Surreptitious Video Surveillance Act of 2010

Mr. President, on this annual Tax Day, I rise to introduce the Taxpayer Protection and Assistance Act of 2007, a robust package of reforms aimed at protecting the rights of all American taxpayers. I am pleased that my colleagues on the Finance Committee, Senators Schumer, Kerry, and Menendez, as well as Senators Akaka, Brown of Ohio, Dodd, Durbin, Lieberman, Merkley, Pryor, and Udall of New Mexico, are joining me in introducing this bill.

This act consists of numerous well-vetted provisions, which will ensure our nation's taxpayers are better able to prepare and file their tax returns each year in a fashion that is fair, reasonable, and affordable.

First, the act clarifies taxpayers' rights and responsibilities by requiring Treasury to publish an easy-to-understand Taxpayer Bill of Rights, enumerating taxpayers' rights and obligation, and corresponding Internal Revenue Code citations. As the National Taxpayer Advocate has explained: ``The [Internal Revenue] Code contains no comprehensive Taxpayer Bill of Rights that explicitly and transparently sets out taxpayer rights and obligations. Taxpayers do have rights, but they are scattered throughout the [Internal Revenue] Code and the Internal Revenue Manual and are neither easily accessible nor written in plain language that most taxpayers can understand.'' The act would rectify these shortcomings, without conferring any rights or obligations not already provided for under law.

Second, the act supports programs that assist low-income taxpayers. It authorizes a $35 million grant program for Volunteer Income Tax Assistance, VITA, programs. VITA programs across the country offer free tax assistance to low- to moderate-income individuals who cannot afford professional assistance. More than 75,000 VITA volunteers prepare basic tax returns for these taxpayers; typically VITA programs focus on at least one specific underserved group with special needs--such as persons with disabilities, non-English speaking persons, Native Americans, rural taxpayers, and the elderly. During the 2009 filing season, VITA programs prepared more than 1.2 million tax returns and brought back over $1.6 billion in tax refunds to working families.

I have seen firsthand the impact that free tax-preparation clinics can have on taxpayers and their communities. In fact, New Mexico is fortunate to have one of the nation's leading programs. Tax Help New Mexico began 35 years ago at Central New Mexico Community College, CNM, as a practical means of giving accounting students work experience in tax preparation while serving a community need. But while 70 percent of New Mexicans are eligible for Tax Help New Mexico's services, only 6.5 percent are able to take advantage. To enable community VITA programs like Tax Help New Mexico to reach more underserved low-income taxpayers, the act authorizes a $35 million IRS grant program.

Likewise, the act would strengthen Low-Income Taxpayer Clinics. These clinics, typically operated by community organizations and law schools, provide representation to low-income taxpayers in disputes with the IRS. The act authorizes the Treasury Secretary to refer taxpayers to these clinics. It also increases to $20 million annually the authorization for LITC grant programs. This will provide a substantial boost to clinics that serve this vital function, such as that which the University of New Mexico Law School operates for taxpayers in my state.

Third, the act enhances the regulation of paid tax-return preparers. Nearly all professions--from beauticians to mortuaries to opticians-- are regulated at the state level. But with only a handful of exceptions, states do not regulate tax return preparers. Nor does the federal government currently regulate unenrolled tax return preparers, i.e., return preparers who are not CPAs, attorneys, enrolled agents, or enrolled actuaries--all already regulated under IRS Circular 230. A significant percentage of unenrolled preparers are well-trained and maintain high ethical standards. But untrained and unscrupulous tax return preparers can inflict serious harm on taxpayers and significantly undermine tax compliance.

For years, taxpayers, tax professionals, and the National Taxpayer Advocate have been calling for federal regulation of unenrolled preparers. In early 2010, the IRS began taking steps to exercise oversight over these unenrolled preparers. I applaud the IRS's initiative. But it is still unclear that the IRS's program will be sufficiently comprehensive. Moreover, many see a benefit in clarifying the scope of the IRS's regulatory authority.

The act responds to these concerns by codifying a regulatory system for unenrolled preparers. In order for a tax preparer to become registered and authorized by Treasury, the act requires preparers to pass a basic background check and an examination of competency and ethics standards. To remain in good standing, preparers will be required to satisfy continuing education requirements or be reexamined every three years on changes in tax law and common preparation mistakes. The act requires Treasury to maintain and publish for taxpayers a comprehensive list of all authorized tax return preparers, including Circular 230 preparers.

Fourth, the act creates an oversight system for tax refund delivery products. Refund Anticipation Loans, RALs, are high-cost bank loans secured by a taxpayer's expected refund--loans that typically last 7 to 14 days, until the actual IRS refund arrives and is used to repay the loan. RALs are often aggressively marketed by paid income-tax preparers, which advertise ``Instant Refunds'' or ``Quick Cash,'' sometimes disguising that they are selling advance loans on anticipated tax refunds. According to the National Consumer Law Center: ``Tax preparers and their bank partners made approximately 8.7 million RALs during the 2007 tax-filing season. . . .'' In my state of New Mexico, 25 percent of taxpayers eligible for the Earned Income Tax Credit received a RAL in 2005.

RALs might offer quick cash, but they are not a good deal for taxpayers. As the National Consumer Law Center exposed in a 2009 report, the typical RAL of about $3,000 carries an annual percentage rate, APR, from 77 percent to 140 percent. We know that our vulnerable communities are particularly susceptible to RALs. In fact, a recent study by the First Nations Development Institute and Center for Responsible Lending found that RALs drained over $9.1 million from Native American communities in 2005.

I am very troubled by the prevalence of RALs. And to begin addressing problems associated with them, the act requires Treasury to establish a registration program for those involved in the process of facilitating a tax refund delivery product, RDP, including RALs. Additionally, RDP facilitators will be required to disclose in writing and in an easily understandable format the taxpayer's options for receiving tax refunds, listed from least expensive to most expensive, the RDP's loan terms and fee schedule, and any other costs that the taxpayer may incur in filing a tax return. Moreover, the Act would prohibit Treasury from issuing a Refund Indicator, a score on which RDP facilitators rely before issuing a RDP, unless Treasury first determines that the taxpayer's refund would not be prevented by debts the taxpayer owes on student loans, child support, or by other provisions in the Tax Code. This additional screen will minimize the likelihood that a taxpayer will be issued a loan based on a refund claim that will not ultimately materialize

and which the taxpayer would nonetheless be required to repay.

Fifth, the act requires additional protections before the IRS files a federal tax lien. The IRS has a number of enforcement tools at its disposal to ensure tax compliance, but use of these tools must be balanced with the need to ensure taxpayers do not suffer unnecessary long-term harm as a result. One such tool is the filing of a Notice of Federal Tax Lien, NFTL, when a taxpayer owes back taxes. But as the National Taxpayer Advocate explains in her 2009 Report to Congress: ``[The filing of a tax lien can significantly harm the taxpayer's credit and affect his or her ability to obtain financing, find or retain a job, secure affordable housing or insurance, and ultimately pay the outstanding tax debt. For these reasons, the National Taxpayer Advocate believes that the IRS should not automatically file NFTLs but instead should carefully consider and balance these competing interests when determining whether a lien filing is appropriate.'' In my state alone, the IRS filed nearly 5,000 liens against taxpayers last year. The act would require the IRS to make individualized determinations before filing an NFTL, and in doing so to consider several enumerated factors, including the amount due, the taxpayer's compliance history, and any extenuating circumstances.

Sixth, the act establishes a demonstration program to provide accounts to those who currently lack bank accounts. IRS data show that of the 60 million Federal tax refunds that were issued via paper checks in 2005, almost half went to households earning $30,000 or less. These households are most likely to lack access to reasonably-priced financial services--and thus most likely to pay a disproportionate amount of their income to conduct routine financial transactions. Yet the issuance of a refund check presents an important opportunity to bring these low-income taxpayers into the financial mainstream. The act authorizes Treasury to award eligible entities demonstration project grants so that they can establish accounts for individuals who currently lack bank accounts. The act also requires a study on the feasibility of delivering tax refunds on debit, prepaid, and other electronic cards.

Finally, the act requires the IRS to study processing information returns and the effectiveness of collection alternatives. Currently, the IRS processes income tax returns before it processes most information returns, such as W-2s and 1099s. From the taxpayer's perspective, this leads to millions of cases where taxpayers may inadvertently make overclaims that the IRS does not identify until months later, exposing the taxpayer not only to additional tax liability, but to penalties and interest. This sequence also provides opportunities for fraud and requires the IRS to devote resources that should have not been paid and that it often cannot recover. The act also directs Treasury to conduct a study to identify and recommend legislative and administrative changes that would enable the IRS to receive and process information reporting documents before it processes tax returns. This should bring us closer to the goal of voluntary pre- populated returns, which I understand are already available in most OECD countries.

I have long maintained that our tax system depends on taxpayers being able to receive the best advice and assistance possible. We have a responsibility to our nation's taxpayers to make sure that they do receive such advice and assistance. This bill goes a long way toward that goal.

I would be remiss if I did not acknowledge that this bill is the product of considerable collaboration. It draws on many recommendations of our National Taxpayer Advocate, Nina Olson. It also builds on input we have received from national and local taxpayer advocacy organizations, among them the Center for Economic Progress, Tax Help New Mexico, and the Maryland CASH Campaign. I am grateful for these stakeholders' participation.

These are long overdue reforms; I hope that the Senate will consider them in this session.

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

Mr. President, Medicare's payment system for physicians is flawed in many ways. One of those flaws has for many years given unfairly low payments to high quality areas like my own home state of Iowa and many other rural States. The new health care reform law makes some much-needed changes in that regard.

The legislation I am introducing today makes additional improvements in addressing unfair geographic disparities in payment. It is intended to provide more equitable rural health payments and improve rural access to care for all rural states.

As many of you know, Medicare payment varies from one area to another based on the geographic adjustments known as the Geographic Practice Cost Indices or GPCIs. These geographic adjustments are intended to equalize physician payment by reflecting differences in physician's practice costs.

But they do not accurately represent those costs in Iowa or other rural states. They have been a dismal failure in fact. They discourage physicians from practicing in rural areas like New Mexico, Arkansas, Missouri, and Iowa because they create such unfairly low Medicare rates.

I introduced legislation in the last Congress, and again last year, to correct these unwarranted payment disparities. Last fall, I offered an amendment in the Senate Finance Committee mark up of health reform legislation to reform the inequitable formula that has caused these unduly low payments.

My amendment provided more equity and accuracy in calculating this adjustment, and it provided a national solution to the problem. It was accepted unanimously by the Senate Finance Committee, and it was included in the Senate health reform bill, the Patient Protection and Affordable Care Act, that was signed into law.

But, unfortunately, the rural equity that would be achieved by that amendment has been endangered by another sweetheart deal that was added to the Senate health care reform bill that is now the law.

This special deal was added behind closed doors, that is, the closed doors of the majority leader. This special deal addresses geographic disparities but it helps just five states at the expense of the other 45 states.

It was included in the Senate health reform bill for two Democratic Senators from so-called ``frontier states.'' It's what I call the ``Frontier Freeloader.''

The Frontier Freeloader provision improves Medicare reimbursement in so-called frontier states by establishing floors for the hospital wage index and the physician practice expense GPCI.

A frontier state is defined as one with 50 percent or more frontier counties, defined as counties with a population per square mile of less than six.

The Frontier Freeloader deal ensures that higher payments go to just five states--North Dakota, South Dakota, Montana, Wyoming and Utah--at the expense of every other state.

It is another example of how the deals made behind closed doors to garner votes led to bad policies, like the Cornhusker Kickback, the Louisiana Purchase, and the Florida Gator-aid.

Now we have the Frontier Freeloader deal that became law when the President signed the health care reform bill.

Iowa provides some of the highest quality care in the country but it does not meet the definition of a frontier state. Certainly Iowa should have been helped since Medicare reimbursement for hospitals and physicians is lower in Iowa than in most of these so-called ``frontier'' states.

Medicare also pays much lower rates in other rural states, like Arkansas and New Mexico, but they don't benefit from the Frontier Freeloader because they don't meet the definition of a frontier state.

The Frontier Freeloader is even more egregious because Iowa--and other States like Arkansas and New Mexico that don't benefit--are paying for it! So, taxpayers in your state and mine--all the other 45 states--will kick in to pay the bill for these five states. And that's just the cost for the next few years.

This sweetheart deal is not time-limited. The Frontier Freeloader that benefits these five states continues forever while taxpayers in your State and mine--the other 45--continue to pay the bills.

The bill I am introducing today would repeal the Frontier Freeloader sweetheart deal.

We should improve physician payments for all rural states, not just a select few. It is unfair to improve hospital payments for just a few states. This bill would eliminate those special payment deals for just 5 States.

It would also improve physician payments for all rural states during the transition to more accurate data.

The new health care reform law requires the Secretary of Health and Human Services to limit the impact of the current unfair adjustments to \1/2\ of the current adjustment in 2010 and 2011. This bill would use some of the funds saved by repealing the frontier states deal to increase physician payments more in rural states next year.

That would mean higher payments for all rural States, not higher payments for just a few States.

Finally, the bill makes it clear that a side agreement reportedly made between House members and the Secretary of Health and Human Services for an Institute of Medicine study cannot interfere with the legislative changes to the geographic adjustment for physician practice expense that are now law.

My amendment in the Senate bill that became law improves the data that the government uses to calculate geographic physician practice costs.

The House health care reform bill called for a study by the Institute of Medicine to make recommendations on geographic disparities.

It is unclear what agreement was made between Secretary Sebelius and the House, since it was another backroom deal. It is also unclear what advantage it holds for rural health care equity for beneficiaries and physicians.

My amendment that is now the law requires Medicare officials to use accurate data.

The legislation that I am introducing today would ensure that the agreement

House members made with Secretary Sebelius--that somehow accompanies the House health-care reconciliation bill--cannot undo the actual legislative fix in the Senate health care bill that is now law.

If the Institute of Medicine comes up with different data or makes recommendations that are not consistent with the requirements for the geographic adjustments that are now law, we could be back where we started, or even worse off. So this legislation would ensure that HHS follows the legislative improvements just enacted to require more accurate data for calculating these geographic adjustments.

To summarize, the bill does three main things:

First, it eliminates the unfair $2 billion Frontier Freeloader carve- out for 5 States that ends up harming all the other rural States. As I said earlier, that extra spending would continue forever if the Frontier Freeloader is allowed to take effect.

Second, the bill helps provide greater rural health care access and payment equity in a way that is fair to all taxpayers and states.

It would provide additional payments for physicians in all rural States during the transition.

Finally, the bill would ensure that Medicare officials use accurate data to calculate geographic adjustments as now required by the new health care reform law.

This legislation helps ensure that seniors in all of rural America continue to have access to needed health care.

It ensures rural health care equity nationwide.

Mr. President, today I am introducing the Harbor Maintenance Act, a bill with bipartisan and multi-regional support that would help ensure that funds deposited into the Harbor Maintenance Trust Fund would be used for their intended purposes: to properly maintain and operate our Federal harbors and ports.

The Harbor Maintenance Trust Fund, also known as the HMTF, was created to collect fees in order to pay for the

maintenance and operation costs of Federal harbors and ports. While nearly \1/4\ of the U.S. gross domestic product flows through these harbors, over half of these important ports are not maintained to their authorized dimensions. This results in less efficient and more polluting transport, as well as an increased risk of vessel groundings and collisions. One of the ways to ensure a robust and sustainable economic recovery includes strengthening our Nation's infrastructure, which includes our navigational infrastructure.

Every year, hundreds of millions of dollars are collected into the HMTF but never spent, even though there are critical navigation needs. For example, the Army Corps of Engineers estimates a backlog of about 15 million cubic yards of dredging needs at commercial federally- authorized Great Lakes harbors and channels. This dredging backlog has resulted in freighters getting stuck in channels, ships having to carry reduced loads, and some shipments simply stopping altogether.Dredging to proper depths is critical not only for Michigan's economy, but for the Nation's economy, as these shipments include commodities that fuel our Nation's industries, products for construction, fuel for heating and cooling homes and businesses, and agricultural products for export.

Similar navigational infrastructure needs exist throughout our country, and the range of cosponsors from different parts of the country demonstrates this bill would help improve the navigational infrastructure across the Nation. This bill also has the support of a broad coalition called the Realize America's Maritime Promise, which is made up of hundreds of port authorities, vessel operators, port communities, public and private terminal operators, pilot associations, dredging companies, shipbuilders, maritime labor unions, manufacturers, bulk cargo owners and shippers, and other companies and associations dependent on fully accessible navigation channels.

Currently, the HMTF has a surplus that exceeds $5 billion. Beginning in 2003, funds appropriated for harbor and channel maintenance have been significantly below annual HMTF collections. To help ensure these backlogs do not continue to grow, this bill would allow any Member of Congress to make a point of order against an appropriations bill if the total revenue for that fiscal year, as projected in the President's annual budget request, is not fully appropriated for its intended navigational infrastructure purposes. Similar problems with funding backlogs occurred with the Highway Trust Fund and the Airports and Airways Trust Fund. Congress responded by enacting legislation to address these problems. Congress should do the same for the Harbor Maintenance Trust Fund. Our Nation's infrastructure--whether it be roadways, airports, or ports and harbors--should be treated the same way. Shipping by water is the most efficient means of transporting bulk commodities, and we should make sure our Nation's navigational infrastructure can effectively handle these shipments, rather than allowing these ports and harbors to exist in a state of disrepair.

A sustainable economic recovery depends on strong infrastructure. Passing this bill would help us advance our recovery and improve our economic competitiveness. I urge your support.

Mr. President, three weeks ago, the Senate passed significant student loan reform. It turns out that for the past several decades, we have been paying banks $6 billion per year to be the middle men in our student loan system. The bill we passed puts a stop to that. Instead of lining the pockets of bankers like Al Lord at Sallie Mae, we will originate all Federal student loans through the Direct Loan Program and we will invest the savings, $68 billion, in education priorities. We put $36 billion into Pell Grants to increase the grant size and tie it to inflation. We also capped monthly student loan payments at 10 percent of discretionary income to help ease repayment for students in public service careers. We invested in historically black colleges and universities, minority serving institutions, community colleges, and state-based college access programs that help students succeed in college. These reforms are essential in helping students afford a college education.

Today, along with Senator Franken and Senator Whitehouse, I am introducing a bill that will take an additional step in restoring fairness in student lending by treating privately issued student loans in bankruptcy the same way other types of private debt are treated. Our bill, the Fairness for Struggling Students Act, will allow borrowers of private student loans to discharge those loans in bankruptcy. Representatives Cohen and Davis are introducing a similar bill in the House.

Federally issued or guaranteed student loans have been protected during personal bankruptcy since 1978. This is a good law that protects Federal investments in higher education. In 2005, a provision was added to law to protect the investments of private lenders that extend private credit--not federally guaranteed student loans--to students. With the 2005 protections in place, there is virtually no risk to lenders making high-cost private loans to students at schools with low graduation rates and even lower job placement rates. So the industry has boomed over the past decade. Private student loan volume last year was $11 billion.

But there is plenty of risk for student borrowers. The interest rates and fees on private loans can be as onerous as credit cards. There are reports of private loans with variable interest rates reaching 18 percent. Unlike Federal student loans, the Government does not impose loan limits on private loans and does not regulate the terms or cost of these loans. Some students who take out these loans find themselves trapped under an enormous amount of debt that they cannot escape.

Today, I am pleased to introduce a bill that will give students who find themselves in dire financial straits a chance at a new beginning. My bill restores the bankruptcy law, as it pertains to private student loans, back to where it was before the law was amended in 2005. Under this legislation, privately issued student loans will once again be dischargeable in bankruptcy. My bill also clarifies that the remaining protections are specific to loans that were issued by or are guaranteed by State and Federal Government.

Three weeks ago we ended the ability of lenders and banks to make risk-free federal loans to students. It is time to also end the risk- free nature of private student loans and restore fairness for student borrowers.

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

Mr. President, early this morning, we awoke to sad news out of Memphis, TN. This country has lost a civil rights pioneer, a strong leader, and a witness to history.

Benjamin Lawson Hooks fought all of his life for freedom, prosperity, and universal equality. When the world was consumed by war, Benjamin put on the uniform of the 92nd Infantry Division and rendered honorable service to his country.

When peace was won and America looked inward today to address policies of discrimination and inequality, he was on the frontlines once again, standing with visionaries such as Rev. Dr. Martin Luther King, Jr.

At every turn, and at every moment in his life, he waged to fight against injustice. He became an attorney and was eventually appointed as the highest ranking Black Federal judge in the State of Tennessee. But that was only the beginning of a remarkable career in public service.

Benjamin Hooks was the first African American to serve on the Federal Communications Commission, where he spoke out against biased reporting in the media and called for minority ownership of TV and radio stations.

In 1977, he was unanimously elected as President of the National Association for the Advancement of Colored People, the NAACP--a position he would hold with distinction until his retirement in 1993 and which would come to define his career.

Throughout those tumultuous years, Benjamin Hooks was at the forefront of the nonviolent struggle for civil rights. He constantly challenged old assumptions, stood up to discrimination, and fought against those who defended the status quo.

He taught us the courage to live out our convictions. He showed us how to translate our dearest principles into words and action.

In 1980, he became the first national leader to address conventions of both political parties. He denounced those who resorted to violence, and he personally led prayer vigils, peaceful protests, and countless other popular demonstrations.

At various times throughout his career, Benjamin Hooks served as a pastor, a soldier, a judge, and a political leader. He fought for equality in the courtroom, on the pulpit, on the airwaves, and even on the battlefield, but never did he act for personal gain. Not once did he forget the cause of justice that he and others dedicated their lives to defend.

So great was the legacy of this civil rights leader, so deep was the impact he had on the fabric of our society, that even today, on the sad occasion of his passing, I cannot help but feel a lasting sense of pride in the profound and enduring accomplishments he leaves behind.

Benjamin Hooks will be sorely missed by all who knew him, particularly his family, to whom we express our deepest condolences today.

Even as we mourn his loss, I urge my colleagues to join me in celebrating his memory and honoring the living legacy he leaves behind. I am sure Benjamin would be the first to remind us that we must not pause in remembrance for long because there is much work yet to be done.

Let us take up this fight. Let us defend the principles that guided Benjamin Hooks throughout his life and embrace the spirit that drove this pioneer to reach for equality, fight for opportunity, and aspire to greatness.

I yield the floor.