SBA Reauthorization and Improvement Act of 2008

Mr. President, today I introduce the Future Fuels Act of 2008. Put simply, I think coal--especially clean coal--is a critical part of the solution to America's energy independence and to our national security. The bill I will describe this morning presents several technological options that will help put us on a path toward achieving greater energy independence, while also tackling the grave threat to human health, property, and the world's economy that is global climate change.

I know that there are some, in this chamber and around the country, who would demonize coal. But the reality is that coal is what we have-- in abundance. We just can't ignore this resource or the incredible potential that it has not just to generate electricity, but as a potential transportation fuel source. The challenges that we face today--and they are challenges which I firmly believe can be overcome with the right combination of resources and American know-how--is how to use coal to produce energy in cleaner ways than we do now, and to accelerate development of carbon capture and sequestration, CCS, technologies to see to it that we don't make our current climate problems worse.

In addition to the bill I am introducing today, in West Virginia we have been working with major companies and our coal industry to promote some exciting next generation projects that will produce a range of value-added products out of coal--electricity, chemical feedstocks, fertilizer, diesel and aviation fuels. If we can pull off what we are trying to do, it will be, in a word, transformational.

My colleagues know that from Maine to California, West Virginia to Washington State, our constituents are paying more at the gasoline pump, in the supermarket aisles, and for virtually everything else. American families are being crushed by the weight of the rising cost of living--especially our seniors, veterans, and low-income families, who often live on fixed incomes. They are looking for solutions, not lengthy and circular debates on how this energy crisis came about and who is to blame for not fixing it. They are looking for the people they sent to Washington to examine all the options, work together for the common good, and to stop playing partisan or parochial games.

As a Senator from West Virginia, I can tell you that the people of my State know a thing or two about coal. They know that from small towns to major cities, from the Capitol building to the Vegas strip, coal generates nearly 50 percent of the Nation's electricity. It lights our homes, schools, and workplaces, and while the summer sun beats down, coal-burning power plants keep us cool. West Virginians, like so many others in this country who have considered our energy options, understand that coal also has the potential to run our cars and trucks and keep our planes flying. West Virginians--like the relatively few of us who are proud to call ourselves Coal State Senators--understand that the only thing keeping us from turning this promise into a reality is a laser-focused commitment from our government and the Nation's industries to unleash good old American ingenuity.

The Future Fuels Act can be the foundation for our efforts. In a way not seen since the Manhattan Project helped us win World War II, and at least not since we fulfilled President Kennedy's promise to put a man on the Moon and bring him safely back to Earth, the Future Fuels Act would bring together the best minds in government and the private sector to figure out commercially viable solutions to carbon capture and sequestration. In achieving what is undoubtedly the greatest environmental challenge of this century, the best minds throughout the world, working together, will renew the promise of a better standard of living that coal showed the world at the dawn of the industrial age. For Americans blessed with abundant reserves of this resource, the Future Fuels Act can allow coal to be the source of most of the clean energy we must have in the coming decades.

I understand there are those who believe that coal can never be part of the solution, because its detractors have made it such a poster child of the problem. Let's be honest. No energy policy choice can be made that does not have an environmental consequence. Oil drilling obviously does--and mining coal does, as well.

But it is not just the use of fossil fuels that has consequences. Wind power probably has more than its fair share of detractors, due to perceived threats to migratory birds and bats, and what some consider an unacceptable disruption of scenic vistas. Ethanol has been blamed for rising food prices and for the minimal value of the energy it produces relative to its production costs. Nuclear energy is touted by its proponents as a carbon-free option that should have its share of the nation's electricity generation expanded. Yet we have never figured out what to do about the permanent storage of, and human health and safety concerns regarding, highly radioactive waste with a half-life measured in tens of thousands of years. It is clear to me, at least, that the fundamentally flawed Yucca Mountain plan is not the answer. Natural gas-powered plants emit somewhat less than coal-fired plants, but are still not clean. In any event, installing new gas pipelines or trying to open a liquefied natural gas terminal inevitably runs utilities into the classic problem of ``not in my backyard,'' or NIMBY. The point is we need to find energy alternatives that are accessible, can be used wisely, preserve our standard of living, and make positive strides to heal our broken world.

Anyone who has watched the nightly news lately or who has read a newsmagazine in the last several years knows that global climate change is no longer cloaked in uncertainty or shrouded in doubt. The sheer repetition of major meteorological calamities renders discussion of ``storms of the century'' mute. Meanwhile, all too frequently floods, hurricanes, and typhoons are characterized as ``500-year events.'' We've watched the floodwaters rise in the heartland of America, forest fires rage out West, and both our Atlantic and Pacific coastlines battered by more common storms. The permafrost in the Arctic Tundra is thawing and releasing methane, and the polar ice caps are melting. Growing seasons are changing, and temperate zones are shifting. The damaging effects of global climate change are not suffered only by humanity; an increasing number of plant and animal species are facing extinction.

Whether you believe that climate change is happening or not; whether you accept the science of it all, or not, is beside the point. One thing is clear--we can't afford to be wrong, and doing nothing is not an option any longer. Our national policy can not be to merely clean up after more and more terrible weather affects more and more parts of the country--we'll go steadily more bankrupt if we do. We need to start addressing the root cause of it all--and that means fundamental changes in the ways we harness the immense power of fossil fuels, like coal, and permanent solutions for the carbon produced.

To do this, my legislation will expand incentives for clean coal technologies, establish an incentive to capture a potent greenhouse gas currently being vented into the atmosphere, create a low-cost program to promote responsible conversion of coal to transportation fuels, help develop new pipeline networks connecting the coalfields to the gas pump, and devote substantial resources to enable government and private sector scientists to turn the corner on commercially viable CCS.

The United States has more than a 250-year supply of coal stored beneath the hills of Appalachia and in several places around the country. To use this abundance in a responsible and environmentally appropriate way, the Future Fuels Act will do the following:

It will expand tax incentive and clean coal energy bond programs in current law designed to defray costs incurred by investor-owned utilities and public power providers when they choose advanced clean coal technologies to replace and supplement our current fleet of electricity generating plants. We have provided money for this purpose over the last decade, but given the scope of the challenge, we have up until now provided pennies on the dollar. The Future Fuels Act will provide $10.3 billion--$8.3 billion in expanded clean coal tax incentives and an additional $2 billion for municipal and cooperative energy providers in clean coal energy bonds.

It will establish a new incentive available to companies that mine coal underground to capture and sequester methane. Methane is more than 20 times as potent a heat-trapping greenhouse gas as an equal volume of carbon dioxide. It is liberated as a natural byproduct of the excavation of coal, and is currently vented to prevent explosions and to purify the air coal miners breathe. This incentive would allow coal companies that voluntarily capture methane and prevent it from being

released into the atmosphere to offset some of the costs of that capture.

It will create a ``stand-by'' loan program for development of environmentally responsible coal conversion facilities. Coal-based fuel developers would receive no Federal funds to build or operate their facilities, but would be able to tap into a loan program with strict repayment terms when the world price of oil drops below a figure to be set in statute. As a frustrating summer of high gasoline prices and airlines teetering on the edge of collapse because of high jet fuel costs makes clear, we need a new set of solutions to meet our energy demand. The Future Fuels Act will move us toward a time when we can run our cars, trucks, planes, and trains with domestic coal-derived fuel.

It will establish a tax incentive for the construction of pipeline infrastructure to bring coal-based fuels to the marketplace. Because our current network of oil and gas pipelines serves, naturally, where oil and gas is found, it may not be adequate or geographically able to serve new sources of fuels in the coalfields of Appalachia and other regions of the country where coal conversion facilities might be built. This incentive would encourage pipeline companies to build out to new locations with untapped potential in coal reserves.

But the Future Fuels Act is not just about using coal. It is about meeting the challenge of using coal in the carbon-constrained future we know is coming. The Future Fuels Act does this by harnessing the wisdom, scientific knowledge, and creativity of both government scientists and their private sector counterparts.

First, it would put into motion the kind of massive research, development, demonstration, and technology deployment program we should have seen from the current Administration, which had promised to be a friend to coal, only to walk away from ongoing coal initiatives in our Federal laboratories. Instead of doing the work that would establish a sustainable future for coal, the Administration first denied climate change was a problem, and then cut the fossil fuel R&D. Consequently, we have lost eight years' worth of serious efforts to develop commercial-scale carbon capture and sequestration, or CCS, options. This is utterly inexcusable, but by increasing the size and investment in government CCS R&D, my legislation attempts to make up for that lost time. Our national labs have done groundbreaking work, especially West Virginia, but they have not been given the resources they need to truly accelerate their research and make it commercially available. In contrast, this legislation would authorize $650 million over the next 5 fiscal years to develop commercial-scale carbon sequestration demonstrations in multiple geological and terrestrial formations, with the goal of storing 1 million tons of carbon dioxide annually.

Finally, my bill would create the Future Fuels Corporation, FFC, a publicly funded but privately operated institution with two primary goals. First, the FFC accelerate research--and more importantly, commercial deployment--of CCS technologies. Without the combination of brainpower and private sector dedication to deadlines and results we may never get CCS technologies off the drawing board and on to power plants and other industrial emitting facilities.

Second, the FFC will work to create new technologies and new production processes to enable the production of coal-based transportation fuels that are not only cleaner than petroleum-based fuels in use today, but which are made in plants that are cleaner, and which cause less environmental disruption than drilling for oil.

Like so many of the other legislative responses to the current energy and economic crisis, my legislation is not a ``silver bullet.'' It is, however, a sincere attempt to offer American solutions to what is both an American and a global problem.

We can never be truly energy ``independent,'' but we must resolve to be more energy ``resilient.'' We can do that when we tap into coal's still unbound potential. Likewise, we cannot expect the serious problem of global climate change to fix itself. The combination of our abundant coal and the innovative potential of the greatest scientists, technicians, and researchers in American business, academia, and government can make the energy resources of Saudi Arabia seem like a drop in the bucket. We need to foster policies to unleash these brilliant men and women to find and prove a range of carbon storage solutions, and then watch a waiting world beat a path to our doorstep.

Known American coal reserves can produce electricity at current rates--and be converted to transportation fuels in sufficient amounts to supplant more than the petroleum we import from the Persian Gulf and elsewhere--for two centuries or more. No American president will have to call up the Guard and Reserve to secure the coalfields, and no American parent will have trouble falling asleep because they're concerned about the safety of their son or daughter in uniform because the people who own the energy don't much like the American presence near the energy.

That is why the Future Fuels Act is so important, and why I commend it to my colleagues.

Mr. President, I ask consent that the text of the bill be printed in the Record.

Mr. President, I come to the floor today to speak on behalf of small businesses in the rural areas of my State, as well as rural small businesses nationwide. This is because small businesses are crucial to rural communities as they account for 90 percent of all rural establishments. In 1998, small firms employed 60 percent of rural workers and over 1.2 million small firms were located in rural areas. While Louisiana has major metropolitan areas such as New Orleans, Baton Rouge, Shreveport, and Lafayette, my State has countless rural communities which are vital to our State's economy. In fact, Louisiana has 13.8 million acres of hardwood and softwood forests, in addition to the fact that the State is one of the 10 largest producers of agricultural products. These include cotton, sugar cane, rice, pecans, soybeans, strawberries, and cattle. We are proud of our natural and agricultural resources, just as Louisianans are proud of our culture and cuisine.

As I mentioned, rural small businesses are key to the economy in my State, just as they are in other States. While the Department of Agriculture has various programs to help rural communities, the Small Business Administration, SBA, remains the primary Federal agency focused on promoting small businesses. From my positions on the Senate Committee on Small Business and Entrepreneurship as well as the Senate Appropriations Subcommittee on Financial Services and General Government, I have focused on improving SBA's ability to serve small businesses in Louisiana. One area that I believe this Congress can truly make a difference in addressing the main challenges facing rural small businesses. In talking to various stakeholders, I have repeatedly heard that two of the traditional obstacles to small business expansion in rural areas are lack of access to technology and capital.

For my part, I would like to offer some commonsense solutions to help address these and other challenges facing our rural small businesses. These businesses are the backbone of our economy so we should give them every opportunity to succeed. In particular, I am proud to introduce today the, ``Rural Small Business Enhancement Act of 2008.'' This bill provides necessary improvements to SBA programs to help the agency better assist rural small businesses.

First, as you may know, in 1982 Congress established a 5-year government-wide Small Business Innovation Research, SBIR, program. This program has been extended three times, most recently by Public Law 106- 554, which continues the SBIR program through September 30, 2008. The SBIR program was created to help meet the Federal Government's research and development needs. Among other things, the SBIR program was established to stimulate technological innovation related to each participating agency's goals and missions, to encourage agencies to use small businesses to meet Federal research and development needs, and to increase private sector commercialization of innovation derived from Federal research and development. The SBIR program had awarded over $17 billion to more than 82,000 projects from its inception to 2004.

In addition to the SBIR program, Congress also created the Small Business Technology Transfer, STTR, program. STTR is another important small business program that expands funding opportunities for small business in the area of Federal research and development. This program expands the public/private sector partnership to include joint venture opportunities for small businesses and nonprofit research institutions. For example, our university labs are important to the country in that they provide the engine for high-technology innovation. However, if innovation cannot be translated from the classroom or the lab to the marketplace, it cannot benefit the lives of everyday people. STTR combines the strengths of small businesses and universities to transfer technology/products from the lab to the marketplace. The small businesses in particular benefit from commercialization, which supports jobs and the U.S. economy.

As part of the 2000 Reauthorization of the SBIR program, Congress also created the Federal and State Technology Partnership Program, or FAST. FAST was created to strengthen the technological competitiveness of small business concerns by providing competitive grants to States to help support the SBIR program. These grants are traditionally used to assist technology transfers by universities to small businesses, provide technical assistance to firms participating in the SBIR program, and encourage commercialization of technology developed through SBIR funding. The FAST program has proven vital to States like Louisiana, which have traditionally been in the lower tier of States in terms of SBIR/STTR awards and total dollars. For example, in fiscal year 2003, Louisiana ranked 44 in terms of total SBIR award dollars out of the other 50 States, Puerto Rico and the District of Columbia. That year Louisiana had 14 Phase I and II awards for a total of $2,373,062. Compare that to the 3 ranked State of Maryland which had 325 awards for $96,533,591. For this reason, technical assistance provided under FAST grants is extremely important to businesses in my State. In general, the more SBIR

applications that are submitted by small businesses in a State, the more SBIR awards are made in that State.

The FAST program has allowed the Louisiana Business and Technology Center, LBTC, located at Louisiana State University in Baton Rouge, to establish the Louisiana SBIR/STTR Phase Zero Program. This program allows LBTC to grant up to $3,000 to companies needed help in writing SBIR Phase One grant applications and up to $5,000 for Phase Two proposals. One of the companies that benefitted from FAST and the Phase Zero Program was Mezzo Systems. Mezzo Systems is a provider of design analysis and prototyping services for micro fluidic, optic, magneto, and electronic devices. The company was an incubator tenant of the LBTC at LSU and I was able to visit with them at the center in 2003. With the support of my office and the LBTC, Mezzo won five SBIR awards totalling $1.3 million. One of these awards was an SBIR grant from the Department of Defense Missile Defense Agency totalling $750,000.

Through the FAST program, several spinoff companies at Louisiana Technical University in Ruston, Louisiana have also received SBIR funding to support research and development related to commercial application of their innovations. This is because Louisiana Tech recognizes the value of expanding the local service network for technology-based, small and rural businesses through programs like

Mr. President, I am pleased today to introduce the Medicare Imaging Disclosure Sunshine Act of 2008.

I agreed to a short-term Medicare extension bill last December with the understanding that this would give us the opportunity to include other priorities in a bipartisan Medicare package this year. One of the significant issues I had hoped to address was the lack of transparency in physician self-referrals for imaging services in the Medicare program.

The recently-enacted Medicare bill requires accreditation for providers of the technical component of advanced diagnostic imaging services such as magnetic resonance imaging, MRI, computed tomography, CT, scans, and positron emission tomography, PET, and it establishes a demonstration project to assess appropriate physician use of these services. However, Mr. President, the legislation regrettably fails to address an issue that has contributed significantly to the rapid growth in Medicare spending for imaging services: physician self-referrals for imaging services in their offices and in facilities where they own or lease advanced imaging equipment. According to a June 2008 report of the Government Accountability Office, Medicare Part B spending for imaging services more than doubled in 6 years, growing from $6.89 billion in 2000 to $14.11 billion in 2006. During this time, the percentage of Medicare spending on imaging services provided in physician offices grew from 58 percent, about $4 billion, in 2000 to 64 percent, about $9 billion, in 2006. Spending on advanced imaging services, such as MRIs, CT scans, and nuclear medicine, also grew substantially faster than other imaging services.

Beneficiaries need more transparency and disclosure of potential conflicts of interest when physicians write referrals for imaging services. An imaging disclosure provision was included in the Medicare bill that I introduced in June, and it was included in the agreement that Senator Baucus and I reached for this year's Medicare bill. The provision was not onerous nor was it overly proscriptive: it merely required referring physicians to disclose any conflict of interest related to their ownership of advanced imaging facilities or equipment. Patients still would be free to choose their physicians' imaging facility or equipment or to go elsewhere. Unfortunately, the imaging disclosure provision was dropped from the Medicare bill that Congress enacted once the process became partisan.

It is for this reason that I am introducing this bill. The Medicare Imaging Disclosure Sunshine Act does just what the name implies: it requires referring physicians to shed some light on their relationship to imaging facilities and equipment they own by disclosing that ownership interest and providing beneficiaries with a list of alternative providers. The referring physician is required to inform the individual in writing at the time of referral that he or she can obtain imaging services elsewhere if they choose to do so and to provide a list of imaging suppliers located where the individual resides. The imaging services covered by the requirement include MRIs, CT scans, PET, and other radiology services specified as designated health services that the Secretary of Health and Human Services determines appropriate. The requirement would be effective in January 2010.

Technology has made great advances in imaging services in recent years, and improvements in imaging hold much promise for earlier and more accurate diagnoses of life-threatening diseases which often may lead to improved outcomes for patients. But we must do more to help control the potential for overutilization of imaging services. The Medicare Payment Advisory Commission, or MedPAC, and others have expressed serious concerns that the sizeable growth in the volume of imaging services needs to be addressed. In March 2005, MedPAC recommended that the Secretary of HHS establish standards for providers of diagnostic imaging services and measure physicians' use of imaging services with their peers. Those recommendations were addressed to some degree in the Medicare bill that Congress enacted. However, another key MedPAC recommendation--that the Secretary of HHS strengthen the rules limiting physicians' financial incentives to order imaging services-- unfortunately was ignored.

The June 2008 GAO Report noted that physicians in specialties other than radiology generated an increasing share of revenue from in-office imaging services from 2000 to 2006. They also found that in-office imaging spending per beneficiary, like other Medicare spending, varied widely across geographic regions of the country. By 2006, in-office imaging spending per beneficiary varied from $62 in Vermont to $472 in Florida, nearly eight times as much. This raises additional concerns about overuse since research on geographic variations on health care spending shows that, generally, providing more services does not lead to improved health care outcomes. In GAO's view, the shift in imaging services from hospital settings to physician offices has the potential to encourage overuse in light of the financial incentives that exist for physicians to supplement lower professional fees for interpreting imaging tests with relatively higher fees for performing the tests. They concluded that physician ownership of imaging equipment is a way to generate additional revenue for a practice.

The Medicare Imaging Disclosure Sunshine Act will provide another necessary tool to address the significant increase in Medicare spending for in-office imaging services by providing more transparency and shedding some light on physician referrals to facilities and medical imaging equipment they own. I urge my colleagues to support this legislation.

Mr. President, I rise today to introduce the Federal Financial Assistance Management Improvement Act of 2008 with Senator Lieberman.

In 1999, I introduced the Federal Financial Assistance Management Improvement Act of 1999 with Senators Lieberman, Thompson and Durbin. My good friend from Ohio, Congressman Portman, introduced companion legislation in the House of Representatives, and working together we were able to enact that legislation to improve the effectiveness and performance of Federal financial assistance programs, simplify Federal financial assistance application and reporting requirements, improve the delivery of services to the public and coordinate the delivery of such services.

Progress was made under the provisions of the Federal Financial Assistance Management Improvement Act of 1999, commonly known as ``PL 106-107.'' A 2005 Government Accountability Office, GAO, report noted that ``[m]ore than 5 years after passage of P.L. 106-107, cross-agency work groups have made some progress in streamlining aspects of the early phases of the grants life cycle and in some specific aspects of overall grants management . . .'' However, GAO noted that work remained to be done, and in 2006 suggested that Congress consider reauthorizing the Federal Financial Assistance Management Improvement Act of 1999. The Act expired in November, and I believe Congress should heed GAO's advice and reauthorize this important law.

The bill I am introducing today with Senator Lieberman reauthorizes the Federal Financial Assistance Management Improvement Act and makes improvements to that Act based on the 2005 and 2006 recommendations of GAO. The bill requires the Director of the Office of Management and Budget, OMB, to develop a public Web site that allows grant applicants to search and

apply for grants, report on the use of grants, and provide required certifications and assurances for grants. I believe such a Web site will enhance the transparency required by the Federal Funding Accountability and Transparency Act that Congress enacted last year.

The bill also requires the Director of OMB to develop a strategic plan for an end-to-end electronic capability that allows non-Federal entities to manage Federal financial assistance and requires each Federal agency to plan actions to implement that strategic plan. Each Federal agency would be required to report to OMB on progress made in achieving its objectives under the OMB strategic plan, and the Director of OMB would be required to report to Congress biennially on progress made in implementing the Federal Financial Assistance Management Improvement Act.

In 1999 I said the Federal Financial Assistance Management Improvement Act was an important step toward detangling the web of duplicative Federal grants available to States, localities and community organizations. While some progress has been made to detangle that web, work remains to be done, and I hope that Congress will quickly reauthorize this law so that OMB and Federal agencies continue those efforts.

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

Mr. President, I think--I do not think--I am almost certain that S. 2920 is at the desk and due for its first reading.

Mr. President, I now ask for its second reading but object to my own request.