A bill to amend the Internal Revenue Code of 1986 to clarify the treatment of dependent care assistance programs sponsored by the Department of Defense for members of the Armed Forces of the United States.

I suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, thousands of men and women from Montana are currently stationed overseas, be it in Iraq, Afghanistan, South Korea, Southeast Asia or in other supporting missions throughout the United States and the rest of the world.

These brave and dedicated soldiers have chosen to join the Armed Forces and protect our country, which is one of the highest forms of service there is. They are putting their lives on the line to protect the freedom and security of the United States. I take my hat off to them.

To date, Montana has sent almost 700 Reserve forces into Active Duty. Malmstrom Air Force Base has 105 airmen deployed overseas, including 50 members of the 819th Red Horse Squadron. Earlier this month 114 members of the Red Horse Squadron came home after being deployed in southwest Asia for five and a half months. The airmen are supporting six different operations around the world in southwest Asia, supporting no- fly zones in Iraq or in Afghanistan.

About 390 Army Reservists from Montana have been deployed. From Great Falls, the 889th Quartermaster Company unit--with 119 members--recently received mobilization orders along with 100 members of the 4225th U.S. Army Hospital.

From Missoula, 58 soldiers from the 279th Engineer Battalion and 16 soldiers from the 823rd Transportation Detachment have been activated. And out of Billings, 161 members of the 592nd Ordnance Company recently received their orders. Most of these army Reservists will take part in Operation Enduring Freedom.

Montana's Air National Guard has also contributed significant human resources. 210 members of the 120th Fighter Wind have been activated flying in the no-fly zone over Iraq.

Montana's Army National Guard has contributed about 125 Army Guard members, many of which are at other bases throughout the United States taking part in Homeland Security measures.

Thirty-five members of the 443rd Petroleum, Oil and Lubricants Supply Company have been mobilized to assist

with base security at the 120th Fighter Wing unit on Gore Hill outside of Great Falls, MT. Forty-five soldiers from the 495th Transportation Battalion are taking part in Operation Enduring Freedom. Eight ground- air liaison teams are in Fort Sill, OK, and 2 UH60 Helicopter pilots are in Fort Benning, GA.

Most certainly, I do not want to forget the thousands of Active Duty Army, Navy, Air Force and Marines from Montana stationed elsewhere throughout the Nation and overseas.

These soldiers are sons and daughters, brothers and sisters, fathers and mothers. And like you and I, they have families to take care of and worry about. They have personal lives to attend to, bills to pay and tax forms to fill out. As they are stationed far away, they are worried about how their children are doing in school and how their husbands or wives are coping with the distance. It is not easy.

Every day they are putting their lives back here on hold and instead putting their lives on the line to protect the rights we hold so dear.

With all of the worries they are facing, I am urging for passage of the military tax bill so we can take one, or two, burden off of their minds.

These men and women should not have to worry about whether or not their deployment changes their residency for tax purposes. They should not have to worry about whether or not they can afford their weekend training, nor should they ever have to worry about whether their death could result in an undue tax burden to their family.

One of the best ways we can support our troops is by doing everything we can to ensure that they and their families are taken care of. As a tribute to our Armed Forces, I cannot think of a better way to support them than by passing the military tax bill and allowing them to focus on their mission rather than their finances.

I encourage my colleagues to show their support for our troops today by voting in favor of the Armed Forces Tax Fairness Act.

I share the sentiments of Chairman Grassley. I would support tax treatment for our Guardsmen and Reservists like that proposed by Senators Landrieu, DeWine, and Allen. S. 351 is not the appropriate venue, but the reconciliation package should achieve the goals of S. 442. The junior Senator from Louisiana is correct that the $350 billion tax package should contain both tax cuts to promote growth and benefit the quality of life for the men and women in the United States Armed Forces.

Mr. President, earlier I paid tribute to Senator Daniel Patrick Moynihan. There is a provision in the legislation we are considering which was very near and dear to the heart of Senator Moynihan, and that is the expatriation provision contained in this bill. It was actually developed by Senator Moynihan and Senator Roth several years ago. That is the genesis of this provision.

As we know, there are many men and women overseas fighting for our country. For example, there are currently about 300,000 in Iraq. At the same time, there are individuals who attempt to escape their patriotic duty. While we have 300,000 men and women over in Iraq, other individuals are attempting to escape their patriotic duty. They relinquish their U.S. citizenship. Why? One basic reason: In order to avoid supporting the United States through taxes.

Between 1991 and 2002, approximately 6,500 U.S. citizens have expatriated; that is, they gave up their U.S. citizenship. In 1966, as part of the Foreign Investors Tax Act, Congress created an alternative tax regime for U.S. citizens who expatriated in order to avoid paying taxes. The alternative tax regime taxes a former citizen on U.S. property for 10 years after expatriation.

These tax rules were strengthened in 1996 following press reports and congressional hearings indicating that very wealthy individuals expatriated while maintaining significant contacts with the United States.

Unfortunately, these changes to the law have not deterred citizens from expatriating to avoid paying U.S. taxes. The changes simply never worked as Congress intended.

This year, the Joint Committee on Taxation published a study on individual expatriation. According to the Joint Committee, there is virtually no enforcement of the special tax and immigration rules applicable to tax-motivated citizenship relinquishment and residency termination.

The Joint Committee also said that present law has been highly ineffective. Present law continues to provide tax incentives for individuals to expatriate. It also is difficult to collect U.S. taxes on former citizens who are no longer physically present in the United States.

Additionally, a study conducted by the General Accounting Office concluded that the IRS did not have a systematic compliance effort. That means that we are not even enforcing the alternative tax regime that is on the books.

That means a former citizen could avoid the alternative tax regime by holding foreign assets--which are not taxed. Or by waiting until the 10-year period expires before disposing of U.S. property.

The Armed Forces Tax Fairness Act includes a new system to address tax-motivated expatriation. Under this legislation, any U.S. citizen or long-term resident who relinquishes their U.S. citizenship or residency will be subject to an exit tax on the gains attributable to property owned during their U.S. citizenship.

Under this proposal, if the gain exceeds $600,000, then a former citizen will be taxed on the net unrealized gain on property--as if it were sold at fair market value 1 day prior to expatriation. The Treasury Department believes that this new system will greatly improve the administrability of the tax on expatriates. The new system imposes the tax at the time the individual leaves the U.S. jurisdiction.

Additionally, by including foreign assets within the regime, this eliminates a significant incentive for tax-motivated expatriation.

This expatriation provision will raise $700 million. The military bill uses that $700 million to provide tax benefits to military personnel.

In contrast, the House version of the military bill is simply a modification of the current alternative tax regime. It raises $328 million. The House version will not go far enough. It simply adds more provisions for the IRS to enforce. This strikes me as odd considering none of the current provisions is being enforced.

Sometimes the laws just do not work the way Congress intended. So, we must change the laws to ensure they are effective and administered as Congress intended.

The current system to tax expatriates does not work. We have had nearly 40 years to make the system work. We should not wait any longer to collect taxes on those who do not value the freedoms our nation provides.

The new proposal does not seek to tax expatriates on income earned after expatriation. It just says they have to

pay tax on the income earned while they were a U.S. citizen. While our military protected them.

I thank former Senator Bill Roth and the late Senator Daniel Patrick Moynihan, who developed this proposal several years ago. And I thank Senator Harkin and others who have continued to work on this in the 107th Congress and this year.

Amendment No. 433

(Purpose: In the nature of a substitute)

On behalf of Senator Grassley and myself, I call up amendment numbered 433.

I ask unanimous consent reading of the amendment be dispensed with.

Mr. President, I yield whatever time the Senator from Arkansas desires.

Mr. President, that is a very important statement and request that the Senator from Arkansas has made. I can speak on behalf of myself, and I am sure Senator Grassley, that we would be more than honored to join with the Senator from Arkansas in making that request. It is a very timely request. It is one that is very important. Frankly, I am a little bit surprised none of us made that same request that he has made because it is so important, and it is going to give us a lot better idea of the financial condition of our armed services. It is a good idea.

Mr. President, when the space program began in 1959 there were only seven astronauts in the entire country. They all were or had been in the Armed Forces.

That was only 44 years ago and since then, much has changed. Today, astronauts are comprised of Americans from every race, creed, color and gender.

While many still come from the military, the astronaut corps now includes civilian doctors, scientists, and engineers. They are our best and our brightest. They risk their lives to advance our knowledge and understanding of the world.

On February 1, 2003, seven men and women aboard the space shuttle Columbia lost their lives. LTC Michael P. Anderson, U.S. Navy CAPT David Brown, U.S. Navy CDR Laurel Clark, Dr. Kalpana Chawla, U.S. Air Force COL Rick Husband, Naval CDR William McCool, and Israeli Air Force COL Ilan Ramon will be remembered forever.

Five of the six Columbia crew members, from the United States, had military backgrounds. They were national heroes who are deeply missed by their family and friends. Through their dedication to space exploration, they lived their lives to the fullest and made long lasting contributions.

In honor of their sacrifice, I along with 13 of my Senate colleagues, introduced S. 298, the Assistance for Families of Space Shuttle Columbia Heroes Act.

I am pleased that the legislation was included by the Senate Finance Committee as part of the Armed Forces Tax Fairness Act of 2003.

Under the legislation, the families of the Columbia heroes would receive the same benefits as families of military personnel who die in the line of duty.

The provisions are similar to legislation passed in 2001 that provided relief to victims of the September 11, anthrax and the Oklahoma City attacks.

Specifically, the bill expands the class of those eligible for these benefits to include astronauts killed in the line of duty.

The legislation provides income tax relief. Current law generally excludes from tax income received in the year of death or in a previous year for soldiers killed in combat zones, and victims of September 11, anthrax and Oklahoma City.

The legislation expands this benefit to apply to astronauts who die in the line of duty.

The legislation provides death benefit relief. Current law excludes from income any death benefit paid by the U.S. Government to a soldier killed in a combat zone or paid by an employer to the families of the victims of September 11, the anthrax attacks, or the Oklahoma City bombing.

The legislation expands this benefit to apply to death benefits paid to the families of astronauts killed in the line of duty.

The legislation provides for estate tax relief. Current law provides estate tax relief that effectively lowers the estate tax rate to 20 percent for the estates of soldiers killed in combat zones, the victims of September 11, the anthrax attacks or the Oklahoma City bombing.

The legislation expands this benefit to apply to the estates of any astronaut killed in the line of duty.

The best way to honor Columbia's fallen heroes is to promptly pass this legislation and pledge that the goals and missions of NASA will live on in the years to come.

I urge my colleagues to support the Armed Forces Tax Fairness Act of 2003 which includes tax relief for the families of the Space Shuttle Columbia heroes.

Mr. President, since September 11, significant progress has been made to disrupt and dismantle the financial components of terrorist organizations.

Special agents from the IRS and other law enforcement agencies have successfully investigated numerous terrorist related entities-- including tax exempt organizations that have engaged in terrorist fundraising.

The Armed Forces Tax Fairness Act of 2003 contains a provision that would suspend the tax-exempt status of any organization designated by U.S. authorities as a terrorist organization or supporter of terrorism.

There is no procedure under present law for the IRS to suspend the tax-exempt status of an organization.

The IRS can revoke an organization's tax-exempt status only after conducting an examination of the organization.

Even then, the IRS must issue a letter proposing revocation and allow the organization to exhaust its administrative appeals rights.

The provision in this legislation is simply common sense. It is an important weapon in our war on terrorist financing.

An organization that has been designated by the Federal Government as a terrorist organization should not be exempt from Federal income tax. Moreover, contributions to such organizations should not be tax deductible.

Once the Federal Government determines that an entity is a terrorist organization pursuant to certain authority--for example, the International Emergency Economic Powers Act--a separate investigation by the IRS is not necessary.

Further, because a terrorist organization may challenge the Federal government's designation under the law authorizing the designation, recourse to the declaratory judgment procedures of the Tax Code is not appropriate.

If a tax-exempt organization's suspension is determined to be erroneous, the provision would allow tax refunds for any overpayments.

Lastly, the IRS will be required to update its listings of tax-exempt organizations to take into account organizations that have had their exemption suspended. This will give notice to taxpayers that contributions to these organizations are no longer deductible.

I urge my colleagues to support the Armed Forces Tax Fairness Act of 2003.

Mr. President, this bill includes many important changes in the tax treatment of income and benefits received by members of our armed forces. One provision is particularly important for members that face the dual challenge of serving their nation while raising a family. The bill explicitly states that child care subsidies that members of the military receive shall not be subject to income tax.

In 1986, we passed a law which stated that military benefits should not be included in income for tax purposes. The statute lists a number of benefits received by members of the military--

housing allowances, medical benefits, education assistance, and many others. But child care subsidies do not appear on the list.

When we passed this law, the Department of Defense did have a program to assist members of the military in caring for their children. But the importance of this program has increased as the demographics of the members of the military have changed.

There was a time when our forces were primarily young single men. However, times have changed. Twelve percent of the forces are women. Over half of the active duty members are married. Two-thirds of military spouses work outside the home. Six percent of members are married to another member of the military. And 6 percent are single parents.

Young single soldiers are no longer the norm. Recognizing these changes, the Department of Defense has placed a reinforced importance on assisting military families.

The Department of Defense recognizes the additional challenges faced by military families as they raise children. The average military family moves every two and a half years, making it difficult for them to find quality child care, or friends and neighbors to look to for help with child care responsibilities. And with work schedules that are often long and unpredictable, help is often necessary. In addition, members of the military face the possibility of deployment anywhere in the world at any time.

They now operate over 800 child care centers in the U.S. and abroad. These include child development centers for young children, after- school centers for older children, and other family care programs. They provide night and weekend services as well, to accommodate the often hectic schedules that military families face. All in all, these programs provide care for over 200,000 children every day.

The cost of these programs varies depending on the income of the parents--on average, it is about $7,700 per child. This cost is shared by the military parents and the government, with each paying about half the cost.

The law is unclear about whether these benefits are subject to income tax. A provision in this bill ends that confusion. It states that these child care subsidies, shall not be included in income, for tax purposes.

As the demographics of the members of the military have changed, so has the policy of the Department of Defense. Now it is time that we follow with these changes to the tax code.

I compliment Senator Landrieu of Louisiana, who developed this proposal, and insisted on its inclusion in this military tax bill.

It is one more reason the Senate should pass this legislation today.

I yield the floor.

Mr. President, I rise today to support the Coastal Zone Enhancement Reauthorization Act of 2003. I am pleased to have bipartisan support for this bill and to be joined by the chair and ranking Democrats of the Commerce Committee and the Subcommittee on Oceans and Fisheries. Senators McCain, Hollings, and Kerry have been instrumental in developing the wide range of support for this bill, and I appreciate their interest in improving the way we manage our Nation's valuable coastal and marine resources.

In 1972, Congress responded to concerns over the increasing demands being placed on our nation's coastal regions and resources by enacting of the Coastal Zone Management Act. These pressures have greatly increased since the act was originally authorized.

Although the coastal zone only comprises 10 percent of the contiguous U.S. land area, nearly 53 percent of all Americans live in these coastal regions, and more than 3,600 people are relocating there annually. This small portion of our country supports approximately 361 sea-ports, contains most of our largest cities, and serves as critical habitat for a variety of plants and animals.

This bill reauthorizes and makes a number of important improvements to the Coastal Zone Management Act. Under the authorities in this act, coastal States can choose to participate in the voluntary Federal Coastal Zone Management Program. States then design individual coastal zone management programs, taking their specific needs and problems into account, and then receive federal matching funds to help carry out their program plans. State coastal zone programs manage issues ranging from public access to beaches, to protecting habitat, to coordinating permits for coastal development.

As voluntary program, the framework of the CZMA provides guidelines for State plans to address multiple environmental, societal, cultural, and economic objectives.

The health of our coastal zone is vitally important not only to the multitude of plants and animals that inhabit this area, but also to the people and communities that are dependent on it for their livelihood. For example, coastal areas provide habitat for more than 75 percent of the U.S. commercial fisheries and 85 percent of the U.S. recreational fisheries. In turn, the commercial fishing industry, along with value- added services included, contributes $40 billion to the U.S. economy each year. Recreational fishing adds another $25 billion to the economy.

The Coastal Zone Management Program can be used to help balance the conservation of fish stocks with the demands that we place on coastal areas. In my State of Maine, a $150,000 study of the State's cargo needs led to a $27 million bond issue for cargo port improvements. As a result, Bath Iron Works built a new $45 million facility, creating 1,000 new jobs. Similar work needs to be done with our fishing ports so that when fisheries stock rebound, the fishermen will be able to realize the returns.

Unfortunately our precious coastal resources are being threatened by environmental problems, including non-point source pollution. Although the States are currently taking action to

address this problem under existing authority, the Coastal Zone Enhancement Reauthorization Act of 2003 encourages, but does not require, them to take additional steps to combat these problems through the Coastal Community Program.

This initiative provides States with the funding and flexibility needed to deal with their specific nonpoint source pollution problems. The States will have the ability to implement local solutions to a broad array of local problems. Many States are actively engaged in nonpoint source pollution programs and all can benefit from this new tool I am proud to say that Maine has risen to the challenge and already spends close to 30 percent of its funding on such activities. This has led to the reopening of hundreds of acres of shellfish beds and the restoration of fish nursery areas. Even with these successes, Maine is looking forward to this new opportunity to do more.

The Coastal Community Program in this bill also aides States in developing and implementing creative initiatives to deal with problems other than nonpoint source pollution. It increases Federal and State support of Local community-based programs that address coastal environmental issues, such as the impact of development and sprawl on coastal uses and resources. This type of bottom-up management approach is critical.

The Coastal Zone Enhancement Reauthorization Act of 2003 significantly increases the authorization levels for the Coastal Zone Management Program, allowing States to better address their coastal management plan goals. The bill authorizes $135.5 million for fiscal year 2004, $141 million for fiscal year 2005 and increases the authorization levels by $5.5 million each year through fiscal year 2008. This increase in funding is necessary to allow the coastal programs to reach their full potential.

Additionally, the Coastal Zone Enhancement Reauthorization Act of 2003 increases authorization for the National Estaurine Research Reserve System, NERRS, to $13 million in fiscal year 2004 with an additional $1 million increase each year through fiscal year 2008. NERRS is a network of reserves across the country that are operated as a cooperative Federal-State partnership.

Currently, there are 25 reserves in 22 States. They provide an important opportunity for long-term research and education in these ecosystems. Additional funds will help strengthen this nationwide program which has not received increased funding commensurate with the addition of new reserves.

I wish to address a very serious problem facing the Coastal Zone Management Program that we have tried to rectify in this bill. The Administrative Grant Program, section 306, serves as the base funding mechanism for the States' coastal zone management programs. The amount of funding each State receives is determined by a formula that takes into account both the length of the coastline and the population of each State.

However, sine 1992, the Appropriations Committee has imposed a $2 million dollar cap per State on administrative grants. This was an attempt to ensure equitable allocation to all the participating States. Over the past 8 years, appropriations for administrative grants have increased by $19 million, yet the $2 million cap has remained. The result has been an inequitable distribution of these new funds. By fiscal year 2000, 13 States had reached this arbitrary $2 million cap. These 13 States account for 83 percent of our Nation's coastline and 76 percent of our coastal population.

It is not equitable to have the 13 States with the largest coastlines and populations stuck at a $2 million dollar cap, despite major overall funding increases. While smaller States have enjoyed additional programmatic success due to an influx of funding, some of the larger States have stagnated.

In an attempt to reassure members of the Appropriations Committee that a fair distribution of funds can occur without this hard cap in place, I have worked with Senator Hollings to develop language that has been included in this bill that directs the Secretary of Commerce to ensure equitable increases or decreases between funding years for each State. It further requires that States should not experience a decrease in base program funds in any year when the overall appropriations increase.

I thank Senator Hollings for his assistance in resolving this matter and his commitment over the years to ensuring that the states are treated fairly.

The Coastal Zone Management Program enjoys wide support among all of the coastal States due to its history of success. This support has been clearly demonstrated by the many members of the Commerce Committee who have worked with me to strengthen this program over the past several years.

I thank Senator Kerry, the ranking Democrat of the Oceans and Fisheries Subcommittee, for his hard work and support of this bill. I would also like to express my appreciation to Senator McCain, the chairman of the Commerce Committee, and Senator Hollings, the ranking Democrat of the Committee, for their support of this measure and for their willingness to discharge this bill out of the committee so that we may begin working with our colleagues in the House of Representatives to enact this critical piece of legislation.

This is a solid, reasonable, and a realistic bill that enjoys bipartisan support on the Commerce Committee. It is time that we now turn to legislation reauthorizing a program with a long track record of preserving our coastal environment while allowing sensible development.

I am pleased to support this legislation that will provide the States with the necessary funding and framework to meet the challenges facing our coastal communities in the 21st Century. I urge my colleagues to support.

Mr. President, I rise today to introduce the Harmful Algal Bloom and Hypoxia Amendments Act of 2003. This bill continues and builds upon the research efforts established in 1998 by the Harmful Algal Bloom and Hypoxia Research and Control Act.

I am very pleased to continue working with my friend and co-sponsor Senator Breaux on this important issue. He and I represent coastal States that are directly affected by harmful algal bloom outbreaks and hypoxia, and we see the ecological and economic damage, as well as the risks to human health, that are caused by these events.

In Maine, for example, harmful algal blooms lead to paralytic shellfish poisoning, a potentially fatal neurological disorder. When humans eat shellfish that have fed on algae in the genus Alexandrium, they are exposed to the toxins that have accumulated in the fish as a result of the algae. Along with human, fish and marine mammals suffer and die from this exposure. This phenomenon, which occurs along thousands of miles of U.S. coastline, has increased dramatically in the Gulf of Maine in the last 20 years.

Although we have learned a great deal about harmful algal blooms and hypoxia in recent years, we still have a long way to go in understanding, predicting, and mitigating these events. Massive fish kills still occur along our coastlines on almost a regular basis, leading to extensive impacts on fish and shellfish populations and fishing industries. Beach-goers and anglers are still being warned of ``no swimming'' and ``no fishing'' alerts when conditions pose a threat to human health. The Woods Hole Oceanographic Institution, in a 2000 study, estimated the annual economic impact from harmful algae to be $49 million, in lost tourism, fishing, and health costs. According to the National Oceanic and Atmospheric Administration, in the U.S. approximately $1 billion could be lost in the next decade due to harmful algae.

Harmful algal blooms and hypoxia present enormous challenges to marine resource managers. For example, consider what happens in the Gulf of Mexico. Thirty-one States drain into the Mississippi River, and the runoff from this massive watershed is carried into the gulf. When the waters heat up in the summer, the heavy loads of nutrients in this runoff likely contribute to massive algal blooms. When these algae die and decompose they are consumed by bacteria, which depletes oxygen from the water. If the algal blooms are extensive enough, they will essentially remove all oxygen from the water. No sea life can live under these conditions, which creates a massive area in the water column known as the

``dead zone.'' At that point, all we can really do is wait it out. Clearly, we need to equip our coastal and ocean managers with better tools for predicting, minimizing, and mitigating these outbreaks.

Harmful algal blooms and hypoxia are just as much of a problem now as they were in 1998, when we passed the original bill. It is clear that these problems have not gone away. Algal blooms are still prevalent around the country, the dead zone still occurs each summer in the Gulf of Mexico, and the management and mitigation measures we set the framework for in our 1998 bill still need to be realized.

Our 1998 bill authorized a cross-section of research and monitoring activities on harmful algal blooms and hypoxia. These activities were to encompass basic and applied sciences, looking at the distribution and frequency of outbreaks, as well as how they may be better mitigated and managed. This research, however, was never fully funded at the authorized amounts for research and monitoring, so many of these research activities still need to occur, and many on-going projects need to continue. These amendments would authorize the funding that will reignite these scientific activities.

Our 1998 bill also codified an Interagency Task Force, chaired by the Department of Commerce. Through this group, experts from the Environmental Protection Agency, the Department of Agriculture, the Department of the Interior, the Department of Health and Human Services, and numerous other appropriate Federal agencies were able to start the long process of collectively understanding and seeking solutions to many aspects of harmful algal blooms and hypoxia. This Task Force spearheaded a technical assessment of the causes and consequences of the northern Gulf of Mexico dead zone, an action plan to eliminate this dead zone, a national assessment of harmful algal blooms, and a national assessment of hypoxia. I would like to express my appreciation for the hard work and accomplishments of this group, yet I realize--as do they--that much more needs to be done.

The 1998 bill allowed the President to disestablish the Task Force after submission of their reports. Considering the great challenges that lay before us and this Task Force, we need to keep this group intact so that they can follow through on their previous recommendations and continue much of their ongoing collaborative efforts. This bill would repeal the Task Force disestablishment clause in the 1998 bill.

This reauthorization continues to seek the valuable contributions of Task Force members on a response and prediction action plan to protect environmental and public health from impacts of harmful algal blooms. This plan would review prediction techniques, develop innovative response measures, and include incentive-based partnership approaches. The Task Force would contribute to this plan, as would coastal zone management experts from State and local governments, Indian tribes, industries, universities, and non-governmental organizations. In developing this process, we mirrored the process used for the dead zone action plan, one of the products of the Task Force from the 1998 bill, to ensure widespread public participation and involvement of the coastal governors.

The dead zone action plan recommended a national framework for reducing nutrients entering the Mississippi River as well as regional plans to implement any needed measures. While a national framework is essential for facilitating the widespread changes that are needed, it is at the local and regional level that solutions must be developed and implemented. The regional plans will help avoid a one-size-fits-all approach, since local and regional variations in the types of land use, landscape geology, and community input should be taken into account when carrying out nutrient reduction and outbreak mitigation measures of this magnitude. By tailoring mitigation and management measures to each location, the overall approach can be more effective.

Local and regional assessments are a key component of this reauthorization as well. Coastal states, Indian tribes, and local governments would be able to request these local and regional assessments of hypoxia and harmful algal blooms, so they can better understand the causes, impacts, and mitigation alternatives for these outbreaks. By having the Commerce Department and the Task Force provide and assist in these assessments, local and regional communities can be more empowered to take action on reducing the magnitude and impacts of these outbreaks.

This bill would authorize $26 million in FY04, and $26.5 million in FY05, and $27 million in FY06. These funding levels reflect modest increases in some of the research and monitoring programs authorized in the 1998 bill and provide funding for the new assessments and implementation of their recommendations.

This reauthorization enables collaborative, science-based research efforts that can help us to better understand how to predict and mitigate harmful algal blooms and hypoxia events. It facilitates action at the local and regional levels, which is a key element for effectively addressing and minimizing the adverse ecological, economic, and health impacts of these outbreaks. I wish to thank Senator Breaux for his continued vigilance and important contributions on this matter, and I encourage my colleagues to support this bill.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to introduce again legislation to eliminate one of the great inconsistencies in the Internal Revenue Code.

The bill I am introducing today with Senator Bennett is designed to restore some internal consistency to the tax code as it applies to art and artists. No one has ever said that the tax code is fair even though it has always been a theoretical objective of the code to treat similar taxpayers similarly.

The bill I am introducing today would address two areas where similarly situated taxpayers are not treated the same.

Internal inconsistency #1 deals with the long-term capital gains tax treatment of investments in art and collectibles. If a person invests in stocks or bonds, holds the asset for the requisite period of time, and sells at a gain, the tax treatment is long term capital gains. The top capital gains tax rate is 20 percent, 18 percent, if the asset is held for five or more years. However, if the same person invests in art or collectibles the top rate is hiked up to 28 percent. Art for art's sake should not incur an additional 40 percent tax bill simply for revenue's sake. That is a big impact on the pocketbook of the beholder.

Art and collectibles are alternatives to financial instruments as an investment choice. To create a tax disadvantage with respect to one investment compared to another creates an artificial market and may lead to poor investment allocations. It also adversely impacts those who make their livelihood in the cultural sectors of the economy.

Santa Fe, NM, is the third largest art market in the country. We have a diverse colony of artists, collectors and gallery owners. We have fabulous Native American rug weavers, potters, and carvers. Creative giants like Georgia O'Keeffe, Maria Martinez, E.L. Blumenshein, Allan Houser, R.C. Gorman, and Glenna Goodacre have all chosen New Mexico as their home and as their artistic subject. John Nieto, Wilson Hurley, Clark Hulings, Veryl Goodnight, Bill Acheff, Susan Rothenberg, Bruce Nauman, Agnes Martin, Doug Hyde, Margaret Nez, Dan

Ostermiller are additional examples of living artists creating art in New Mexico.

Art, antiques, and collectibles are a $12 to $20 billion annual industry nationwide. In New Mexico, it has been estimated that art and collectible sales range between $500 million and $1 billion a year.

Economists have always been interested in the economics of the arts. Adam Smith is a well-known economist. He was also a serious, but little-known essayist on painting, dancing, and poetry. Keynes was a passionate devotee of painting.

Even the artistically inclined economists found it difficult to define art within the context of economic theory. When asked to define jazz, Louis Armstrong replied: ``If you gotta ask, you ain't never going to know.''

A similar conundrum has challenged Galbraith and other economists who have grappled with the definitional issues associated with bringing art within the economic calculus. Original art objects are, as a commodity group, characterized by a set of attributes: every unit of output is differentiated from every other unit of output; art works can be copied but not reproduced; the cultural capital of the Nation has significant elements of public good.

Because art works can be resold, and their prices may rise over time, they have the characteristics of financial assets, and as such may be sought as a hedge against inflation, as a store of wealth, or as a source of speculative capital gain. A study by Keishiro Matsumoto, Samuel Andoh and James P. Hoban, Jr. assessed the risk-adjusted rates of return on art sold at Sotheby's during the 14-year period ending September 30, 1989. They concluded that art was a good investment in terms of average real rates of return. Several studies found that rates of return from the price appreciation on paintings, comic books, collectibles and modern prints usually made them very attractive long- term investments.

William Goetzmann when he was at the Columbia Business School constructed an art index and concluded that painting price movements and stock market fluctuations are correlated.

I conclude that with art, as well as stocks, past performance is no guarantee of future returns but the gains should be taxed the same.

In 1990, the editor of Art and Auction asked the question: ``Is there an `efficient' art market?'' A well-known art dealer answered ``Definitely not. That's one of the things that makes the market so interesting.'' For everyone who has been watching world financial markets lately, the art market may be a welcome distraction.

Why do people invest in art and collectibles? Art and collectibles are something you can appreciate even if the investment doesn't appreciate. Art is less volatile. If buoyant and not so buoyant bond prices drive you berserk and spiraling stock prices scare you, art may be the appropriate investment. Because art and collectibles are investments, the long-term capital gains tax treatment should be the same as for stocks and bonds. This bill would accomplish that.

Artists will benefit. Gallery owners will benefit. Collectors will benefit. And museums benefit from collectors. About 90 percent of what winds up in museums like the New York's Metropolitan Museum of Art comes from collectors.

Collecting isn't just for the hoyty toity. It seems that everyone collects something. Some collections are better investments than others. Some collections are just bizarre. The internet makes collecting big business.

The flea market fanatics are also avid collectors. In fact, people collect the darndest things. Books, duck decoys, chia pets, snowglobes, thimbles, handcuffs, spectacles, baseball cards, and guns.

For most of these collections, capital gains isn't really an issue, but you never know. You may find that your collecting passion has created a tax predicament, to phrase it politely. Art and collectibles are tangible assets. When you sell them, capital gains tax is due on any appreciation over your purchase price.

The bill provides capital gains tax parity because it lowers the top capital gains rate from 28 percent to 20 percent, 18 percent if the asset has been held for five or more years.

Internal inconsistency #2 deals with the charitable deduction for artists donating their work to a museum or other charitable cause. When someone is asked to make a charitable contribution to a museum or to a fund raising auction it shouldn't matter whether you are an artist or not. Under current law, however, it makes a big difference. As the law stands now, an artist/creator can only take a deduction equal to the cost of the art supplies. The bill I am introducing will allow a fair market deduction for the artist.

It's important to note that this bill includes certain safeguards to keep the artist from ``painting himself a tax deduction.'' This bill applies to literary, musical, artistic, and scholarly compositions if the work was created at least 18 months before the donation was made, has been appraised, and is related to the purpose or function of the charitable organization receiving the donation. As with other charitable contributions, it is limited to 50 percent of adjusted gross income, AGI. If it is also a capital gain, there is a 30 percent of AGI limit. I believe these safeguards bring fairness back into the code and protect the Treasury against my potential abuse.

When I introduced this legislation in the last Congress, the Committee on Joint Tax estimated that revenue for the capital gains provision was $2.3 billion over ten years and for the charitable deduction was approximately $48 million over ten years.

I hope my colleagues will help me put the internally consistent into the Internal Revenue Code for art's sake.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I am pleased to be joined by Senator Bingaman in introducing legislation that declares the United States holds certain public domain lands in trust for the Pueblos of San Ildefonso and Santa Clara in New Mexico. This body, in the 107th Congress, passed this legislation by unanimous consent. The House did not act on it's companion and so we are here today to reintroduce the legislation.

In 1988 the Bureau of Land Management, BLM, pursuant to the Federal Lands Policy and Management Act, declared approximately 4,484 acres located in the eastern foothills of the Jemez Mountains in north central New Mexico, including portions of Garcia and Chupadero Canyons, to be ``disposal property.'' The Garcia Canyon surplus lands qualify for disposal partially because the track is an isolated tract of land almost inaccessible to the general public. It is bordered on three sides by the reservations of Santa Clara Pueblo and the Pueblo of San Ildefonso, and by U.S. Forest Service land on the remaining side. The only road access consists of unimproved roads through the two Pueblo's reservations. These factors have resulted in minimal or no public usage of the Garcia Canyon surplus lands in recent decades.

I understand that currently there are no resource permits, leases, patents or claims affecting these lands; nor is it likely that any significant minerals exist with the Garcia Canyon transfer lands. The Garcia Canyon transfer lands contain a limited amount of lesser quality forage for livestock and have not been actively grazed for over a decade. However, the Garcia Canyon surplus lands constitute an important part of the ancestral homelands of the Pueblos of Santa Clara and San Ildefonso.

Santa Clara and San Ildefonso are two of the Tewa-speaking federally- recognized Indian Pueblos of New Mexico. Both Pueblos have occupied and controlled the areas where they are presently located many centuries before the arrival of the first Europeans in the area in the late 16th century. Their homelands are defined by geographical landmarks, cultural sites, and other distinct places whose traditional Tewa names and locations have been known and passed down in each Pueblo through the generations. Based upon these boundaries, about 2,000 acres of the Garcia Canyon surplus lands is within the aboriginal domain of the Pueblo of San Ildefonso. The remaining approximately 2,484 acres are in Santa Clara's aboriginal lands.

The Bureau of Land Management currently seeks to dispose of the Garcia Canyon surplus lands and the Pueblos of Santa Clara and San Ildefonso seek to obtain these lands. In addition, the BLM and Interior Department for years have supported the transfer of the land to the two Pueblos, provided the Pueblos agree upon a division of the Garcia Canyon surplus lands. In response, the two Pueblos signed a formal agreement affirming the boundary between the respective parcels on December 20, 2000.

The Pueblos of Santa Clara and San Ildefonso have worked diligently in arriving at this agreement. They have also worked collaboratively in seeking community support and garnering supporting resolutions from Los Alamos, Rio Arriba and Santa Fe Counties, the National Congress of American Indians and supporting letters from the National Audubon Society's New Mexico State Office, the Quivira Coalition and the Santa Fe Group of the Sierra Club.

This unique situation presents a win-win opportunity to support more efficient management of public resources while restoring to tribal control isolated tracts of federal disposal property. Upon transfer, the Pueblos of Santa Clara and San Ildefonso intend to maintain these lands in their natural state and use them for sustainable traditional purposes including cultural resource gathering, hunting and possible livestock grazing. Where appropriate, both tribes are interested in performing work to restore and improve ecosystem health, particularly to support habitat for culturally significant animal and plant species. Both Pueblos have experience Natural Resource Management and Environmental Protection programs and are capable of managing these lands for both ecologic health and community benefits.

We want to secure Congressional authorization to transfer control of these lands to the two Pueblos, with legal title being held in trust by the Secretary of the Interior for each of the Pueblos for their respective portions of the property. I urge my colleagues to support this legislation as they did last term. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I am proud to be an original cosponsor of the Armed Forces Tax Fairness Act of 2003, H.R. 1307. This important legislation provides Congress with the opportunity to demonstrate our firm resolve to support the men and women who sacrifice so much in the service of our country. I applaud Chairman Grassley's and ranking member Baucus' efforts, and those of my colleagues who have worked so hard on these initiatives, in some cases, for many years. I want to particularly thank Senator DeWine for his stalwart leadership on the above-the-line deduction for expenses incurred by our National Guard and Reserve service members who have to travel great distances for their duty and training.

This long overdue tax benefit for our true citizen-soldiers is even more important today considering these facts: During each of the past 5 years, Reserve and National Guard service members have performed between 12 and 13.5 million duty days in support of the Active Force. These numbers are in a direct contrast to 1990, when 1 million duty days were performed at a time when there were 25 percent more reservists.

Reservists and National Guardsmen currently comprise more than half of the airlift crews and 85 percent of the sealift personnel that are needed to move troops and equipment in either wartime or peacetime operations. In addition, Reserve medical and construction battalions and other specialists are critical to a wide range of operations. Efforts by the Reserve components to move beyond a traditional wartime backup role and to provide peacetime support to active units are thus desirable. The Naval Reserve and Air Force Reserve components have made particularly impressive progress in this area.

The Reserve components are performing many vital tasks: From direct involvement in military operations to liberate Iraq in the air, on the ground, and on the sea; to guarding nuclear power plants in the United States; to providing support to the war on terrorism through guarding, interrogating, and providing medical service to detainees in Guantanamo Bay Cuba; to rebuilding schools in hurricane-stricken Honduras and fighting fires in our Western States; to overseeing civil affairs in Bosnia; to augmenting aircraft carriers short on Active-Duty sailors with critical skilled enlisted ratings during at-sea exercises as well as periods of deployment.

I believe that the civilian and uniformed leadership of our Armed Forces and the Congress must recognize this involvement. At a minimum, Congress must provide equality in benefits for Reserve component service members

when they put on the uniform and perform their weekend drills or other critical training evolutions. Quality of life is not just an Active- Duty obligation that Congress must provide. Reservists, on duty, who resemble their Active-Duty counterparts during training evolutions and are deployed at times around the world, should be treated equally when the administration and Congress provide for quality of life benefits.

I would like to take a moment to discuss a provision in the bill that I have personally worked on for some time. Section 101 would allow members of the uniformed services, as well as State Department personnel who are away on extended duty overseas, to qualify for the same tax relief on the profit generated when they sell their main residence as other Americans. I am pleased to announce that Secretary of State Colin Powell fully supports this legislation, and this legislation enjoys overwhelming support by the senior uniformed leadership, the Joint Chiefs of Staff, as well as the Office of Management and Budget Director Mitch Daniels, the 31-member associations of the Military Coalition representing 5.5 million veterans, the American Foreign Service Association, and the American Bar Association.

The average American participates in our country's growth through home ownership. Appreciation in the value of a home allows everyday Americans to participate in our country's prosperity. Fortunately, the Taxpayer Relief Act of 1997 recognized this and provided this break to lessen the amount of tax most Americans will pay on the profit they make when they sell their homes. Unfortunately, the 1997 home sale provision unintentionally discourages home ownership among members of the Uniformed and Foreign Services.

Under the 1997 Act the taxpayer must meet two requirements to qualify for this tax relief. The taxpayer must: (1) own the home for at least 2 of the 5 years preceding the sale, and (2) live in the home as their main home for at least 2 years of the last 5 years. The second part of this eligibility test unintentionally and unfairly prohibits many of the women and men who serve this country overseas from qualifying for this beneficial tax relief.

Constant travel across the United States and abroad is inherent in the uniformed and foreign services. Nonetheless, some members of these services choose to purchase a home in our communities, even though they will not live there much of the time. Under current law, if they do not have a spouse who resides in the house during their absence, they will not qualify for the full benefit of the home sales provision, because no one ``lives'' in the home for the required period of time. The law is prejudiced against families that serve our Nation abroad. They would not qualify for the home sales exclusion because neither spouse ``lives'' in the house for enough time to qualify for the exclusion.

Section 101 simply remedies this inequality in there 1997 law. It amends the Internal Revenue Code so that members of the uniformed and foreign services will be considered to be using their house as their main residence for any period that they are assigned overseas in the execution of their duties. In short, they will be deemed to be using their house as their main home, even if they are stationed in Bosnia, the Persian Gulf, in the ``no man's land,'' commonly called the DMZ between North and South Korea, or anywhere else they are assigned.

With Operation Iraqi Freedom, the global war on terrorism, and continuing operations in Afghanistan, Bosnia, and Kosovo, our Armed Forces are deployed to an unprecedented number of locations. They are away from their primary homes, protecting and furthering the freedoms we Americans hold so dear. It is wrong to penalize them for doing their duty. Military service entails sacrifice. We must do all that we can to ensure that Congress is not adding to the burdens service men and women bear with an unfair Tax Code. This narrowly tailored remedy will grant equal tax relief to the members of our uniformed and foreign services, and restore fairness and consistency to our increasingly complex Tax Code.

This military tax package is a clear show of support for our men and women in uniform. It is the right thing to do, and I hope that all my colleagues will support this critical measure.

Mr. President, I know that my friends and colleagues, Senator Grassley from Iowa and Senator Baucus from Montana, share my concerns about the safety and welfare of our troops in the field and their families at home. With the deployment of the 389th Engineer Battalion and the 106th Aviation Unit from the Iowa Guard and 495th Transportation Company and 411th Support Detachment from the Montana Guard, no one can doubt that the people of the Hawkeye and Big Sky States are making very important contributions to our national defense.

However, I wonder if my friends saw the article in the Washington Post on March 4, entitled ``Called-Up Reservists Take Big Hit in Wallet; Families Struggle on Military Salary.'' I ask unanimous consent that this article be printed in the Record.

This Post story captures the reality of reservists who are called to war and are asked to make the double sacrifice of enormous pay cuts to serve their country.

Because of stories like these in my home State, and across the country, I introduced S. 442, the Reservists and Guardsmen Pay Protection Act. This bill would provide a tax credit to employers who take the patriotic step of covering the difference between their employee's pay and as a civilian, and their pay as a soldier. The tax cut would cover 50 percent of the amount, and last for 1 year. Additionally, the Senate just passed a budget resolution that calls for $350 billion in tax cuts over 10 years. Certainly, we should ensure that there is room in this tax cut to both promote economic growth and benefit the men and women in uniform willing to risk their lives in defense of this great Nation.

As the chairman and ranking member know, I have been a strong supporter of Senate Bill 351, the Armed Forces Tax Fairness Act. It contains a provision that I introduced as separate legislation relating to dependent care benefits for military personnel, and I very much appreciate Senator Grassley's and Senator Baucus' effort to include these provisions in the bill.

However, I think it would be a terrible mistake to ignore this looming question that affects so many Reservists and Guardsmen, especially after agreeing to $350 billion in tax cuts. S. 442 is both stimulative and necessary for the men and women on the front lines, as well as their families back at home. So, I ask my friends, the distinguished chairman and ranking member of the Senate Finance Committee, can anything be done to address this problem?

Mr. President, I appreciate the chairman's offer and the ranking member's offer, and look forward to working with them to include this important legislation in the reconciliation bill this year.

Mr. President, our Nation has always risen to the challenges of war. During such times, Congress has spared no expense to make sure that our dedicated armed services personnel have everything they need to fight and win. We will always meet this obligation.

But the men and women on the battlefield have families back home and there is more that we can do for them. I am talking about the families of the troops from Barksdale, Belle Chasse, and Fort Polk in Louisiana, as well as our guardsmen from all across the State. Every one of my colleagues represents military families. We need to make sure that we support them as well.

That is why today I would like to add my voice of strong support for the Armed Forces Tax Fairness Act of 2003. I congratulate Senator Grassley, the Finance Committee chairman, and Senator Baucus, the ranking member, for bringing this bill to the floor today. I urge my colleagues to vote in favor of this legislation.

This bill contains several provisions that would reduce taxes for members of our armed services. The bill would clarify that childcare benefits provided to military personnel are to be excluded from income, a provision based on legislation that I introduced earlier in this Congress, S. 235. In addition, the bill excludes all death gratuity payments from the income of surviving family members. Military and Foreign Service personnel would receive capital gains tax relief when they have to sell a home and move because of reassignment or deployment orders. National Guard and Reserve members would receive an above-the- line deduction for overnight expenses when they travel more than 100 miles from home to attend National Guard and Reserve meetings. There are other important provisions in this bill that give needed tax relief to our families.

I had hoped to include language in this bill to give a much-needed tax break to the employers for Reserve personnel. When a reservist gets called up, as many have, to go fight in Iraq, employers have to keep his or her job open, but do not have to pay a salary to the reservist while they are gone. This can cause an extreme hardship on a reservist's family. While the reservist receives military pay, in many cases this is much less than their civilian pay. Some employers, but not all, will pay the difference between the civilian and military pay, but they do not receive any benefit for this act of patriotism. I introduced S. 442, the Reservist and Guardsmen Pay Protection Act, to give a 50 percent tax credit to these patriotic employers.

I regret that we were not able to include my bill in the Armed Forces Tax Fairness Act. But I deeply appreciate the chairman and ranking member for their commitment to address my tax credit proposal in the future reconciliation package. I look forward to working with them.

Again our men and women in the Armed Forces and their families deserve our support. For all these reasons and more, this legislation deserves to pass. I urge my colleagues to join me in supporting this bill.