent
of their time performing activities not related to the
educational mission of training competent physicians.
(3) The excessive numbers of hours worked by resident-
physicians is inherently dangerous for patient care and for
the lives of resident-physicians.
(4) The scientific literature has consistently demonstrated
that the sleep deprivation of the magnitude seen in residency
training programs leads to cognitive impairment.
(5) A substantial body of research indicates that excessive
hours worked by resident-physicians lead to higher rates of
medical error, motor vehicle accidents, depression, and
pregnancy complications.

[[Page S7302]]

(6) The medical community has not adequately addressed the
issue of excessive resident-physician work hours.
(7) The Federal Government has regulated the work hours of
other industries when the safety of employees or the public
is at risk.
(8) The Institute of Medicine has found that as many as
98,000 deaths occur annually due to medical errors and has
suggested that 1 necessary approach to reducing errors in
hospitals is reducing the fatigue of resident-physicians.

SEC. 3. REVISION OF MEDICARE HOSPITAL CONDITIONS OF
PARTICIPATION REGARDING WORKING HOURS OF
MEDICAL RESIDENTS, INTERNS, AND FELLOWS.

(a) In General.--Section 1866 of the Social Security Act
(42 U.S.C. 1395cc) is amended--
(1) in subsection (a)(1)--
(A) by striking ``and'' at the end of subparagraph (U);
(B) by striking the period at the end of subparagraph (V)
and inserting ``, and''; and
(C) by inserting after subparagraph (V) the following new
subparagraph:
``(W) in the case of a hospital that uses the services of
postgraduate trainees (as defined in subsection (k)(4)), to
meet the requirements of subsection (k).''; and
(2) by adding at the end the following new subsection:
``(k)(1)(A) In order that the working conditions and
working hours of postgraduate trainees promote the provision
of quality medical care in hospitals, as a condition of
participation under this title, each hospital shall establish
the following limits on working hours for postgraduate
trainees:
``(i) Subject to subparagraphs (B) and (C), postgraduate
trainees may work no more than a total of 24 hours per shift.
``(ii) Subject to subparagraph (C), postgraduate trainees
may work no more than a total of 80 hours per week.
``(iii) Subject to subparagraph (C), postgraduate
trainees--
``(I) shall have at least 10 hours between scheduled
shifts;
``(II) shall have at least 1 full day out of every 7 days
off and 1 full weekend off per month;
``(III) subject to subparagraph (B), who are assigned to
patient care responsibilities in an emergency department
shall work no more than 12 continuous hours in that
department;
``(IV) shall not be scheduled to be on call in the hospital
more often than every third night; and
``(V) shall not engage in work outside of the educational
program that interferes with the ability of the postgraduate
trainee to achieve the goals and objectives of the program or
that, in combination with the program working hours, exceeds
80 hours per week.
``(B)(i) Subject to clause (ii), the Secretary shall
promulgate such regulations as may be necessary to ensure
quality of care is maintained during the transfer of direct
patient care from 1 postgraduate trainee to another at the
end of each shift.
``(ii) Such regulations shall ensure that, except in the
case of individual patient emergencies, the period in which a
postgraduate trainee is providing for the transfer of direct
patient care (as referred to in clause (i)) does not extend
such trainee's shift by more than 3 hours beyond the 24-hour
period referred to in subparagraph (A)(i) or the 12-hour
period referred to in subparagraph (A)(iii)(III), as the case
may be.
``(C) The work hour limitations under subparagraph (A) and
requirements of subparagraph (B) shall not apply to a
hospital during a state of emergency declared by the
Secretary that applies with respect to that hospital.
``(2) The Secretary shall promulgate such regulations as
may be necessary to monitor and supervise postgraduate
trainees assigned patient care responsibilities as part of an
approved medical training program, as well as to assure
quality patient care.
``(3) Each hospital shall inform postgraduate trainees of--
``(A) their rights under this subsection, including methods
to enforce such rights (including so-called whistle-blower
protections); and
``(B) the effects of their acute and chronic sleep
deprivation both on themselves and on their patients.
``(4) For purposes of this subsection, the term
`postgraduate trainee' means a postgraduate medical resident,
intern, or fellow.''.
(b) Designation.--
(1) In general.--The Secretary of Health and Human Services
(in this subsection referred to as the ``Secretary'') shall
designate an individual within the Department of Health and
Human Services to handle all complaints of violations that
arise from a postgraduate trainee (as defined in paragraph
(4) of section 1886(k) of the Social Security Act, as added
by subsection (a), who reports that the hospital operating
the medical residency training program for which the trainee
is enrolled is in violation of the requirements of such
section.
(2) Grievance rights.--A postgraduate trainee may file a
complaint with the Secretary concerning a violation of the
requirements under such section 1886(k). Such a complaint may
be filed anonymously. The Secretary may conduct an
investigation and take corrective action with respect to such
a violation.
(3) Enforcement.--
(A) Civil money penalty enforcement.--Subject to
subparagraph (B), any hospital that violates the requirements
under such section 1886(k) is subject to a civil money
penalty not to exceed $100,000 for each medical residency
training program operated by the hospital in any 6-month
period. The provisions of section 1128A of the Social
Security Act (other than subsections (a) and (b)) shall apply
to civil money penalties under this paragraph in the same
manner as they apply to a penalty or proceeding under section
1128A(a) of such Act.
(B) Corrective action plan.--The Secretary shall establish
procedures for providing a hospital that is subject to a
civil monetary penalty under subparagraph (A) with an
opportunity to avoid such penalty by submitting an
appropriate corrective action plan to the Secretary.
(4) Disclosure of violations and annual reports.--The
individual designated under paragraph (1) shall--
(A) provide for annual anonymous surveys of postgraduate
trainees to determine compliance with the requirements under
such section 1886(k) and for the disclosure of the results of
such surveys to the public on a medical residency training
program specific basis;
(B) based on such surveys, conduct appropriate on-site
investigations;
(C) provide for disclosure to the public of violations of
and compliance with, on a hospital and medical residency
training program specific basis, such requirements; and
(D) make an annual report to Congress on the compliance of
hospitals with such requirements, including providing a list
of hospitals found to be in violation of such requirements.
(c) Whistleblower Protections.--
(1) In general.--A hospital covered by the requirements of
section 1866(k) of the Social Security Act, as added by
subsection (a), shall not penalize, discriminate, or
retaliate in any manner against an employee with respect to
compensation, terms, conditions, or privileges of employment,
who in good faith (as defined in paragraph (2)), individually
or in conjunction with another person or persons--
(A) reports a violation or suspected violation of such
requirements to a public regulatory agency, a private
accreditation body, or management personnel of the hospital;
(B) initiates, cooperates, or otherwise participates in an
investigation or proceeding brought by a regulatory agency or
private accreditation body concerning matters covered by such
requirements;
(C) informs or discusses with other employees, with a
representative of the employees, with patients or patient
representatives, or with the public, violations or suspected
violations of such requirements; or
(D) otherwise avails himself or herself of the rights set
forth in such section or this subsection.
(2) Good faith defined.--For purposes of this subsection,
an employee is deemed to act ``in good faith'' if the
employee reasonably believes--
(A) that the information reported or disclosed is true; and
(B) that a violation has occurred or may occur.
(d) Effective Date.--The amendments made by subsection (a)
shall take effect on the first July 1 that begins at least 1
year after the date of enactment of this Act.

SEC. 4. ADDITIONAL FUNDING FOR HOSPITAL COSTS.

There are hereby appropriated to the Secretary of Health
and Human Services such amounts as may be required to provide
for additional payments to hospitals for their reasonable
additional, incremental costs incurred in order to comply
with the requirements imposed by this Act (and the amendments
made by this Act).
Mr. ENSIGN. Mr. President, I come before the Senate today about a
very serious issue that is threatening the disbursal of justice in the
western United States.
My home State of Nevada, along with eight other States, has been part
of an unbelievable population boom over the last several decades. As a
result, we face the frustrating challenges of increased traffic
congestion, crowded schools, and a shortage of many services. However,
there is one consequence of that growth that has reached a critical
level because it is delaying and denying justice for too many
Americans.
That is the situation with the Court of Appeals for the Ninth
Circuit. The largest circuit in the country, it encompasses 20 percent
of the entire Nation's population. The Ninth Circuit has the highest
cases per jurist ratio. And the trend is not changing. The Circuit is
just too large. Each of the States covered by the Ninth Circuit saw
population growths over the last decade, and three of the States--
Nevada, Idaho, and Arizona--are in the top five in the country for
population growth. Something must be done, or the Ninth Circuit will
continue to bust at the seams.
That is why I am introducing legislation today that would divide the
current Ninth Circuit into 3 new circuits. The new Ninth Circuit would
include California, Hawaii, Guam, and the Northern Marianas Islands.
The new

[[Page S7303]]

Twelfth Circuit would be comprised of Arizona, Nevada, Idaho, and
Montana. And the new Thirteenth Circuit would contain Oregon,
Washington, and Alaska.
This splitting of the Ninth Circuit is absolutely necessary if the
residents of Nevada and the other western states are to have equal
access to justice. Right now, citizens living under the Ninth Circuit
face incomparable delays and judicial inconsistencies. Recently, the
Ninth Circuit had more cases pending for more than one year than all
other circuits combined.
And because of the sheer magnitude of the number of judges in the
Ninth Circuit, it has become increasingly difficult for judges to track
the opinions of the other judges in the circuit. In fact, it happened
that on the same day, 2 different 3-judge panels in the Ninth Circuit
issued different legal standards to resolve the same issue. Can you
imagine the headache this causes for district judges who are supposed
to follow the standard set by the Ninth Circuit? It compromises the
system of justice that is the cornerstone of our democracy.
As a Nevadan, I am also angered by some of the decisions made by the
Ninth Circuit Court. I know how Nevadans feel about issues such as the
Pledge of Allegiance. Like me, they were outraged that the phrase
``under God'' was ruled unconstitutional by the Ninth Circuit. This
wasn't the only case of the Ninth Circuit misinterpreting the
Constitution and our laws. In 1997 alone, the United States Supreme
Court overruled 27 out of 28 Ninth Circuit decisions. I wish I could
say that was just an ``off' year for the court, but their track record
wasn't much better in the 6 years before that.
Rather than continue down this path of judicial destruction, it is
time to use a forward looking approach to the access of justice in the
western United States. I urge my colleagues to join me in our
Constitutional duty to establish courts for the sake of justice in this
country. Failure to act will cost the citizens of my state, and many
other western states, dearly.
______

By Mr. DeMINT (for himself, Mr. Santorum, Mr. Graham, Mr. Crapo,
Mr. Coburn, Mr. Sununu, Mr. Isakson, Mr. Enzi, Mr. Cornyn, Mr.
Lott, Mr. Brownback, and Mr. Craig).
S. 1302. A bill to amend the Social Security Act and the Internal
Revenue Code of 1986 to stop the Congress from spending Social Security
surpluses on other Government programs by dedicating those surpluses to
personal accounts that can only be used to pay Social Security
benefits; to the Committee on Finance.
Mr. DeMINT. Mr. President, it's time to stop the raid on Social
Security. For over twenty years, Congress has maintained the misguided
practice of over-collecting Social Security taxes and spending them on
other government programs. Congress has used the Social Security Trust
Fund to promote the false notion that Social Security actually saves
the money workers pay in, and it is time to end this abusive practice.
It is time we start saving these resources in personal accounts that
politicians cannot spend.
Money cannot have 2 masters--it either belongs to the government or
to individual Americans. The only way to prevent Congress from spending
Social Security surpluses is to rebate these funds back to a worker in
a personal account with their name on it. The only true lock-box is a
personal account.
President Bush has done a good job helping Americans understand the
problem. Now it is up to Congress to build consensus around some
solutions. Every American and nearly everyone in Congress agree on at
least one core principle: Social Security money should only be spent on
Social Security. Before we can have an honest debate on long-term
solutions, we must restore trust with Americans.
Stopping the raid will strengthen Social Security and is the first
step toward long-term reform.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1302

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 ``Stop the
Raid on Social Security Act of 2005''.

(b) Table of Contents.--The table of contents is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.

TITLE I--SOCIAL SECURITY PERSONAL RETIREMENT ACCOUNTS PROGRAM

Sec. 101. Establishment of the Social Security Personal Retirement
Accounts Program.

``Part B--Social Security Personal Retirement Accounts Program

``Sec. 251. Definitions.
``Sec. 252. Establishment of Program.
``Sec. 253. Participation in Program.
``Sec. 254. Social security personal retirement accounts .
``Sec. 255. Investment of accounts.
``Sec. 256. Distributions of account balance at retirement.
``Sec. 257. Additional rules relating to disposition of account assets.
``Sec. 258. Administration of the program.
Sec. 102. Annual account statements.

TITLE II--TAX TREATMENT

Sec. 201. Tax treatment of social security personal retirement
accounts.
Sec. 202. Benefits taxable as Social Security benefits.
``Sec. 2059. Social security personal retirement accounts.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) President Franklin Roosevelt's January 17, 1935,
message on Social Security declared that, ``First, the system
adopted, except for the money necessary to initiate it,
should be self-sustaining in the sense that funds for the
payment of insurance benefits should not come from the
proceeds of general taxation.''.
(2) Social Security's financial integrity is maintained by
requiring that benefit payments do not exceed the program's
dedicated tax revenues and the interest earned on the
balances in the Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust Fund over the
long term.
(3) The separation of Social Security from other budget
accounts also serves to protect Social Security benefits from
competing against other Federal programs for its funding
resources.
(4) Comprehensive reforms should be enacted to--
(A) fix Social Security permanently;
(B) ensure that any use of general revenues for the program
is temporary; and
(C) provide for the eventual repayment of any revenue
transfers from the general fund to the Federal Old-Age and
Survivors Insurance Trust Fund and the Federal Disability
Insurance Trust Fund.

TITLE I--SOCIAL SECURITY PERSONAL RETIREMENT ACCOUNTS PROGRAM

SEC. 101. ESTABLISHMENT OF THE SOCIAL SECURITY PERSONAL
RETIREMENT ACCOUNTS PROGRAM.

(a) In General.--Title II of the Social Security Act is
amended--
(1) by inserting before section 201 the following:

``Part A--Insurance Benefits'';

and
(2) by adding at the end of such title the following new
part:

``Part B--Social Security Personal Retirement Accounts Program

``DEFINITIONS

``Sec. 251. For purposes of this part--
``(1) Participating individual.--The term `participating
individual' has the meaning provided in section 253(a).
``(2) Account assets.--The term `account assets' means,
with respect to a social security personal retirement
account, the total amount transferred to such account,
increased by earnings credited under this part and reduced by
losses and administrative expenses under this part.
``(3) Certified account manager.--The term `certified
account manager' means a person who is certified under
section 258(b).
``(4) Board.--The term `Board' means the Social Security
Personal Savings Board established under section 258(a).
``(5) Commissioner.--The term `Commissioner' means the
Commissioner of Social Security.
``(6) Program.--The term `Program' means the Social
Security Personal Retirement Accounts Program established
under this part.

``ESTABLISHMENT OF PROGRAM

``Sec. 252. There is hereby established a Social Security
Personal Retirement Accounts Program. The Program shall be
governed by regulations which shall be prescribed by the
Social Security Personal Savings Board. The Board, the
Executive Director appointed by the Board, the Commissioner,
and the Secretary of the Treasury shall consult with each
other in issuing regulations relating to their respective
duties under this part. Such regulations shall provide for
appropriate exchange of information to assist them in
performing their duties under this part.

``PARTICIPATION IN PROGRAM

``Sec. 253. (a) Participating Individual.--For purposes of
this part, the term `participating individual' means any
individual--

[[Page S7304]]

``(1) who is credited under part A with wages paid after
December 31, 2005, or self-employment income derived in any
taxable year ending after such date,
``(2) who is born on or after January 1, 1950, and
``(3) who has not filed an election to renounce such
individual's status as a participating individual under
subsection (b).
``(b) Renunciation of Participation.--
``(1) In general.--An individual--
``(A) who has not attained retirement age (as defined in
section 216(l)(1)), and
``(B) with respect to whom no distribution has been made
from amounts credited to the individual's social security
personal retirement account,

may elect, in such form and manner as shall be prescribed in
regulations of the Board, to renounce such individual's
status as a `participating individual' for purposes of this
part. Upon completion of the procedures provided for under
paragraph (2), any such individual who has made such an
election shall not be treated as a participating individual
under this part, effective as if such individual had never
been a participating individual. The Board shall provide for
immediate notification of such election to the Commissioner
of Social Security, the Secretary of the Treasury, and the
Executive Director.
``(2) Procedure.--The Board shall prescribe by regulation
procedures governing the termination of an individual's
status as `participating individual' pursuant to an election
under this subsection. Such procedures shall include--
``(A) prompt closing of the individual's social security
personal retirement account established under section 254,
and
``(B) prompt transfer to the Federal Old-Age and Survivors
Insurance Trust Fund as general receipts of any amount held
for investment in such individual's social security personal
retirement account.
``(3) Irrevocability.--An election under this subsection
shall be irrevocable.

``SOCIAL SECURITY PERSONAL RETIREMENT ACCOUNTS

``Sec. 254. (a) Establishment of Accounts.--Under
regulations which shall be prescribed by the Board in
consultation with the Secretary of the Treasury--
``(1) the Board shall establish a social security personal
retirement account for each participating individual (for
whom a social security personal retirement account has not
otherwise been established under this part) upon initial
receipt of a transfer under subsection (b) with respect to
such participating individual, and
``(2) in any case described in paragraph (2) of section
257(b), the Board shall establish a social security personal
retirement account for the divorced spouse referred to in
such paragraph (2).
``(b) Transfers to Social Security Personal Retirement
Accounts.--
``(1) In general.--Under regulations which shall be
prescribed by the Secretary of the Treasury in consultation
with the Board, as soon as practicable during the 1-year
period after each calendar year, the Secretary of the
Treasury shall transfer to each participating individual's
social security personal retirement account, from amounts
held in the Federal Old-Age and Survivors Insurance Trust
Fund, amounts equivalent to the personal retirement account
deposit with respect to such participating individual for
such calendar year.
``(2) Personal retirement account deposit.--
``(A) In general.--For purposes of paragraph (1), the
personal retirement account deposit for a calendar year with
respect to a participating individual is the product derived
by multiplying--
``(i) the sum of--

``(I) the total amount of wages paid to the participating
individual during such calendar year on which there was
imposed a tax under section 3101(a) of the Internal Revenue
Code of 1986, and
``(II) the total amount of self-employment income derived
by the participating individual during the taxable year
ending during such calendar year on which there was imposed a
tax under section 1401(a) of the Internal Revenue Code of
1986, by

``(ii) the surplus percentage for such calendar year
determined under subparagraph (B),

increased by deemed interest on each amount transferred for
such calendar year for the period commencing with July 1 of
such calendar year and the ending on the date on which such
amount is transferred, computed at an annual rate equal to
the average annual rate of return on investments of amounts
in the Government Securities Investment Fund for such
calendar year and the preceding 2 calendar years (except
that, for purposes of the first 3 calendar years for which
deemed interest is computed, this sentence shall be applied
by substituting `Federal Old-Age and Survivors Insurance
Trust Fund' for `Government Securities Investment Fund') and
decreased by the administrative offset amount determined
under subparagraph (D).
``(B) Surplus percentage.--For purposes of subparagraph
(A)(ii), the surplus percentage for a calendar year is the
ratio (expressed as a percentage) of--
``(i) the net surplus in the Federal Old-Age and Survivors
Insurance Trust Fund for such year, to
``(ii) the sum of--

``(I) the total amount of wages paid to participating
individuals during such calendar year under section 3101(a)
of the Internal Revenue Code of 1986, and
``(II) the total amount of self-employment income derived
during taxable years ending during such calendar year by
participating individuals under section 1401(a) of such Code.

``(C) Net trust fund surplus.--For purposes of subparagraph
(B), the term `net surplus' in connection with the Federal
Old-Age and Survivors Insurance Trust Fund for a calendar
year means the excess, if any, of--
``(i) the sum of--

``(I) the total amounts which are appropriated to such
Trust Fund under clauses (3) and (4) of section 201(a) and
attributable to such calendar year, and
``(II) the total amounts which are appropriated to such
Trust Fund under section 121 of the Social Security
Amendments of 1983 and attributable to such calendar year,
over

``(ii) the amount estimated by the Commissioner of Social
Security to be the total amount to be paid from such Trust
Fund during such calendar year for all purposes authorized by
section 201 (other than payments of interest on, and
repayments of, loans from the Federal Hospital Insurance
Trust Fund under section 201(l)(1), but reducing the amount
of any transfer to the Railroad Retirement Account by the
amount of any transfers into such Trust Fund from such
Account).
``(D) Administrative offset amount.--For purposes of
subparagraph (A), the administrative offset amount determined
with respect to a personal retirement account deposit for a
calendar year is the amount equal to the product of--
``(i) the amount of such deposit determined for that year
without regard to a reduction under this subparagraph; and
``(ii) the administrative cost percentage attributable to
the Program determined by the Board for that year (including
reasonable administration fees charged by certified account
managers under the Program), but in no event to exceed 30
basis points per year of the assets under management).
``(3) Transition rule.--Notwithstanding paragraph (1),
amounts payable to social security personal retirement
accounts under paragraph (1) with respect to the first
calendar year described in paragraph (1) ending after the
date of the enactment of the Stop the Raid on Social Security
Act of 2005 shall be paid by the Secretary of the Treasury as
soon as practicable after such Secretary determines that the
administrative mechanisms necessary to provide for accurate
and efficient payment of such amounts have been established.
``(4) Transfer of general revenues to ensure continued
solvency of federal old-age and survivors insurance trust
fund.--Whenever the Secretary of the Treasury makes a
transfer under paragraph (1), the Secretary of the Treasury
also shall transfer, to the extent necessary, from amounts
otherwise available in the general fund of the Treasury, such
amounts as are necessary to maintain a 100 percent ratio of
assets of the Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust Fund to the
annual amount required to pay the full amount of benefits
payable under part A for each year occurring during the
period that begins with the year in which such transfer is
made and ends with 2041.
``(c) Requirements for Accounts.--The following
requirements shall be met with respect to each social
security personal retirement account:
``(1) Amounts transferred to the account consist solely of
amounts transferred pursuant to this part.
``(2) In accordance with section 255, the account assets
are held for purposes of investment under the Program by a
certified account manager designated by (or on behalf of) the
participating individual for whom such account is established
under the Program.
``(3) Disposition of the account assets is made solely in
accordance with sections 256 and 257.
``(d) Accounting of Receipts and Disbursements Under the
Program.--The Board shall provide by regulation for an
accounting system for purposes of this part--
``(1) which shall be maintained by or under the Executive
Director,
``(2) which shall provide for crediting of earnings from,
and debiting of losses and administrative expenses from,
amounts held in social security personal retirement accounts,
and
``(3) under which receipts and disbursements under the
Program which are attributable to each account are separately
accounted for with respect to such account.
``(e) Correction of Erroneous Transfers.--The Board, in
consultation with the Commissioner, shall provide by
regulation rules similar to paragraphs (4) through (7) and
(9) of section 205(c) and section 205(g) with respect to the
correction of erroneous or omitted transfers of amounts to
social security personal retirement accounts.

``INVESTMENT OF ACCOUNTS

``Sec. 255. (a) Designation of Certified Account
Managers.--Under the Program, a certified account manager
shall be designated by or on behalf of each participating
individual to hold for investment under this section such
individual's social security personal retirement account
assets.
``(b) Procedure for Designation.--Any designation made
under subsection (a) shall

[[Page S7305]]

be made in such form and manner as shall be prescribed in
regulations prescribed by the Board. Such regulations shall
provide for annual selection periods during which
participating individuals may make designations pursuant to
subsection (a). Designations made pursuant to subsection (a)
during any such period shall be irrevocable for the one-year
period following such period, except that such regulations
shall provide for such interim designations as may be
necessitated by the decertification of a certified account
manager. Such regulations shall provide for such designations
made by the Board on behalf of a participating individual in
any case in which a timely designation is not made by the
participating individual.
``(c) Investment.--Any balance held in a participating
individual's social security personal retirement account
under this part which is not necessary for immediate
withdrawal shall be invested on behalf of such participating
individual by the certified account manager as follows:
``(1) Investment in marketable government securities.--In a
representative mix of fixed marketable interest-bearing
obligations of the United States then forming a part of the
public debt which are not due or callable earlier than 4
years after the date of investment.
``(2) Additional and alternative investments.--Beginning
with 2008, in such additional and alternative investment
options in broad-based index funds that are similar to the
index fund investment options available within the Thrift
Savings Fund established under section 8437 of title 5,
United States Code, as the Board determines would be prudent
sources of retirement income that could yield greater amounts
of income than the investment described in paragraph (1) and
a participating individual may elect.

``DISTRIBUTIONS OF ACCOUNT BALANCE AT RETIREMENT

``Sec. 256. (a) Part a and Social Security Personal
Retirement Account Benefits Combined.--Upon the date on which
a participating individual becomes entitled to old-age
insurance benefits under section 202(a), the Executive
Director shall determine the total amount which would (but
for this section) be payable as benefits under subsection
(a), (b), (c), or (h) of section 202, subsection (e) or (f)
of section 202 other than on the basis of disability, or any
combination thereof, to any individual who is a participant
on the basis of the wages and self-employment income of such
individual or any other individual under part A for any month
and provide for the following distributions from the
individual's social security personal retirement account (in
accordance with regulations which shall be prescribed by the
Board):
``(1) Part a benefit provides at least a poverty-level
annual benefit.--If such total amount would be sufficient to
purchase a minimum annuity, the participating individual
shall elect to have the Executive Director provide for the
distribution of the balance in the participating individual's
social security personal retirement account in the form of--
``(A) a lump-sum payment; or
``(B) an annuity which meets the requirements of subsection
(b) (other than the requirement that the annuity provides for
payments which, on an annual basis, are equal to at least the
minimum annuity amount), the terms of which provide for a
monthly payment equal to the maximum amount that such account
can fund.
``(2) Part a benefit combined with account balance provides
at least a poverty-level benefit.--
``(A) In general.--If such total amount when combined with
all or a portion of the balance in the participating
individual's social security personal retirement account
would be sufficient to purchase a minimum annuity, the
Executive Director shall, subject to subparagraph (B)--
``(i) use such amount of the balance in a participating
individual's social security personal retirement account as
is necessary to purchase an annuity which meets the
requirements of subsection (b) (other than the requirement
that the annuity provides for payments which, on an annual
basis, are equal to at least the minimum annuity amount), the
terms of which provide for an annual payment that, when
combined with the total amount of annual old-age insurance
benefits payable to the participating individual, is equal to
the annual amount that a minimum annuity would pay to the
individual; and
``(ii) provide for the distribution of any remaining
balance in the participating individual's social security
personal retirement account in the form of a lump-sum
payment.
``(B) Option for Increased Annuity.--A participating
individual may elect to have the Executive Director use the
balance of the individual's social security personal
retirement account to purchase an annuity which meets the
requirements of subsection (b), the terms of which provide
for the maximum monthly payment that such account can fund,
in lieu of using only a portion of such balance to purchase
an annuity which provides a monthly payment equal to the
amount described in subparagraph (A)(i).
``(3) Distribution in event of failure to obtain at least a
poverty-level benefit.--If such total amount when combined
with all of the balance in the participating individual's
social security personal retirement account would not be
sufficient to purchase a minimum annuity, the participating
individual may elect to have the Executive Director--
``(A) distribute the balance in the participating
individual's social security personal retirement account in
the form of a lump-sum payment; or
``(B) if such balance is sufficient to purchase an annuity
which meets the requirements of subsection (b) (other than
the requirement that the annuity provides for payments which,
on an annual basis, are equal to at least the minimum annuity
amount), purchase such an annuity on behalf of the
individual.
``(b) Minimum Annuity Defined.--For purposes of this
subsection, the term `minimum annuity' means an annuity that
meets the following requirements:
``(1) The annuity starting date (as defined in section
72(c)(4) of the Internal Revenue Code of 1986) commences on
the first day of the month beginning after the date of the
purchase of the annuity.
``(2) The terms of the annuity provide for a series of
substantially equal annual payments, subject to adjustment as
provided in subsection (d), payable monthly to the
participating individual during the life of the participating
individual which are, on an annual basis, equal to at least
the minimum annuity amount.
``(c) Minimum Annuity Amount.--For purposes of this
subsection, the term `minimum annuity amount' means an amount
equal to 100 percent of the poverty line for an individual
(determined under the poverty guidelines of the Department of
Health and Human Services issued under sections 652 and
673(2) of the Omnibus Budget Reconciliation Act of 1981).
``(d) Cost of Living Adjustment.--The terms of any annuity
described in subsection (b) shall include provision for
increases in the monthly annuity amounts thereunder
determined in the same manner and at the same rate as primary
insurance amounts are increased under section 215(i).
``(e) Assumptions.--The assumptions under subsection (b)
include the probability of survival for persons born in the
same year as the participating individual (and the spouse, in
the case of a joint annuity), future projection of investment
earnings based on investment of the account assets, and
expected price inflation. Determinations under this
subsection shall be made in accordance with regulations which
shall be prescribed by the Board, otherwise using generally
accepted actuarial assumptions, except that no
differentiation shall be made in such assumptions on the
basis of sex, race, health status, or other characteristics
other than age. Such assumptions may include, for
determinations made prior to 2009, an assumed interest rate
reflecting investment earnings of the Federal Old-Age and
Survivors Insurance Trust Fund.
``(f) Offset of Part A Benefits.--Notwithstanding any other
provision of this title, in the case of a participating
individual to which subsection (a)(1) applies, the total
amount of monthly old-age insurance benefits payable as
benefits under subsection (a), (b), (c), or (h) of section
202, subsection (e) or (f) of section 202 other than on the
basis of disability, or any combination thereof, to such
individual determined under subsection (a) shall be reduced
so that the amount of such monthly old-age insurance benefits
payable to the individual does not exceed the amount equal to
the difference between--
``(i) such monthly old-age insurance benefits (determined
without regard to a reduction under this subsection); and
``(ii) the ratio of--

``(I) what would have been the monthly annuity payment
payable to the individual from an annuity if the individual's
personal retirement account balance had earned the rate of
return specified in section 254(b)(2)(A); to
``(II) the expected present value of all future potential
benefits payable under section 202 on the basis of the wages
or self-employment income of the participating individual
(determined as of the date the participating individual
becomes entitled to old-age benefits under section 202(a)).

``ADDITIONAL RULES RELATING DISPOSITION OF ACCOUNT ASSETS

``Sec. 257. (a) Splitting of Account Assets Upon Divorce
After 1 Year of Marriage.--
``(1) In general.--Upon the divorce of a participating
individual for whom a social security personal retirement
account has been established under this part, from a spouse
to whom the participating individual had been married for at
least 1 year, the Board shall direct the appropriate
certified account manager to transfer--
``(A) from the social security personal retirement account
of the participating individual,
``(B) to the social security personal retirement account of
the divorced spouse,
an amount equal to one-half of the amount of net accruals
(including earnings) during the time of the marriage in the
social security personal retirement account of the
participating individual.
``(2) Treatment of divorced spouse who is not a
participating individual.--In the case of a divorced spouse
referred to in paragraph (1) who, as of the time of the
divorce, is not a participating individual and for whom a
social security personal retirement account has not been
established--
``(A) the divorced spouse shall be deemed a participating
individual for purposes of this part, and

[[Page S7306]]

``(B) the Board shall establish a social security personal
retirement account for the divorced spouse and shall direct
the appropriate certified account manager to perform the such
transfer.
``(3) Preemption.--The provisions of this subsection shall
supersede any provision of law of any State or political
subdivision thereof which is inconsistent with the
requirements of this subsection.
``(b) Closing of Account Upon the Death of the
Participating Individual.--
``(1) In general.--Upon the death of a participating
individual, the Executive Director shall close out any
remaining balance in the participating individual's social
security personal retirement account. In closing out the
account, the Executive Director shall certify to the
certified account manager the amount of the account assets,
and, upon receipt of such certification, the certified
account manager shall transfer from such account an amount
equal to such certified amount to the Secretary of the
Treasury for subsequent transfer to--
``(A) the social security personal retirement account of
the surviving spouse of such participating individual,
``(B) if there is no such surviving spouse, to such other
person as may be designated by the participating individual
in accordance with regulations which shall be prescribed by
the Board, or
``(C) if there is no such designated person, to the estate
of such participating individual.
``(2) Treatment of surviving spouse who is not a
participating individual.--In the case of a surviving spouse
referred to in paragraph (1) who, as of the time of the death
of the participating individual, is not a participating
individual and for whom a social security personal retirement
account has not been established--
``(A) the surviving spouse shall be deemed a participating
individual for purposes of this part, and
``(B) the Board shall establish a social security personal
retirement account for the surviving spouse and shall direct
the appropriate certified account manager to perform the such
transfer.
``(c) Closing of Account of Participating Individuals Who
Are Ineligible for Benefits Upon Attaining Retirement Age.--
In any case in which, as of the date on which a participating
individual attains retirement age (as defined in section
216(l)), such individual is not eligible for an old-age
insurance benefit under section 202(a), the Commissioner
shall so certify to the Executive Director and, upon receipt
of such certification, the Executive Director shall close out
the participating individual's social security personal
retirement account. In closing out the account, the Executive
Director shall certify to the certified account manager the
amount of the account assets, and upon receipt of such
certification from the Executive Director, the account
manager shall transfer from such account an amount equal to
such certified amount to the Secretary of the Treasury for
subsequent transfer to the participating individual.
``(d) Administrative Expenses.--
``(1) In general.--Under regulations which shall be
prescribed by the Board, account assets are available in
accordance with section 254(b)(2)(D)(ii) for payment of the
reasonable administrative costs of the Program (including
reasonable administration fees charged by certified account
managers under the Program), but in no event to exceed 30
basis points per year of the assets under management.
``(2) Temporary authorization of appropriations for startup
administrative costs.--For any such administrative costs that
remain after applying paragraph (1) for each of the first
five fiscal years that end after the date of the enactment of
this part, there are authorized to be appropriated such sums
as may be necessary for each of such fiscal years.

``ADMINISTRATION OF THE PROGRAM

``Sec. 258. (a) General Provisions.--
``(1) Establishment and duties of the social security
personal savings board.--
``(A) Establishment.--There is established within the
Social Security Administration a Social Security Personal
Savings Board.
``(B) Number and appointment.--The Board shall be composed
of 6 members as follows:
``(i) two members appointed by the President who may not be
of the same political party;
``(ii) one member appointed by the Speaker of the House of
Representatives, in consultation with the Chairman of the
Committee on Ways and Means of the House of Representatives;
``(iii) one member appointed by the minority leader of the
House of Representatives, in consultation with the ranking
member of the Committee on Ways and Means of the House of
Representatives;
``(iv) one member appointed by the majority leader of the
Senate, in consultation with the Chairman of the Committee on
Finance of the Senate; and
``(v) one member appointed by the minority leader of the
Senate, in consultation with the ranking member of the
Committee on Finance of the Senate.
``(C) Advice and consent.--Appointments under this
paragraph shall be made by and with the advice and consent of
the Senate.
``(D) Membership requirements.--Members of the Board shall
have substantial experience, training, and expertise in the
management of financial investments and pension benefit
plans.
``(E) Terms.--
``(i) In general.--Each member shall be appointed for a
term of 4 years, except as provided in clauses (ii) and
(iii). The initial members shall be appointed not later than
90 days after the date of the enactment of this section.
``(ii) Terms of initial appointees.--Of the members first
appointed under each clause of subparagraph (B), one of the
members appointed under subparagraph (B)(i) (as designated by
the President at the time of appointment) and the members
appointed under clauses (iii) and (v) of subparagraph (B)
shall be appointed for a term of 2 years, and the remaining
members shall be appointed for a term of 4 years.
``(iii) Vacancies.--Any member appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term. A member may serve after the
expiration of that member's term until a successor has taken
office. A vacancy in the Board shall be filled in the manner
in which the original appointment was made.
``(F) Powers and duties of the board.--
``(i) In general.--The Board shall have powers and duties
solely as provided in this part. The Board shall prescribe by
regulation the terms of the Social Security Personal
Retirement Accounts Program established under this part,
including policies for investment under the Program of
account assets, and policies for the certification and
decertification of account managers under the Program, which
shall include consideration of the appropriateness of the
marketing materials and plans of such person.
``(ii) Budgetary requirements.--The Board shall prepare and
submit to the President and to the appropriate committees of
Congress an annual budget of the expenses and other items
relating to the Board which shall be included as a separate
item in the budget required to be transmitted to the Congress
under section 1105 of title 31, United States Code. The Board
shall provide for low administrative costs such that, to the
extent practicable, overall administrative costs of the
Program do not exceed 30 basis points in relation to assets
under management under the Program.
``(iii) Additional authorities of the board.--The Board
may--

``(I) adopt, alter, and use a seal;
``(II) establish policies with which the Commissioner shall
comply under this part;
``(III) appoint and remove the Executive Director, as
provided in paragraph (2); and
``(IV) beginning with 2008, provide for such additional and
alternative investment options for participating individuals
as the Board determines would be prudent sources of
retirement income that would yield greater amounts of
retirement income than the investment described in section
255(c)(1).

``(iv) Independence of certified account managers.--The
policies of the Board may not require a certified account
manager to invest or to cause to be invested any account
assets in a specific asset or to dispose of or cause to be
disposed of any specific asset so held.
``(v) Meetings of the board.--The Board shall meet at the
call of the Chairman or upon the request of a quorum of the
Board. The Board shall perform the functions and exercise the
powers of the Board on a majority vote of a quorum of the
Board. Four members of the Board shall constitute a quorum
for the transaction of business.
``(vi) Compensation of board members.--

``(I) In general.--Each member of the Board who is not an
officer or employee of the Federal Government shall be
compensated at the daily rate of basic pay for level IV of
the Executive Schedule for each day during which such member
is engaged in performing a function of the Board. Any member
who is such an officer or employee shall not suffer any loss
of pay or deduction from annual leave on the basis of any
time used by such member in performing such a function.
``(II) Travel, per diem, and expenses.--A member of the
Board shall be paid travel, per diem, and other necessary
expenses under subchapter I of chapter 57 of title 5, United
States Code, while traveling away from such member's home or
regular place of business in the performance of the duties of
the Board.

``(vii) Standard for board's discharge of
responsibilities.--The members of the Board shall discharge
their responsibilities solely in the interest of
participating individuals and the Program.
``(viii) Annual report.--The Board shall submit an annual
report to the President, to each House of the Congress, and
to the Board of Trustees of the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disability Insurance
Trust Fund regarding the financial and operating condition of
the Program.
``(ix) Public accountant.--

``(I) Definition.--For purposes of this subparagraph, the
term `qualified public accountant' shall have the same
meaning as provided in section 103(a)(3)(D) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1023(a)(3)(D)).
``(II) Engagement.--The Executive Director, in consultation
with the Board, shall annually engage, on behalf of all
individuals for whom a social security personal retirement
account is established under this part, an independent
qualified public accountant,

[[Page S7307]]

who shall conduct an examination of all records maintained in
the administration of this part that the public accountant
considers necessary.
``(III) Duties.--The public accountant conducting an
examination under clause (ii) shall determine whether the
records referred to in such clause have been maintained in
conformity with generally accepted accounting principles. The
public accountant shall transmit to the Board a report on his
examination.
``(IV) Reliance on certified actuarial matters.--In making
a determination under clause (iii), a public accountant may
rely on the correctness of any actuarial matter certified by
an enrolled actuary if the public accountant states his
reliance in the report transmitted to the Board under such
clause.

``(2) Executive director.--
``(A) Appointment and removal.--The Board shall appoint,
without regard to the provisions of law governing
appointments in the competitive service, an Executive
Director by action agreed to by a majority of the members of
the Board. The Executive Director shall have substantial
experience, training, and expertise in the management of
financial investments and pension benefit plans. The Board
may, with the concurrence of 4 members of the Board, remove
the Executive Director from office for good cause shown.
``(B) Powers and duties of executive director.--The
Executive Director shall--
``(i) carry out the policies established by the Board,
``(ii) administer the provisions of this part in accordance
with the policies of the Board,
``(iii) in consultation with the Board, prescribe such
regulations (other than regulations relating to fiduciary
responsibilities) as may be necessary for the administration
of this part, and
``(iv) meet from time to time with the Board upon request
of the Board.
``(C) Administrative authorities of executive director.--
The Executive Director may--
``(i) appoint such personnel as may be necessary to carry
out the provisions of this part,
``(ii) subject to approval by the Board, procure the
services of experts and consultants under section 3109 of
title 5, United States Code,
``(iii) secure directly from any agency or instrumentality
of the Federal Government any information which, in the
judgment of the Executive Director, is necessary to carry out
the provisions of this part and the policies of the Board,
and which shall be provided by such agency or instrumentality
upon the request of the Executive Director,
``(iv) pay the compensation, per diem, and travel expenses
of individuals appointed under clauses (i), (ii), and (v) of
this subparagraph, subject to such limits as may be
established by the Board,
``(v) accept and use the services of individuals employed
intermittently in the Government service and reimburse such
individuals for travel expenses, as authorized by section
5703 of title 5, United States Code, including per diem as
authorized by section 5702 of such title, and
``(vi) except as otherwise expressly prohibited by law or
the policies of the Board, delegate any of the Executive
Director's functions to such employees under the Board as the
Executive Director may designate and authorize such
successive redelegations of such functions to such employees
under the Board as the Executive Director may consider to be
necessary or appropriate.
``(3) Role of the commissioner of social security.--The
Commissioner shall--
``(A) prescribe such regulations (supplementary to and
consistent with the regulations prescribed by the Board and
the Executive Director) as may be necessary for carrying out
the duties of the Commissioner under this part,
``(B) meet from time to time with, and provide information
to, the Board upon request of the Board regarding matters
relating to the Social Security Personal Retirement Accounts
Program, and
``(C) in consultation with the Board and utilizing
available Federal agencies and resources, develop a campaign
to educate workers about the Program.
``(b) Certification and Oversight of Account Managers.--
``(1) Certification by the board.--
``(A) In general.--Any person that is a qualified
professional asset manager (as defined in section 8438(a)(8)
of title 5, United States Code) may apply to the Board (in
such form and manner as shall be provided by the Board by
regulation) for certification under this subsection as a
certified account manager. In making certification decisions,
the Board shall consider the applicant's general character
and fitness, financial history and future earnings prospects,
and ability to serve participating individuals under the
Program, and such other criteria as the Board deems necessary
to carry out this part. Certification of any person under
this subsection shall be contingent upon entry into a
contractual arrangement between the Board and such person.
``(B) Nondelegation requirement.--The authority of the
Board to make any determination to deny any application under
this subsection may not be delegated by the Board.
``(2) Oversight of certified account managers.--
``(A) Role of regulatory agencies.--The Board may enter
into cooperative arrangements with Federal and State
regulatory agencies identified by the Board as having
jurisdiction over persons eligible for certification under
this subsection so as to ensure that the provisions of this
part are enforced with respect to certified account managers
in a manner consistent with and supportive of the
requirements of other provisions of Federal law applicable to
them. Such Federal regulatory agencies shall cooperate with
the Board to the extent that the Board determines that such
cooperation is necessary and appropriate to ensure that the
provisions of this part are effectively implemented.
``(B) Access to records.--The Board may from time to time
require any certified account manager to file such reports as
the Board may specify by regulation as necessary for the
administration of this part. In prescribing such regulations,
the Board shall minimize the regulatory burden imposed upon
certified account managers while taking into account the
benefit of the information to the Board in carrying out its
functions under this part.
``(3) Revocation of certification.--The Board shall
provide, in the contractual arrangements entered into under
this subsection with each certified account manager, for
revocation of such person's status as a certified account
manager upon determination by the Board of such person's
failure to comply with the requirements of such contractual
arrangements. Such arrangements shall include provision for
notice and opportunity for review of any such revocation.
``(c) Fiduciary Responsibilities.--
``(1) In general.--Rules similar to the provisions of
section 8477 of title 5, United States Code (relating to
fiduciary responsibilities; liability and penalties) shall
apply in connection with account assets, in accordance with
regulations which shall be issued by the Board. The Board
shall issue regulations with respect to the investigative
authority of appropriate Federal agencies in cases involving
account assets.
``(2) Exculpatory provisions voided.--Any provision in an
agreement or instrument which purports to relieve a fiduciary
from responsibility or liability for any responsibility,
obligation, or duty under this part shall be void.
``(d) Civil Actions by Board.--If any person fails to meet
any requirement of this part or of any contract entered into
under this part, the Board may bring a civil action in any
district court of the United States within the jurisdiction
of which such person's assets are located or in which such
person resides or is found, without regard to the amount in
controversy, for appropriate relief to redress the violation
or enforce the provisions of this part, and process in such
an action may be served in any district.
``(e) Preemption of Inconsistent State Law.--A provision of
this part shall not be construed to preempt any provision of
the law of any State or political subdivision thereof, or
prevent a State or political subdivision thereof from
enacting any provision of law with respect to the subject
matter of this part, except to the extent that such provision
of State law is inconsistent with this part, and then only to
the extent of the inconsistency.''.
(b) Conforming Amendment to Part A.--Section 202 of such
Act (42 U.S.C. 402) is amended by adding at the end the
following new subsection:

``Adjustments Under Part B

``(z) The amount of benefits under subsection (a), (b),
(c), or (h), subsection (e) or (f) other than on the basis of
disability, or any combination thereof which are otherwise
payable under this part shall be subject to adjustment as
provided under section 256(f).''.
(c) Additional Conforming Amendments.--(1) Section 701(b)
of the Social Security Act (42 U.S.C. 901(b)) is amended by
striking ``title II'' and inserting ``part A of title II, the
Social Security Personal Retirement Accounts Program under
part B of title II,''.
(2) Section 702(a)(4) of the Social Security Act (42 U.S.C.
902(a)(4)) is amended by inserting ``other than those of the
Social Security Personal Savings Board'' after
``Administration'', and by striking ``thereof'' and inserting
``of the Administration in connection with the exercise of
such powers and the discharge of such duties''.

SEC. 102. ANNUAL ACCOUNT STATEMENTS.

Section 1143 of the Social Security Act (42 U.S.C.
1320b0913) is amended by adding at the end the following new
subsection:

``Performance of Social Security Personal Retirement Accounts

``(d) Beginning not later than 1 year after the date of the
first deposit is made to an eligible individual's Social
Security personal retirement account, each statement provided
to such eligible individual under this section shall include
information determined by the Social Security Personal
Savings Board as sufficient to fully inform such eligible
individual annually of the balance, investment performance,
and administrative expenses of such account.''.

TITLE II--TAX TREATMENT

SEC. 201. TAX TREATMENT OF SOCIAL SECURITY PERSONAL
RETIREMENT ACCOUNTS.

Section 7701 of the Internal Revenue Code of 1986 (relating
to definitions) is amended by redesignating subsection (o) as
subsection (p) and by inserting after subsection (n) the
following new subsection:
``(o) Tax Treatment of Social Security Personal Retirement
Accounts.--All social

[[Page S7308]]

security personal retirement accounts established under part
B of title II of the Social Security Act shall be exempt from
taxation under this title.''.

SEC. 202. BENEFITS TAXABLE AS SOCIAL SECURITY BENEFITS.

(a) Special Rules Relating to Distribution of Closed
Account Under Section 257(d) of Social Security Act.--Section
86(a) of such Code (as amended by paragraph (2)) is amended
by adding at the end the following new paragraph:
``(4) Extension of paragraph (2)(b) to distributions of
closed account under section 257(d) of social security act.--
Notwithstanding any other provision of this subsection, in
the case of any amount received pursuant to the closing of an
account under section 257(d) of the Social Security Act,
paragraph (2)(B) shall apply to such amounts, and for such
purposes the amount allocated to the investment in the
contract shall be zero.''.
(b) Effective Date.--The amendments made by this subsection
shall apply to taxable years beginning after the end of the
calendar year in which this Act is enacted.
(c) Estate Tax Not to Apply to Assets of Social Security
Personal Retirement Accounts.--
(1) In general.--Part IV of subchapter A of chapter 11 of
such Code (relating to taxable estate) is amended by adding
at the end the following new section:

``SEC. 2059. SOCIAL SECURITY PERSONAL RETIREMENT ACCOUNTS.

``For purposes of the tax imposed by section 2001, the
value of the taxable estate shall be determined by deducting
from the value of the gross estate an amount equal to the
value of the assets of a social security personal retirement
account transferred from such account by the Secretary under
section 257 of the Social Security Act.''.
(2) Clerical amendment.--The table of sections for part IV
of subchapter A of chapter 11 of such Code is amended by
adding at the end the following new item:

``Sec. 2059. Social security personal retirement accounts''.

(3) Effective date.--The amendments made by this subsection
shall apply to decedents dying in or after the calendar year
in which this Act is enacted.
______

By Mr. ROCKEFELLER (for himself, Mr. Reed, Mr. Lautenberg, Mr.
Corzine, Mr. Sarbanes, and Mr. Kerry):
S. 1303. A bill to amend the Social Security Act to guarantee
comprehensive health care coverage for all children born after 2006; to
the Committee on Finance.
Mr. ROCKEFELLER. Mr. President, I rise today with my friends and
colleagues--Senators Reed, Lautenberg, Corzine, Sarbanes, and Kerry--to
introduce an important piece of legislation, the MediKids Health
Insurance Act of 2005. This legislation will provide health insurance
for every child in the United States by 2012, regardless of family
income. My long-time friend from California, Congressman Stark, is
introducing a companion bill in the House. He has worked tirelessly to
improve access to health care for all Americans, and I am pleased to be
joining him once again to advocate on behalf of America's children.
We have introduced this legislation in each of the last three
Congresses because we know how vital health insurance is to a child.
Children with untreated illnesses are less likely to learn and
therefore less likely to move out of poverty. Such children have an
inherent disadvantage when it comes to being productive members of
society. We can have a positive impact on our children's lives today as
well as tomorrow by guaranteeing health insurance coverage for all.
Children are inexpensive to insure, but the rewards for providing them
with health care during their early education and development years are
enormous.
Despite the well-documented benefits of providing health insurance
coverage for children, there are still over 8 million uninsured
children in America. We can and must do better. Our children are our
future. No child in this country should ever be without access to
health care. This is why I am proud to reintroduce the MediKids Health
Insurance Act of 2005.
This legislation is a clear investment in our future--our children.
Every child would be automatically enrolled at birth into a new,
comprehensive Federal safety net health insurance program beginning in
2007. The benefits would be tailored to meet the needs of children and
would be similar to those currently available to children through the
Medicaid Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)
program. Families below 150 percent of poverty would have no premiums
or co-payments, and there would be no cost sharing for preventive or
well-child visits for any child.
MediKids children would remain enrolled in the program throughout
childhood. When families move to another state, Medikids would be
available until parents can enroll their children in a new insurance
program. Between jobs or during family crises, Medikids would offer
extra security and ensure continuous health coverage to our Nation's
children. During that critical period when a family is just climbing
out of poverty and out of the eligibility range for means-tested
assistance programs, MediKids would fill in the gaps until the parents
can move into jobs that provide reliable health insurance coverage. The
key to our program is that whenever other sources of health insurance
fail, MediKids would stand ready to cover the health needs of our next
generation. Ultimately, every child in America would be able to grow up
with consistent, continuous health insurance coverage.
Like Medicare, MediKids would be independently financed, would cover
benefits tailored to the needs of its target population, and would have
the goal of achieving nearly 100 percent health insurance coverage for
the children of this country--just as Medicare has done for our
Nation's seniors and disabled population over its 40-year history. At
the time we created Medicare, seniors were more likely to be living in
poverty than any other age group. Most were unable to afford needed
medical services and unable to find health insurance in the market even
if they could afford it. Today, it is our Nation's children who
shoulder the burden of poverty. Children in America are nearly twice as
vulnerable to poverty as adults. It's time we make a significant
investment in the future of America by guaranteeing all children the
health coverage they need to make a healthy start in life.
Congress cannot rest on the success we achieved by expanding Medicaid
and passing the State Children's Health Insurance Program (CHIP).
Although each was a remarkable step toward reducing the ranks of the
uninsured, particularly uninsured children, we still have a long way to
go. Even with perfect enrollment in CHIP and Medicaid, there would
still be a great number of children without health insurance. What's
more troubling is the fact that both Medicaid and CHIP are in serious
jeopardy because of the budget cuts being proposed by the current
Administration.
It's long past time to rekindle the discussion about how we are going
to provide health insurance for all Americans. The bill we are
introducing today--the MediKids Health Insurance Act of 2005--is a step
toward eliminating the irrational and tragic lack of health insurance
for so many children and adults in our country. I urge my colleagues to
move beyond partisan politics and to support this critical step toward
universal coverage.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1303

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; FINDINGS.

(a) Short Title.--This Act may be cited as the ``MediKids
Health Insurance Act of 2005''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents; findings
Sec. 2. Benefits for all children born after 2006

``TITLE XXII--MEDIKIDS PROGRAM

``Sec. 2201. Eligibility
``Sec. 2202. Benefits
``Sec. 2203. Premiums
``Sec. 2204. MediKids Trust Fund
``Sec. 2205. Oversight and accountability
``Sec. 2206. Inclusion of care coordination services
``Sec. 2207. Administration and miscellaneous
Sec. 3. MediKids premium
Sec. 4. Refundable credit for cost-sharing expenses under MediKids
program
Sec. 5. Report on long-term revenues

(c) Findings.--Congress finds the following:
(1) More than 9 million American children are uninsured.
(2) Children who are uninsured receive less medical care
and less preventive care and have a poorer level of health,
which result in

[[Page S7309]]

lifetime costs to themselves and to the entire American
economy.
(3) Although SCHIP and Medicaid are successfully extending
a health coverage safety net to a growing portion of the
vulnerable low-income population of uninsured children, they
alone cannot achieve 100 percent health insurance coverage
for our nation's children due to inevitable gaps during
outreach and enrollment, fluctuations in eligibility,
variations in access to private insurance at all income
levels, and variations in States' ability to provide required
matching funds.
(4) As all segments of society continue to become more
transient, with many changes in employment over the working
lifetime of parents, the need for a reliable safety net of
health insurance which follows children across State lines,
already a major problem for the children of migrant and
seasonal farmworkers, will become a major concern for all
families in the United States.
(5) The medicare program has successfully evolved over the
years to provide a stable, universal source of health
insurance for the nation's disabled and those over age 65,
and provides a tested model for designing a program to reach
out to America's children.
(6) The problem of insuring 100 percent of all American
children could be gradually solved by automatically enrolling
all children born after December 31, 2006, in a program
modeled after Medicare (and to be known as ``MediKids''), and
allowing those children to be transferred into other
equivalent or better insurance programs, including either
private insurance, SCHIP, or Medicaid, if they are eligible
to do so, but maintaining the child's default enrollment in
MediKids for any times when the child's access to other
sources of insurance is lost.
(7) A family's freedom of choice to use other insurers to
cover children would not be interfered with in any way, and
children eligible for SCHIP and Medicaid would continue to be
enrolled in those programs, but the underlying safety net of
MediKids would always be available to cover any gaps in
insurance due to changes in medical condition, employment,
income, or marital status, or other changes affecting a
child's access to alternate forms of insurance.
(8) The MediKids program can be administered without
impacting the finances or status of the existing Medicare
program.
(9) The MediKids benefit package can be tailored to the
special needs of children and updated over time.
(10) The financing of the program can be administered
without difficulty by a yearly payment of affordable premiums
through a family's tax filing (or adjustment of a family's
earned income tax credit).
(11) The cost of the program will gradually rise as the
number of children using MediKids as the insurer of last
resort increases, and a future Congress always can accelerate
or slow down the enrollment process as desired, while the
societal costs for emergency room usage, lost productivity
and work days, and poor health status for the next generation
of Americans will decline.
(12) Over time 100 percent of American children will always
have basic health insurance, and we can therefore expect a
healthier, more equitable, and more productive society.

SEC. 2. BENEFITS FOR ALL CHILDREN BORN AFTER 2006.

(a) In General.--The Social Security Act is amended by
adding at the end the following new title:

``TITLE XXII--MEDIKIDS PROGRAM

``SEC. 2201. ELIGIBILITY.

``(a) Eligibility of Individuals Born After December 31,
2006; All Children Under 23 Years of Age in Fifth Year.--An
individual who meets the following requirements with respect
to a month is eligible to enroll under this title with
respect to such month:
``(1) Age.--
``(A) First year.--As of the first day of the first year in
which this title is effective, the individual has not
attained 6 years of age.
``(B) Second year.--As of the first day of the second year
in which this title is effective, the individual has not
attained 11 years of age.
``(C) Third year.--As of the first day of the third year in
which this title is effective, the individual has not
attained 16 years of age.
``(D) Fourth year.--As of the first day of the fourth year
in which this title is effective, the individual has not
attained 21 years of age.
``(E) Fifth and subsequent years.--As of the first day of
the fifth year in which this title is effective and each
subsequent year, the individual has not attained 23 years of
age.
``(2) Citizenship.--The individual is a citizen or national
of the United States or is permanently residing in the United
States under color of law.
``(b) Enrollment Process.--An individual may enroll in the
program established under this title only in such manner and
form as may be prescribed by regulations, and only during an
enrollment period prescribed by the Secretary consistent with
the provisions of this section. Such regulations shall
provide a process under which--
``(1) individuals who are born in the United States after
December 31, 2006, are deemed to be enrolled at the time of
birth and a parent or guardian of such an individual is
permitted to pre-enroll in the month prior to the expected
month of birth;
``(2) individuals who are born outside the United States
after such date and who become eligible to enroll by virtue
of immigration into (or an adjustment of immigration status
in) the United States are deemed enrolled at the time of
entry or adjustment of status;
``(3) eligible individuals may otherwise be enrolled at
such other times and manner as the Secretary shall specify,
including the use of outstationed eligibility sites as
described in section 1902(a)(55)(A) and the use of
presumptive eligibility provisions like those described in
section 1920A; and
``(4) at the time of automatic enrollment of a child, the
Secretary provides for issuance to a parent or custodian of
the individual a card evidencing coverage under this title
and for a description of such coverage.

The provisions of section 1837(h) apply with respect to
enrollment under this title in the same manner as they apply
to enrollment under part B of title XVIII. An individual who
is enrolled under this title is not eligible to be enrolled
under an MA or MA-PD plan under part C of title XVIII.
``(c) Date Coverage Begins.--
``(1) In general.--The period during which an individual is
entitled to benefits under this title shall begin as follows,
but in no case earlier than January 1, 2007:
``(A) In the case of an individual who is enrolled under
paragraph (1) or (2) of subsection (b), the date of birth or
date of obtaining appropriate citizenship or immigration
status, as the case may be.
``(B) In the case of another individual who enrolls
(including pre-enrolls) before the month in which the
individual satisfies eligibility for enrollment under
subsection (a), the first day of such month of eligibility.
``(C) In the case of another individual who enrolls during
or after the month in which the individual first satisfies
eligibility for enrollment under such subsection, the first
day of the following month.
``(2) Authority to provide for partial months of
coverage.--Under regulations, the Secretary may, in the
Secretary's discretion, provide for coverage periods that
include portions of a month in order to avoid lapses of
coverage.
``(3) Limitation on payments.--No payments may be made
under this title with respect to the expenses of an
individual enrolled under this title unless such expenses
were incurred by such individual during a period which, with
respect to the individual, is a coverage period under this
section.
``(d) Expiration of Eligibility.--An individual's coverage
period under this section shall continue until the
individual's enrollment has been terminated because the
individual no longer meets the requirements of subsection (a)
(whether because of age or change in immigration status).
``(e) Entitlement to MediKids Benefits for Enrolled
Individuals.--An individual enrolled under this title is
entitled to the benefits described in section 2202.
``(f) Low-income Information.--
``(1) Inquiry of income.--At the time of enrollment of a
child under this title, the Secretary shall make an inquiry
as to whether the family income (as determined for purposes
of section 1905(p)) of the family that includes the child is
within any of the following income ranges:
``(A) Up to 150 percent of poverty.--The income of the
family does not exceed 150 percent of the poverty line for a
family of the size involved.
``(B) Between 150 and 200 percent of poverty.--The income
of the family exceeds 150 percent, but does not exceed 200
percent, of such poverty line.
``(C) Between 200 and 300 percent of poverty.--The income
of the family exceeds 200 percent, but does not exceed 300
percent, of such poverty line.
``(2) Coding.--If the family income is within a range
described in paragraph (1), the Secretary shall encode in the
identification card issued in connection with eligibility
under this title a code indicating the range applicable to
the family of the child involved.
``(3) Provider verification through electronic system.--The
Secretary also shall provide for an electronic system through
which providers may verify which income range described in
paragraph (1), if any, is applicable to the family of the
child involved.
``(g) Construction.--Nothing in this title shall be
construed as requiring (or preventing) an individual who is
enrolled under this title from seeking medical assistance
under a State medicaid plan under title XIX or child health
assistance under a State child health plan under title XXI.

``SEC. 2202. BENEFITS.

``(a) Secretarial Specification of Benefit Package.--
``(1) In general.--The Secretary shall specify the benefits
to be made available under this title consistent with the
provisions of this section and in a manner designed to meet
the health needs of enrollees.
``(2) Updating.--The Secretary shall update the
specification of benefits over time to ensure the inclusion
of age-appropriate benefits to reflect the enrollee
population.
``(3) Annual updating.--The Secretary shall establish
procedures for the annual review and updating of such
benefits to account for changes in medical practice, new
information from medical research, and other relevant
developments in health science.

[[Page S7310]]

``(4) Input.--The Secretary shall seek the input of the
pediatric community in specifying and updating such benefits.
``(5) Limitation on updating.--In no case shall updating of
benefits under this subsection result in a failure to provide
benefits required under subsection (b).
``(b) Inclusion of Certain Benefits.--
``(1) Medicare core benefits.--Such benefits shall include
(to the extent consistent with other provisions of this
section) at least the same benefits (including coverage,
access, availability, duration, and beneficiary rights) that
are available under parts A and B of title XVIII.
``(2) All required medicaid benefits.--Such benefits shall
also include all items and services for which medical
assistance is required to be provided under section
1902(a)(10)(A) to individuals described in such section,
including early and periodic screening, diagnostic services,
and treatment services.
``(3) Inclusion of prescription drugs.--Such benefits also
shall include (as specified by the Secretary) benefits for
prescription drugs and biologicals which are not less than
the benefits for such drugs and biologicals under the
standard option for the service benefit plan described in
section 8903(1) of title 5, United States Code, offered
during 2005.
``(4) Cost-sharing.--
``(A) In general.--Subject to subparagraph (B), such
benefits also shall include the cost-sharing (in the form of
deductibles, coinsurance, and copayments) which is
substantially similar to such cost-sharing under the health
benefits coverage in any of the four largest health benefits
plans (determined by enrollment) offered under chapter 89 of
title 5, United States Code, and including an out-of-pocket
limit for catastrophic expenditures for covered benefits,
except that no cost-sharing shall be imposed with respect to
early and periodic screening and diagnostic services included
under paragraph (2).
``(B) Reduced cost-sharing for low income children.--Such
benefits shall provide that--
``(i) there shall be no cost-sharing for children in
families the income of which is within the range described in
section 2201(f)(1)(A);
``(ii) the cost-sharing otherwise applicable shall be
reduced by 75 percent for children in families the income of
which is within the range described in section 2201(f)(1)(B);
or
``(iii) the cost-sharing otherwise applicable shall be
reduced by 50 percent for children in families the income of
which is within the range described in section 2201(f)(1)(C).
``(C) Catastrophic limit on cost-sharing.--For a refundable
credit for cost-sharing in the case of cost-sharing in excess
of a percentage of the individual's adjusted gross income,
see section 36 of the Internal Revenue Code of 1986.
``(c) Payment Schedule.--The Secretary, with the assistance
of the Medicare Payment Advisory Commission, shall develop
and implement a payment schedule for benefits covered under
this title. To the extent feasible, such payment schedule
shall be consistent with comparable payment schedules and
reimbursement methodologies applied under parts A and B of
title XVIII.
``(d) Input.--The Secretary shall specify such benefits and
payment schedules only after obtaining input from appropriate
child health providers and experts.
``(e) Enrollment in Health Plans.--The Secretary shall
provide for the offering of benefits under this title through
enrollment in a health benefit plan that meets the same (or
similar) requirements as the requirements that apply to
Medicare Advantage plans under part C of title XVIII (other
than any such requirements that relate to part D of such
title). In the case of individuals enrolled under this title
in such a plan, the payment rate shall be based on payment
rates provided for under section 1853(c) in effect before the
date of the enactment of the Medicare Prescription Drug,
Modernization, and Improvement Act of 2003 (Public Law 108-
173), except that such payment rates shall be adjusted in an
appropriate manner to reflect differences between the
population served under this title and the population under
title XVIII.

``SEC. 2203. PREMIUMS.

``(a) Amount of Monthly Premiums.--
``(1) In general.--The Secretary shall, during September of
each year (beginning with 2006), establish a monthly MediKids
premium for the following year. Subject to paragraph (2), the
monthly MediKids premium for a year is equal to \1/12\ of the
annual premium rate computed under subsection (b).
``(2) Elimination of monthly premium for demonstration of
equivalent coverage (including coverage under low-income
programs).--The amount of the monthly premium imposed under
this section for an individual for a month shall be zero in
the case of an individual who demonstrates to the
satisfaction of the Secretary that the individual has basic
health insurance coverage for that month. For purposes of the
previous sentence enrollment in a medicaid plan under title
XIX, a State child health insurance plan under title XXI, or
under the medicare program under title XVIII is deemed to
constitute basic health insurance coverage described in such
sentence.
``(b) Annual Premium.--
``(1) National per capita average.--The Secretary shall
estimate the average, annual per capita amount that would be
payable under this title with respect to individuals residing
in the United States who meet the requirement of section
2201(a)(1) as if all such individuals were eligible for (and
enrolled) under this title during the entire year (and
assuming that section 1862(b)(2)(A)(i) did not apply).
``(2) Annual premium.--Subject to subsection (d), the
annual premium under this subsection for months in a year is
equal to 25 percent of the average, annual per capita amount
estimated under paragraph (1) for the year.
``(c) Payment of Monthly Premium.--
``(1) Period of payment.--In the case of an individual who
participates in the program established by this title,
subject to subsection (d), the monthly premium shall be
payable for the period commencing with the first month of the
individual's coverage period and ending with the month in
which the individual's coverage under this title terminates.
``(2) Collection through tax return.--For provisions
providing for the payment of monthly premiums under this
subsection, see section 59B of the Internal Revenue Code of
1986.
``(3) Protections against fraud and abuse.--The Secretary
shall develop, in coordination with States and other health
insurance issuers, administrative systems to ensure that
claims which are submitted to more than one payor are
coordinated and duplicate payments are not made.
``(d) Reduction in Premium for Certain Low-income
Families.--For provisions reducing the premium under this
section for certain low-income families, see section 59B(d)
of the Internal Revenue Code of 1986.

``SEC. 2204. MEDIKIDS TRUST FUND.

``(a) Establishment of Trust Fund.--
``(1) In general.--There is hereby created on the books of
the Treasury of the United States a trust fund to be known as
the `MediKids Trust Fund' (in this section referred to as the
`Trust Fund'). The Trust Fund shall consist of such gifts and
bequests as may be made as provided in section 201(i)(1) and
such amounts as may be deposited in, or appropriated to, such
fund as provided in this title.
``(2) Premiums.--Premiums collected under section 59B of
the Internal Revenue Code of 1986 shall be periodically
transferred to the Trust Fund.
``(3) Transitional funding before receipt of premiums.--In
order to provide for funds in the Trust Fund to cover
expenditures from the fund in advance of receipt of premiums
under section 2203, there are transferred to the Trust Fund
from the general fund of the United States Treasury such
amounts as may be necessary.
``(b) Incorporation of Provisions.--
``(1) In general.--Subject to paragraph (2), subsection (b)
(other than the last sentence) and subsections (c) through
(i) of section 1841 shall apply with respect to the Trust
Fund and this title in the same manner as they apply with
respect to the Federal Supplementary Medical Insurance Trust
Fund and part B, respectively.
``(2) Miscellaneous references.--In applying provisions of
section 1841 under paragraph (1)--
``(A) any reference in such section to `this part' is
construed to refer to title XXII;
``(B) any reference in section 1841(h) to section 1840(d)
and in section 1841(i) to sections 1840(b)(1) and 1842(g) are
deemed references to comparable authority exercised under
this title;
``(C) payments may be made under section 1841(g) to the
Trust Funds under sections 1817 and 1841 as reimbursement to
such funds for payments they made for benefits provided under
this title; and
``(D) the Board of Trustees of the MediKids Trust Fund
shall be the same as the Board of Trustees of the Federal
Supplementary Medical Insurance Trust Fund.

``SEC. 2205. OVERSIGHT AND ACCOUNTABILITY.

``(a) Periodic GAO Reports.--The Comptroller General of the
United States shall periodically submit to Congress reports
on the operation of the program under this title, including
on the financing of coverage provided under this title.
``(b) Periodic MedPAC Reports.--The Medicare Payment
Advisory Commission shall periodically report to Congress
concerning the program under this title.

``SEC. 2206. INCLUSION OF CARE COORDINATION SERVICES.

``(a) In General.--
``(1) Program authority.--The Secretary, beginning in 2007,
may implement a care coordination services program in
accordance with the provisions of this section under which,
in appropriate circumstances, eligible individuals under
section 2201 may elect to have health care services covered
under this title managed and coordinated by a designated care
coordinator.
``(2) Administration by contract.--The Secretary may
administer the program under this section through a contract
with an appropriate program administrator.
``(3) Coverage.--Care coordination services furnished in
accordance with this section shall be treated under this
title as if they were included in the definition of medical
and other health services under section 1861(s) and benefits
shall be available under this title with respect to such
services without the application of any deductible or
coinsurance.
``(b) Eligibility Criteria; Identification and Notification
of Eligible Individuals.--
``(1) Individual eligibility criteria.--The Secretary shall
specify criteria to be used in making a determination as to
whether an individual may appropriately be enrolled in

[[Page S7311]]

the care coordination services program under this section,
which shall include at least a finding by the Secretary that
for cohorts of individuals with characteristics identified by
the Secretary, professional management and coordination of
care can reasonably be expected to improve processes or
outcomes of health care and to reduce aggregate costs to the
programs under this title.
``(2) Procedures to facilitate enrollment.--The Secretary
shall develop and implement procedures designed to facilitate
enrollment of eligible individuals in the program under this
section.
``(c) Enrollment of Individuals.--
``(1) Secretary's determination of eligibility.--The
Secretary shall determine the eligibility for services under
this section of individuals who are enrolled in the program
under this section and who make application for such services
in such form and manner as the Secretary may prescribe.
``(2) Enrollment period.--
``(A) Effective date and duration.--Enrollment of an
individual in the program under this section shall be
effective as of the first day of the month following the
month in which the Secretary approves the individual's
application under paragraph (1), shall remain in effect for
one month (or such longer period as the Secretary may
specify), and shall be automatically renewed for additional
periods, unless terminated in accordance with such procedures
as the Secretary shall establish by regulation. Such
procedures shall permit an individual to disenroll for cause
at any time and without cause at re-enrollment intervals.
``(B) Limitation on reenrollment.--The Secretary may
establish limits on an individual's eligibility to reenroll
in the program under this section if the individual has
disenrolled from the program more than once during a
specified time period.
``(d) Program.--The care coordination services program
under this section shall include the following elements:
``(1) Basic care coordination services.--
``(A) In general.--Subject to the cost-effectiveness
criteria specified in subsection (b)(1), except as otherwise
provided in this section, enrolled individuals shall receive
services described in section 1905(t)(1) and may receive
additional items and services as described in subparagraph
(B).
``(B) Additional benefits.--The Secretary may specify
additional benefits for which payment would not otherwise be
made under this title that may be available to individuals
enrolled in the program under this section (subject to an
assessment by the care coordinator of an individual's
circumstance and need for such benefits) in order to
encourage enrollment in, or to improve the effectiveness of,
such program.
``(2) Care coordination requirement.--Notwithstanding any
other provision of this title, the Secretary may provide that
an individual enrolled in the program under this section may
be entitled to payment under this title for any specified
health care items or services only if the items or services
have been furnished by the care coordinator, or coordinated
through the care coordination services program. Under such
provision, the Secretary shall prescribe exceptions for
emergency medical services as described in section
1852(d)(3), and other exceptions determined by the Secretary
for the delivery of timely and needed care.
``(e) Care Coordinators.--
``(1) Conditions of participation.--In order to be
qualified to furnish care coordination services under this
section, an individual or entity shall--
``(A) be a health care professional or entity (which may
include physicians, physician group practices, or other
health care professionals or entities the Secretary may find
appropriate) meeting such conditions as the Secretary may
specify;
``(B) have entered into a care coordination agreement; and
``(C) meet such criteria as the Secretary may establish
(which may include experience in the provision of care
coordination or primary care physician's services).
``(2) Agreement term; payment.--
``(A) Duration and renewal.--A care coordination agreement
under this subsection shall be for one year and may be
renewed if the Secretary is satisfied that the care
coordinator continues to meet the conditions of participation
specified in paragraph (1).
``(B) Payment for services.--The Secretary may negotiate or
otherwise establish payment terms and rates for services
described in subsection (d)(1).
``(C) Liability.--Care coordinators shall be subject to
liability for actual health damages which may be suffered by
recipients as a result of the care coordinator's decisions,
failure or delay in making decisions, or other actions as a
care coordinator.
``(D) Terms.--In addition to such other terms as the
Secretary may require, an agreement under this section shall
include the terms specified in subparagraphs (A) through (C)
of section 1905(t)(3).

``SEC. 2207. ADMINISTRATION AND MISCELLANEOUS.

``(a) In General.--Except as otherwise provided in this
title--
``(1) the Secretary shall enter into appropriate contracts
with providers of services, other health care providers,
carriers, and fiscal intermediaries, taking into account the
types of contracts used under title XVIII with respect to
such entities, to administer the program under this title;
``(2) beneficiary protections for individuals enrolled
under this title shall not be less than the beneficiary
protections (including limits on balance billing) provided
medicare beneficiaries under title XVIII;
``(3) benefits described in section 2202 that are payable
under this title to such individuals shall be paid in a
manner specified by the Secretary (taking into account, and
based to the greatest extent practicable upon, the manner in
which they are provided under title XVIII); and
``(4) provider participation agreements under title XVIII
shall apply to enrollees and benefits under this title in the
same manner as they apply to enrollees and benefits under
title XVIII.
``(b) Coordination With Medicaid and SCHIP.--
Notwithstanding any other provision of law, individuals
entitled to benefits for items and services under this title
who also qualify for benefits under title XIX or XXI or any
other Federally funded health care program that provides
basic health insurance coverage described in section
2203(a)(2) may continue to qualify and obtain benefits under
such other title or program, and in such case such an
individual shall elect either--
``(1) such other title or program to be primary payor to
benefits under this title, in which case no benefits shall be
payable under this title and the monthly premium under
section 2203 shall be zero; or
``(2) benefits under this title shall be primary payor to
benefits provided under such title or program, in which case
the Secretary shall enter into agreements with States as may
be appropriate to provide that, in the case of such
individuals, the benefits under titles XIX and XXI or such
other program (including reduction of cost-sharing) are
provided on a `wrap-around' basis to the benefits under this
title.''.
(b) Conforming Amendments to Social Security Act
Provisions.--
(1) Section 201(i)(1) of the Social Security Act (42 U.S.C.
401(i)(1)) is amended by striking ``or the Federal
Supplementary Medical Insurance Trust Fund'' and inserting
``the Federal Supplementary Medical Insurance Trust Fund, and
the MediKids Trust Fund''.
(2) Section 201(g)(1)(A) of such Act (42 U.S.C.
401(g)(1)(A)) is amended by striking ``and the Federal
Supplementary Medical Insurance Trust Fund established by
title XVIII'' and inserting ``, the Federal Supplementary
Medical Insurance Trust Fund, and the MediKids Trust Fund
established by title XVIII''.
(c) Maintenance of Medicaid Eligibility and Benefits for
Children.--
(1) In general.--In order for a State to continue to be
eligible for payments under section 1903(a) of the Social
Security Act (42 U.S.C. 1396b(a))--
(A) the State may not reduce standards of eligibility, or
benefits, provided under its State medicaid plan under title
XIX of the Social Security Act or under its State child
health plan under title XXI of such Act for individuals under
23 years of age below such standards of eligibility, and
benefits, in effect on the date of the enactment of this Act;
and
(B) the State shall demonstrate to the satisfaction of the
Secretary of Health and Human Services that any savings in
State expenditures under title XIX or XXI of the Social
Security Act that results from children enrolling under title
XXII of such Act shall be used in a manner that improves
services to beneficiaries under title XIX of such Act, such
as through expansion of eligibility, improved nurse and nurse
aide staffing and improved inspections of nursing facilities,
and coverage of additional services.
(2) Medikids as primary payor.--In applying title XIX of
the Social Security Act, the MediKids program under title
XXII of such Act shall be treated as a primary payor in cases
in which the election described in section 2207(b)(2) of such
Act, as added by subsection (a), has been made.
(d) Expansion of Medpac Membership to 19.--
(1) In general.--Section 1805(c) of the Social Security Act
(42 U.S.C. 1395b-6(c)) is amended--
(A) in paragraph (1), by striking ``17'' and inserting
``19''; and
(B) in paragraph (2)(B), by inserting ``experts in
children's health,'' after ``other health professionals,''.
(2) Initial terms of additional members.--
(A) In general.--For purposes of staggering the initial
terms of members of the Medicare Payment Advisory Commission
under section 1805(c)(3) of the Social Security Act (42
U.S.C. 1395b-6(c)(3)), the initial terms of the 2 additional
members of the Commission provided for by the amendment under
subsection (a)(1) are as follows:
(i) One member shall be appointed for 1 year.
(ii) One member shall be appointed for 2 years.
(B) Commencement of terms.--Such terms shall begin on
January 1, 2006.
(3) Duties.--Section 1805(b)(1)(A) of such Act (42 U.S.C.
1395b-6(b)(1)(A)) is amended by inserting before the
semicolon at the end the following: ``and payment policies
under title XXII''.

SEC. 3. MEDIKIDS PREMIUM.

(a) General Rule.--Subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to determination of
tax liability) is amended by adding at the end the following
new part:

[[Page S7312]]

``PART VIII--MEDIKIDS PREMIUM

``Sec. 59B. MediKids premium

``SEC. 59B. MEDIKIDS PREMIUM.

``(a) Imposition of Tax.--In the case of a taxpayer to whom
this section applies, there is hereby imposed (in addition to
any other tax imposed by this subtitle) a MediKids premium
for the taxable year.
``(b) Individuals Subject to Premium.--
``(1) In general.--This section shall apply to a taxpayer
if a MediKid is a dependent of the taxpayer for the taxable
year.
``(2) Medikid.--For purposes of this section, the term
`MediKid' means any individual enrolled in the MediKids
program under title XXII of the Social Security Act.
``(c) Amount of Premium.--For purposes of this section, the
MediKids premium for a taxable year is the sum of the monthly
premiums (for months in the taxable year) determined under
section 2203 of the Social Security Act with respect to each
MediKid who is a dependent of the taxpayer for the taxable
year.
``(d) Exceptions Based on Adjusted Gross Income.--
``(1) Exemption for very low-income taxpayers.--
``(A) In general.--No premium shall be imposed by this
section on any taxpayer having an adjusted gross income not
in excess of the exemption amount.
``(B) Exemption amount.--For purposes of this paragraph,
the exemption amount is--
``(i) $19,245 in the case of a taxpayer having 1 MediKid,
``(ii) $24,135 in the case of a taxpayer having 2 MediKids,
``(iii) $29,025 in the case of a taxpayer having 3
MediKids, and
``(iv) $33,915 in the case of a taxpayer having 4 or more
MediKids.
``(C) Phaseout of exemption.--In the case of a taxpayer
having an adjusted gross income which exceeds the exemption
amount but does not exceed twice the exemption amount, the
premium shall be the amount which bears the same ratio to the
premium which would (but for this subparagraph) apply to the
taxpayer as such excess bears to the exemption amount.
``(D) Inflation adjustment of exemption amounts.--In the
case of any taxable year beginning in a calendar year after
2005, each dollar amount contained in subparagraph (C) shall
be increased by an amount equal to the product of--
``(i) such dollar amount, and
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2004'
for `calendar year 1992' in subparagraph (B) thereof.

If any increase determined under the preceding sentence is
not a multiple of $50, such increase shall be rounded to the
nearest multiple of $50.
``(2) Premium limited to 5 percent of adjusted gross
income.--In no event shall any taxpayer be required to pay a
premium under this section in excess of an amount equal to 5
percent of the taxpayer's adjusted gross income.
``(e) Coordination With Other Provisions.--
``(1) Not treated as medical expense.--For purposes of this
chapter, any premium paid under this section shall not be
treated as expense for medical care.
``(2) Not treated as tax for certain purposes.--The premium
paid under this section shall not be treated as a tax imposed
by this chapter for purposes of determining--
``(A) the amount of any credit allowable under this
chapter, or
``(B) the amount of the minimum tax imposed by section 55.
``(3) Treatment under subtitle f.--For purposes of subtitle
F, the premium paid under this section shall be treated as if
it were a tax imposed by section 1.''.
(b) Technical Amendments.--
(1) Subsection (a) of section 6012 of such Code is amended
by inserting after paragraph (9) the following new paragraph:
``(10) Every individual liable for a premium under section
59B.''.
(2) The table of parts for subchapter A of chapter 1 of
such Code is amended by adding at the end the following new
item:

``Part VIII. MediKids Premium''.

(c) Effective Date.--The amendments made by this section
shall apply to months beginning after December 2006, in
taxable years ending after such date.

SEC. 4. REFUNDABLE CREDIT FOR CERTAIN COST-SHARING EXPENSES
UNDER MEDIKIDS PROGRAM.

(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 36 as
section 37 and by inserting after section 35 the following
new section:

``SEC. 36. CATASTROPHIC LIMIT ON COST-SHARING EXPENSES UNDER
MEDIKIDS PROGRAM.

``(a) In General.--
``In the case of a taxpayer who has a MediKid (as defined
in section 59B) at any time during the taxable year, there
shall be allowed as a credit against the tax imposed by this
subtitle an amount equal to the excess of--
``(1) the amount paid by the taxpayer during the taxable
year as cost-sharing under section 2202(b)(4) of the Social
Security Act, over
``(2) 5 percent of the taxpayer's adjusted gross income for
the taxable year.''.
(b) Coordination With Other Provisions.--The excess
described in subsection (a) shall not be taken into account
in computing the amount allowable to the taxpayer as a
deduction under section 162(l) or 213(a).
(c) Technical Amendments.--
(1) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of such Code is amended by
redesignating the item relating to section 36 as an item
relating to section 37 and by inserting before such item the
following new item:

``Sec. 36. Catastrophic limit on cost-sharing expenses under MediKids
program''.

(2) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``or 36'' after
``section 35''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.

SEC. 5. REPORT ON LONG-TERM REVENUES.

Within one year after the date of the enactment of this
Act, the Secretary of the Treasury shall propose a gradual
schedule of progressive tax changes to fund the program under
title XXII of the Social Security Act, as the number of
enrollees grows in the out-years.
______

By Mr. HARKIN (for himself, Mr. Kennedy, Mr. Durbin, Mr.
Feingold, Mrs. Boxer, and Mr. Dayton):
S. 1304. A bill to amend the Employee Retirement Income Security Act
of 1974 and the Internal Revenue Code of 1986 to protect pension
benefits of employees in defined benefit plans and to direct the
Secretary of the Treasury to enforce the age discrimination
requirements of the Internal Revenue Code of 1986; to the Committee on
Health, Education, Labor, and Pensions.
Mr. HARKIN. Mr. President, I rise today to introduce a piece of
legislation to fix a huge oversight in pension policy.
In the early 1990s, a large number of U.S. companies began a process
of switching their traditional defined benefit pension plans to what's
referred to as ``cash balance'' pension plans. A cash balance pension
is insured, like a traditional plan, through the PBGC. However, it
looks more like a defined contribution plan to participants because the
benefit is expressed as some percent of play plus some guaranteed
interest rate. This isn't necessarily a bad idea, in and of itself.
However, in practice, many of the employees working for these companies
were not told what these changes would mean for them. Some companies
had their employees work for years without earning any more benefits.
Many of those employees didn't figure that out for a very long time.
Unfortunately, their lack of understanding in this situation was a key
benefit to management. However, once they figured out what was
happening, the retirees were furious.
As two consultants who helped put these plans together said at an
Actuaries conference in 1998:

``I've been involved in cash balance plans five or six
years down the road and what I have found is that while
employees understand it, it is not until they are actually
ready to retire that they understand how little they are
actually getting.''
``Right, but they're happy while they're employed.''

One of the most abusive practices in cash balance conversions is
known as ``wear away. `` The company freezes the value of the benefits
employees already earned, which by law cannot be taken away once given.
However, the employer opens a cash balance account for that worker at a
much lower dollar level. So they end up working for years contributing
to this lower cash balance account, not realizing that contribution is
meaningless because their old benefits were higher. At the same time,
younger workers do get money added to their account every day. This is
clearly age discrimination, and bad pension policy.
In 1999, I introduced a bill to make it illegal for corporations to
wear away the benefits of older workers during conversions to cash
balance plans. I offered my bill as an amendment. Forty-eight Senators,
including 3 Republicans, voted to waive the budget point of order so we
could consider this amendment. We did not have enough votes then, but I
believe the tide is turning.
After that vote, more and more stories came out about how many
workers were losing their pensions. In September of 1999, the Secretary
of the Treasury put a moratorium on conversions from defined benefit
plans to cash balance plans. That moratorium has

[[Page S7313]]

been in effect now for over three years. In April of 2000, I offered a
Sense-of-the-Senate resolution to stop this practice, and it passed the
Senate unanimously.
There are hundreds of age discrimination complaints currently pending
before the EEOC based on some of these abusive cash balance
conversions. Clearly, something must be done to address this issue
that's been floating around now unresolved for over five years.
Before, I said that wear-away is the least fair practice during
conversion. And I have to say that now, public sentiment is really
coming around to acknowledge that unfairness. However, aside from wear-
away, there's another problem in shifting from a traditional pension to
cash balance. In a traditional plan, you accrue most of the benefits
toward the end of your career, because there's usually some kind of
formula that multiplies top pay times years of service. People tend to
earn more salary toward the end of their careers, and if that is
multiplied times more years served, the pension grows quickly in later
years. But in a cash balance plan, younger workers do better because
they are given a flat percent of pay plus some guaranteed interest
credit. Interest is good for young people, they have many years to
accrue and compound it. So if you get caught in mid-life, mid-career in
one of these transitions, you get the downside of both plans.
Before I go any further, I want to be clear on one point--cash
balance pensions can be a great deal for workers. Some. And they may
help fill a needed niche in the pension world to cover the half of the
workforce that currently has no pension. But I will continue my long
battle to oppose the unilateral decision of a company to cut off a
promise for an older worker, give that money to a younger worker, and
not view it as age discrimination.
That is what this issue is all about. It is fairness. It is equity. I
know discussion of pension law can become very convoluted. But this can
be boiled down pretty simply. It is about what we think a promise from
an employer ought to mean.
There is one thing that has distinguished the American workplace from
others around the world. We have valued loyalty. At least we used to.
That is one of the reasons pension plans exist--the longer you work
somewhere, the more you earn in your pension program. Obviously, the
longer you work someplace, the better you do your job, the more you
learn about it, the more productive you are. We should value that
loyalty.
But here, companies are able to take away the benefits of the longest
serving workers. What kind of a signal does that send to the workers?
It tells workers they are fools if they are loyal because if you put in
20 or 25 years, the boss can just change the rules of the game, and
break their promise. It tells younger workers that it would be crazy to
work for a company for a long time, that it's best to hedge your bets
and move on as soon as it is convenient. It's crazy to trade current
pay for the promise of future benefits. So why even take into account
the fact that you're being offered a pension plan? This is a very
dangerous road to go down.
This destroys the kind of work ethic we have come to value and that
we know built this country. But some of these cash balance conversions
counter all of that. Here is an analogy. Imagine I hire someone for 5
years with a promise of a $50,000 bonus at the end of 5 years of
service. At the end of 3 years, however, I renege on the $50,000 bonus.
But the employee has 3 years invested. Had they known that the deal was
going to be off, perhaps they would not have gone to work for me. They
could have gone to work someplace else for a total higher compensation
package. Now imagine that they hire a new guy to join the team, and
they give him part of that $50,000 bonus they promised me. Is that the
way we want to treat workers in this country, where the employer has
all the cards and employees have none, and employers can make whatever
deal they want, but can change the rules at any time?

That is why I am introducing this legislation. It is simple. It says
that you have to give older, longer serving employees a choice, at
retirement, when their pension plan is converted to a cash balance plan
to get the benefits earned in the old plan instead. It also says that
employers must start counting the new cash balance benefits where the
old defined benefit plan left off, instead of starting the cash balance
plan at a lower level than an employee had already earned.
This isn't a radical idea. I was very pleased that in February of
2004, the Administration came out with a cash balance proposal that
recognized that these transitions are hard on workers. It not only
prohibits wear-away but provides for 5 year transition credits for
workers caught in the middle of a conversion. Treasury reaffirmed its
commitment to this approach in this year's budget request.
I was excited when Treasury first came to the table with a proposal
to do more to protect workers here. I was so encouraged by this that I
convened a series of meetings over the course of last summer to get all
interested parties to the table--everyone from participant rights
advocates to industry groups to consultants. I heard some really great
ideas, and some that I didn't agree with. But I think there is still
room to find answers to this problem. So I'm putting my plan back on
the table today. And I really hope that we can continue a meaningful
dialog on this issue.
If we do that, this year, we can enact meaningful participant
protections moving forward so that there is another pension option out
there to cover the roughly half of Americans with no pension at all.
But I also want to make it clear that this Senator will never sit idly
by as older workers get the rug pulled out from under them just as they
thought they were on solid ground for their retirement. I won't stand
idly by and watch their money redistributed in an age-discriminatory
way. We can have this dialog and we can find a way to fix what's broken
here, but not by blessing some of these blatant abuses.
______

By Mr. BROWNBACK:
S. 1305. A bill to amend the Internal Revenue Code of 1986 to
increase tax benefits for parents with children, and for other
purposes; to the Committee on Finance.
Mr. BROWNBACK. Mr. President, I rise today to introduce the Parents
Tax Relief Act.
The Parents Tax Relief Act would help restore to families the pride-
of-place, which they enjoyed during the early days of the income tax.
This important legislation would relieve the growing tax burden on
families with children; provide a realistic option for one parent to
stay at home and care for the children; and acknowledge the
indispensable social value of the time and effort that parents put into
rearing and forming their children.
Letting parents keep more of their hard-earned money for family-
related expenses leaves the childcare decision to parents. Given this
opportunity to make their own decision about childcare, many will
choose to stay at home and care for their children themselves.
This legislation is necessary because parents have been hit
especially hard by increasing taxes over the past half-century. In
1948, the average family with children paid 3 percent of its income in
Federal taxes; today, that same average family with children pays
almost 25 percent of its income in Federal taxes.
It is time for the Federal Government to step back and recognize the
contributions of the American family. As a matter of policy, I believe
we should work to further reduce taxes on families with children in
order to make it easier for parents to be parents and care for their
own children at home. Outside of abusive situations, nothing is better
for our children than spending time with their parents.
The Parents Tax Relief Act takes a modest step towards empowering and
strengthening the family. It builds on Marriage Penalty Tax Relief and
the Child Tax Credit, making both permanent. While the Child Tax Credit
was significant in leveling a three-decade trend of an increasing
percentage of married mothers with preschool children who work outside
the home full-time, more needs to be done to give parents the chance to
decrease this percentage.
To accomplish this end, the Parents Tax Relief Act would increase
deductions for young and elderly dependents.

[[Page S7314]]

It would equalize existing Federal preferences between parents who
choose to stay at home with their children and parents Who choose to
work outside of the home and place their children in paid daycare.
The bill would make it easier for a parent to spend more time with
their children through provisions that encourage telecommuting and home
businesses. And it recognizes the societal contributions of parents by
granting 10 years worth of Social Security credits to a spouse who
leaves the workforce during their prime-earning years to care for a
young child.
The Parents Tax Relief Act is about investing in human capital. The
hard-working American family, instilling traditional values to
children, has been the bedrock of American society. As the family goes,
so goes the Nation.
In recent years, the Federal Government has engaged in a massive
experiment with paid, out-of-home daycare. As a national policy,
through Federal subsidies, we have encouraged parents to place their
children in daycare, and further, we have increasingly become a Nation
where it is necessary for both husband and wife to be in the workforce
just to cover a family's basic needs. The end result is that children
are getting less of their parents' time when they need their parents
the most.
Make no mistake, both men and women have made valuable contributions
to our national workforce. Our Nation's productivity is strong, and we
have enjoyed a great period of national prosperity. But how long will
it last when our children are spending less time with mom and dad?
Sociological data confirms time and again that children do best when
raised by a mother and a father, where one spouse works and the other
spouse stays at home with the children.
Unfortunately--and I believe that most mothers, especially, would
tend to agree--we have reached a point where a family has to make a
truly great sacrifice for one parent to stay at home to raise the
children. I have heard so many stories of mothers wanting to stay home
with their children, but between paying a mortgage and taxes, they feel
helpless. They feel that they must work in order that their family can
enjoy and maintain a middle-class lifestyle.
It is time for us to acknowledge, through Federal policy, the
sacrifices that parents make to invest in the upbringing of their
children when they stay at home. That is goal of the Parents Tax Relief
Act, and it is the reason why I am introducing this important measure.
It costs a great sum to raise children these days, and it is
essential to our Nation's social and economic welfare that we ensure
Federal tax policy does not infringe on a parent's ability to afford
that great sum.
The Parents Tax Relief Act would establish a new national tax policy
that would allow parents to invest more time and effort in the
formation of their children. In the end, this type of investment in
human capital may be the most effective way for the Federal Government
to ensure our future economic growth and competitiveness.
The legislative road to this new policy begins today, and I look
forward to working with my colleagues on both sides of the aisle to
make it a reality.
______

By Ms. MURKOWSKI:
S. 1306. A bill to provide for the recognition of certain Native
communities and the settlement of certain claims under the Alaska
Native Claims Settlement Act, and for other purposes; to the Committee
on Energy and Natural Resources.
Ms. MURKOWSKI. Mr. President, at the very beginning of the Alaska
Native Claims Settlement Act of 1971 there are a series of findings and
declarations of Congressional policy which explain the underpinnings of
this landmark legislation.
The first clause reads, ``There is an immediate need for a fair and
just settlement of all claims by Natives and Native groups of Alaska,
based on aboriginal land claims.'' The second clause states, ``The
settlement should be accomplished rapidly, with certainty, in
conformity with the real economic and social needs of Natives.''
Thirty three years have passed since the Alaska Native Claims
Settlement Act became law and still the Native peoples of five
communities in Southeast Alaska--Haines, Ketchikan, Petersburg, Tenakee
and Wrangell--the five ``landless communities'' are still waiting for
their fair and just settlement.
The Alaska Native Claims Settlement Act awarded approximately $1
billion and 44 million acres of land to Alaska Natives and provided for
the establishment of Native Corporations to receive and manage such
funds and lands. The beneficiaries of the settlement were issued stock
in one of 13 regional Alaska Native Corporations. Most beneficiaries
also had the option to enroll and receive stock in a village, group or
urban corporation.
For reasons that still defy explanation the Native peoples of the
``landless communities,'' were not permitted by the Alaska Native
Claims Settlement Act to form village or urban corporations. These
communities were excluded from this benefit even though they did not
differ significantly from other communities in Southeast Alaska that
were permitted to form village or urban corporations under the Alaska
Native Claims Settlement Act. This finding was confirmed in a February
1994 report submitted by the Secretary of the Interior at the direction
of the Congress. That study was conducted by the Institute of Social
and Economic Research at the University of Alaska.
The Native people of Southeast Alaska have recognized the injustice
of this oversight for more than 33 years. An independent study issued
more than 11 years ago confirms that the grievance of the landless
communities is legitimate. Legislation has been introduced in the past
sessions of Congress to remedy this injustice. Hearings have been held
and reports written. Yet legislation to right the wrong has inevitably
stalled out. This December marks the 34th anniversary of Congress'
promise to the Native peoples of Alaska--the promise of a rapid and
certain settlement. And still the landless communities of Southeast
Alaska are landless.
I am convinced that this cause is just, it is right, and it is about
time that the Native peoples of the five landless communities receive
what has been denied them for more than 30 years.
The legislation that I am introducing today would enable the Native
peoples of the five ``landless communities'' to organize five ``urban
corporations,'' one for each unrecognized community. These newly formed
corporations would be offered and could accept the surface estate to
approximately 23,000 acres of land. Sealaska Corporation, the regional
Alaska Native Corporation for Southeast Alaska would receive title to
the subsurface estate to the designated lands. The urban corporations
would each receive a lump sum payment to be used as start-up funds for
the newly established corporation. The Secretary of the Interior would
determine other appropriate compensation to redress the inequities
faced by the unrecognized communities.
It is long past time that we return to the Native peoples of
Southeast Alaska a small slice of the aboriginal lands that were once
theirs alone. It is time that we open our minds and open our hearts to
correcting this injustice which has gone on far too long and finally
give the Native peoples of Southeast Alaska the rapid and certain
settlement for which they have been waiting.
I ask unanimous consent that the text of the legislation be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1306

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 ``Unrecognized Southeast
Alaska Native Communities Recognition and Compensation Act''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress finds the following:
(1) In 1971, Congress enacted the Alaska Native Claims
Settlement Act (43 U.S.C. 1601 et seq.) (referred to in this
section as the ``Act'') to recognize and settle the
aboriginal claims of Alaska Natives to the lands Alaska
Natives had used for traditional purposes.
(2) The Act awarded approximately $1,000,000,000 and
44,000,000 acres of land to Alaska Natives and provided for
the establishment of Native Corporations to receive and
manage such funds and lands.
(3) Pursuant to the Act, Alaska Natives have been enrolled
in one of 13 Regional Corporations.

[[Page S7315]]

(4) Most Alaska Natives reside in communities that are
eligible under the Act to form a Village or Urban Corporation
within the geographical area of a Regional Corporation.
(5) Village or Urban Corporations established under the Act
received cash and surface rights to the settlement land
described in paragraph (2) and the corresponding Regional
Corporation received cash and land which includes the
subsurface rights to the land of the Village or Urban
Corporation.
(6) The southeastern Alaska communities of Haines,
Ketchikan, Petersburg, Tenakee, and Wrangell are not listed
under the Act as communities eligible to form Village or
Urban Corporations, even though the population of such
villages comprises greater than 20 percent of the
shareholders of the Regional Corporation for Southeast Alaska
and display historic, cultural, and traditional qualities of
Alaska Natives.
(7) The communities described in paragraph (6) have sought
full eligibility for lands and benefits under the Act for
more than three decades.
(8) In 1993, Congress directed the Secretary of the
Interior to prepare a report examining the reasons why the
communities listed in paragraph (6) had been denied
eligibility to form Village or Urban Corporations and receive
land and benefits pursuant to the Act.
(9) The report described in paragraph (8), published in
February, 1994, indicates that--
(A) the communities listed in paragraph (6) do not differ
significantly from the southeast Alaska communities that were
permitted to form Village or Urban Corporations under the
Act;
(B) such communities are similar to other communities that
are eligible to form Village or Urban Corporations under the
Act and receive lands and benefits under the Act--
(i) in actual number and percentage of Native Alaskan
population; and
(ii) with respect to the historic use and occupation of
land;
(C) each such community was involved in advocating the
settlement of the aboriginal claims of the community; and
(D) some of the communities appeared on early versions of
lists of Native Villages prepared before the date of the
enactment of the Act, but were not included as Native
Villages in the Act.
(10) The omissions described in paragraph (9) are not
clearly explained in any provision of the Act or the
legislative history of the Act.
(11) On the basis of the findings described in paragraphs
(1) through (10), Alaska Natives who were enrolled in the
five unlisted communities and their heirs have been
inadvertently and wrongly denied the cultural and financial
benefits of enrollment in Village or Urban Corporations
established pursuant to the Act.
(b) Purpose.--The purpose of this Act is to redress the
omission of the communities described in subsection (a)(6)
from eligibility by authorizing the Native people enrolled in
the communities--
(1) to form Urban Corporations for the communities of
Haines, Ketchikan, Petersburg, Tenakee, and Wrangell under
the Act; and
(2) to receive certain settlement lands and other
compensation pursuant to the Act.

SEC. 3. ESTABLISHMENT OF ADDITIONAL NATIVE CORPORATIONS.

Section 16 of the Alaska Native Claims Settlement Act (43
U.S.C. 1615) is amended by adding at the end thereof the
following new subsection:
``(e)(1) The Native residents of each of the Native
Villages of Haines, Ketchikan, Petersburg, Tenakee, and
Wrangell, Alaska, may organize as Urban Corporations.
``(2) Nothing in this subsection shall affect any
entitlement to land of any Native Corporation previously
established pursuant to this Act or any other provision of
law.''.

SEC. 4. SHAREHOLDER ELIGIBILITY.

Section 8 of the Alaska Native Claims Settlement Act (43
U.S.C. 1607) is amended by adding at the end thereof the
following new subsection:
``(d)(1) The Secretary of the Interior shall enroll to each
of the Urban Corporations for Haines, Ketchikan, Petersburg,
Tenakee, or Wrangell those individual Natives who enrolled
under this Act to the Native Villages of Haines, Ketchikan,
Petersburg, Tenakee, or Wrangell, respectively.
``(2) Those Natives who are enrolled to an Urban
Corporation for Haines, Ketchikan, Petersburg, Tenakee, or
Wrangell pursuant to paragraph (1) and who were enrolled as
shareholders of the Regional Corporation for Southeast Alaska
on or before March 30, 1973, shall receive 100 shares of
Settlement Common Stock in such Urban Corporation.
``(3) A Native who has received shares of stock in the
Regional Corporation for Southeast Alaska through inheritance
from a decedent Native who originally enrolled to the Native
Villages of Haines, Ketchikan, Petersburg, Tenakee, or
Wrangell, which decedent Native was not a shareholder in a
Village or Urban Corporation, shall receive the identical
number of shares of Settlement Common Stock in the Urban
Corporation for Haines, Ketchikan, Petersburg, Tenakee, or
Wrangell as the number of shares inherited by that Native
from the decedent Native who would have been eligible to be
enrolled to such Urban Corporation.
``(4) Nothing in this subsection shall affect entitlement
to land of any Regional Corporation pursuant to section 12(b)
or section 14(h)(8).''.

SEC. 5. DISTRIBUTION RIGHTS.

Section 7 of the Alaska Native Claims Settlement Act (43
U.S.C. 1606) is amended--
(1) in subsection (j), by adding at the end thereof the
following new sentence: ``Native members of the Native
Villages of Haines, Ketchikan, Petersburg, Tenakee, and
Wrangell who become shareholders in an Urban Corporation for
such a community shall continue to be eligible to receive
distributions under this subsection as at-large shareholders
of the Regional Corporation for Southeast Alaska.''; and
(2) by adding at the end thereof the following new
subsection:
``(s) No provision of or amendment made by the Unrecognized
Southeast Alaska Native Communities Recognition and
Compensation Act shall affect the ratio for determination of
revenue distribution among Native Corporations under this
section and the `1982 Section 7(i) Settlement Agreement'
among the Regional Corporations or among Village Corporations
under subsection (j).''.

SEC. 6. COMPENSATION.

The Alaska Native Claims Settlement Act (43 U.S.C. 1601 et
seq.) is amended by adding at the end thereof the following
new section:

``Urban Corporations for Haines, Ketchikan, Petersburg, Tenakee, and
Wrangell

``Sec. 43. (a) Upon incorporation of the Urban Corporations
for Haines, Ketchikan, Petersburg, Tenakee, and Wrangell, the
Secretary, in consultation and coordination with the
Secretary of Commerce, and in consultation with
representatives of each such Urban Corporation and the
Regional Corporation for Southeast Alaska, shall offer as
compensation, pursuant to this Act, one township of land
(23,040 acres) to each of the Urban Corporations for Haines,
Ketchikan, Petersburg, Tenakee, and Wrangell, and other
appropriate compensation, including the following:
``(1) Local areas of historical, cultural, traditional, and
economic importance to Alaska Natives from the Villages of
Haines, Ketchikan, Petersburg, Tenakee, or Wrangell. In
selecting the lands to be withdrawn and conveyed pursuant to
this section, the Secretary shall give preference to lands
with commercial purposes and may include subsistence and
cultural sites, aquaculture sites, hydroelectric sites,
tidelands, surplus Federal property and eco-tourism sites.
The lands selected pursuant to this section shall be
contiguous and reasonably compact tracts wherever possible.
The lands selected pursuant to this section shall be subject
to all valid existing rights and all other provisions of
section 14(g), including any lease, contract, permit, right-
of-way, or easement (including a lease issued under section
6(g) of the Alaska Statehood Act).
``(2) $650,000 for capital expenses associated with
corporate organization and development, including--
``(A) the identification of forest and land parcels for
selection and withdrawal;
``(B) making conveyance requests, receiving title,
preparing resource inventories, land and resource use, and
development planning;
``(C) land and property valuations;
``(D) corporation incorporation and start-up;
``(E) advising and enrolling shareholders;
``(F) issuing stock; and
``(G) seed capital for resource development.
``(3) Such additional forms of compensation as the
Secretary deems appropriate, including grants and loan
guarantees to be used for planning, development and other
purposes for which Native Corporations are organized under
the Act, and any additional financial compensation, which
shall be allocated among the five Urban Corporations on a pro
rata basis based on the number of shareholders in each Urban
Corporation.
``(b) The Urban Corporations for Haines, Ketchikan,
Petersburg, Tenakee, and Wrangell, shall have one year from
the date of the offer of compensation from the Secretary to
each such Urban Corporation provided for in this section
within which to accept or reject the offer. In order to
accept or reject the offer, each such Urban Corporation shall
provide to the Secretary a properly executed and certified
corporate resolution that states that the offer proposed by
the Secretary was voted on, and either approved or rejected,
by a majority of the shareholders of the Urban Corporation.
In the event that the offer is rejected, the Secretary, in
consultation with representatives of the Urban Corporation
that rejected the offer and the Regional Corporation for
Southeast Alaska, shall revise the offer and the Urban
Corporation shall have an additional six months within which
to accept or reject the revised offer.
``(c) Not later than 180 days after receipt of a corporate
resolution approving an offer of the Secretary as required in
subsection (b), the Secretary shall withdraw the lands and
convey to the Urban Corporation title to the surface estate
of the lands and convey to the Regional Corporation for
Southeast Alaska title to the subsurface estate as
appropriate for such lands.
``(d) The Secretary shall, without consideration of
compensation, convey to the Urban Corporations of Haines,
Ketchikan, Petersburg, Tenakee, and Wrangell, by quitclaim
deed or patent, all right, title, and interest of the United
States in all roads, trails, log transfer facilities, leases,
and appurtenances on or related to the land conveyed to the
corporations pursuant to subsection (c).
``(e)(1) The Urban Corporations of Haines, Ketchikan,
Petersburg, Tenakee, and Wrangell may establish a settlement
trust in

[[Page S7316]]

accordance with the provisions of section 39 for the purposes
of promoting the health, education, and welfare of the trust
beneficiaries and preserving the Native heritage and culture
of the communities of Haines, Ketchikan, Petersburg, Tenakee,
and Wrangell, respectively.
``(2) The proceeds and income from the principal of a trust
established under paragraph (1) shall first be applied to the
support of those enrollees and their descendants who are
elders or minor children and then to the support of all other
enrollees.''.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated such sums as shall
be necessary to carry out this Act and the amendments made by
this Act.
______

By Mr. BAUCUS:
S. 1308. A bill to establish an Office of Trade Adjustment
Assistance, and for other purposes; to the Committee on Finance.
Mr. BAUCUS. Mr. President, today I introduce the Trade Adjustment
Assistance for Firms Reorganization Act.
The Trade Adjustment Assistance for Firms program assists hundreds of
mostly small and medium-sized manufacturing and agricultural companies
in Montana and nationwide when they face layoffs and lost sales due to
import competition. Qualifying companies develop adjustment plans and
receive technical assistance to become more competitive, so that they
can retain and expand employment.
The program is very cost effective. It requires the firms being
helped to match the Federal assistance with their own funds, and it
pays the government back in federal and State tax revenues when the
firms succeed.
For example, TAA for Firms is helping Montola Growers from
Culbertson, Montana, to develop cosmetic applications for its safflower
oil. And it is helping Porterbilt Company of Hamilton to expand its
product line.
Currently, TAA for Firms clients receive assistance preparing
petitions and adjustment plans from twelve Trade Adjustment Assistance
Centers, which are Commerce Department contractors. Program and policy
decisions are made by a small headquarters staff in the Commerce
Department's Economic Development Administration.
In the Trade Act of 2002, Congress voted to reauthorize this
important program for seven years and to increase its authorized
funding level. The program seemed headed toward some years of smooth
sailing. But it turns out that is not the case.
For reasons unrelated to TAA for Firms, EDA began more than a year
ago to move all its headquarters programs to its six regional offices.
For TAA for Firms, that means clients will still get the same local
services from the TAACs, but decisions will be made in six regional
offices plus a national policy office. The likely result is more
personnel needed to run the program, more layers of government, less
centralized and consistent decision making, and less accountability--
all without any likely improvement in customer service.
In preparation for this reorganization, EDA transferred or otherwise
eliminated most of its experienced TAA staff in the Washington office.
But to date it has not completed the transfer and hired or trained the
necessary regional staff. So the program is in limbo.
Meanwhile, the President recently announced a multi-agency
consolidation of economic development programs that will eliminate EDA
and its regional offices. Not surprisingly, the latest word from EDA is
that plans to complete the move of TAA for Firms to the regional
offices are now on indefinite hold. The President's fiscal year 2006
budget zeroes out TAA for Firms, even though Congress has authorized
the program through fiscal year 2007. With funding in doubt and the
Washington-based management structure for TAA for Firms already largely
dismantled, this program is on the verge of a crisis.
TAA for Firms was not broken until someone decided to fix it. Now it
is doomed to stay in limbo unless Congress acts to clean up the mess.
The bill I am introducing today solves these problems by moving
administration of the TAA for Firms program from EDA into a different
part of the Commerce Department--the International Trade
Administration. I introduced this same bill last year with 15 co-
sponsors.
Relocating the program to ITA makes sense. ITA has experience running
this program, which was located there prior to 1990. Relocating TAA for
Firms to ITA will result in fewer lays of government and more
centralized and accountable program management than running it through
EDA's regional offices or some new economic development agency.
Relocating the program also creates synergies by allowing better
coordination of the TAA for Firms program with other trade and trade
remedy programs administered by ITA. And it enhances the ability of the
Finance Committee to carry out its oversight responsibilities for this
program and for trade policy in general.
I do not want to see this important TAA program die of neglect. This
legislation is a simple matter of good, sensible government. I
encourage my colleagues to lend it their support.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1308

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 ``Trade Adjustment Assistance
for Firms Reorganization Act''.

SEC. 2. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

(a) In General.--Chapter 3 of title II of the Trade Act of
1974 (19 U.S.C. 2341 et seq.) is amended by inserting after
section 255 the following new section:

``SEC. 255A. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

``(a) Establishment.--Not later than 90 days after the date
of enactment of the Trade Adjustment Assistance for Firms
Reorganization Act, there shall be established in the
International Trade Administration of the Department of
Commerce an Office of Trade Adjustment Assistance.
``(b) Personnel.--The Office shall be headed by a Director,
and shall have such staff as may be necessary to carry out
the responsibilities of the Secretary of Commerce described
in this chapter.
``(c) Functions.--The Office shall assist the Secretary of
Commerce in carrying out the Secretary's responsibilities
under this chapter.''.
(b) Conforming Amendment.--The table of contents for the
Trade Act of 1974 is amended by inserting after the item
relating to section 255, the following new item:

``Sec. 255A. Office of Trade Adjustment Assistance''.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

Section 256(b) of the Trade Act of 1974 (19 U.S.C. 2346(b))
is amended by striking ``2007'' and inserting ``2012''.
______

By Mr. BAUCUS (for himself, Mr. Coleman, and Mr. Wyden):
S. 1309. A bill to amend the Trade Act of 1974 to extend the trade
adjustment assistance program to the services sector, and for other
purposes; to the Committee on Finance.
Mr. BAUCUS. Mr. President, today I introduce the Trade Adjustment
Assistance Equity for Service Workers Act.
Frankly, I am disappointed to be here introducing this bill yet
again.
Just last week, the substance of the bill was adopted by a majority
of members of the Finance Committee as an amendment to the implementing
legislation for the United States-Central America-Dominican Republic
Free Trade Agreement. But today, the administration sent us the final
implementing bill with the amendment stripped out.
President Bush likes to say that trade is for everyone. That we all
share the benefits, including workers. And he claims to care a lot
about having a skilled workforce that can keep American businesses
competitive in global markets.
This amendment presented the President with the perfect opportunity
to put his money where his mouth is.
He could have said to the American people--as President Clinton did
when Congress considered the NAFTA--that just as all Americans share in
the benefits of trade, we all bear a responsibility for its costs.
Trade liberalization and trade adjustment go hand in hand. And then he
could have provided America's service sector workers with access to the
one program designed to make that happen--Trade Adjustment Assistance.
But by submitting the CAFTA implementing bill stripped of the Trade
Adjustment Assistance amendment passed by the Finance Committee, he
chose not to.

[[Page S7317]]

Since 1962, Trade Adjustment Assistance--what we call ``TAA''--has
provided retraining, income support, and other benefits so that workers
who lose their jobs due to trade can make a new start.
The rationale for TAA is simple. When our government pursues trade
liberalization, we create benefits for the economy as a whole. But
there is always some dislocation from trade.
When he created the TAA program, President Kennedy explained that the
Federal Government has an obligation ``to render assistance to those
who suffer as a result of national trade policy.''
For more than 40 years, we have met that obligation through TAA,
which is principally a retraining program designed to update worker
skills.
The TAA program has not been static over time. Congress periodically
revises the program to meet new economic realities. Most recently, in
the Trade Act of 2002, Congress completed the most comprehensive
overhaul and expansion of the TAA program since its inception.
I am proud to have played a leading role in passing this landmark
legislation. But I am also the first to admit that our work is not
done. Economic realities continue to change, and TAA must continue to
change with them.
One fundamental aspect of TAA that has remained unchanged since 1962
is its focus on manufacturing. We only give TAA benefits to workers who
make ``articles.''
Excluding service workers from TAA may have made sense in 1962, when
most non-farm jobs were in manufacturing and most services were not
traded across national borders.
But today, most American jobs are in the service sector. And the
market for many services is becoming just as global as the market for
manufactured goods.
In 2002, the service sector accounted for three quarters of U.S.
private sector gross domestic product and nearly 80 percent of non-farm
private employment.
Trade in services is a net plus for the U.S. economy. Although trade
in goods continues to dominate, services accounted for 29 percent of
the value of total U.S. exports in 2002 and the service sector
generated a trade surplus of $74 billion.
Just as we have seen with trade in manufactured goods, however, there
are winners and losers from trade. Trade in services will inevitably
cost some workers their jobs.
Indeed, there have been some well-publicized examples in the papers.
Software sign. Technical support. Accounting and tax preparation
services. Not long ago, a group of call center workers in Kalispell, MT
saw their jobs move to Canada and India.
Examples abound of service sector jobs--even high tech jobs--
relocating overseas. A series of studies estimate that between a half
million and over 3 million U.S. service sector jobs would be moved
offshore in the next 5 to 10 years.
That doesn't mean the total number of jobs in the U.S. economy is
shrinking. But the fact that jobs may be available in a different field
is cold comfort to a worker whose own skills are no longer in demand.
That is why this legislation is so important. It is a simple matter
of equity.
When a factory relocates to another country, those workers are
eligible for TAA. But when a call center moves to another country,
those workers are not eligible for TAA. They should be.
The benefits service workers will receive under this legislation
would be exactly the same as those that trade-impacted manufacturing
workers now receive. They include retraining, income support, job
search and relocation allowance, and a health coverage tax credit.
Hard working American service workers deserve this safety net. These
benefits will always be second best to a job. But they can really make
a difference in helping workers make a new start.
Truthfully, I am mystified by why the President so cavalierly dropped
the TAA for Services amendment and let this opportunity pass him by.
His actions are entirely inconsistent with his stated desire to make
trade benefit all Americans. But, sadly, this has become a pattern.
Despite the obvious benefits of the TAA program, the Bush
Administration fought tooth and nail against every penny, and against
every provision in what became the Trade Adjustment Assistance Reform
Act of 2002. Extending TAA to service workers was one of many needed
improvements that was struck in the final version of the bill.
Again in the last Congress, the extension of TAA to service workers
was offered as an amendment to the JOBS Act and opposed by the
Administration. It garnered 54 votes from both sides ofthe aisle--
failing only on a technicality.
The world is changing and TAA must keep up with the times. Last
year's Senate vote and this year's Finance Committee vote make clear
that there is wide support for extending TAA to service workers. I
truly believe this bill's time has come. I will work hard to move this
legislation this year.
I want to thank Senators Coleman and Wyden for co-sponsoring this
legislation. They have been stalwart supporters in the fight to bring
equity to service workers. I look forward to working with them to make
TAA for service workers a reality.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1309

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 ``Trade Adjustment Assistance
Equity for Service Workers Act of 2005''.

SEC. 2. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE TO SERVICES
SECTOR.

(a) Adjustment Assistance for Workers.--Section
221(a)(1)(A) of the Trade Act of 1974 (19 U.S.C.
2271(a)(1)(A)) is amended by striking ``firm)'' and inserting
``firm, and workers in a service sector firm or subdivision
of a service sector firm or public agency)''.
(b) Group Eligibility Requirements.--Section 222 of the
Trade Act of 1974 (19 U.S.C. 2272) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by striking
``agricultural firm)'' and inserting ``agricultural firm, and
workers in a service sector firm or subdivision of a service
sector firm or public agency)'';
(B) in paragraph (1), by inserting ``or public agency''
after ``of the firm''; and
(C) in paragraph (2)--
(i) in subparagraph (A)(ii), by striking ``like or directly
competitive with articles produced'' and inserting ``or
services like or directly competitive with articles produced
or services provided'';
(ii) by striking subparagraph (B) and inserting the
following:
``(B)(i) there has been a shift, by such workers' firm,
subdivision, or public agency to a foreign country, of
production of articles, or in provision of services, like or
directly competitive with articles which are produced, or
services which are provided, by such firm, subdivision, or
public agency; or
``(ii) such workers' firm, subdivision, or public agency
has obtained or is likely to obtain such services from a
foreign country.'';
(2) in subsection (b)--
(A) in the matter preceding paragraph (1), by striking
``agricultural firm)'' and inserting ``agricultural firm, and
workers in a service sector firm or subdivision of a service
sector firm or public agency)'';
(B) in paragraph (2), by inserting ``or service'' after
``related to the article''; and
(C) in paragraph (3)(A), by inserting ``or services'' after
``component parts'';
(3) in subsection (c)--
(A) in paragraph (3)--
(i) by inserting ``or services'' after ``value-added
production processes'';
(ii) by striking ``or finishing'' and inserting ``,
finishing, or testing'';
(iii) by inserting ``or services'' after ``for articles'';
and
(iv) by inserting ``(or subdivision)'' after ``such other
firm''; and
(B) in paragraph (4)--
(i) by striking ``for articles'' and inserting ``, or
services, used in the production of articles or in the
provision of services''; and
(ii) by inserting ``(or subdivision)'' after ``such other
firm''; and
(4) by adding at the end the following new subsection:
``(d) Basis for Secretary's Determinations.--
``(1) Increased imports.--For purposes of subsection
(a)(2)(A)(ii), the Secretary may determine that increased
imports of like or directly competitive articles or services
exist if the workers' firm or subdivision or customers of the
workers' firm or subdivision accounting for not less than 20
percent of the sales of the workers' firm or subdivision
certify to the Secretary that they are obtaining such
articles or services from a foreign country.

[[Page S7318]]

``(2) Obtaining services abroad.--For purposes of
subsection (a)(2)(B)(ii), the Secretary may determine that
the workers' firm, subdivision, or public agency has obtained
or is likely to obtain like or directly competitive services
from a foreign country based on a certification thereof from
the workers' firm, subdivision, or public agency.
``(3) Authority of the secretary.--The Secretary may obtain
the certifications under paragraphs (1) and (2) through
questionnaires or in such other manner as the Secretary
determines is appropriate.''.
(c) Training.--Section 236(a)(2)(A) of the Trade Act of
1974 (19 U.S.C. 2296(a)(2)(A)) is amended by striking
``$220,000,000'' and inserting ``$440,000,000''.
(d) Definitions.--Section 247 of the Trade Act of 1974 (19
U.S.C. 2319) is amended--
(1) in paragraph (1)--
(A) by inserting ``or public agency'' after ``of a firm'';
and
(B) by inserting ``or public agency'' after ``or
subdivision'';
(2) in paragraph (2)(B), by inserting ``or public agency''
after ``the firm'';
(3) by redesignating paragraphs (8) through (17) as
paragraphs (9) through (18), respectively; and
(4) by inserting after paragraph (6) the following:
``(7) The term `public agency' means a department or agency
of a State or local government or of the Federal Government.
``(8) The term `service sector firm' means an entity
engaged in the business of providing services.''.
(e) Technical Amendment.--Section 245(a) of the Trade Act
of 1974 (19 U.S.C. 2317(a)) is amended by striking ``, other
than subchapter D''.

SEC. 3. TRADE ADJUSTMENT ASSISTANCE FOR FIRMS AND INDUSTRIES.

(a) Firms.--
(1) Assistance.--Section 251 of the Trade Act of 1974 (19
U.S.C. 2341) is amended--
(A) in subsection (a), by inserting ``or service sector
firm'' after ``(including any agricultural firm'';
(B) in subsection (c)(1)--
(i) in the matter preceding subparagraph (A), by inserting
``or service sector firm'' after ``any agricultural firm'';
(ii) in subparagraph (B)(ii), by inserting ``or service''
after ``of an article''; and
(iii) in subparagraph (C), by striking ``articles like or
directly competitive with articles which are produced'' and
inserting ``articles or services like or directly competitive
with articles or services which are produced or provided'';
and
(C) by adding at the end the following:
``(e) Basis for Secretary Determination.--
``(1) Increased imports.--For purposes of subsection
(c)(1)(C), the Secretary may determine that increases of
imports of like or directly competitive articles or services
exist if customers accounting for not less than 20 percent of
the sales of the workers' firm certify to the Secretary that
they are obtaining such articles or services from a foreign
country.
``(2) Authority of the secretary.--The Secretary may obtain
the certifications under paragraph (1) through questionnaires
or in such other manner as the Secretary determines is
appropriate. The Secretary may exercise the authority under
section 249 in carrying out this subsection.''.
(2) Authorization of appropriations.--Section 256(b) of the
Trade Act of 1974 (19 U.S.C. 2346(b)) is amended by striking
``$16,000,000'' and inserting ``$32,000,000''.
(3) Definition.--Section 261 of the Trade Act of 1974 (19
U.S.C. 2351) is amended--
(A) by striking ``For purposes of'' and inserting ``(a)
FIRM.--For purposes of''; and
(B) by adding at the end the following:
``(b) Service Sector Firm.--For purposes of this chapter,
the term `service sector firm' means a firm engaged in the
business of providing services.''.
(b) Industries.--Section 265(a) of the Trade Act of 1974
(19 U.S.C. 2355(a)) is amended by inserting ``or service''
after ``new product''.
(c) Technical Amendments.--
(1) In general.--Section 249 of the Trade Act of 1974 (19
U.S.C. 2321) is amended by striking ``subpena'' and inserting
``subpoena'' each place it appears in the heading and the
text.
(2) Table of contents.--The table of contents for the Trade
Act of 1974 is amended by striking ``Subpena'' in the item
relating to section 249 and inserting ``Subpoena''.

SEC. 4. MONITORING AND REPORTING.

Section 282 of the Trade Act of 1974 (19 U.S.C. 2393) is
amended--
(1) in the first sentence--
(A) by striking ``The Secretary'' and inserting ``(a)
MONITORING PROGRAMS.--The Secretary'';
(B) by inserting ``and services'' after ``imports of
articles'';
(C) by inserting ``and domestic provision of services''
after ``domestic production'';
(D) by inserting ``or providing services'' after
``producing articles''; and
(E) by inserting ``, or provision of services,'' after
``changes in production''; and
(2) by adding at the end the following:
``(b) Collection of Data and Reports on Services Sector.--
``(1) Secretary of labor.--Not later than 3 months after
the date of the enactment of the Trade Adjustment Assistance
Equity for Service Workers Act of 2005, the Secretary of
Labor shall implement a system to collect data on adversely
affected service workers that includes the number of workers
by State, industry, and cause of dislocation of each worker.
``(2) Secretary of commerce.--Not later than 6 months after
such date of enactment, the Secretary of Commerce shall, in
consultation with the Secretary of Labor, conduct a study and
report to the Congress on ways to improve the timeliness and
coverage of data on trade in services, including methods to
identify increased imports due to the relocation of United
States firms to foreign countries, and increased imports due
to United States firms obtaining services from firms in
foreign countries.''.

SEC. 5. EFFECTIVE DATE.

(a) In General.--Except as provided in subsection (b), the
amendments made by this Act shall take effect on the date
that is 60 days after the date of the enactment of this Act.
(b) Special Rule for Certain Service Workers.--A group of
workers in a service sector firm, or subdivision of a service
sector firm, or public agency (as defined in section 247 (7)
and (8) of the Trade Act of 1974, as added by section 2(d) of
this Act) who--
(1) would have been certified eligible to apply for
adjustment assistance under chapter 2 of title II of the
Trade Act of 1974 if the amendments made by this Act had been
in effect on November 4, 2002, and
(2) file a petition pursuant to section 221 of such Act
within 6 months after the date of the enactment of this Act,
shall be eligible for certification under section 223 of the
Trade Act of 1974 if the workers' last total or partial
separation from the firm or subdivision of the firm or public
agency occurred on or after November 4, 2002 and before the
date that is 60 days after the date of the enactment of this
Act.

____________________