Improving Access to Education for Students Who Are Homeless or in Foster Care Act

Mr. President, this week, American taxpayers face another Federal income tax deadline. The date of April 15 stabs fear, anxiety, and unease into the hearts of millions of Americans. Every year during ``tax season,'' millions of Americans spend their evenings poring over page after page of IRS instructions, going through their records looking for information and struggling to find and fill out all the appropriate forms on the Federal tax returns. Americans are intimidated by the sheer number of different tax forms and their instructions, many of which they may be unsure whether they need to file. Given the approximately 325 possible forms, not to mention the instructions that accompany them, simply trying to determine which form to file can in itself be a daunting and overwhelming task. According to a 2002 study conducted by the Tax Foundation, American taxpayers, including businesses, spend more than 5.8 billion hours and $194 billion each year in complying with tax laws. That works out to more than $2,400 per U.S. household. Much of this time is spent burrowing through IRS laws and regulations which fill 17,000 pages and have grown from 744,000 words in 1955 to over 6.9 million words in 2000. By contrast, the Pledge of Allegiance has only 31 words, the Gettysburg Address has 267 words, the Declaration of Independence has about 1,300 words, and the Bible has only about 1,773,000 words.

The majority of taxpayers still face filing tax forms that are far too complicated and take far too long to complete. According to the estimated preparation time listed on the forms by the IRS, the 2004 Form 1040 is estimated to take 13 hours and 35 minutes to complete. Moreover this does not include the estimated time to complete the accompanying schedules, such as Schedule A, for itemized deductions, which carries an estimated preparation time of 5 hours, 37 minutes, or Schedule D, for reporting capital gains and losses, shows an estimated preparation time of 6 hours, 10 minutes. Moreover, this complexity is getting worse each year. Just from 2000 to 2004 the estimated time to prepare Form 1040 jumped 34 minutes.

It is no wonder that well over half of all taxpayers, 56 percent according to a recent survey, now hire an outside professional to prepare their tax returns for them. However, the fact that only about 30 percent of individuals itemize their deductions shows that a significant percentage of our taxpaying population believes that the tax system is too complex for them to deal with. We all understand that paying taxes will never be something we enjoy, but neither should it be cruel and unusual punishment. Further, the pace of change to the Internal Revenue Code is brisk--Congress made about 9,500 tax code changes in the past thirteen years. And we are far from being finished. Year after year, we continue to ask the same question--isn't there a better way?

My flat tax legislation would make filing a tax return a manageable chore, not a seemingly endless nightmare, for most taxpayers. My flat tax legislation will fundamentally revise the present tax code, with its myriad rates, deductions, and instructions. This legislation would institute a simple, flat 20 percent tax rate for all individuals and businesses. This proposal is not cast in stone, but is intended to move the debate forward by focusing attention on three key principles which are critical to an effective and equitable taxation system: simplicity, fairness and economic growth.

My flat tax plan would eliminate the kinds of frustrations I have outlined above for millions of taxpayers. This flat tax would enable us to scrap the great majority of the IRS rules, regulations and instructions and delete most of the 6.9 million words in the Internal Revenue Code. Instead of billions of hours of non-productive time spent in compliance with, or avoidance of, the tax code, taxpayers would spend only the small amount of time necessary to fill out a postcard- sized form. Both business and individual taxpayers would thus find valuable hours freed up to engage in productive business activity, or for more time with their families, instead of poring over tax tables, schedules and regulations.

My flat tax proposal is dramatic, but so are its advantages: a taxation system that is simple, fair and designed to maximize prosperity for all Americans. A summary of the key advantages are:

Simplicity: A 10-line postcard filing would replace the myriad forms and attachments currently required, thus saving Americans up to 5.8 billion hours they currently spend every year in tax compliance.

Cuts Government: The flat tax would eliminate the lion's share of IRS rules, regulations and requirements, which have grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages currently. It would also allow us to slash the mammoth IRS bureaucracy of approximately 117,000 employees, creating opportunities to put their expertise to use elsewhere in the government or in private industry.

Promotes Economic Growth: Economists estimate a growth due to a flat tax of over $2 trillion in national wealth over seven years, representing an increase of approximately $7,500 in personal wealth for every man, woman and child in America. This growth would also lead to the creation of 6 million new jobs.

Increases Efficiency: Investment decisions would be made on the basis of productivity rather than simply for tax

avoidance, thus leading to even greater economic expansion.

Reduces Interest Rates: Economic forecasts indicate that interest rates would fall substantially, by as much as two points, as the flat tax removes many of the current disincentives to savings.

Lowers compliance costs: Americans would be able to save or invert up to $194 billion they currently spend every year in tax compliance.

Decreases fraud: As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud, which now amounts to over $120 billion in uncollected revenue annually.

Reduces IRS costs: Simplification of the tax code will allow us to save significantly on the $10 billion annual budget currently allocated to the Internal Revenue Service.

The most dramatic way to illustrate the flat tax is to consider that the income tax form for the flat tax is printed on a postcard--it will allow all taxpayers to file their April 15 tax returns on a simple 10- line postcard. This postcard will take 15 minutes to fill out.

At my town hall meetings across Pennsylvania, there is considerable public support for fundamental tax reform.

This is a win-win situation for America because it lowers the tax burden on the taxpayers in the lower brackets. For example in the 2004 tax year, the standard deduction is $4,850 for a single taxpayer, $7,150 for a head of household and $9,700 for a married couple filing jointly, while the personal exemption for individuals and dependents is $3,100. Thus, under the current tax code, a family of four which does not itemize deductions would pay taxes on all income over $22,100--that is personal exemptions of$12,400 and a standard deduction of $9,700. By contrast, under my flat tax bill, that same family would receive a personal exemption of $30,000, and would pay tax on only income over that amount.

The tax loopholes enable write-offs of some $393 billion a year. What is eliminated under the flat tax are the loopholes, the deductions in this complicated code which can be deciphered, interpreted, and found really only by the $500-an-hour lawyers. That money is lost to the taxpayers. $120 billion would be saved by the elimination of fraud because of the simplicity of the Tax Code, the taxpayer being able to find out exactly what they owe.

This bill is modeled after a proposal organized and written by two very distinguished professors of law from Stanford University, Professor Hall and Professor Rabushka. Their model was first introduced in the Congress in the fall of 1994 by Majority Leader Richard Armey. I introduced the flat tax bill--the first one in the Senate--on March 2, 1995, Senate bill 488. On October 27, 1995, I introduced a Sense of the Senate Resolution calling on my colleagues to expedite Congressional adoption of a flat tax. The Resolution, which was introduced as an amendment to pending legislation, was not adopted. I reintroduced my legislation in the 105th Congress with slight modifications to reflect inflation-adjusted increases in the personal allowances and dependent allowances. I re-reintroduced the bill on April 15, 1999--income tax day--in a bill denominated as S. 822. I then introduced my flat tax legislation as an amendment to S. 1429, the Tax Reconciliation bill; the amendment was not adopted. During the 108th Congress, I introduced my flat tax legislation once again on April 11, 2003. On May 14, 2003, I offered an amendment to the Tax Reconciliation legislation urging the Senate to hold hearings and consider legislation providing for a flat tax; this amendment passed by a vote of 70 to 30 on May 15, 2003. I then testified on this issue at a subsequent hearing held by the Joint Economic Committee on November 5, 2003.

Over the years and prior to my legislative efforts on behalf of flat tax reform, I have devoted considerable time and attention to analyzing our nation's tax code and the policies which underlie it. I began the study of the complexities of the tax code over 40 years ago as a law student at Yale University. I included some tax law as part of my practice in my early years as an attorney in Philadelphia. In the spring of 1962, I published a law review article in the Villanova Law Review, ``Pension and Profit Sharing Plans: Coverage and Operation for Closely Held Corporations and Professional Associations,'' 7 Villanova L. Rev. 335, which in part focused on the inequity in making tax-exempt retirement benefits available to some kinds of businesses but not others. It was apparent then, as it is now, that the very complexities of the Internal Revenue Code could be used to give unfair advantage to some. Einstein himself is quoted as saying ``the hardest thing in the world to understand is the income tax.''

The Hall-Rabushka model envisioned a flat tax with no deductions whatever. After considerable reflection, I decided to include in the legislation limited deductions for home mortgage interest for up to $100,000 in borrowing and charitable contributions up to $2,500. While these modifications undercut the pure principle of the flat tax by continuing the use of tax policy to promote home buying and charitable contributions, I believe that those two deductions are so deeply ingrained in the financial planning of American families that they should be retained as a matter of fairness and public policy--and also political practicality. With those two deductions maintained, passage of a modified flat tax will be difficult, but without them, probably impossible.

In my judgment, an indispensable prerequisite to enactment of a modified flat tax is revenue neutrality. Professor Hall advised that the revenue neutrality ofthe Hall-Rabushka proposal, which uses a 19 percent rate, is based on a well-documented model founded on reliable governmental statistics. My legislation raises that rate from 19 percent to 20 percent to accommodate retaining limited home mortgage interest and charitable deductions.

This proposal taxes business revenues fully at their source, so that there is no personal taxation on interest, dividends, capital gains, gifts or estates. Restructured in this way, the tax code can become a powerful incentive for savings and investment--which translates into economic growth and expansion, more and better jobs, and raising the standard of living for all Americans.

The key advantages of this flat tax plan are threefold: First, it will dramatically simplify the payment of taxes. Second, it will remove much of the IRS regulatory morass now imposed on individual and corporate taxpayers, and allow those taxpayers to devote more of their energies to productive pursuits. Third, since it is a plan which rewards savings and investment, the flat tax will spur economic growth in all sectors of the economy as more money flows into investments and savings accounts.

Professors Hall and Rabushka have projected that within seven years of enactment, this type of a flat tax would produce a 6 percent increase in output from increased total work in the U.S. economy and increased capital formation. The economic growth would mean a $7,500 increase in the personal income of all Americans. No one likes to pay taxes. But Americans will be much more willing to pay their taxes under a system that they believe is fair, a system that they can understand, and a system that they recognize promotes rather than prevents growth and prosperity. My flat tax legislation will afford Americans such a tax system.

I ask unanimous consent that a copy of my flat tax postcard, a variety of specific cases that illustrate the fairness and simplicity of this flat tax, and an example flat tax table be printed in the Record following my statement.

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

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Mr. President, I have sought recognition today to introduce the Prescription Drug and Health Improvement Act of 2005 to reduce the high prices of prescription drugs for Medicare beneficiaries. I introduced a similar version of this bill in the 108th Congress, S. 2766. To increase the likelihood that this bill may become law this bill does not include a costly provision which would have closed the gap in prescription drug costs for Medicare beneficiaries.

Americans, specifically senior citizens, pay the highest prices in the world for brand-name prescription drugs. With 45 million uninsured Americans and many more senior citizens without an adequate prescription drug benefit, filling a doctor's prescription is unaffordable for many people in this country. The United States has the greatest health care system in the world; however, too many seniors are forced to make difficult choices between life-sustaining prescription drugs and daily necessities.

The Centers for Medicare and Medicaid Services estimate that in 2004 per capita spending on prescription drugs rose approximately 12 percent, with a similar rate of growth expected for this year. Much of the increase in drug spending is due to higher utilization and the shift from older, lower cost drugs to newer, higher cost drugs. However, rapidly increasing drug prices are a critical component.

High drug prices, combined with the surging older population, are also taking a toll on State budgets and private sector health insurance benefits. Medicaid spending on prescription drugs increased at an average annual rate of nearly 19 percent between 1998 and 2002. Until lower priced drugs are available, pressures will continue to squeeze public programs at both the State and Federal level.

To address these problems, my legislation would reduce the high prices of prescription drugs to seniors by repealing the prohibition against interference by the Secretary of HHS with negotiations between drug manufacturers, pharmacies, and prescription drug plan sponsors and instead authorize the Secretary to negotiate contracts with manufacturers of covered prescription drugs. It will allow the Secretary of HHS to use Medicare's large beneficiary population to leverage bargaining power to obtain lower prescription drug prices for Medicare beneficiaries.

Price negotiations between the Secretary of HHS and prescription drug manufacturers would be analogous to the ability of the Secretary of Veterans Affairs to negotiate prescription drug prices with manufacturers. This bargaining power enables veterans to receive prescription drugs at a significant cost savings. According to the National Association of Chain Drug Stores, the average ``cash cost'' of a prescription in 2001 was $40.22. The average cost in the Veterans Affairs (VA) health care system in fiscal year 2001 was $22.87.

In the 108th Congress, in my capacity as chairman of the Veterans' Affairs Committee, I introduced the Veterans Prescription Drugs Assistance Act, S. 1153, which was reported out of committee, but was not considered before the full Senate. In the 109th Congress, I have again introduced the Veterans Prescription Drugs Assistance Act, S. 614.

This legislation will broaden the ability of veterans to access the Veterans Affairs' Prescription Drug Program. Under my bill, all Medicare-eligible veterans will be able to purchase medications at a tremendous price reduction through the Veterans Affairs' Prescription Drug Program. In many cases, this will save veterans who are Medicare beneficiaries up to 50 percent on the cost of prescribed medications, a significant savings for veterans. Similar savings may be available to America's seniors from the savings achieved using the HHS bargaining power, like the Veterans Affairs bargaining power for the benefit of veterans. These savings may provide America's seniors with fiscal relief from the increasing costs of prescription drugs.

I believe this bill can provide desperately needed access to inexpensive, effective prescription drugs for America's seniors. The time has come for concerted action in this arena. I urge my colleagues to move this legislation forward promptly.

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

Mr. President, today I join Senator Murray in introducing the ``Improving Access to Education for Students Who Are Homeless or in Foster Care Act.'' I thank Senator Murray for her deep commitment to the education of children who are homeless or in foster care. I have worked with her on provisions to promote their access to and completion of education in both the Individuals with Disabilities Education Act (IDEA) reauthorization and the Head Start Act reauthorization and am pleased to have worked with her again on this bill.

In the United States, on any given day, more than half a million children are in foster care--20,000 of whom are in the State of Ohio, alone. In 2003, also know that more than 900,000 children were found to be victims of child abuse or neglect. More than half of the children in foster care experience developmental delays. Children in foster care have three to seven times more chronic medical conditions, birth defects, emotional disorders, and academic failures than children of similar socioeconomic backgrounds who do not enter foster care.

We also know that homeless children face great barriers to higher education. Often, these students have run away from an abusive home, or have been lost to the system. These students also may be living on the street with a parent--too often with a parent suffering from an addiction to alcohol or drugs. These children will move from school to school and shelter to shelter, piecing together their education as they can. This is not good enough. Although we have tried to reach out to these students through the McKinney Vento Homelessness Assistance Act, we need to do more. These children deserve a better chance at an education.

Education offers foster care and homeless children their best hope for escaping the poverty and instability they experience. This bill includes additional outreach to these hard to reach populations through current Federal education programs, such as TRIO and GEAR UP. It also would expand and clarify the definition of ``Independent Student'' in order to accommodate the special circumstances of foster care and homeless children and would allow student financial aid administrators additional flexibility to help this cohort of students attain access to higher education. This bill would create a $20 million demonstration grant program targeting foster and homeless children to help decrease the barriers to higher education by involving stakeholders and their communities in the outreach process.

I look forward to working with HELP Committee Chairman Enzi to incorporate these provisions into the Higher Education Act reauthorization bill. I appreciate his willingness to incorporate provisions related to homeless and foster children in the Head Start Act reauthorization bill, as well. He is equally concerned with the welfare of these children. And again, I thank Senator Murray for her commitment to these children. We cannot afford to overlook their needs.

Mr. President, I join several of my colleagues today to introduce a series of bills related to the reauthorization of the Higher Education Act (HEA). These bills emphasize a number of issues that are vital to higher education, including teacher quality, recruitment, and retention; loan forgiveness for social workers, family lawyers, and early childhood teachers; and the reduction of drug use and underage drinking at our colleges and universities.

The quality of a student's education is the direct result of the quality of that student's teachers. If we don't have well trained teachers, then future generations of our children will not be well educated. That is why I am introducing a bill ``Ready to Educate All Children Act'' that would provide $200 million in grants to our schools of education to partner with high-need local schools to ensure that our teachers are receiving the best, most extensive training available before they enter the classroom.

Studies find that a majority of graduates of schools of education believe that the traditional teacher preparation program left them ill prepared for the challenges and rigors of the classroom. Part of the responsibility for this lies in the hands of our schools of education. However, Congress also has a responsibility to give our schools of education the tools they need to make necessary improvements. This new bill would create a competitive grant program for schools of education, which partner with low-income schools to create clinical programs to train teachers. Additionally, it would require schools of education to make internal changes by working with other departments at the university to ensure that teachers are receiving the highest quality education in core academic subjects. Finally, it would require the college or university to demonstrate a commitment to improving their schools of education by providing matching funds.

Another bill I am introducing today, is the ``Collaborative Agreements to Recruit Educators Act,'' which also would encourage improvement in the education of our Nation's low-income students. Children raised in poverty have a much more difficult time in finishing high school and going on to college. While about seventy percent of children in America will graduate from high school, that rate drops to fifty percent for low-income students. We know that every day, about 3,000 children drop out of school. Our Nation's inner city schools have some of the lowest rates of graduation. I strongly believe that education is one of the most important ways to break the cycle of poverty. To break that cycle, we must keep our children in school, help them graduate from high school, and increase their access to higher education.

My bill would provide grants for collaborative agreements to between local education agencies in low-income communities and to colleges of education. These partnerships would work to provide services, such as mentoring, tutoring, and scholarships through the college of education to the students at the partnering school in order to 1. encourage those students to graduate from high school, 2. let them know of opportunities within higher education, and (3) encourage them to become teachers, which are so badly needed.

Another complex issue affecting the teaching force is the high percentage of disillusioned beginning teachers who leave the field. This bill would help combat this issue, as well. Schools of education receiving these grants would be responsible for following their graduates and continuing to provide assistance after they enter the classroom. The more we invest in the education of teachers--especially once they have entered the profession--the more likely they will remain in the classroom.

To further help teacher quality and retention, I am introducing a bill ``The Master Teacher Scholarship Act''--to establish a Master's in Education Scholarship Program. The lack of promotions and salary increases are some of the most pervasive reasons for the disillusionment of teachers. This disillusionment is becoming a crisis as half of teachers leave the profession altogether within their first five years of teaching. To both improve the quality of teachers and increase their retention, this bill would provide $30 million in grants to schools of education to administer scholarships to eligible teachers. In return for the scholarships, teachers would agree to teach for another five years and mentor a novice teacher for two years.

Today, along with Senator Dodd, I am introducing the ``Paul Wellstone Early Educator Loan Forgiveness Act.'' Our dear friend and colleague, Senator Wellstone, and I had been working on this legislation together before his tragic death. I know he cared deeply about this issue and about making sure that all children receive a quality education. He was passionate about that. Though our bill was originally called the ``Early Care and Education Loan Forgiveness Act,'' we have renamed our bill in Paul's memory.

Our bill would expand the loan forgiveness program so that it benefits not just childcare workers, but also early childhood educators. This loan forgiveness program would serve as an incentive to keep those educators in the field for longer periods of time. Research shows that children who attend quality early childcare programs when they were three or four years old scored better on math, language arts, and social skills in early elementary school than children who attended poor quality childcare programs. In short, children in early learning programs with high quality teachers--teachers with a Bachelor's degree or an Associate's degree or higher--do substantially better.

When we examine the number and recent growth of pre-primary education programs, it becomes difficult to differentiate between early education and childcare settings because they are so often intertwined-- especially considering that about 12 million children younger than age five spend part of their time with a care provider other than a parent and that demand for quality childcare and education is growing as more mothers enter the workforce.

Because this bill targets loan forgiveness to those educators working in low-income schools or childcare settings, we can make significant strides toward providing high quality education for all of our young children, regardless of socioeconomic status. The bill would serve a twofold function. First, it would reward professionals for their training. Second, it would encourage professionals to remain in the profession over longer periods of time, since more time in the profession leads to higher percentages of loans forgiveness. The bill would result in more educated individuals with more teaching experience and lower turnover rates, each of which enhance student performance.

I encourage my colleagues to join me in this effort to help ensure that truly

no children--especially our youngest children--are left behind.

I also am working on two bills with my friend and colleague from West Virginia, Senator Rockefeller. These bills would provide loan forgiveness to students who dedicate their careers to working in the realm of child welfare, including social workers, who work for child protective services, and family law experts.

Currently, there aren't enough social workers to fill available jobs in the area of child welfare. Furthermore, the number of social work job openings is expected to increase faster than the average for all occupations through 2010. The need for highly qualified social workers in the child protective services is reaching crisis level.

We also need more qualified individuals focusing on family law. The wonderful thing about family law is its focus on rehabilitation--that is the rehabilitation of families by helping them through life's transitions, whether it is a family going through a divorce, a family dealing with their troubled teenager in the juvenile system, or a child getting adopted and becoming a member of a new family.

Across the United States, family, juvenile, and domestic relations courts are experiencing a shortage of qualified attorneys. As many of my colleagues and I know, law school is an expensive investment. In the last 20 years, tuition has increased more than 200 percent. Currently, the average rate of law school debt is about $80,000 per graduate. To be sure, few law school graduates can afford to work in the public sector because debts prevent even the most dedicated public service lawyer from being able to take these low-paying jobs. This results in a shortage of family lawyers.

The shortage of family law attorneys also disproportionately impacts juveniles. The lack of available representation causes children to spend more time in foster care because cases are adjourned or postponed when they simply cannot find an attorney to represent their rights or those of the parent or guardian. Furthermore, the number of children involved in the court system is sharply increasing. We need to ensure that the interests of these children are taken care of by making certain they have an advocate--someone working solely on their behalf. By offering loan forgiveness to those willing to pursue careers in the child welfare field, we can increase the number of highly qualified and dedicated individuals who work in the realm of child welfare and family law.

Finally, I am introducing a bill today that would help address an epidemic--the epidemic of underage drinking on college and university campuses across the United States. This bill would provide grants to states to establish statewide partnerships among colleges and universities and the surrounding communities to work together to reduce underage and binge drinking and illicit drug use by students.

Many States, including my home State of Ohio, have coalitions that deal specifically with the culture of alcohol and drug abuse on America's college campuses. They work with the surrounding communities, including local residents; bar, restaurant, and shop owners; and law enforcement officials toward a goal of changing the pervasive culture of drug and alcohol abuse. They provide alternative alcohol-free events, as well as support groups for those who choose not to drink. They also educate students about the dangers of alcohol and drug use.

Furthermore, the coalitions recognize that while it is important to promote an alcohol aware and drug-free campus community, if the community surrounding the campus does not promote these initiatives, there will be no long-term solutions. Therefore, these coalitions also have worked to establish regulations both on and off campus, which will help our Nation's youth to stay healthy, alive, and get the most out of their time at college. Some of these regulations include the registration of kegs. This provides accountability for both the store and the student. This is just an example of one step that colleges, local communities, and organizations can take.

To help start the expansion of these coalitions, this bill would provide $5 million in grants. This is an important demonstration project that would help lead to positive effects for our young people. It is up to us to change the culture, which has been perpetuated by years of complacency and a dismissal tone of ``that's just the way it is in college.'' We must protect the health and education of our young people by changing this culture of abuse--and that is exactly what this bill would help do.

I thank all of my colleagues who have worked with me on these bills. I look forward to the reauthorization of the Higher Education Act and working with Chairman Enzi and Ranking Member Kennedy to incorporate these important measures.

Mr. President, I am pleased to introduce the, Indian Trust Reform Act of 2005.

The following is an overview of the bill, title by title, which is followed by a discussion of the reasons for the measure.

Title I: Resolution of historical accounting claims in Cobell v. Norton

Title I of the bill would provide for a lump sum settlement of the claims for an historical accounting that have been asserted in the case of Cobell v. Norton. The section would establish a Settlement Fund which would be administered by the Secretary of the Treasury and a Special Master. The total amount of the fund is left blank in this introduced version of the bill. The Committee on Indian Affairs will hold a hearing on this soon and have further discussions with the parties, hopefully to reach a consensus number for the settlement. The settlement fund would be distributed to individual Indians using two formulas: part of the fund would be distributed among all claimants equally, and part would be distributed under a formula that allocates funds in accordance with a through-put analysis--account holders with high volume accounts would receive more than those with low volume accounts. A portion of the fund would be held in reserve for payment of attorneys fees at an hourly rate, for administration of the fund and for claimants who successfully challenge their distribution in court. If any of the reserved funds remain unused, they are to be distributed to the claimants under the formula.

Title II: Indian Trust Asset Management Policy Review Commission

Title II of the bill establishes and sets forth the duties, responsibilities, and authority of a 12-member Indian Trust Asset Management Review Commission. The Commission would have two principal areas of responsibility: 1. Reviewing all current trust resource management laws, (including regulations), and the Secretary of Interior's trust resource management practices, and 2. Following that review, preparing a report to the Senate Committee on Indian Affairs, the House Committee on Resources and the Secretary of Interior containing the Commission's recommendations for improving the management of those assets.

Title III: Indian Trust Resource Management Demonstration Project

Title III of the bill establishes an eight-year Indian Trust Resource Management Demonstration Project. The demonstration project would initially be open to all Indian tribes participating in section 131 of the Fiscal Year 2005 Interior Appropriations Act and an additional 30 Indian tribes that submit applications to the Secretary. Participating tribes would negotiate a ``trust resource management plan'' with the Secretary, which would remain in effect for the full duration of the demonstration project but would be subject to modification or termination annually. A participating tribe would be allowed to negotiate with the Department of Interior as to how the trust asset management budget for the reservation would be prioritized. Self- governance tribes participating in the demonstration project would also be permitted to develop their own ``customized'' trust asset management systems and practices. Trust assets subject to the plan would have to be managed in accordance with 1. The Federal trust responsibility and 2. Certain basic standards set forth in the section. The trust asset management plan itself would not create, diminish or increase

the liability of either the United States or the Indian tribe. The Indian tribe would have the right to terminate the plan by giving the Secretary notice, but termination would not be effective until the beginning of the next fiscal year.

Title IV: Fractional Interest Purchase and Consolidation Program

Title IV of the bill would be an amendment to Section 213 of the Indian Land Consolidation Act (25 USC 2212). As currently written, Section 213 of ILCA authorizes the Secretary to purchase fractional interests in land in accordance with certain requirements. One problem with this program is that the fractional interests are so small that an offer of fair market value is such a small amount of money that there is little incentive to sell. Accordingly, the amendment would be a new subsection to ILCA Section 213 that would authorize the Secretary to offer more than fair market value for fractional interests in tracts of land that have 20 or more trust or restricted fractional interests--the offer would be fair market value PLUS an additional amount of at least $100 but not more than $350.

Also, this title would add another new subsection to ILCA section 213 that would authorize the Secretary to offer, along with an offer to purchase any interest or interests under section 213, an additional amount of money to settle any and all mismanagement claims against the United States that the interest owner may have in connection with the tract of land of which the fractional interest is a part. The interest owner would have the option of selling his or her interest to the Secretary with or without a settlement of mismanagement claims, i.e., the settlement of mismanagement claims could not be made a mandatory condition of the sale of the interest.

Also included as part of this title is a provision dealing with tracts of extremely fractionated land--specifically, tracts of land that consist of 200 or more fractional trust interests. If the Secretary determines that a tract is owned by 200 or more individuals, she is authorized to make the offer (not less than four times fair market value) via certified mail to each and every trust interest owner in the tract. The offer would include a notice that says they have 90 days to reject the offer or it will be deemed to have been accepted. It would include a pre-addressed (back to the Secretary) postage-paid ``notice of rejection'' form that the offeree may use to reject the offer. If they fail to mail the form back in time, they will be given another notice stating that they may withdraw the offer by mailing a postage pre-paid ``notice of withdrawal'' form back to the Secretary within 30 days. If They fail to do that in time, the offer is deemed to be accepted.

Title V: Restructuring the Bureau of Indian Affairs and Office of the

Special Trustee

This title of the bill would reorganize the Bureau of Indian Affairs and Office of the Special Trustee for American Indians under a new office within the Department of Interior, an Under Secretary for Indian Affairs. The title provides that the Under Secretary has responsibility for the administration of all Indian trust and non-trust matters, including, after a transition period ending on December 31, 2008, matters currently within the scope of authority of the Special Trustee for American Indians under the American Indian Trust Fund Management Reform Act of 1994 (25 USC 4041 et seq.). The Under Secretary would oversee a new Office of Trust Reform Implementation and Oversight, but the Special Trustee would continue performing his duties under the 1994 Act until December 31, 2008, at which time the OST would be abolished.

Title VI: Annual Audit of Indian Trust Funds by the Government

Accountability Office

Title VI of the bill requires the Government Accountability Office to contract for an annual audit of all funds held in trust by the United States for the benefit of an Indian Tribe or an individual Indian. The audit would be conducted in accordance with generally accepted auditing principles and the Single Audit Act. Copies of each audit report must be submitted to the Secretary of Interior, the Senate Committee on Indian Affairs, and the House Committee on Resources.

Reasons for the bill: the performance of the United States over the past 125 years in its capacity as trustee and manager of Indian trust and restricted lands is not something to be proud of. The policy of allotting Indian tribal lands, which was made the general Federal Indian policy in the 1880s, was one of several federal ``experiments'' in Indian matters that have had regrettable results both for Native Americans and for the Government. This policy of the 19th Century has come back to haunt us now in the form of fractionated ownership of allotted lands--where some parcels of land are owned by hundreds and in some cases over a thousand different Indian owners. This fractionation of ownership has led to a proliferation of individual Indian money accounts ``IIM accounts,'' now numbering in the hundreds of thousands, all of which the Federal Government has a trust obligation to track and manage.

The staggering number of IIM accounts--along with decades of mismanagement on the part of Government officials--contributed to the conditions that led to the filing of the Federal class action here in the District of Columbia known as Cobell v. Norton. A lot has happened in that litigation since it was filed 9 years ago, much of it reported in newspapers across the country, but I think it is fair to say that one thing the case has shown is that the United States has not lived up to its duty as a fiduciary to the thousands of Indian beneficiaries of IIM accounts.

The principal objectives of the Cobell case are to obtain a complete historical accounting of IIM accounts and to reform the trust itself. The Government has been ordered to perform a complete, detailed accounting of transactions relating to IIM accounts and to submit and implement a plan to reform the trust. In hearings before the Committee on Indian Affairs, officials from the Department of Interior have stated that the cost of doing the accounting may run in to multiple billions of dollars, and representatives of the plaintiffs in the case as well as the GAO, have stated that much of this accounting cannot be done due to missing or destroyed records, information, or data relating to the IIM accounts.

The bill I introduce today would provide a resolution of the class action relating to an historical accounting and would also bring a number of important changes to the Indian trust asset management system. In lieu of an accounting, the bill would create a settlement fund and direct the Secretary of the Treasury to develop a formula for distributing the fund to the beneficial owners of IIM accounts in full settlement for losses, errors, and unpaid interest in their IIM accounts. Several other aspects of the bill are included for the purpose of reforming the Indian trust management system. For example, the bill would create a special commission charged with the responsibility of examining current Indian trust management laws, regulations and practices and reporting back to the authorizing committees of jurisdiction in the Senate and House with recommended revisions of these laws, regulations and practices. It would also restructure the Bureau of Indian Affairs under an Under Secretary For Indian Affairs, phasing out the Office of the Special Trustee whose responsibilities would be transferred to the Under Secretary after December 31, 2008.

I would like to thank the National Congress of American Indians, the Inter-Tribal Monitoring Association, the Affiliated Tribes of Northwest Indians, representatives of the plaintiffs as well as many other stakeholders for their considerable and helpful input in developing this legislation. The bill does not include everything that they requested, and they may have issues with certain aspects of the bill as it is now written. That said, the bill is offered as a starting point for discussion. I do not think that there is any provision in the bill that is immutable, closed to debate or negotiation. Hopefully the stakeholders will remain engaged and continue to provide me with information and suggestions to make it a better bill, a bill that brings substantial improvements to the administration and management of Indian trust assets.

I look forward to working with my colleagues on both sides of the aisle to enact this timely legislation. I ask unanimous consent that the full text of the bill be printed in the Record.

Mr. President, I rise today for myself and fellow Alaska Senator Ted Stevens to introduce legislation concerning a complex issue, the Quality Bank that is used to facilitate payments between shippers using the Trans-Alaska Oil Pipeline System to reflect variations in the value of different crude oil streams that are injected into the pipeline.

Since its opening in June 1977, the Trans-Alaska Pipeline System, TAPS, has carried crude oil from Alaska's North Slope to Valdez where the oil is shipped to market. The pipeline carries crude oil from various sources and of varying quality--the oil injected into the line before the pipeline's Pump Station One near Deadhorse, AK, and commingled as the blended stream of oil travels south to Valdez. The TAPS Quality Bank was established to compensate producers of higher quality crude oil for the difference in the value of the crude injected at the North Slope and that of the lower-quality commingled stream received in Valdez, since each shipper receives a quantity of the blended stream equivalent to the amount it injected into the line.

Companies injecting low-quality crude oil pay into the Quality Bank, while companies injecting high quality crude receive a payment from the Quality Bank. In addition, between the North Slope and Valdez, two refineries, Flint Hills and Petro Star, withdraw a portion of the common stream from TAPS, partially refine the crude oil into products such as gasoline, diesel and jet fuel, and reinject into TAPS the other components of crude left over after their refinery processes. Each fuel extracted from the crude is called a ``cut.'' To compensate producers for the loss in value of the crude oil because of what is removed by these refineries, refiners also pay into the Quality Bank. The objective of the Quality Bank is to make monetary adjustments so that each shipper is in the same economic position it would enjoy if it received the same oil in Valdez that it delivered to TAPS on the state's North Slope.

The methodology used to determine Quality Bank payments has been a subject of controversy since the Quality Bank's creation. The problem arises because there is no independent market for the crude injected on the North Slope and thus no way to objectively determine its value. The methodology is set by the Federal Energy Regulatory Commission. Since the early 1980s, FERC-approved methodologies have been challenged in court and revised multiple times. In 1993, the majority of North Slope shippers proposed and FERC approved a settlement calling for the use of a ``distillation'' methodology, which would value crude oil based on the market price of various cuts created when the components are separated based on different boiling points--the distillation process. This methodology replaced the former ``gravity'' methodology where oil was valued based on its relative gravity.

Since 1993, disputes have focused largely on the valuation of cuts at the highest boiling points--the ``Heavy Distillate'' cut that evaporates at temperatures between 350 and 650 degrees F. and the Resid, residual, cut, which includes the portion remaining after distillation of all other cuts at boiling points up to 1050 degrees F. Two additional cuts are also at issue, the VGO and Naptha cuts.

In 1997, responding to a D.C. Circuit Court of Appeals ruling, FERC approved a settlement with a revised valuation methodology for Distillate and Resid. Under the FERC order, the new valuation methodologies were to be applied on a prospective basis only. Later, the D.C. Circuit in 1999 told FERC to revise some particular details of the Resid valuation and also held that FERC had ``failed to provide an adequate explanation'' as to why the new methodology should not be made retroactive to 1993.

Responding to the ruling, the Administrative Law Judge, who in 1997 had decided that all changes should only apply prospectively, reversed his position and released a decision in August 2004 calling for changes in the Resid and Heavy Distillate cuts to be applied retroactively, in the case of Resid to as far back as 1993. In addition, the administrative law judge decided to apply new valuations for VGO and Naptha, prospectively. Currently, the judge's decision is awaiting a final decision by the FERC on whether to impose the Initial Decision or alter it.

There are clearly major public policy implications resulting from this Quality Bank issue. While the bank is a ``zero sum'' game as far as money paid in and out of the bank is concerned, the impacts on the parties and thus on the citizens of Alaska are anything but equal.

For decades Alaskans suffered under the impacts of having to import all refined fuel products into the State from West Coast refineries. Besides higher prices caused by transportation, that left the State wholly dependent on fuel supplies that needed to travel at least 2,000 miles on average to reach Alaska consumers--sometimes through bad weather and difficult sea conditions. With the construction of in-State refineries, Alaskans finally saw greater security of supply, less dependence upon weather for shipment arrivals, and the possibility of lower fuel prices because of potentially reduced transportation costs. The greater dependability of fuel supplies improved aviation freight shipments at the Anchorage and Fairbanks international airports, helping create jobs in air freight and related industries.

But the decision of the Administrative Law Judge to apply new Quality Bank methodology assessments retroactively, places the economics of in- State refineries at risk. That in turn not only impacts the job security for the roughly 400 Alaskans who work at the refineries, but also threatens the State's energy and economic security.

The problem is that both of the refineries must make long- and short- term business decisions based on crude costs when they process crude oil into product. Refineries optimize their production slates based on current market realities. It is difficult for them to operate, given low profit margins, if oil values can change years later as a result of Quality Bank decisions. They simply have no way to make rational business decisions when the value of their products can be determined retroactively long after they can protect themselves for perceived mistakes in FERC-approved valuation methodologies. This certainly threatens the ability of the refineries to attract capital, money needed for them to modernize and meet new ultra-low sulfur diesel ``clean fuel'' requirements soon to go into effect.

The State's Congressional Delegation last fall in report language added to the Federal budget expressed its concern with the equity of long retroactive Quality Bank valuation adjustments. Last autumn we urged FERC to look carefully at the justice of the Initial Decision of the Administrative Law Judge in this case and we encouraged all of the eight parties that includes the State of Alaska, to reach an out-of- court settlement of the 1993 case to bring finality to this complex case before it harms instate refinery capabilities. At the time we avoided a legislative solution to this purely Alaskan case. We are renewing our pleas for action in a letter sent to FERC on Thursday.

In the intervening six months, while one mediation session has occurred, the parties report little or no progress toward reaching a mutually agreeable settlement. While opinions may differ on whether Congress should intervene to settle the on-going case, there is little doubt that Congress should step forward to prevent such an arcane dispute from ever again threatening Alaska's energy industry.

For that reason prior to the next mediation session, today we introduce legislation to limit the ability of FERC in the future to make retroactive the impacts of future Quality Bank valuation methodology changes. By this legislation, after December 31, 2005, FERC still will be able to change the methodology for determining the value of oil flowing through the pipeline but will not be permitted to apply changes to Quality Bank valuation methodologies on anything other than a prospective basis.

We have proposed this provision to prevent this legal nightmare from happening again. This provision will first eliminate the perverse current incentive for all sides to promote further litigation regarding Quality Bank valuations based on the expectation of a retroactive application of changes that would result in a large economic windfall. The retroactive application of valuation methodology changes encourages the sides in a dispute to sue in hopes of gaining a larger benefit in the future. This is a ``lottery,'' however, that Alaskans are guaranteed to lose.

By setting December 31, 2005, as the date that FERC can no longer apply Quality Bank valuation methodologies on a retroactive basis, the legislation will put the FERC and the litigants on record that the current dispute must be resolved by the end of this year.

Requiring FERC to apply valuation methodology changes in connection with any future disputes on a prospective basis only will eliminate the risk and uncertainty associated with the prospect of nearly unlimited retroactive application of Quality Bank payment methodology changes. That will allow all Quality Bank participants to be able to conduct business with the certainty of knowing that prices received and paid for oil today cannot be altered years down the road. In addition, this will eliminate the strong incentive that currently exists for some parties to engage in endless litigation, in hopes of gaining windfall benefits from retroactive application changes.

While we continue to call on all sides in the current dispute to compromise and settle this case now, this bill will discourage if not eliminate this type of dispute in the future--a benefit for all Alaskans.

Mr. President, today, along with my colleague from Maine, Senator Collins, I am introducing legislation to help businesses form group-purchasing cooperatives to obtain enhanced benefits, to reduce health care rates, and to improve quality for their employees' health care.

High health care costs are burdening businesses and employees across the Nation. These costs are digging into profits and preventing access to affordable health care. Too many patients feel trapped by the system, with decisions about their health dictated by costs rather than by what they need.

Nationally, the annual average cost to an employer for an employee's health care is $6,348. In my home State of Wisconsin it is even higher--the average cost there is $7,618. We must curb these rapidly increasing health care costs. I strongly support initiatives to ensure that everyone has access to health care. It is crucial that we support successful local initiatives to reduce health care premiums and to improve the quality of employees' health care.

By using group purchasing to obtain rate discounts, some employers have been able to reduce the cost of health

care premiums for their employees. According to the National Business Coalition on Health, there are nearly 80 employer-led coalitions across the United States that collectively purchase health care. Through these pools, businesses are able to proactively challenge high costs and inefficient delivery of health care and share information on quality. These coalitions represent over 10,000 employers nationwide.

Improving the quality of health care will also lower the cost of care. By investing in the delivery of quality health care, we will be able to lower long term health care costs. Effective care, such as quality preventive services, can reduce overall health care expenditures. Health purchasing coalitions help promote these services and act as an employer forum for networking and education on health care cost containment strategies. They can help foster a dialogue with health care providers, insurers, and local HMOs.

Health care markets are local. Problems with cost, quality, and access to health care are felt most intensely in the local markets. Health care coalitions can function best when they are formed and implemented locally. Local employers of large and small businesses have formed health care coalitions to track health care trends, create a demand for quality and safety, and encourage group purchasing.

In Wisconsin, there have been various successful initiatives that have formed health care purchasing cooperatives to improve quality of care and to reduce cost. For example, the Employer Health Care Alliance Cooperative, an employer-owned and employer-directed not-for-profit cooperative, has developed a network of health care providers in Dane County and 12 surrounding counties on behalf of its 160 member employers. Through this pooling effort, employers are able to obtain affordable, high-quality health care for their 87,500 employees and dependents.

This legislation seeks to build on successful local initiatives, such as the Alliance, that help businesses to join together to increase access to affordable and high-quality health care.

The Promoting Health Care Purchasing Cooperatives Act would authorize grants to a group of businesses so that they could form group- purchasing cooperatives to obtain enhanced benefits, reduce health care rates, and improve quality.

This legislation offers two separate grant programs to help different types of businesses pool their resources and bargaining power. Both programs would aid businesses to form cooperatives. The first program would help large businesses that sponsor their own health plans, while the second program would help small businesses that purchase their health insurance.

My bill would enable larger businesses to form cost-effective cooperatives that could offer quality health care through several ways. First, they could obtain health services through pooled purchasing from physicians, hospitals, home health agencies, and others. By pooling their experience and interests, employers involved in a coalition could better address essential issues, such as rising health insurance rates and the lack of comparable health care quality data. They would be able to share information regarding the quality of these services and to partner with these health care providers to meet the needs of their employees.

For smaller businesses that purchase their health insurance, the formation of cooperatives would allow them to buy health insurance at lower prices through pooled purchasing. Also, the communication within these cooperatives would provide employees of small businesses with better information about the health care options that are available to them. Finally, coalitions would serve to promote quality improvements by facilitating partnerships between their group and the health care providers.

By working together, the group could develop better quality insurance plans and negotiate better rates.

This legislation also tries to alleviate the burden that our Nation's farmers face when trying to purchase health care for themselves, their families, and their employees. Because the health insurance industry looks upon farming as a high-risk profession, many farmers are priced out of, or simply not offered, health insurance. By helping farmers join cooperatives to purchase health insurance, we will help increase their health insurance options.

Past health purchasing pool initiatives have focused only on cost and have tried to be all things for all people. My legislation creates an incentive to join the pools by giving grants to a group of similar businesses to form group-purchasing cooperatives. The pools are also given flexibility to find innovative ways to lower costs, such as enhancing benefits, for example, more preventive care, and improving quality. Finally, the cooperative structure is a proven model, which creates an incentive for businesses to remain in the pool because they will be invested in the organization.

I am pleased that this bill is supported by the National Business Coalition on Health, an organization that already understands that allowing businesses to come together to increase their health care purchasing power can lead to an increase in health care quality, and a decrease in health care costs.

We must reform health care in America and give employers and employees more options. This legislation, by providing for the formation of cost-effective coalitions that will also improve the quality of care, contributes to this essential reform process. I urge my colleagues to join me in cosponsoring this proposal to improve the quality and costs of health care.

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