Pechanga Band of Luiseno Mission Indians Water Rights Settlement Act

Mr. President, I am introducing today, with my colleagues Senator Grassley and Senator McCaskill, the Incorporation Transparency and Law Enforcement Assistance Act. This bill tackles a longstanding homeland security problem involving inadequate State incorporation practices that leave this country unnecessarily vulnerable to wrongdoers, hinders law enforcement, and damages the international stature of the United States.

The problem is straightforward. Each year, our States allow persons to form nearly 2 million corporations and limited liability companies in this country without knowing, or even asking, who the beneficial owners are behind those corporations. Right now, a person forming a U.S. corporation or limited liability company, LLC, provides less information to the State than is required to open a bank account or obtain a driver's license. Instead, States routinely permit persons to form corporations and LLCs under State laws without disclosing the names of any of the people who will control or benefit from them.

It is a fact that criminals are exploiting this weakness in our State incorporation practices. They are forming new U.S. corporations and LLCs, and using these entities to commit crimes ranging from drug trafficking, money laundering, tax evasion, financial fraud, and corruption.

Law enforcement authorities investigating these crimes have complained loudly for years about the lack of beneficial ownership information. Last year, for example, the U.S. Department of the Treasury sent a letter to the States stating: ``the lack of transparency with respect to the individuals who control privately held for-profit legal entities created in the United States continues to represent a substantial vulnerability in the U.S. anti-money laundering/counter terrorist financing (AML/CFT) regime. . . . [T]he use of U.S. companies to mask the identity of criminals presents an ongoing and substantial problem . . . for U.S. and global law enforcement authorities.''

Michael Chertoff, former Secretary of the U.S. Department of Homeland Security, wrote the following:

In countless investigations, where the criminal targets

utilize shell corporations, the lack of law enforcement's

ability to gain access to true beneficial ownership

information slows, confuses or impedes the efforts by

investigators to follow criminal proceeds. This is the case

in financial fraud, terrorist financing and money laundering

investigations. . . . It is imperative that States maintain

beneficial ownership information while the company is active

and to have a set time frame for preserving those records. .

. . Shell companies can be sold and resold to several

beneficial owners in the course of a year or less. . . . By

maintaining records not only of the initial beneficial

ownership but of the subsequent beneficial owners, States

will provide law enforcement the tools necessary to clearly

identify the individuals who utilized the company at any

given period of time.

These types of complaints by U.S. law enforcement, their pleas for assistance, and their warnings about the dangers of anonymous U.S. corporations operating here and abroad are catalogued in a stack of reports and hearing testimony from the Department of Justice, the Department of Homeland Security, the Financial Crimes Enforcement Network of the Department of the Treasury, the Internal Revenue Service, and others.

To add insult to injury, our law enforcement officials have too often had to stand silent when asked by their counterparts in other countries for information about who owns a U.S. corporation committing crimes in their jurisdictions. The reality is that the United States can't answer those requests, because we don't have the information.

Our bill would cure the problem by requiring State incorporation forms to include a request for the names of a corporation's beneficial owners. States would not be required to verify the information, but civil or criminal penalties would apply to persons who submitted false information. If law enforcement issued a subpoena or summons to obtain the ownership information, States would then supply the data contained on its forms.

This bill has received the support of numerous law enforcement associations, including the Federal Law Enforcement Officers Association, the Fraternal Order of Police, the National Association of Assistant United States Attorneys, the National Narcotic Officers' Associations Coalition, the United States Marshals Service Association, and the Association of Former ATF Agents.

The Federal Law Enforcement Officers Association, FLEOA, for example, which represents more than 26,000 Federal law enforcement officers, states that ``the unfortunate lax attitude demonstrated by certain states has enabled large criminal enterprises to exploit those state's flawed filing systems.'' FLEOA goes on:

We regard corporate ownership in the same manner as we do

vehicle ownership. Requiring the driver of a vehicle to have

a registration and insurance card is not a violation of their

privacy. This information does not need to be published in a

Yellow Pages, but it should be available to law enforcement

officers who make legally authorized requests pursuant to

official investigations.

The National Association of Assistant United States Attorneys, NAAUSA, which represents more than 1,500 Federal prosecutors, urges Congress to take legislative action to remedy inadequate State incorporation practices. NAAUSA states:

[M]indful of the ease with which criminals establish `front

organizations' to assist in money laundering, terrorist

financing, tax

evasion and other misconduct, it is shocking and unacceptable

that many State laws permit the creation of corporations

without asking for the identity of the corporation's

beneficial owners. Your legislation will guard against that

from happening, and no longer permit criminals to exploit the

lack of transparency in the registration of corporations.

Our bill was also endorsed by President Obama during the last Congress when he was a member of the U.S. Senate and served as an original cosponsor of the predecessor bill, S. 2956.

In 2006, the leading international anti-money laundering body in the world, the Financial Action Task Force on Money Laundering--known as FATF--issued a report criticizing the United States for its failure to comply with a FATF standard requiring countries to obtain beneficial ownership information for the corporations formed under their laws. This standard is one of 40 FATF standards that this country has publicly committed itself to implementing as part of its efforts to promote strong anti-money laundering laws around the world.

FATF gave the United States 2 years, until July 2008, to make progress toward coming into compliance with the FATF standard on beneficial ownership information. That deadline passed long ago, and we have yet to make any real progress. Enacting the bill we are introducing today would bring the United States into compliance with the FATF standard by requiring the States to obtain beneficial ownership information for the corporations formed under their laws. It would ensure that the United States met its international commitment to comply with FATF anti-money laundering standards.

The bill being introduced today is also the product of years of work by the U.S. Senate Permanent Subcommittee on Investigations, which I chair. As long ago as 2000, the Government Accountability Office, GAO, at my request, conducted an investigation and released a report entitled, ``Suspicious Banking Activities: Possible Money Laundering by U.S. Corporations Formed for Russian Entities.'' This report revealed that one person was able to set up more than 2,000 Delaware shell corporations and, without disclosing the identity of the beneficial owners, open U.S. bank accounts for those corporations, which then collectively moved about $1.4 billion through the accounts. It is one of the earliest government reports to give some sense of the law enforcement problems caused by U.S. corporations with unknown owners. It sounded the alarm years ago but to little avail.

In April 2006, in response to a Subcommittee request, GAO released a second report entitled, ``Company Formations: Minimal Ownership Information Is Collected and Available,'' which reviewed the corporate formation laws in all 50 States. GAO disclosed that the vast majority of the States do not collect any information at all on the beneficial owners of the corporations and LLCs formed under their laws. The report also found that many States have established automated procedures that allow a person to form a new corporation or LLC within the State within 24 hours of filing an online application without any prior review of that application by a State official. In exchange for a substantial fee, at least two States will form a corporation or LLC within one hour of a request. After examining these State incorporation practices, the GAO report described the problems that the lack of beneficial ownership information has caused for a range of law enforcement investigations.

In November 2006, our subcommittee held a hearing further exploring this issue. At that hearing, representatives of the U.S. Department of Justice, DOJ, the Internal Revenue Service, IRS, and the Department of Treasury's Financial Crimes Enforcement Network, FinCEN, testified that the failure of States to collect adequate information on the beneficial owners of the legal entities they form has impeded Federal efforts to investigate and prosecute criminal acts such as terrorism, money laundering, securities fraud, and tax evasion. At the hearing, DOJ testified:

We had allegations of corrupt foreign officials using these

[U.S.] shell accounts to launder money, but were unable--due

to lack of identifying information in the corporate records--

to fully investigate this area.

The IRS testified:

Within our own borders, the laws of some states regarding

the formation of legal entities have significant transparency

gaps which may even rival the secrecy afforded in the most

attractive tax havens.

FinCEN identified 768 incidents of suspicious international wire transfer activity involving U.S. shell companies.

In addition, in a list of the ``Dirty Dozen'' tax scams in 2007, the IRS highlighted shell companies with unknown owners as number four on the list, as follows:

4. Disguised Corporate Ownership: Domestic shell

corporations and other entities are being formed and operated

in certain states for the purpose of disguising the ownership

of the business or financial activity. Once formed, these

anonymous entities can be, and are being, used to facilitate

underreporting of income, non-filing of tax returns, listed

transactions, money laundering, financial crimes and possibly

terrorist financing. The IRS is working with state

authorities to identify these entities and to bring their

owners into compliance.

That is not all. Dozens of Internet websites advertising corporate formation services highlight the fact that some of our States allow corporations to be formed under their laws without asking for the identity of the beneficial owners. These Web sites explicitly point to anonymous ownership as a reason to incorporate within the United States, and often list certain States alongside notorious offshore jurisdictions as preferred locations for the formation of new corporations, essentially providing an open invitation for wrongdoers to form entities within the United States.

One Web site, for example, set up by an international incorporation firm, advocates setting up companies in Delaware by saying: ``DELAWARE--An Offshore Tax Haven for Non U.S. Residents.'' It cites as one of Delaware's advantages that: ``Owners' names are not disclosed to the state.'' Another Web site, from a U.K. firm called ``formacompanyoffshore.com,'' lists the advantages to incorporating in Nevada. Those advantages include: ``No I.R.S. Information Sharing Agreement'' and ``Stockholders are not on Public Record allowing complete anonymity.''

Despite this type of advertising, years of law enforcement complaints, and mounting evidence of abuse, many of our States are reluctant to admit there is a problem with establishing U.S. corporations and LLCs with unknown owners. Too many of our States are eager to explain how quick and easy it is to set up corporations within their borders, without acknowledging that those same quick and easy procedures enable wrongdoers to utilize U.S. corporations in a variety of crimes and tax dodges both here and abroad.

Since 2006, the subcommittee has worked with the States to encourage them to recognize the homeland security problem they have created and to come up with their own solution. After the subcommittee's hearing on this issue, for example, the National Association of Secretaries of State, NASS, convened a 2007 task force to examine state incorporation practices. At the request of NASS and several States, I delayed introducing legislation while they worked on a proposal to require the collection of beneficial ownership information. My subcommittee staff participated in multiple conferences, telephone calls, and meetings; suggested key principles; and provided comments to the task force.

In July 2007, the NASS task force issued a proposal. Rather than cure the problem, however, the proposal was full of deficiencies, leading the Treasury Department to state in a letter that the NASS proposal ``falls short'' and ``does not fully address the problem of legal entities masking the identity of criminals.''

Among other shortcomings, the NASS proposal does not require States to obtain the names of the natural individuals who would be the beneficial owners of a U.S. corporation or LLC. Instead, it would allow States to obtain a list of a company's ``owners of record'' who can be, and often are, offshore corporations or trusts. The NASS proposal also doesn't require the States themselves to maintain the beneficial ownership information, or to supply it to law enforcement upon receipt of a subpoena or summons. The proposal also fails to require the beneficial ownership information to be updated over time. These and other flaws in the proposal have been identified by the

Treasury Department, the Department of Justice, me, and others, but NASS has given no indication that the flaws will be corrected.

It is deeply disappointing that the States, despite the passage of more than 1 year, were unable to devise an effective proposal. Part of the difficulty is that the States have a wide range of practices, differ on the extent to which they rely on incorporation fees as a major source of revenue, and differ on the extent to which they attract non-U.S. persons as incorporators. In addition, the States are competing against each other to attract persons who want to set up U.S. corporations, and that competition creates pressure for each individual State to favor procedures that allow quick and easy incorporations. It is a classic case of competition causing a race to the bottom, making it difficult for any one State to do the right thing and request the names of beneficial owners.

That is why we are introducing Federal legislation today. Federal legislation is needed to level the playing field among the States, set minimum standards for obtaining beneficial ownership information, put an end to the practice of States forming millions of legal entities each year without knowing who is behind them, and bring the United States into compliance with its international commitments.

The bill's provisions would require the States to obtain a list of the beneficial owners of each corporation or LLC formed under their laws, to maintain this information for 5 years after the corporation is terminated, and to provide the information to law enforcement upon receipt of a subpoena or summons. If enacted, this bill would ensure, for the first time, that law enforcement seeking beneficial ownership information from a State about one of its corporations or LLCs would not be turned away empty-handed.

The bill would also require corporations and LLCs to update their beneficial ownership information in an annual filing with the State of incorporation. If a State did not require an annual filing, the information would have to be updated each time the beneficial ownership changed.

In the special case of U.S. corporations formed by non-U.S. persons, the bill would go farther. Following the lead of the Patriot Act which imposed additional due diligence requirements on certain financial accounts opened by non-U.S. persons, our bill would require additional due diligence for corporations beneficially owned by non-U.S. persons. This added due diligence would have to be performed--not by the States--but by the persons seeking to establish the corporations. These incorporators would have to file with the State a written certification from a corporate formation agent residing within the State attesting to the fact that the agent had verified the identity of the non-U.S. beneficial owners of the corporation by obtaining their names, addresses, and passport photographs. The formation agent would be required to retain this information for a specified period of time and produce it upon request.

The bill would not require the States to verify the ownership information provided to them by a formation agent, corporation, LLC, or other person filing an incorporation application. Instead, the bill would establish Federal civil and criminal penalties for anyone who knowingly provided a State with false beneficial ownership information or intentionally failed to provide the State with the information requested.

The bill would also exempt certain corporations from the disclosure obligation. For example, it would exempt all publicly traded corporations and the entities they form, since these corporations are already overseen by the Security and Exchange Commission. It would also allow the States, with the written concurrence of the Homeland Security Secretary and the U.S. Attorney General, to identify certain corporations, either individually or as a class, which would not have to list their beneficial owners, if requiring such ownership information would not serve the public interest or assist law enforcement in their investigations. These exemptions are expected to be narrowly drawn and used sparingly, but are intended to provide the States and Federal law enforcement added flexibility to fine-tune the disclosure obligation and focus it where it is most needed to stop crime, tax evasion, and other wrongdoing.

Another area of flexibility in the bill involves privacy issues. The bill deliberately does not take a position on the issue of whether the States should make the beneficial ownership information they receive available to the public. Instead, the bill leaves it entirely up to the States to decide whether and under what circumstances to make beneficial ownership information available to the public. The bill explicitly permits the States to place restrictions on providing beneficial ownership information to persons other than government officials. The bill focuses instead on ensuring that law enforcement and Congress, provided they are equipped with a subpoena or summons, are given ready access to the beneficial ownership information collected by the States.

To ensure that the States have the funds needed to meet the new beneficial ownership information requirements, the bill makes it clear that States can use their DHS state grant funds for this purpose. Every State is guaranteed a minimum amount of DHS grant funds every year and may receive funds substantially above that minimum. Every State will be able to use all or a portion of these funds to modify their incorporation practices to meet the requirements in the act. The bill also authorizes DHS to use appropriated funds to carry out its responsibilities under the act. These provisions will ensure that the States have the funds needed for the modest compliance costs involved with amending their incorporation forms to request the names of beneficial owners.

It is common for bills establishing Federal standards to seek to ensure State action by making some Federal funding dependent upon a State's meeting the specified standards. This bill, however, states explicitly that nothing in the bill authorizes DHS to withhold funds from a State for failing to modify its incorporation practices to meet the beneficial ownership information requirements in the act. Instead, the bill simply calls for a GAO report in 2013 to identify which States, if any, have failed to strengthen their incorporation practices as required by the act. After getting this status report, a future Congress can decide what steps to take, including whether to reduce any DHS funding going to the noncompliant States.

Finally, the bill would require the U.S. Department of the Treasury to issue a rule requiring formation agents to establish anti-money laundering programs to ensure they are not forming U.S. corporations or LLCs for criminals or other wrongdoers. GAO would also be asked to conduct a study of existing State formation procedures for partnerships and trusts.

We have worked hard to craft a bill that would address, in a fair and reasonable way, the homeland security problem created by States allowing the formation of millions of U.S. corporations and LLCs with unknown owners. What the bill comes down to is a simple requirement that States change their incorporation applications to add a question requesting the names and addresses of the prospective beneficial owners. That is not too much to ask to protect this country and the international community from wrongdoers seeking to misuse U.S. corporations and to help law enforcement stop those wrongdoers.

For those who say that, if the United States tightens its incorporation rules, new companies will be formed elsewhere, it is appropriate to ask exactly where they will go. Every country in the European Union is already required to get beneficial information for the corporations formed under their laws. Most offshore jurisdictions already request this information as well, including the Bahamas, Cayman Islands, Jersey, and the Island of Man. Our States should be asking for the same ownership information, but they don't, and there is no indication that they will any time in the near future, unless required to do so.

I wish Federal legislation weren't necessary. I wish the States could solve this homeland security problem on their own, but ongoing competitive pressures make it unlikely that the States will reach agreement. It has been more than 2 years since our 2006 hearing with no real progress to show for it, despite repeated pleas from law enforcement.

Federal legislation is necessary to reduce the vulnerability of the United States to wrongdoing by U.S. corporations with unknown owners, to protect interstate and international commerce from criminals misusing U.S. corporations, to strengthen the ability of law enforcement to investigate suspect U.S. corporations, to level the playing field among the States, and to bring the United States into compliance with its international anti-money laundering obligations.

There is also an issue of consistency. For years, I have been fighting offshore corporate secrecy laws and practices that enable wrongdoers to secretly control offshore corporations involved in money laundering, tax evasion, and other misconduct. I have pointed out on more than one occasion that corporations were not created to hide ownership, but to shield owners from personal liability for corporate acts. Unfortunately, today, the corporate form has too often been corrupted into serving those wishing to conceal their identities and commit crimes or dodge taxes without alerting authorities. It is past time to stop this misuse of the corporate form. But if we want to stop inappropriate corporate secrecy offshore, we need to stop it here at home as well.

For these reasons, I urge my colleagues to support this legislation and put an end to incorporation practices that promote corporate secrecy and render the United States and other countries vulnerable to abuse by U.S. corporations with unknown owners.

As I mentioned earlier, in the 110th Congress, then-Senator Obama was an original cosponsor of this legislation. I look forward to working with President Obama to ensure this homeland security bill is enacted into law.

I thank my cosponsor, Senator Grassley, who has been such a leader in this effort for so long, as he has in so many other good government initiatives. I also thank Senator McCaskill for her cosponsorship.

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

Mr. President, today I want to talk about jobs. Lately it seems that everyone says they want to talk about jobs and that we will get around to tackling jobs next week or the week after. I would like to kick off the discussion today, right now, and follow it up with what I plan to do about jobs. I would not be the first to observe that times are tough right now. Our Nation is still reeling from the most disastrous economic collapse in a generation. Failed regulatory policies--or really, just deregulation--bad lending practices, and Wall Street recklessness all contributed to the current crisis, double-digit unemployment for the first time in 25 years. Millions of American families are relying on their unemployment benefits to put food on the table and to pay their rent. Some are looking down at their final unemployment check, wondering what they are going to do next. For every single job opening, there are six unemployed workers. Too many people are left without options or hope in this dismal job market.

In the fall of 2008, when Wall Street's financial institutions started falling like dominos, our regulators told us: Congress has to pass TARP now or we face total economic ruin. This seemed to get Congress moving. It passed legislation in a matter of days. My feeling is that the American people, especially those folks out of work, need their advocates to say: We have to do this now. Every Senator who has heard from their constituents about the depressing job market, about the day-to-day struggles of being unemployed, should be on the floor insisting that we act now; that if we don't act now and act boldly and broadly, Main Street will continue to suffer, and that this unemployment crisis we are in will drag on and on.

The House has already acted. They passed a robust jobs package last December that provided needed funds to States and localities to keep teachers, firefighters, and police officers on the job. It provided funds for public infrastructure projects. These are all vital elements to a successful jobs creation package.

In addition to these fundamentals, the Senate has the opportunity to put forward new ideas for job creation. Today I am introducing my proposal, the SEED Act, Strengthening our Economy through Employment Development, SEED. We have seen Cash for Clunkers. We have talked about Cash for Caulkers. Now I am proposing cash for jobs. The SEED Act is modeled after a program we used for several years in Minnesota during the recession of the 1980s. By all accounts, it was extremely successful. Minnesota's program got over 7,400 people back to work in its first 6 months and created nearly 15,000 permanent, long-term jobs. It did that at a much lower cost per job than the stimulus package this body passed last year.

The SEED Act will incentivize rapid job creation by offering small and medium-size companies and nonprofits a direct wage subsidy to hire new workers and expand their operations. Small businesses are the driving force behind our economy. We all know that. They want to grow. But many of them need an added infusion of capital since TARP hasn't trickled down to them. Administered on a first-come-first-serve basis, these subsidies will provide 50 percent of wages of newly hired workers and will be disbursed through the already existing Workforce Investment Act system. Using this existing system will minimize the bureaucracy that plagues so many new initiatives. Additionally, employers who hire recently returned Iraq and Afghanistan vets would be eligible for a 60- percent subsidy. The subsidy would be available for a 12-month period, and the employer would commit to keeping the worker on for an additional 3 months after the subsidized year.

This model proved highly effective and efficient in Minnesota. Jim Glowacki is one of my constituents. He used Minnesota's program in the 1980s. After he lost his job, he decided to start his own business. He had few resources and little ability to borrow money. He used Minnesota's program, which was called MEED, to hire his first two employees. Now his company, the JPG Group, employs 17 full-time workers and has an annual payroll of over $800,000. His story epitomizes the incredible potential for this approach to spur job creation.

The second component of the SEED Act is to direct grants to States, localities, and tribes to fund green jobs; Providing funds to retrofit public buildings. In addition to creating green jobs, these retrofits will increase energy efficiency, decreasing our dependence on foreign oil and saving taxpayers money. These are public buildings. Too many of our public buildings, public housing, libraries, and schools are becoming outdated and don't utilize the green technologies available

today. There are many skilled workers currently on the bench who already have the training they need to immediately get to work on these projects. These new projects will increase demand for energy-efficient windows and doors and heating systems and insulation, providing a boost to our Nation's stalled manufacturing sector. Some of you may not know this, but Minnesota is the Silicon Valley of windows. We are home to the Nation's leaders in energy-efficient windows which makes some sense given our winters. Retrofitting public buildings is a win for everyone--for workers, localities, taxpayers, manufacturing, and the environment. This is a win-win-win-win-win, I think. Windows, too. If we reallocate $10 billion from the TARP program and pass this proposal into law, we have the potential of creating up to 500,000 jobs, and quickly.

Getting people back to work will ease the burden on public benefit programs like such as employment and COBRA subsidies. Many employers will convert their participating workers into permanent employees, setting them up for a long-term career. Minnesotans have stressed to me how efficiently this program worked in our State and that it provides an excellent return on investment. They have worked tirelessly to demonstrate the benefits of this type of bold proposal. I thank them for collaborating with me on this important piece of legislation. More than 50 Minnesota organizations, companies, and chambers of commerce have come out in support.

I ask unanimous consent to have printed in the Record a list of these organizations.

I urge my colleagues to join me in quickly moving forward on a bill to put Americans back to work. I urge them to join me in support of the SEED Act, Strengthening our Economy through Employment and Development.

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

Mr. President, I rise to speak on the same bill the Senator from Michigan spoke on, but I ought to compliment him. He is most known for being a leader in the area of military affairs because of being chairman of that committee. But for sure, for years he has been also a chairman of the Permanent Subcommittee on Investigations and so much of the work that comes out of this legislation comes out of his work on that committee. I think he ought to be commended for the work he does through investigations there as well.

I am happy to join Senator Levin and Senator McCaskill in cosponsoring the Incorporation Transparency and Law Enforcement Assistance Act. This bill requires States to obtain corporate ownership information at the time of formation and help law enforcement investigate shell companies which are set up for the sole purpose of conducting illegal activities.

Earlier this year, Senator Levin joined me when I introduced a bill that we entitled the Hedge Fund Transparency Act. I said then that the major cause of the current financial crisis is a lack of transparency among hedge funds. That same thing can be said about corporate ownership. In too many States, very little ownership information is needed to register a corporation, and the actual owners of that corporation are often hidden behind the agents and lawyers who register the corporation on behalf of owners.

One example of how these criminals take advantage of this lack of transparency is the practice of setting up and using shell corporations to hide corporate ownership information. These individuals set up shell corporations that have the benefits of corporate registration and function legitimately. But these same corporations are being used to hide illegal activities. These activities include a variety of elaborate schemes to disguise money laundering, tax evasion, and securities fraud. Law enforcement officials from the Department of Justice and the Internal Revenue Service have testified before Congress about how the lack of corporate information has been a very significant impediment to their ability to conduct criminal investigations.

For example, when a corporation is involved in illegal activities, the legitimate corporate owners are often hidden, making it difficult for law enforcement agencies to determine who is actually responsible. That, in turn, makes it difficult to bring the real culprits to justice. States differ as to what corporate information is required to register a corporation and how long it takes to process that paperwork. Most States require only the name of the company, the name and address of the agent, a signature, and, of course, a fee.

In fact, the Government Accountability Office found that most States will take the time to verify that the fee has been paid but do not take the time to verify the identities of the incorporators, officers, and directors. Perhaps even more important, no State checks the names of incorporators, officers, or directors against criminal records and the watch lists that sometimes Federal agencies have. As a result, we have no way of knowing if the beneficial owners are criminals, or they could even be terrorists, for that matter. Many States now have introduced electronic registration procedures that enable a new corporation to be registered on line within 24 hours. States offer this expedited service in exchange for yet an additional fee. In fact, there are two States where an individual can form a corporation within 1 hour of making the request. The promise of quick registration and little oversight has proven to be a very popular revenue generator for some States. But this process is not necessarily in the best interest of protecting our financial system or our national security.

Some States have raised concerns that if their incorporation laws are tightened, corporations will simply register in other States where there are less stringent registration requirements. This bill is to take care of that problem. It is designed to bring some sanity to this whole process. It makes the registration requirement uniform over all 50 States, as well as the District of Columbia. This way corporations will simply not be able to ``shop around'' for the State with the most relaxed standards and simply play one State against the other. Further, much of the information set forth in this bill is already required by the European Union and many offshore jurisdictions. This bill simply updates our laws to match those of other nations combating the same problems with money laundering, tax evasion, and terrorist financing.

The legislation I am introducing today with Senators Levin and McCaskill requires that States obtain a list of the beneficial owners of each corporation or limited liability company formed under their laws before the corporation is registered in that particular State. The bill also requires that States ensure required information is updated annually and that States provide the information to civil or criminal law enforcement agencies upon receipt of a subpoena or summons. This also establishes a civil penalty of up to $10,000 and a criminal penalty of up to 3 years in prison for providing false information.

Additionally, the bill would exempt publicly traded companies that are already regulated by the Securities and Exchange Commission. Further, the bill requires non-U.S. beneficial owners to provide certification from an in-State agent that verifies the identity of the beneficial owner.

Finally, this bill requires the Government Accountability Office to complete a study of State beneficial ownership information requirements for in-State partnerships and trusts and gives the States until October 2011 to require beneficial ownership information for the corporations and limited liability companies formed under their laws.

I urge colleagues to cosponsor and support this legislation as we try to bring greater transparency to our financial system.

Mr. President, I am pleased to introduce legislation establishing a temporary jobs tax credit to help businesses expand their payroll here in the U.S. by hiring more employees, expanding work hours, or raising pay. The measure is modeled on a proposal by the Economic Policy Institute that would create an estimated 5 million jobs over the next two years.

As we should not undermine the long-term prospects of our economy for the sake of a short-term problem, the legislation is fully offset to ensure that over the next 10 years it will not increase the deficit.

Briefly, the legislation provides firms a tax credit of 15 percent of the increase in their eligible payroll in 2010, and 10 percent in 2011. Eligible payroll includes that portion of a firm's wages subject to Social Security taxes. For 2010 those are wages of $106,800 or less. Thus, pay hikes for very highly salaried workers would not be eligible for the tax credit.

The jobs tax credit is designed to avoid seasonal employment spikes by calculating it on a quarter over-year-ago-quarter basis. For example, wages for the first quarter of 2010 are compared with wages for the first quarter of 2009; wages for the third quarter of 2010 are compared with wages for the third quarter of 2009. To limit possible gaming of the credit the last quarter of 2010 would be measured against the last quarter of 2008, rather than 2009.

Only increased wages for employees here in the U.S. would be eligible for the credit.

President Obama was handed the worst economy since the Great Depression. While he has taken significant steps to turn the economy around, employment continues to be a problem.

The official unemployment rate is a tragically high 10 percent. But even that high level understates the true employment picture, for if one adds in the millions of people working part-time who want full-time employment, and the millions more who are discouraged and have given up looking for work, the rate is 17.3 percent, one of the highest levels since 1994.

We must take steps to help businesses put people back to work and this bill will do that.

No tax credit can be perfectly targeted. Any tax incentive we provide firms will provide some businesses with a windfall for behaving in ways they would have anyway, but a recent report by the Congressional Budget Office on various policy options to spur employment found that a tax break similar to this proposal would be among the most efficient and effective policies we could enact. The CBO report estimated a similar jobs tax credit would boost Gross Domestic Product by as much as $1.30 for every dollar spent, and would increase employment by as much as 18 net full-time equivalent jobs for every million dollars invested through the credit. In laying out the jobs tax credit proposal on which this measure is based, the Economic Policy Institute projected an increase of more than 5 million jobs over the next 2 years.

As I noted earlier, it is essential that we not aggravate the long- term problems facing our economy, and for that reason my legislation includes provisions that will offset the estimated cost of the jobs tax credit, which the Economic Policy Institute estimates to be $27 billion. Specifically, the proposal includes provisions originally proposed by the Senator from Michigan, Mr. Levin, in S. 506, the Stop Tax Haven Abuse Act.

Under the leadership of Senator Levin, the Homeland Security Committee's Permanent Subcommittee on Investigations found that offshore tax evasion costs the taxpayers of this country an estimated one hundred billion dollars every year. Because of this abuse, ordinary taxpayers are bearing more than their fair share of the cost of their government, and our children and grandchildren will be paying an even bigger bill for the increased deficits and debt that result from this practice.

The legislation Senator Levin developed as a result of his Subcommittee's work would go a long way to shutting down this abuse, and I am pleased to include it in a measure to help firms put people back to work.

The economic pain caused by the current recession is real. More than fifteen million people are considered officially unemployed today, and if we include those who want to work more hours and those who have given up looking for work, that number rises to over 26 million. As we know, losing one's job means more than losing income. It is one of the most traumatic events we can experience, and can be devastating for the millions of families that have been affected.

We must take action to address this employment crisis. As the Senate begins to debate possible responses, a jobs tax credit should be at the top of the proposals we consider. While the precise terms of such a credit can be debated, the need for it is clear.

I urge my colleagues to support this approach.

Mr. President, I rise today to introduce the Plain Writing Act of 2009. I am pleased that Senators George Voinovich, Tom Carper Carl Levin, Claire McCaskill, and Jon Tester have joined as original co-sponsors of this legislation.

Our bill is very similar to H.R. 946, introduced by Representative Bruce Braley last month.

The Plain Writing Act has a simple purpose: it would require the Federal Government to write more clearly. Agencies would be required to write documents that are released to the public in a way that is clear, concise, well-organized, readily understandable.

This bill would extend an initiative that President Bill Clinton and Vice President Al Gore started a decade ago as part of the Reinventing Government initiative. In 1998, President Clinton directed agencies to write in plain language. Although many agencies have made progress in writing more clearly, the requirement never was fully implemented. In recent years, the focus on plain writing has dropped. This legislation will renew that focus.

There are many benefits to plain writing. First, it promotes transparency and accountability. It is very difficult to hold the Federal Government accountable for its actions if only lawyers can understand Government writing. As we face an economic crisis and unprecedented budget deficits, the American people need clear explanations of Government actions.

Plain writing also improves customer service. Individuals and businesses waste time and money, and make unnecessary errors, because Government instructions, forms, and other documents are too complicated. Anyone who has filled out their own tax forms, applications for Federal financial aid or veterans' benefits, Medicare forms, or any number of other overly complicated Federal forms understands the need for plain writing.

Government officials, in turn, spend time and money answering questions and addressing complaints from people frustrated with Government documents they cannot understand. Correcting the errors people make because they do not understand Government documents demands Government officials' time as well. Because of this, plain writing makes Government more efficient and effective.

Numerous organizations have called on Congress to require the Federal Government to write more clearly, including the AARP, Disabled American Veterans, National Small Business Association, Small Business Legislative Council, Women Impacting Public Policy, American Nurses Association, American Library Association, American Association of Law Libraries, and several associations dedicated to promoting better communication. These groups support plain writing because their members complain about their frustration with trying to understand Government documents--or hiring attorneys to decipher them--and the time and money they waste because the Government does not write plainly.

As a former teacher and principal, I understand that even very smart people must be trained to write plainly, so this bill recognizes that Federal Employees will need plain writing training. Each agency will report their plans to train employees in plain writing. Writing in plain, clear, concise, and easily understandable language is a skill that Congress and Federal agencies must foster. As Thomas Jefferson once said, ``The most valuable of all talents is that of never using two words when one will do.''

Additionally, congressional oversight will ensure that agencies implement the plain language requirements. Agencies will be required to designate a senior official responsible for implementing plain language requirements and to report to Congress how it will ensure compliance with the plain language requirement and on its progress.

To avoid imposing too great a burden on agencies, agencies will not be required to rewrite existing documents. Only new or substantially revised documents will be covered. Similarly, this bill does not cover regulations, so that agencies can focus first on improving their every day communications with the American people. We recognize that it will be more challenging to write plainly when crafting regulations, which often must be technical and complex.

Requiring plain writing is an important step in improving the way the Federal Government communicates with the American people.

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