Refinery Investment Tax Assistance Act of 2005

Mr. President, I rise to introduce the CARE Act of 2005 along with Senator Lieberman, a bill we have been trying to push through Congress since 2000. However, at no point in the past five years has the passage of this bill been so timely.

At a time where America appears divided on a War on Terror, Supreme Court nominations, and the relief effort in the gulf region, Americans are unified in their support of charitable organizations. In a recent Zogby poll, 86 percent of those polled rated private charities' response to Hurricane Katrina as excellent or good. By contrast, 32 percent described the government's response as excellent or good, and 67 percent said fair or poor.

The work of charitable organizations and their volunteers have been inspirational at a time when many feel hopeless. I recently held a hearing in the Finance Subcommittee of Social Security and Family Policy to hear from charitable organizations about their efforts around the gulf coast. Though the hearing was scheduled before the events of Hurricane Katrina, the amazing work being done by these organizations highlighted the need for charitable incentives to continue and expand the generosity we are seeing.

In response to Hurricane Katrina, we have seen organizations such as America's Second Harvest and the Florida Boulevard Baptist Church feed the hungry. We have seen that within 48 hours of Katrina, the Nation's fraternal benefit societies were feeding, housing, and providing supplies, clothes, toiletries, cash and beds to those in need in shelters both in Houston and in New Orleans. During the first week of this effort, fraternals had already expended upwards of $14 million on hurricane relief, a sum which is expected to increase as these efforts broaden. We see community foundations, such as the Baton Rouge Area Foundation, literally saving people's lives by helping Louisiana State University open a field hospital for 1,000 people in an old Kmart. And we see national organizations such as the YMCA of the USA providing program services such as emergency child care, recreation, and grief counseling. The YMCA has provided showers and other physical comforts and opened up their facilities as staging areas for relief, recovery and clean-up efforts. And the list goes on and on and on--not even considering the response of these same organizations and many others to Hurricane Rita.

The CARE Act is a bipartisan bill that received strong bipartisan support as it passed the Senate in the 108th Congress by a vote of 95- 5. The House of Representatives passed companion legislation, the Charitable Giving Act, by a vote of 408-13. Sadly, this bill was blocked this bill from going to conference despite overwhelming support from both Houses and the general public.

The CARE Act of 2005 provides commonsense provisions to induce charitable giving. Among these include the above-the-line deduction for non-itemizers. More than two-thirds of Americans do not itemize on their tax returns, yet this group is estimated to contribute $36 billion to charities. Research indicates that lower and moderate-income individuals are more likely not to itemize on their tax returns, and that they give a greater percentage of their incomes to charity than higher income individuals. It is only fair that they benefit for their generosity. As Major Hood from the Salvation Army

so eloquently wrote in his testimony at my hearing, ``[t]he provision allowing non-itemizers to deduct charitable contributions can only encourage those Americans with smaller incomes--including young professionals who might otherwise be inclined to begin a lifetime of annual giving--to contribute to worthy causes. We do not discriminate among those in need, and we ask Congress not to discriminate in providing tax incentives for charitable giving.''

Additionally, the CARE Act calls for tax-free IRA charitable distributions for individuals aged 70\1/2\ and over. My home State of Pennsylvania has the second highest percentage of seniors in the country. Many of these older Americans want to experience the joy of making a difference by giving, and this provision provides them that opportunity. Certainly, these individuals should not be penalized for contributing portions of their life's savings to a worthy cause.

Organizations have been generous during this crisis by donating food to those who need it. The CARE Act provides expanded incentives that will yield an estimated $2 billion worth of food donations from farmers, restaurants, and corporations to help those in need. America's Second Harvest estimates that this is the equivalent of 878 million meals for hungry Americans over 10 years. Last year, the North American Mission Board of the Southern Baptist Convention helped provide 3 million meals to hungry people. At the time of my hearing they were feeding hurricane victims 250,000 meals each day. By allowing businesses to recoup production costs this provision will incentivize food donations and help our action fight hunger. For the first time, farmers, ranchers, small business and restaurant owners will benefit from the same tax incentives afforded major corporate donors for the donation of food to the needy.

The CARE Act also provides asset building initiatives for low-income individuals. Low-income Americans face a huge hurdle when trying to save. Individual Development Accounts, IDAs, provide them with a way to work toward building assets while instilling the practice of saving into their everyday lives. IDAs are one of the most promising tools that enable low-income and low-wealth American families to save, build assets, and enter the financial mainstream. Based on the idea that all Americans should have access, through the tax code or through direct expenditures, to the structures that subsidize homeownership and retirement savings of wealthier families, IDAs encourage savings efforts among the poor by offering them a one-to-one match for their own deposits. IDAs reward the monthly savings of working-poor families who are trying to buy their first home, pay for post-secondary education, or start a small business. These matched savings accounts are similar to 401(k) plans and other matched savings accounts, but can serve a broad range of purposes.

We have also seen the philanthropy of corporations such as Home Depot and Coca-Cola Company. The Home Depot Foundation has donated nearly $4 million to assist in the relief efforts. Coca-Cola Company donated $5 million and water and other beverages to the Federal Emergency Management Agency for its relief efforts. This is an appropriate time to gradually raise the caps on corporate contributions from 10 to 20 percent to encourage corporations to continue their social responsibility. We must also level the playing field for all corporate donations by expanding charitable incentives for S corporations to increase charitable giving.

In my home State of Pennsylvania, I have worked closely with the Pennsylvania Association of Nonprofit Organizations. I have heard from many of the nonprofits in my State about the pressing need for the charitable incentives we have in the CARE Act.

The time is now to expand charitable giving, both in my home State and throughout the Nation. One certainty we have seen is in every disaster that occurs in the United States and around the world is the desire of fellow Americans to help those that are in need. We should commend that generosity by passing this legislation.

Mr. President, I rise today to introduce the Downed Animal Protection Act, legislation intended to protect people from the unnecessary spread of disease. This bill would prohibit the use of nonambulatory animals for human consumption.

Nonambulatory animals, also known as downed animals, are livestock such as cattle, sheep, swine, goats, horses, mules, or other equines that are too sick to stand or walk unassisted. Many of these animals are dying from infectious diseases and present a significant pathway for the spread of disease.

The safety of our Nation's food supply is of the utmost importance. With the presence of bovine spongiform encephalopathy (BSE), also known as mad-cow disease, and other strains of transmissible spongiform encephalopathies (TSE), which are related animal diseases found not only in nearby countries but also in the United States, it is important that we take all measures necessary to ensure that our food is safe.

Currently, before slaughter, the United States Department of Agriculture's (USDA) Food Safety Inspection Service (FSIS) diverts downer livestock only if they exhibit clinical signs associated with BSE. Routinely, BSE is not correctly distinguished from many other diseases and conditions that show similar symptoms. The ante-mortem inspection that is currently used in the United States is very similar to the inspection process in Europe, which has proved to be inadequate for detecting BSE. Consequently, if BSE were present in a U.S. downed animal, it could currently be offered for slaughter. If the animal showed no clinical signs of the disease, the animal would then pass an ante-mortem inspection, making the diseased animal available for human consumption. The BSE agent could then cross-contaminate the normally safe muscle tissue during slaughter and processing. The disposal of downer livestock would ensure that the BSE agent would not be recycled to contaminate otherwise safe meat.

There are other TSE diseases already known to us such as scrapie that affects sheep and goats, chronic wasting disease in deer and elk, and classic Creutzfeldt-Jakob Disease in humans, all of which are present in the United States. Because our knowledge of such diseases are limited, the inclusion of horses, mules, swine, and other equine in this act are a necessary precaution. This precautionary measure is needed in order to ensure that the human population is not affected by diseased livestock. The Food and Drug Administration (FDA) has already created regulations that prevent imports of all live cattle and other ruminants and certain ruminant products from countries where BSE is known to exist. In 1997, the FDA placed a prohibition on the use of all mammalian protein, with a few exceptions, in animal feeds given to cattle and other ruminants. These regulations are a good start in protecting us from the possible spread of BSE, however, they do not go far enough. Because they still allow the processing of downer cattle.

According to a study performed by the Harvard School of the Public Health in conjunction with the USDA and surveillance data from European countries, downer cattle are among the highest risk population for BSE. According to the Harvard Study, the removal of nonambulatory cattle from the population intended for slaughter would reduce the probability of spreading BSE by 82 percent. The USDA and the FDA have acknowledged that downed animals serve as a potential pathway for the spread of BSE. While both have entertained the idea of prohibiting the rendering of downed cattle, they have taken no formal action. It is imperative that we, Congress, ensure that downer livestock does not enter our food chain, and the best way to accomplish this task is to codify the prohibition of downer livestock from entering our food supply.

The Downed Animal Protection Act fills a gap in the current USDA and FDA regulations. The bill calls for the humane euthanization of nonambulatory livestock, both for interstate and foreign commerce. The euthanization of nonambulatory livestock would remove this high risk population from the portion of livestock reserved for our consumption. Due to the presence of other TSE diseases found throughout other species of livestock, all animals that fit under the definition of livestock will be included in this bill.

The benefits of my bill are numerous, for both the public and the industry. On the face of it, the bill will prevent needless suffering by humanely euthanizing nonambulatory animals. The removal of downed animals from our products will insure that they are safer and of better quality. The reduction in the likelihood of the spread of diseases would result in safer working conditions for persons handling livestock. This added protection against disease would help the flow of livestock and livestock products in interstate and foreign commerce, making commerce in livestock more easily attainable.

Some individuals fear that this bill would place an excessive financial burden on the livestock industry. I want to remind my colleagues that one single downed cow in Canada diagnosed with BSE in 2003 shut down the world's third largest beef exporter. It is estimated that the Canadian beef industry lost more than $1 billion when more than 30 countries banned Canadian cattle and beef upon the discovery of BSE. As the Canadian cattle industry continues to recover from its economic loss, it is prudent for the United States to be proactive in preventing BSE and other animal diseases from entering our food chain.

Today, the USDA has increased its efforts to test approximately ten percent of downed cattle per year for BSE.

However, it is my understanding that the USDA is looking to revisit this issue. I do not believe that now is the time to lower our defenses. We must protect our livestock industry and human health from diseases such as BSE. This bill reduces the threat of passing diseases from downed livestock to our food supply. It ensures downed animals will not be used for human consumption. It also requires higher standards for food safety and protects the human population from diseases and the livestock industry from economic distress.

American consumers should be able to rely on the Federal Government to ensure that meat and meat by-products are safe for human consumption. I urge my colleagues to support this important bill. I ask unanimous consent that the text of the measure be printed in the Record.

Mr. President, just this past May, I stood at a gas station in Salt Lake City and announced the introduction of S. 1039, the Gas Price Reduction Through Increased Refining Capacity Act of 2005.

By standing near a gas pump charging $2.25 per gallon, I thought I was making a strong statement about the high price of gas and the need for greater refining capacity in our country.

That was only a few months ago, but hurricanes Katrina and Rita have since exposed the vulnerability of our Nation's refining infrastructure, and the gas prices in May now seem like the good old days.

I am pleased that the energy bill signed by President Bush this summer included the principal concept of S. 1039--that of providing a strong tax incentive to expand refinery capacity by allowing the cost to be written off immediately. Unfortunately, because of budget restrictions, my legislation had to be cut.

I have long been concerned that our shrinking number of refineries and their proximity to our Nation's coasts pose an unacceptable risk to our economic and strategic security. I thought cutting S. 1039 was a mistake at the time, and now I am hoping Congress will remedy that mistake.

Today, I rise to reintroduce those portions of my refining capacity legislation that were left out of the energy bill and call upon my colleagues to help me finish what was begun with my original bill.

My new legislation, the Refinery Investment Tax Assistance Act, would enhance the incentives made in the energy bill by increasing the short- term incentive to add new and expanded refining facilities and by removing the obstacle of long tax depreciation schedules that refineries face.

For those refiners able to commit to installing new refining equipment before 2008 and to have that added capacity built by 2012, my original bill would have allowed a complete write-off for investments in new refining equipment in the first year. As passed by Congress, though, this provision was cut for budgetary reasons to allow for expensing of only 50 percent of the costs in the first year. The legislation I am introducing today would enhance that to allow for the full 100 percent expensing in the first year. Now, more than ever, we need to use every possible means to increase the security of our fuel supply.

This bill would also restore another very important provision of S. 1039 that was dropped out of the energy bill as a cost savings. This provision would help to remove some of the disparity the refining industry faces in our current tax system. Most manufacturers in our country are able to depreciate the cost of their new equipment over five years. Refineries, on the other hand, are strapped with a full 10- year depreciation period. This unfair treatment of our refining industry acts as a long-term obstacle to new investment in increased capacity. The current 10-year depreciation schedule for refiners is unwarranted, and it is past time that we level the playing field on depreciation for this critically important sector of our energy industry.

On September 6, in the aftermath of Katrina, Mr. Bob Slaughter of the National Petrochemical & Refiners Association testified before the Senate Energy and Natural Resources Committee. He said that an important solution to our energy crisis would be to ``[e]xpand the refining tax incentive provision in the Energy Act. Reduce the depreciation period for refining investments from 10 to seven or five years in order to remove a current disincentive for refining investment. Allow expensing under the current language to take place as the investment is made rather than when the equipment is actually placed in service. Or the percentage expensed could be increased as per the original legislation introduced by Senator Hatch.''

I think it is important to recognize that, over time, this legislation will not cost the U.S. Treasury one dime. It would allow refineries to change the timing of the depreciation of their equipment, but not the amount. And, we should keep in mind that when this

bill leads to more refineries and increased capacity, we will have also increased the tax base.

I want to throw my full support behind the proposals recently announced by House Energy and Commerce Chairman Barton and House Resource Committee Chairman Pombo, which would take other approaches to increase the number of refineries in our Nation. From both a national security and an energy security perspective, I especially endorse a proposal by Chairman Pombo to locate more refineries on public lands near oil resource deposits. Such a move will make our Nation more secure from attacks from terrorists and from Mother Nature. I understand that Senate Energy and Natural Resource Committee Chairman Pete Domenici is promoting similar proposals on the Senate side. And I applaud these men for their leadership.

We have learned that when it comes to our Nation's energy security, refining is where we are the most vulnerable. It is not the time for half measures, but bold immediate action to establish a secure and independent refining program in this country. I hope my colleagues will join me in my efforts to achieve this goal. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, just this past May, I stood at a gas station in Salt Lake City and announced the introduction of S. 1039, the Gas Price Reduction Through Increased Refining Capacity Act of 2005.

By standing near a gas pump charging $2.25 per gallon, I thought I was making a strong statement about the high price of gas and the need for greater refining capacity in our country.

That was only a few months ago, but hurricanes Katrina and Rita have since exposed the vulnerability of our Nation's refining infrastructure, and the gas prices in May now seem like the good old days.

I am pleased that the energy bill signed by President Bush this summer included the principal concept of S. 1039--that of providing a strong tax incentive to expand refinery capacity by allowing the cost to be written off immediately. Unfortunately, because of budget restrictions, my legislation had to be cut.

I have long been concerned that our shrinking number of refineries and their proximity to our Nation's coasts pose an unacceptable risk to our economic and strategic security. I thought cutting S. 1039 was a mistake at the time, and now I am hoping Congress will remedy that mistake.

Today, I rise to reintroduce those portions of my refining capacity legislation that were left out of the energy bill and call upon my colleagues to help me finish what was begun with my original bill.

My new legislation, the Refinery Investment Tax Assistance Act, would enhance the incentives made in the energy bill by increasing the short- term incentive to add new and expanded refining facilities and by removing the obstacle of long tax depreciation schedules that refineries face.

For those refiners able to commit to installing new refining equipment before 2008 and to have that added capacity built by 2012, my original bill would have allowed a complete write-off for investments in new refining equipment in the first year. As passed by Congress, though, this provision was cut for budgetary reasons to allow for expensing of only 50 percent of the costs in the first year. The legislation I am introducing today would enhance that to allow for the full 100 percent expensing in the first year. Now, more than ever, we need to use every possible means to increase the security of our fuel supply.

This bill would also restore another very important provision of S. 1039 that was dropped out of the energy bill as a cost savings. This provision would help to remove some of the disparity the refining industry faces in our current tax system. Most manufacturers in our country are able to depreciate the cost of their new equipment over five years. Refineries, on the other hand, are strapped with a full 10- year depreciation period. This unfair treatment of our refining industry acts as a long-term obstacle to new investment in increased capacity. The current 10-year depreciation schedule for refiners is unwarranted, and it is past time that we level the playing field on depreciation for this critically important sector of our energy industry.

On September 6, in the aftermath of Katrina, Mr. Bob Slaughter of the National Petrochemical & Refiners Association testified before the Senate Energy and Natural Resources Committee. He said that an important solution to our energy crisis would be to ``[e]xpand the refining tax incentive provision in the Energy Act. Reduce the depreciation period for refining investments from 10 to seven or five years in order to remove a current disincentive for refining investment. Allow expensing under the current language to take place as the investment is made rather than when the equipment is actually placed in service. Or the percentage expensed could be increased as per the original legislation introduced by Senator Hatch.''

I think it is important to recognize that, over time, this legislation will not cost the U.S. Treasury one dime. It would allow refineries to change the timing of the depreciation of their equipment, but not the amount. And, we should keep in mind that when this

bill leads to more refineries and increased capacity, we will have also increased the tax base.

I want to throw my full support behind the proposals recently announced by House Energy and Commerce Chairman Barton and House Resource Committee Chairman Pombo, which would take other approaches to increase the number of refineries in our Nation. From both a national security and an energy security perspective, I especially endorse a proposal by Chairman Pombo to locate more refineries on public lands near oil resource deposits. Such a move will make our Nation more secure from attacks from terrorists and from Mother Nature. I understand that Senate Energy and Natural Resource Committee Chairman Pete Domenici is promoting similar proposals on the Senate side. And I applaud these men for their leadership.

We have learned that when it comes to our Nation's energy security, refining is where we are the most vulnerable. It is not the time for half measures, but bold immediate action to establish a secure and independent refining program in this country. I hope my colleagues will join me in my efforts to achieve this goal. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I am pleased today to introduce legislation that will improve patient safety while helping to provide some relief to health care providers dealing with escalating medical liability costs.

We are dealing with a medical malpractice problem in this country that is jeopardizing patient safety and hurting our health care system. As I visit with doctors and hospitals in New York and around the Nation, I hear about the pressures and problems of escalating medical malpractice insurance premiums.

These high premiums are forcing many physicians to alter their practice of medicine and leaving some patients without access to necessary medical care. In my State of New York, an unacceptable 40 percent of our counties have less than 5 practicing obstetricians.

At the same time, we have all heard the terrifying statistic from the landmark 1999 IOM report stating that as many as 98,000 deaths every year are the result of medical errors. But, far fewer people know that the IOM suggests that 90 percent of medical errors are the result of failed systems and procedures, not the negligence of physicians.

We must do better. If properly designed, these systems and procedures could go a long way towards seriously reducing medical errors.

But, understanding the root causes of errors requires their disclosure and analysis. And that's the fundamental tension between the medical liability system and our common goal of providing high quality care and improving patient safety in the health care system.

Studies have consistently shown that health care providers are reticent to engage in patient safety activities and be open about errors because they believe they are being asked to do so without appropriate assurances of legal protection.

That's where this legislation comes in. We build on the patient safety bill that was signed into law earlier this summer by creating a voluntary program to encourage disclosure of errors, an opportunity to enter negotiations and early settlement, while, at the same time, protecting patients' rights and providing liability protection for health care providers who participate in the program.

Our bill is designed to bridge the gap between the medical liability and patient safety systems for the benefit of patients and providers.

The truly unfortunate result of the current congressional stalemate over caps is that patients and physicians are left waiting for someone to break the logjam and work to find bipartisan solutions that have an opportunity to mitigate this problem. I believe it's critical that we find a way around this stalemate and that Congress work in good faith to find solutions that can garner enough support to find their way to the President's desk.

I believe that this is an exciting and innovative program that will improve patient-physician communication, reduce the rates of preventable patient injury, reduce the liability insurance premiums that physicians are facing, and insure that patients have access to fair compensation for medical injury: Four fundamental goals that I believe are necessary components of any solution we consider.

There are a number of successful programs across the country that are consistent with the provisions of our legislation, including one at the University of Michigan, and even one initiated by a medical malpractice insurance provider in Colorado. I am excited about the results these programs are producing--fewer numbers of suits being filed, more patients being compensated for injuries, greater patient trust and satisfaction, and significantly reduced administrative and legal defense costs for providers, insurers, and hospitals where these programs are in place.

I am hopeful that our legislation will provide an opportunity for more hospitals and physicians to use this program and see for themselves the benefits they--and their patients--will reap.