Michelle's Law

Mr. President, today I'm joined by Senators Carl Levin of Michigan and Russell Feingold of Wisconsin in re-introducing legislation that we believe will help the Internal Revenue Service (IRS) combat offshore tax haven abuses and ensure that U.S. multinational companies pay the U.S. taxes that they rightfully owe.

Every year, tens of millions of taxpayers work through piles of complicated IRS instructions and complex forms to prepare and file their tax returns to fulfill their taxpaying responsibility. Some tax experts have estimated that taxpayers spend over $100 billion and more than 6 billion hours trying to comply with their Federal tax obligation.

That's why every American has a right to be angry when they hear repeated press accounts of corporate taxpayers that are shirking their tax obligations by actively shifting their profits to foreign tax havens or using other inappropriate tax avoidance techniques. The bill that we are re-introducing today is a simple and straightforward way to try to tackle the offshore tax haven problem. It is virtually identical to our bill in the 109th Congress, S. 779, but we have granted potentially impacted companies an extra year to comply with its provisions.

We have known for many years that some very profitable U.S. multinational businesses are using offshore tax havens to avoid paying their fair share of U.S. taxes. But in the face of these reports, the Congress and the administration have shown little interest in stopping this hemorrhaging of tax revenues. In fact, a growing body of evidence suggests that the tax haven problem is getting much worse and may be costing the U.S. Treasury tens of billions of dollars every year.

Although the Congress did pass legislation a few years ago, which I supported, that addresses a narrow problem of a couple dozen corporate expatriates that reincorporated overseas, that legislation did nothing to deal with the problem of U.S. companies that are setting up tax haven subsidiaries offshore to avoid their taxpaying responsibilities in this country.

Around the time of the debate on corporate inversions, a New York Times article got it right when it suggested that ``instead of moving headquarters offshore, many companies are simply placing patents on drugs, ownership of corporate logos, techniques for manufacturing processes and other intangible assets in tax havens . . . The companies then charge their subsidiaries in higher-tax locales, including the U.S., for the use of these intellectual properties. This allows the companies to take profits in these havens and pay far less in taxes.''

How pervasive is the tax haven subsidiary problem? A couple of years ago, the Government Accountability Office (GAO), the investigative arm of Congress, issued a report that Senator Levin and I requested that gives some insight to the potential magnitude of this tax avoidance activity.

The GAO found that 59 out of the 100 largest publicly-traded Federal contractors in 2001--with tens of billions of dollars of Federal contracts in 2001-- had established hundreds of subsidiaries located in offshore tax havens. According to the GAO, Exxon-Mobil Corporation, the 21st largest publicly traded Federal contractor in 2001, has some 11 tax-haven subsidiaries in the Bahamas. The same report revealed that the Halliburton Company has 17 tax-haven subsidiaries, including 13 in the Cayman Islands, a country that has never imposed a corporate income tax, as well as 2 in Liechtenstein and 2 in Panama. And the now infamous Enron Corporation had 1,300 different foreign entities, including some 441 located in the Cayman Islands.

But the poster child for offshore tax haven abuses, in my opinion, is a five-story building located in the Cayman Islands that thousands of companies call home. According to a very good investigative report published by David Evans with Bloomberg News in the summer of 2004, there is a building named the Ugland House in Grand Cayman that is used as the address of 12,748 companies.

In fact, nearly half of the money U.S. companies earned overseas is accounted for in tax havens like the Cayman Islands. A former Joint Committee on Taxation economist released a study that looked at the amount of profits that U.S. companies are shifting to offshore tax havens. He found that U.S. multinational companies had moved hundreds of billions of dollars in profits to tax havens for years 1999-2002, the latest years for which IRS data was available.

The legislation we are re-introducing today would help put a stop to these tax avoidance schemes. Specifically, our legislation denies tax benefits, namely tax deferral, to U.S. multinational companies that set up controlled foreign corporations in tax haven countries. This tracks the same general approach in legislation passed by the Congress and enacted into law that was designed to curb the problem of corporate inversions. Our bill builds upon the good work of Senators Baucus and Grassley and other members of the Senate Finance Committee by extending similar tax policy changes to cover the case of U.S. companies and their tax haven subsidiaries.

Specifically, our legislation would treat U.S. controlled foreign subsidiaries that are set up in tax haven countries--but are not engaged in a real and active business--as domestic companies for U.S. tax purposes. In other words, we would simply treat these companies as if they never left the United States, which is essentially the case in these tax avoidance motivated transactions. The bill's list of specific tax haven countries subjected to the new rule is based upon the previous work by the Organization for Economic Cooperation and Development. However, our legislation does give the Secretary of the Treasury the ability to add or remove a foreign country from this list in appropriate cases. We also give businesses plenty of time, two additional years through December 31, 2008, to restructure their tax haven operations if they so choose.

As mentioned, our legislation effectively ends the deferral tax benefit for U.S. companies that shift income to offshore inactive tax haven subsidiaries. This means, for example, that any efforts by a U.S. company to move profits to the subsidiary through transfer pricing schemes will not work because the income earned by the subsidiary would still be immediately taxable by the United States. Likewise, any efforts to move otherwise active income earned by a U.S. company in a high-tax foreign country to a tax haven would cause the income to be immediately taxable by the United States. Under this bill, companies that try to move intangible assets--and the income they produce--to tax havens would be unsuccessful because that income would still be immediately taxable by the United States. The Joint Tax Committee says our legislation that will help close this tax shelter game will prevent these companies from draining some $15 billion in revenues from the U.S. Treasury over the next decade.

Let me be very clear about one thing. This legislation will not adversely impact U.S. companies with controlled foreign subsidiaries that are located in tax havens and doing legitimate and substantial business. The legislation expressly exempts a U.S.-controlled foreign subsidiary from its tax rule changes when all of its income is derived from the active conduct of a trade or business within a listed tax haven country.

In 2002, then-IRS Commissioner Charles Rossotti told Congress that ``nothing undermines confidence in the tax system more than the impression that the average honest taxpayer has to pay his or her taxes while more wealthy or unscrupulous taxpayers are allowed to get away with not paying.'' He is absolutely right. It's grossly unfair to ask our Main Street businesses to operate at a competitive disadvantage to large multinational businesses simply because our tax authorities are unable to grapple with the growing offshore tax avoidance problem. It is also outrageous that tens of millions of working families who pay their taxes on time every year are shouldering the tax burden of large profitable U.S. multinational companies that use tax haven subsidiaries.

In conclusion, it is my hope that the White House and Congress in a new spirit of bipartisanship will help in our effort to get this needed tax law change enacted into law. I urge my colleagues to support this effort by cosponsoring this legislation.

Mr. President, today I am pleased to introduce with Senator McCain and other senators the Indian Child Protection and Family, Violence Prevention Act Amendments of 2007. The bill we introduce today is virtually identical to legislation which the Senate adopted last year to amend and reauthorize the Indian Child Protection and Family Violence Prevention Act of 1990. The primary goals of that Act were to reduce the incidence of child abuse, and mandate the reporting and tracking of child abuse in Indian Country.

The Indian Child Protection and Family Violence Prevention Act Amendments would authorize a study to identify impediments to the reduction of child abuse in Indian Country, as well as require data collection and annual reporting to Congress concerning child abuse in Indian Country; provide additional safeguards for the privacy of information about a child by local law enforcement and child protective services; provide for more involvement by the FBI and the Attorney General in documenting incidents of child abuse on Indian reservations; and authorize the Indian Health Service to use telemedicine in connection with examinations of abused Indian children. The bill would also authorize background investigations for employees and volunteers who work with Indian children, amend the Major Crimes Act to criminalize acts of child abuse and neglect in Indian Country, and authorize several treatment programs for Indian children who have been victimized.

I particularly appreciate that this reauthorization legislation addresses a related issue about which I have deep concern--the epidemic of youth suicide in many reservation communities. Indian Country has higher rates of youth suicide, as well as of child abuse, than other American population groups. Often, children who attempt suicide have been abused by a family or community member. This bill would authorize professionals trained in behavioral health, including suicide prevention and treatment, to be included on the staff of regional Indian Child Resource and Family Services Centers authorized under the Act.

I am hopeful that the Senate will act quickly this session to authorize the additional protections for Native American children that would be provided by the Indian Child Protection and Family Violence Prevention Act Amendments of 2007. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today, along with my colleagues, Senators Ted Stevens, R-AK, Carl Levin, D-MI, Susan Collins, R-ME, Frank Lautenberg, D-NJ, John Kerry, D-MA, Barbara Boxer, D-CA, Dianne Feinstein, D-CA, and Robert Menendez, D-NJ to introduce the Downed Animal and Food Safety Protection Act of 2007, legislation intended to protect people from the unnecessary spread of disease. This bill, which has bipartisan support, 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 is 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 feed 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 at high risk 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 disease 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, I rise today to introduce legislation to restore critical funding to one of our Nation's most effective drug enforcement tools, the Edward Byrne Memorial Justice Assistance Grant Program. My bill, the Emergency Local Law Enforcement Byrne Assistance Act of 2007, will bring a desperately needed infusion of cash into this critical local law enforcement assistance program.

The Byrne grant program provides funding for local drug task forces all over the country. These local drug task forces are critical to creating regional cooperation and to fighting the manufacture, distribution, and use of methamphetamine.

A survey by the Iowa Office of Drug Control Policy found that in fiscal year 2004 Byrne JAG dollars funded 4,316 police officers and prosecutors working on 764 drug enforcement task forces. The study also found that Byrne JAG funding led to 221,000 arrests in 45 states, the seizure of 5.5 million grams of methamphetamine, and the breakup of almost 9,000 methamphetamine labs.

Yet the program has suffered draconian cuts over the past 4 years. Between 2003 and 2006 the President and the Attorney General have refused to provide a single dollar for Byrne local law enforcement funding. As a result, funding for the Byrne program has been slashed by almost 60 percent from $1 billion dollars in 2003 to just $416 million in 2006.

I hear on a weekly basis from Sheriffs and other law enforcement officials in Iowa how hard these cuts are hitting them. Over the past year, Iowa has had to absorb a 42 percent cut in Byrne funding. That translates to less law enforcement officers and less regional cooperation in finding and stopping that meth that continues to flood the State of Iowa. I recently heard from Story County Sheriff Paul Fitzgerald that his agency alone will lose two drug task force agents this year, a statistic that is being repeated in almost every county across my State.

The anecdotal evidence from Iowa law enforcement is clearly reflected at the national level. The Federal Bureau of Investigation Uniform Crime Reports recently found that violent crime in the United States increased 2.5 percent in 2005, and an additional 3.7 percent in the first half of 2006, the largest increase in 15 years! The increase was much more severe in the meth plagued Midwest with violent crime up 5.7 percent in 2005.

You don't need a side by side chart to understand the connection between drastic reductions in federal funding for local law enforcement and rising crime rates!

At the same time, a recent report by the Department of Justice Inspector General found that the Department of Justice has not been doing a particularly effective job of administering the grants within its jurisdiction. The Inspector General found that just over $170 million expired grant funding is sitting at DOJ. Some of this funding is for grants that expired as long as five years ago!

My bill simply takes this unused money and puts it into the Byrne grant program. Specifically, the legislation transfers all balances on COPS and Office of Justice Program grants that have been expired for more than 90 days and all Office of Violence Against Women grants that have been expired for more than 2 years, to the Byrne JAG program for fiscal year 2007. These expired grant funds are currently sitting in DOJ coffers and cannot legally be used by the grantee, and the funds would ultimately revert to the treasury. My bill instead puts the money to good use in offsetting some of the most drastic consequences of cuts to the Byrne program.

While reallocating these amounts to Byrne JAG will make only a dent in the massive budget cuts of recent years, the Emergency Local Law Enforcement Byrne Assistance Act of 2007 is an important first step and sends an immediate message to line officers

overwhelmed by the unstoppable flow of meth into our States that we are going to help.

I am hopeful that in this new Congress the President and the Congress will more adequately fund crucial law enforcement programs like Byrne JAG. In the meantime, I urge my colleagues to join me in demonstrating a commitment to local law enforcement and to our continuing fight against methamphetamine by coming together to quickly pass the Emergency Local Law Enforcement Byrne Assistance Act of 2007.

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

Mr. President, I am pleased to be able to reintroduce the Utah Recreational Land Exchange Act of 2007, together with my colleague Senator Hatch. This legislation will ensure the protection of critical lands along the Colorado River corridor in southeastern Utah and will help provide important funding for Utah's school children.

In Utah, we treasure our children's education. A key component of our education system is the 3.5 million acres of school trust lands scattered throughout the State. Upon Utah's admission to the Union in 1896, these lands were dedicated to support public education. Revenue from the trust lands, whether from grazing, forestry, surface leasing, or mineral development, is placed in the State School Fund. This fund is a permanent, income-producing endowment created by Congress to fund Utah's public education. Unfortunately, the majority of these lands are surrounded by public lands, making responsible management very difficult. It is critical to both the State of Utah and the Bureau of Land Management that we consolidate their respective lands to ensure that both public agencies are permitted to fulfill their mandates.

The legislation we are introducing today is yet another chapter in our State's long history of consolidating these State lands for the financial well-being of our education system. These efforts allow the Federal land management agencies to consolidate public lands in environmentally-sensitive areas that can then be reasonably managed. We see this exchange as a win-win solution for the State of Utah and its school children, as well as the Department of the Interior, the caretaker of our public lands.

In 1998, Congress passed the first major Utah school trust land exchange which consolidated hundreds of thousands of acres. Again in 2000, Congress enacted an exchange consolidating another 100,000 acres. I was proud to play a role in those efforts, and the bill we are introducing today is yet another step in the long journey toward fulfilling the promise Congress made to Utah's school children in 1896.

Utah's School and Institutional Trust Lands Administration manages some of the most spectacular lands in America, located along the Colorado River in southeastern Utah. This legislation will ensure that places like Westwater Canyon of the Colorado River, the world famous Kokopelli and Slickrock biking trails, some of the largest natural rock arches in the United States, wilderness study areas, and viewsheds for Arches National Park will be traded into Federal ownership and for the benefit of future generations. At the same time, the school children of Utah will receive mineral and development lands that are not environmentally-sensitive, and where responsible development makes sense. This will be an equal value exchange, with approximately 40,000 acres exchanged on both sides, giving taxpayers and the school children of Utah a fair deal. Moreover, the legislation establishes a common- sense valuation process for resources that are often either overlooked or overvalued because of their highly-speculative nature.

This legislation represents a truly collaborative process that has included local governments, the State, the recreation and environmental communities, and other interested parties. We

also worked closely with the Department of the Interior on proper valuation in the appraisal of the lands. In a hearing held before the Senate Energy and Natural Resources Committee on May 24, 2006, the Department of the Interior expressed their support for the bill and said that this land exchange will resolve management issues, improve public access, and facilitate greater resource protection. We look forward to working with the appropriate committees toward a successful resolution of this proposed exchange during this Congress.

I ask my colleagues to support our effort to fund the education of our children in Utah and to protect some of this nation's truly great land. I urge support of the Utah Recreational Land Exchange Act of 2007.

Mr. President, I rise to join Senator Bunning to introduce this important bill to make sure that Medicaid patients have access to care provided by podiatrists.

This bill ensures that Medicaid patients across the country can get services provided by podiatrists. This is a simple, common sense bill. This legislation includes podiatric physicians in Medicaid's definition of physician. This means that the services of podiatrists will be covered by Medicaid, just like they are in Medicare. Podiatrists are considered physicians under Medicare. They should be under Medicaid. Medicaid covers necessary foot and ankle care services. Medicaid should allow podiatrists who are trained specifically in foot and ankle care to provide these services and be reimbursed for them.

The services of podiatrists are considered optional under Medicaid. Currently, most State Medicaid programs, including Maryland, recognize and reimburse podiatrists for providing foot and ankle care to their beneficiaries. However, during times of tight budget States may choose to cut back on these optional services. There are now 7 States where access to a podiatrist is limited or nearly impossible for someone who receives Medicaid. Even though podiatrist services are considered optional, Medicaid patients need foot and ankle care. If podiatrists do not provide the care, patients will see providers who may not be as well trained in the care of the lower extremities as podiatrists. I want to make sure the over 750,000 Medicaid patients in Maryland continue to have access to the services provided by over 400 podiatrists in Maryland.

Podiatrists receive special training on the foot, ankle, and lower leg. They play an important role in the recognition of systemic diseases like diabetes, and in the recognition and treatment of peripheral neuropathy, a frequent cause of diabetic foot wounds that can often lead to preventable lower extremity amputations. Nearly 21 million Americans are now living with diabetes, a 14 percent increase from the 18 million in 2003. Another 41 million have pre-diabetes, the condition that indicates an increased risk for developing both type 2 diabetes and cardiovascular disease. Both the CDC and the American Diabetes Association recommend that podiatric physicians be part of the care term for people with diabetes.

Ensuring Medicaid patient access to podiatrists will save Medicaid funds in the long term. According to the American Podiatric Medical Association, 75 percent of Americans will experience some type of foot health problem during their lives. Foot disease is the most common complication of diabetes leading to hospitalization. About 82,000 people have diabetes-related leg, foot, or toe amputations each year. Foot care programs with regular examinations and patient education could prevent up to 85 percent of these amputations. This alone could have saved $1.3 billion in savings for Medicare and $386 million in savings for Medicaid. Podiatrists are important providers of this care.

This bill will make sure that Medicaid patients across the country have access to care provided by podiatrists. It has the support of the American Podiatric Medical Association and gained broad bi-partisan support in both the House and Senate last Congress. 29 Senators co- sponsored S. 440, including nearly half the members of the Finance Committee. The House companion bill, HR 699 had 210 co-cosponsors, including 68 percent of the committee with primary jurisdiction, Energy and Commerce. I urge my colleagues to cosponsor this important legislation.