September 18, 1996 - Issue: Vol. 142, No. 129 — Daily Edition104th Congress (1995 - 1996) - 2nd Session
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS; Congressional Record Vol. 142, No. 129
(Senate - September 18, 1996)
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[Pages S10838-S10841] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. KOHL: S. 2088. A bill to amend the Internal Revenue Code of 1986 to provide a credit against tax for employers who provide childcare assistance for dependents of their employees, and for other purposes; to the Committee on Finance. the child care infrastructure act
Mr. KOHL. Mr. President, as we reach the end of the 104th Congress, we can be proud of the business we have finished, and we should look forward to finishing the business we have just begun. In that spirit, I introduce the Child Care Infrastructure Act of 1996--a tax credit designed to encourage employers to increase the supply of quality child care by providing it to their employees. My bill responds to the challenges presented by the landmark welfare legislation recently enacted. And it responds to the fundamental changes in the American economy that have led to parents entering the workforce in record numbers. Already in my State of Wisconsin, 67 percent of the women with children under 6 are in the workforce, yet there is only 1 accredited child care center for every 2,800 of these kids. Wisconsin has 6,500 children from 4,000 families on waiting lists for child care. What is most amazing is that Wisconsin, even with this sort of supply bottleneck, is considered by many to be one of the best States in which to find quality child care. With the advent of welfare reform, and the movement of more mothers of young children into the workforce, the shortage of good child care will only get worse. Conservative estimates show that at least 8,000 new, full-time child care slots will be needed in Milwaukee County alone to provide for the children of welfare mothers moving into work. Quality child care is the answer on many levels to the challenges of an economy fueled more and more by working parents. Safe child care is the link that makes it possible for welfare mothers to move from dependency to a decent job. Stimulating child care gives our youngest children a leg up on a lifetime of learning. Employer-provided child care gives working parents the peace of mind to perform their jobs well. The Child Care Infrastructure Act of 1996 creates a tax credit for employers who get involved in increasing the supply of quality child care. The credit goes to employers who engage in activities like: building and subsidizing an entire child care center, reserving slots in a child care center for employees, or contracting with a resource and referral agency to provide services such as placement or the design of a family day care network to employees. The credit is designed so that any company --small or large--has an incentive to get involved in the provision of quality child care to its employees. The credit is limited to 50 percent of $150,000 per year. The credit will sunset after 3 years. With this legislation, I want to encourage companies to consider providing child care as an employee benefit. However, I believe, and study after study has shown, that once a company offers this benefit, they will want to continue it even without a tax write-off. That is because companies that provide child care find their workers stay in their jobs longer (cutting training costs), have higher morale, work harder, and take less sick leave. I had the opportunity during the August recess to visit Quad Graphics, a large printing firm in Wisconsin that is known for its provision of quality child care to its employees through on-site child care centers. Quad Graphics is one of Working Mothers magazine's ``100 Best Companies''--primarily because of the quality of its on-site child care centers. Talking to the parents of children at one of those centers--seeing the happy and healthy children greeting their parents on their breaks and at lunch--was all the evidence I needed to convince me that we ought to be encouraging this sort of corporate involvement nationwide. Their 24 hour facility improves the company's bottom line-- Quad Graphics is able to attract and retain dedicated employees who want a job that allows them to be near their children. And that day care center improves the participating families' bottom line as well-- many parents I spoke with told me they would not be able to work, or to work well, if they had to worry each day about whether their children were cared for, safe, and happy. The 21st century economy will be one in which more of us are working, and more of us are trying to balance work and family. How well we adjust to that balance will determine how strong we are as an economy and as a nation of families. My legislation is an attempt to encourage businesses to play an active role in this deeply important transition. In the 1950's, Federal, State, local governments, communities and businesses banded together to build a highway system that is the most impressive in the world. Those roads allowed our economy to flourish and our people to move safely and quickly to work. In the 1990's, we need the same sort of national, comprehensive effort to build safe and affordable child care for our children. As more and more parents--of all income levels--move into the work force, they need access to quality child care just as much as their parents needed quality highways to drive to work. And if we are successful--and I plan to be successful--in the 21st century excellent child care--like the care these kids are getting--will be as common as interstate highways. Child care is an investment that is good for children, good for business, good for our States, and good for the Nation. We need to involve every level of government--and private communities and private businesses--in building a child care infrastructure that is the best in the world. My legislation is a first, essential step toward this end. Mr. President, I ask unanimous consent that the text of my legislation and a section-by-section summary be placed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: S. 2088 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 ``Child Care Infrastructure Act of 1996''. SEC. 2. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE ASSISTANCE. (a) In General.--Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following new section: ``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT. ``(a) In General.--For purposes of section 38, the employer-provided child care credit determined under this section for the taxable year is an amount equal to 50 percent of the qualified child care expenditures of the taxpayer for such taxable year. ``(b) Dollar Limitation.--The credit allowable under subsection (a) for any taxable year shall not exceed $150,000. ``(c) Definitions.--For purposes of this section-- ``(1) Qualified child care expenditure.--The term `qualified child care expenditure' means any amount paid or incurred-- ``(A) to acquire, construct, rehabilitate, or expand property-- ``(i) which is to be used as part of a qualified child care facility of the taxpayer, ``(ii) with respect to which a deduction for depreciation (or amortization in lieu of depreciation) is allowable, and ``(iii) which does not constitute part of the principal residence (within the meaning of section 1034) of the taxpayer or any employee of the taxpayer, ``(B) for the operating costs of a qualified child care facility of the taxpayer, including costs related to the training of employees, to scholarship programs, and to the providing of increased compensation to employees with higher levels of child care training, ``(C) under a contract with a qualified child care facility to provide dependent care services to employees of the taxpayer, or ``(D) under a contract to provide dependent care resource and referral services to employees of the taxpayer. [[Page S10839]] ``(2) Qualified child care facility.-- ``(A) In general.--The term `qualified child care facility' means a facility-- ``(i) the principal use of which is to provide dependent care assistance, and ``(ii) which meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including, but not limited to, the licensing of the facility as a child care facility. Clause (i) shall not apply to a facility which is the principal residence (within the meaning of section 1034) of the operator of the facility. ``(B) Special rules with respect to a taxpayer.--A facility shall not be treated as a qualified child care facility with respect to a taxpayer unless-- ``(i) enrollment in the facility is open to employees of the taxpayer during the taxable year, ``(ii) the facility is not the principal trade or business of the taxpayer unless at least 30 percent of the enrollees of such facility are dependents of employees of the taxpayer, and ``(iii) the use of such facility (or the eligibility to use such facility) does not discriminate in favor of employees of the taxpayer who are highly compensated employees (within the meaning of section 414(q)). ``(d) Recapture of Acquisition and Construction Credit.-- ``(1) In general.--If, as of the close of any taxable year, there is a recapture event with respect to any qualified child care facility of the taxpayer, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of-- ``(A) the applicable recapture percentage, and ``(B) the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted if the qualified child care expenditures of the taxpayer described in subsection (c)(1)(A) with respect to such facility had been zero. ``(2) Applicable recapture percentage.-- ``(A) In general.--For purposes of this subsection, the applicable recapture percentage shall be determined from the following table: The applicable recapture ``If the recapture evpercentage is: Years 1-3....................................................100 Year 4........................................................85 Year 5........................................................70 Year 6........................................................55 Year 7........................................................40 Year 8........................................................25 Years 9 and 10................................................10 Years 11 and thereafter........................................0. ``(B) Years.--For purposes of subparagraph (A), year 1 shall begin on the first day of the taxable year in which the qualified child care facility is placed in service by the taxpayer. ``(3) Recapture event defined.--For purposes of this subsection, the term `recapture event' means-- ``(A) Cessation of operation.--The cessation of the operation of the facility as a qualified child care facility. ``(B) Change in ownership.-- ``(i) In general.--Except as provided in clause (ii), the disposition of a taxpayer's interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable. ``(ii) Agreement to assume recapture liability.--Clause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership). ``(4) Special rules.-- ``(A) Tax benefit rule.--The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted. ``(B) No credits against tax.--Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under subpart A, B, or D of this part. ``(C) No recapture by reason of casualty loss.--The increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary. ``(e) Special Rules.--For purposes of this section-- ``(1) Aggregation rules.--All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer. ``(2) Pass-thru in the case of estates and trusts.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. ``(3) Allocation in the case of partnerships.--In the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary. ``(f) No Double Benefit.-- ``(1) Reduction in basis.--For purposes of this subtitle-- ``(A) In general.--If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined. ``(B) Certain dispositions.--If during any taxable year there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph (A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term `recapture amount' means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d). ``(2) Other deductions and credits.--No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section. ``(g) Termination.--This section shall not apply to taxable years beginning after December 31, 1999.'' (b) Conforming Amendments.-- (1) Section 38(b) of the Internal Revenue Code of 1986 is amended-- (A) by striking out ``plus'' at the end of paragraph (11), (B) by striking out the period at the end of paragraph (12), and inserting a comma and ``plus'', and (C) by adding at the end the following new paragraph: ``(13) the employer-provided child care credit determined under section 45D.'' ____ Section-by-Section Section 1. Short Title The bill's short title is the ``Child Care Infrastructure Act of 1996''. Section 2. Allowance of Credit for Employer Expenses for Child Care Assistance This section adds a new business related credit called the ``employer-provided child care credit.'' The credit is set at 50 percent of eligible expenditures up to a limit of $150,000 per taxpayer per tax year. Qualified expenditures mean amounts spent to: build, rehabilitate or expand a qualified child care facility for the taxpayer's employees; to subsidize the operating costs of such a facility; to contract with a child care facility to provide services for the taxpayer's employees; and to contract with a resource and referral service for the taxpayers' employees. The tax credit will not be available to build, rehabilitate, or expand a child care facility if that facility is also the home of the taxpayer or one of the taxpayer's employees. A child care facility is considered ``qualified'' if its principle use is to provide dependent care assistance, and if the facility meets all applicable state licensing requirements and other regulations. If the facility is a family day care center located in a home, i.e., if the facility is the primary residence of the operator of the facility, then the requirement that the facility's principle use be as a dependent care center is waived. A facility also will not be treated as ``qualified'' unless enrollment is open to employees of the taxpayer, and unless the facility does not discriminate in favor of highly compensated employees. A taxpayer whose primary business is the provision of dependent care assistance will not be eligible for the credit unless the taxpayer's investment is in a facility in which 30 percent of the enrollees are dependents of employees of the taxpayer. The provision was added to ensure that for-profit day care centers would not be eligible for a tax credit simply for engaging in their primary business by building a center. They will, however, be eligible if they build a center chiefly for the children of their employees. Under a set of recapture rules, a taxpayer who invests in a facility that ceases activity or changes ownership in less than ten years will have some of his or her credit clawed back. The applicable recapture percentage ranges from 100 percent in years 1 through 3 of the center's operation to 10 percent in years 9 and 10. The credit will be in effect beginning after December 21, 1996 and sunset on December 31, 1999. ______ By Mr. THOMAS: S. 2089. A bill to transfer land administered by the Bureau of Land Management to the States in which the land is located; to the Committee on Energy and Natural Resources. Bureau of Land Management Legislation Mr. THOMAS. Mr. President, today, I introduce legislation that would transfer the lands controlled by the Bureau of Land Management [BLM] to the States. This bill is similar to legislation I introduced in the Senate last year, but has a number of very important changes designed to improve the measure and ensure these public lands remain in public hands. In addition, the measure also protects access to these lands after they are transferred [[Page S10840]] to ensure that multiple use activities will continue on them when they become State property. After I introduced S. 1031 last year, some folks misleadingly claimed my legislation would allow the States to selloff the lands that were transferred to them and give them to the highest bidder. False claims were also made that access to these lands for hunting, fishing, and recreation would be limited. These attacks may have played well with the environmental community, unfortunately they have nothing to do with the truth about this effort. Currently, the BLM controls nearly 270 million acres of land in the United States. The agency administers over 18 million acres of land in Wyoming and much more in other Western States. This landownership pattern puts a heavy burden on the people of Wyoming and throughout the West and affects our economy and communities across the West. The bill I am introducing today would ensure that these lands remain public-- only administered by the States rather than the Federal Government. It is also important to note that this bill only deals with lands administered by the BLM. This legislation would do nothing to alter the management of our national parks, national forests, or wilderness areas. Let me be clear, I believe strongly that the State governments can do a much better job of managing the BLM lands in their States. Transferring these lands to the States is a common-sense approach to bring public management of these areas closer to local people. However, I also feel strongly that these lands should remain public and available to folks for a variety of uses. The key is to allow local people to make decisions regarding management of these public resources rather than bureaucrats in Washington, DC. The principle behind my efforts to transfer the BLM lands is to give local people the opportunity to have real input into how these areas are managed. It has never been the intent of any supporters of this legislation to privatize or restrict access to these public lands. Although the opponents of this bill use every scare tactic imaginable, the real issue regarding my legislation is whether you believe land management decisions can be made better by folks in Washington or Cheyenne? This is not a question about making public lands private, this is a question about fairness and who can do a better job of listening to the concerns of local people. I trust the people of Wyoming and the other States to make the proper decisions for themselves. Hopefully, the legislation I introduce today will allow us to begin focusing on the real questions in this matter, rather than the attacks and half-truths used by the opponents of my bill. ______ By Mrs. BOXER: S. 2090. A bill to provide for the conveyance of certain land in the State of California to the Hoopa Valley Tribe; to the Committee on Energy and Natural Resources. THE HOOPA VALLEY RESERVATION SOUTH BOUNDARY ADJUSTMENT ACT Mrs. BOXER. Mr. President, I am pleased to introduce legislation that would allow the Hoopa Valley Tribe to obtain lands of deep cultural and historical significance. The Hoopa Valley Tribe has resided in Hoopa Valley, beginning at the mouth of the Trinity River Canyon in Humbolt County for 10,000 years. In the 1950s, a settlement agreement between the Hoopa Valley Tribe and the United States Government designated a 12-by-12 mile area for the Hoopa Valley Reservation. When this land was surveyed and demarcated, a ``dog-leg'' was created along the southern boundary which omitted certain lands the Tribe has deemed culturally and religiously significant. My legislation will remedy this situation by transferring 2,641 acres of the Six Rivers National Forest to the Hoopa Valley Tribe. I join the United States Forest Service in commending the Hoopa Valley Tribe for its history of natural resource management and expertise. This legislation enjoys broad bipartisan support in California and in the House, where it was sponsored by Congressman Frank Riggs. I urge my colleagues to support this bill, so that we can quickly provide the Hoopa Valley Tribe with lands necessary to maintain their cultural and religious heritage. ______ By Mr. PRESSLER (for himself and Mr. HARKIN): S. 2091. A bill to provide for small business and agriculture regulatory relief; to the Committee on Commerce, Science, and Transportation. The Small Business and Farm Transportation Regulatory Relief Act of 1996 Mr. PRESSLER. Mr. President, today I am introducing the Small Business and Farm Transportation Regulatory Relief Act of 1996. I am pleased to be joined in this effort by Senator Harkin. This legislation is designed to address transportation and economic concerns raised recently by the agriculture community and small business owners and operators. These concerns stem from a U.S. Department of Transportation [DOT] proposal to apply Federal hazardous materials regulations to intrastate commerce. Let me explain. Since 1987, a rulemaking has been underway at DOT to fully impose Federal hazardous materials regulations on intrastate commerce. The intent is to achieve compatibility between Federal and State hazardous materials transportation regulations. If implemented as currently planned, however, farmers and agriculture retailers could face new costs and regulatory burdens. Mr. President, I understand the rationale behind DOT's push for uniformity in hazardous materials regulations. Indeed, the Congress has a lengthy record promoting Federal and State compatibility of motor carrier and hazardous materials transportation regulations. However, the legitimate need for exceptions to these regulations should not be ignored. States have already achieved general compatibility with Federal hazardous materials regulations. In doing so, some agricultural States have also provided limited regulatory exemptions in this area to farmers and retailers. These exceptions are due to the seasonal nature of the planting and harvesting seasons associated with a farmer's work and the minimal risk associated with the transport of agricultural production materials. For example, the very nature of a farmer's work requires the use of fuel, fertilizers, and pesticides. These products are transported from retail sites to farm and from farm to field, primarily on sparsely traveled roads. Have these exceptions from stringent hazardous materials regulations jeopardized safety? No. The record is clear. Public safety has not been adversely affected by farmers doing their jobs free of regulatory burdens. Mr. President, the agriculture industry has worked to explain its position to DOT throughout the public comment periods. Unfortunately, we cannot be sure to what extent DOT will address these concerns until the rule is final. Waiting until then could be too late. Congressional action is necessary to prevent unnecessary regulations and economic burdens on our farmers. The legislation we are introducing today would ensure States are allowed to maintain existing exceptions for farmers and agribusinesses. It also ensures States can continue to grant targeted exceptions for farmers in the future, as long as such exceptions will not adversely impact public safety. In addition to addressing farm-related transportation concerns, this legislation would also streamline regulatory requirements for small business operators. It is based on a DOT supplemental notice of proposed rulemaking, Docket No. HM 200, issued March 20, 1996. The DOT proposal would, in part, exempt certain quantities and types of hazardous materials from regulations concerning their transport. These so-called materials of trade are often the types of products used by small businesses across our country. Because transporting these small quantities of materials pose minimal risks to public safety and property, DOT is correctly proposing to lift the stringent hazardous materials transportation regulations currently imposed on operators. In my view, and the view of many others, DOT is on the right track. However, Congress should ensure DOT stays on that track. According to DOT officials, the rulemaking is expected to be completed by the end of this year. But there is no firm deadline. Given this issue has been part of the rulemaking under consideration for the past 10 years, many small [[Page S10841]] business owners are skeptical about DOT meeting its target date. Indeed, there is no legal assurance that DOT will finish what it has started. After all, Federal agencies are known to miss target dates for completing rulemakings or implementing regulations. DOT is no exception. Small business owners have no way of knowing when or if the proposed materials of trade regulatory exceptions will be a reality. Therefore, we are introducing legislation today to address this uncertainty and impose a needed congressional directive. This bill would establish a deadline for DOT and help ensure unnecessary regulatory burdens on small business owners are lifted in a timely manner. The deadline for DOT to complete the small business exception final rule would be December 31, 1996. That is the same date DOT announced as its target. Mr. President, I want to acknowledge the efforts going on in the other body to address the concerns I have just outlined. Representatives DeLay, Ewing, Buyer, and Poshard have been working on legislative measures very similar to the proposal Senator Harkin and I are introducing. We share a common goal. Sound transportation and policy cannot be achieved by a one-size-fits-all approach. I urge my colleagues to join in sponsoring this very important and necessary legislation and urge its swift passage. ____________________