A bill to amend Public Law 107-153 to modify a certain date.

Mr. President, today my good friends Senators Grassley and McCain and I are introducing the ``Government Settlement Transparency Act of 2005'', a bill that will put a stop to tax deductions for fines and penalties paid by companies to government agencies in connection with civil settlements. Over the past several years, we have become increasingly concerned about the approval of various settlements that allow penalty payments made to the government in settlement of a violation or potential violation of the law to be tax deductible. Our concerns were heightened this week upon the release of a Government Accountability Office Report that confirmed many companies deduct these settlements notwithstanding the tax code's prohibition against deducting fines and penalties. This abuse shifts the tax burden from the wrongdoer onto the backs of the American people. This is unacceptable.

Many government agencies enter into these settlement agreements after investigating companies for violations of the law. Every year thousands of violations are resolved with settlements totaling tens of billions of dollars paid to the Federal Government. Civil settlements serve to punish past wrongdoing and to deter future wrongdoing without protracted court proceedings. For example, in the past several years settlements of various SEC investigations into violations or potential violations of the securities laws have been front and center in the news. Through civil investigations, Federal and State regulators are working hard to hold these firms responsible for their actions. With these efforts to achieve greater accountability in the business community and ensure the integrity of our financial markets, it is important that the rules governing the appropriate tax treatment of settlements be clear and adhered to by taxpayers.

Section 162(f) of the Internal Revenue Code provides that no deduction is allowed as a trade or business expense under section 162(a) for the payment of a fine or penalty to a government for violation of any law. The enactment of section 162(f) in 1969 codified existing case law that denied the deductibility of fines and penalties as ordinary and necessary business expenses on the grounds that ``allowance of the deduction would frustrate sharply defined national or state policies proscribing the particular types of conduct evidenced by some governmental declaration thereof.'' Treasury regulations provide that a fine or penalty includes an amount paid in settlement of the taxpayer's actual or potential liability for a fine or penalty.

The legislation introduced today modifies the rules regarding the determination of whether payments are nondeductible payments of fines or penalties under section 162(f). In particular, the bill generally provides that amounts paid or incurred whether by suit, agreement, or otherwise, to, or at the direction of, a government in relation to the violation of any law or the investigation or inquiry in the potential violation of any law are nondeductible. The bill applies to deny a deduction for any such payments, including those where there is no admission of guilt or liability and those made for the purpose of avoiding further investigation or litigation.

An exception applies to payments that the taxpayer establishes are either restitution, including remediation of property, or amounts required to come into compliance with any law that was violated, and that are so identified in the settlement agreement. It is intended that a payment will be treated as restitution only if the payment is required to be paid to the specific persons, or in relation to the specific property, actually harmed by the conduct of the taxpayer that resulted in the payment. Restitution does not include reimbursement of government investigative or litigation costs, or payments to whistleblowers. It is intended that a payment will be treated as an amount required to come into compliance only if it directly corrects a violation with respect to a particular requirement of law that was under investigation. Amounts paid to educate consumers or customers about the risks of doing business with the taxpayer or about the field in which the taxpayer generally does business, and which are not specifically required under the law, are not deductible if required under a settlement agreement.

To ensure that companies do not take unallowable tax deductions for settlement payments, the bill requires government agencies to report to the IRS and to the taxpayer within thirty days of the settlement the amount of each settlement agreement, and to identify whether the payment is for fines, restitution, remediation or compliance, where the aggregate amount of the settlement is at least six hundred dollars, the Secretary of the Treasury will have the authority to adjust the amount and deadline for filing. Further, the IRS is encouraged to require taxpayers to separately identify such settlements on their tax returns.

The bill would be effective for amounts paid or incurred on or after the date of enactment unless the amounts were under binding order or agreement before such date.

I ask unanimous consent that the Joint Committee on Taxation Technical Description and the text of the bill be printed in the Record.

Mr. President, today I am pleased to join with the Senator from Vermont, Mr. Jeffords, in introducing legislation that would bring a small measure of relief to the families of our men and women in uniform as they seek to maintain a sense of normalcy here at home while their loved ones are deployed in service to our country. Our ongoing large-scale deployments in Iraq continue to demand so much from our men and women in uniform and their families. Passing this measure is the least we can do.

As part of the pre-deployment process, military personnel with dependent children or other dependent family members, such as elderly parents who require care, designate a caregiver for their dependents. This person will act in the deployed personnel's place to provide care for these family members during the period of deployment. The caregiver could be a spouse, parent, sibling, or other responsible adult who is capable of caring for, and willing to care for, the dependents in question.

The bill that we are introducing today, the Military Family Support Act, would create two programs to provide additional leave options for persons who have been designated as caregivers. The first program would require the Office of Personnel Management, OPM, to create a program under which Federal employees who are designated as caregivers could use accrued annual or sick leave, leave bank benefits, and other leave available to them under Title 5 for purposes directly relating to or resulting from their designation as a caregiver.

This bill would also require the Secretary of Labor to establish a voluntary program under which private sector companies would create similar programs for their employees and to solicit participation from private sector companies. I commend the many employers around the country for their understanding and support when an employee or a family member of an employee is called to active duty, and I hope that companies in Wisconsin and around the country will participate in this voluntary program.

In addition, our bill would require the Government Accountability Office to report to Congress with an evaluation of both the OPM program and the voluntary Department of Labor program. It is my hope that this evaluation will demonstrate the utility of such a leave program for designated caregivers and that these pilot programs could then be expanded to the designated caregivers of additional deployed military personnel.

This legislation builds on a measure that I introduced earlier this year, S. 798, the Military Families Leave Act. This bill would provide a similar benefit to military families by allowing eligible employees whose spouses, parents, sons, or daughters are military personnel who are serving on or called to active duty in support of a contingency operation to use their Family and Medical Leave Act, FMLA, benefits for issues directly relating to or resulting from that deployment. These instances could include preparation for deployment or additional responsibilities that family members take on as a result of a loved one's deployment, such as child care. I also introduced this bill during the 108th Congress.

Let me be clear, that the legislation we are introducing today does not amend the FMLA in any way. In fact, FMLA benefits are specifically exempted from the types of leave that can be used by designated caregivers for purposes directly related to or resulting from their caregiver responsibilities. While I believe that the FMLA could serve as the basis for providing additional leave opportunities for designated caregivers, opposition in some quarters to the original FMLA makes this a difficult proposition. I am proud to have been a cosponsor of this landmark law, and I believe that the FMLA continues to provide much-needed assistance to millions of workers around the country as they seek to care for their own serious health condition or that of a family member or as they welcome the birth or adoption of a child. I will continue to support this law and efforts to ensure that the vital benefits that it provides are not eroded.

I thank the Senator from Vermont, Mr. Jeffords, for his work on this important measure, and I urge all of our colleagues to support it.

Mr. President, I rise today on behalf of every person in America who owns property and to speak on behalf of everyone working toward the American dream of homeownership. That dream is being threatened today, and that threat comes from our own government and court system. Since the birth of our Nation, property ownership has been a fundamental and guarded right. The Founding Fathers went to great lengths to protect citizens from the heavy and greedy hand of government. This is why the Bill of Rights includes the fifth amendment's ``takings clause.''

Unfortunately, 200 years of upholding property rights was not enough to protect some Americans from the excessive use of government power. In Kelo v. City of New London, the U.S. Supreme Court ruled 5 to 4 that economic development was a sufficient reason to take a person's property. In this case, the city of New London, CT wanted to tear down private homes and redevelop private property into an industrial complex. It is important to understand that the city did not want to tear down these homes because the neighborhood was blighted. The city did not want to redevelop the property because the homes were being used by drug dealers. The homeowners were middle-class families living in a middle-class neighborhood. So why would the city want to redevelop these properties? City officials believed this would create jobs and increase the city's tax revenue. When the homeowners refused to sell to the city, the city began condemnation proceedings. The homeowners sued the city and argued that this ``taking'' violated their fifth amendment rights.

The fifth amendment states that private property cannot be taken except for a ``public use'' and only then if the owners are justly compensated. The owners believed, as I do, that creating jobs and increasing tax revenue is not a public use. The Supreme Court, despite the plain meaning of the fifth amendment, ruled against the homeowners. As bad as that is, it gets worse for these homeowners. The city of New London is demanding that the homeowners, those who fought to protect their fifth amendment rights, must now pay back rent. For the Kelo family, that means $57,000 in rent owed to the city.

This cannot be what the Founding Fathers intended when they adopted the Bill of Rights. The Kelo decision has highlighted a serious problem with how government has taken more power at the expense of the people. The Supreme Court's decision favors big corporations and persons with political clout over homeowners and regular people.

Congress is partly to blame. Congress has created incentives for government to redevelop property in a never-ending quest for more and more tax dollars. New London, CT is the perfect example of these incentives. To Americans, the Kelo decision means that no matter how hard you work and no matter how hard you save, government can come in and take it all away from you. No person's home will be safe if Congress does not act to restore the fifth amendment. The property owners who lost their homes as a result of the Kelo decision paid their Federal taxes, paid their State taxes, and paid their local taxes. They played by the rules. Ironically, it was these taxes that made it possible for their government to steal their homes. As a result, Congress must step in to limit the use of Federal dollars.

Just as our country's Founders sought to protect private property by amending the Constitution, I feel Congress must act to protect those rights. That is why I am introducing the Private Property Rights Protection Act, legislation to protect and preserve the American dream. This bill will curb government power and return it where it belongs, to the people.

Mr. President, today I rise to introduce the Biotechnology Future Investment Expansion Act of 2005.

Biotechnology has resulted in some of the most important innovations of our time. Substantive research in agriculture, bioengineering, and medicine have given Americans a better life. From the discovery of DNA to the creation of synthetic insulin, biotechnology has improved the standard of living and has saved many lives. It is important that we encourage continued research to further advances in the biotech field.

The biotech industry is one of the most research-intensive industries in the world. The industry spent $17.9 billion on research and development in 2003 alone. The overwhelming majority of biotech companies engaged in this research are not profitable in the early years of development. Such companies may accumulate net operating losses NOLs, without earning income, for a decade or more. Unfortunately, a provision of the tax code, (Section 382), operates to severely limit the utilization of NOLs by many such biotech companies. Often, these limitations cause NOLs to expire before they can be used by these companies.

This legislation will modify the application of Section 382 to the biotech industry, with the goal of increasing that important sector's ability to leverage capital into high-tech, high-risk cutting-edge research. Specifically, the legislation will ensure that neither new investment into biotech companies nor a business-driven merger of two biotech loss companies will trigger the section 382 NOL limitation. Neither of these changes runs counter to the long-standing tax policy behind Section 382 of preventing corporations, from NOL trafficking.

My home State of Pennsylvania is a national leader in biotechnology innovation, and the biosciences are a significant economic driver in Pennsylvania's economy. Pennsylvania's support of the industry has made it a policy leader for the biosciences. More than 125 biopharmaceutical companies and 2,000 bioscience-related companies make Pennsylvania their home. For example, Philadelphia's BioAdvance focuses on bioinformatics, bio-pharmaceuticals and medical devices, and clinical trials. The Pittsburgh Life Sciences Greenhouse focuses on drug discovery tools, tissue and organ research, medical devices, and therapeutic strategies for neuropsychiatric disorders. The Central Pennsylvania Life Sciences Greenhouse is pursuing drug design and delivery systems, biomedical devices, and bio-nanotechnology. These and many other companies in Pennsylvania are developing ground-breaking therapies, devices, diagnostics and vaccines for once untreatable diseases and debilitating conditions, providing hope for millions of patients.

Additionally, top-of-the-line bioscience research takes place in Pennsylvania's academic institutions. Pennsylvania researchers garnered $1.3 billion in funding through the I.-- National Institutes of Health in 2003, making the Commonwealth fourth in the Nation. And the University of Pennsylvania and the University of Pittsburgh are in the top 10 nationally for NIH funding.

We must encourage continued research and the funding that supports it. Biotech companies are pursuing high-risk research projects to find cures for many deadly and debilitating diseases that afflict humanity. From cancer to AIDS, and from Alzheimer's Disease to Parkinson' Disease, the biotechnology industry will be in the center of finding cures to these life-ending illnesses. My legislation offers a little more support to an industry we depend upon. I encourage my colleagues to join me in supporting this legislation and ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, today I introduce legislation to create a bi-partisan Entitlement Reform Commission. The Commission will review America's three major entitlement programs, Social Security, Medicare and Medicaid, and make comprehensive recommendations to Congress and the President that would sustain the solvency and stability of these three programs for future generations. Representative John Tanner, D- TN, has joined me by introducing this legislation in the House of Representatives.

Social Security, Medicare and Medicaid have played a vital role for millions of Americans to cope with the financial burdens of retirement and health care costs. However, over the next 75 years these three programs represent a 42 trillion dollar unfunded commitment are on a trajectory that cannot be sustained. The Social Security Trust Fund faces a four trillion dollar unfunded commitment and will pay out more money than it takes in beginning in 2017; it will be exhausted in 2041. The Medicare Part A Trust Fund, hospital insurance, faces an 8.6 trillion dollar unfunded commitment and will be exhausted even sooner in 2020. The remainder of the 42 trillion dollar unfunded commitment includes 12.4 trillion dollars for Medicare Part B, supplementary medical insurance; 8.7 trillion dollars for Medicare Part D, prescription drugs; and 8.4 trillion dollars for Medicaid.

We have no idea where we are going to get the money to pay for these commitments. We must deal with these challenges today while we still have options so that our children will not be severely burdened with paying for huge entitlement commitments when they are competing in a far more competitive world than exists today. To leave future generations in this predicament would be an irresponsible and colossal failure of our generation.

Eight members will sit on the Commission established in my legislation. The House Speaker, House Minority Leader, Senate Majority Leader and Senate Minority Leader will each appoint two members. Members cannot be elected officials. The Commission will select two Co- Chairmen from among its members and hire an Executive Director.

The Commission must submit its final report to the President and Congress one year after the selection of the two Co-Chairmen of the Commission and the Executive Director. Congress will hold Committee hearings to review the Commission's recommendations. The bill authorizes 1.5 million dollars to carry out the Commission's tasks.

In March 2005, Federal Reserve Chairman Alan Greenspan urged Congress to act on modernizing entitlement programs, ``sooner rather than later.'' He warned that unless we act now to meet the huge unfunded commitments of our entitlement programs, there will be significant economic consequences for our nation. Dealing with this problem now means facing less dramatic and difficult choices down the road. The earlier we confront this reality, the more options we will have to pursue a wise and sustainable course of action.

I am 59 years old. I am at the front end of the ``baby boom'' generation. My daughter is 15 years old and my son is 13 years old. I don't want to fail their generation. That means addressing these entitlement programs now while we have time to do it in a responsible way. This is a defining debate for today's leaders. Doing nothing is irresponsible and cowardly. It is in every American's interest to deal with this challenge now. We have it in us to do what needs to be done. I invite my colleagues to cosponsor this legislation.