Brewer's Employment and Excise Relief Act of 2011

Mr. President, I rise today to introduce important civil justice legislation. This legislation is desperately needed for several reasons--the most important of which is to cut down on the costs and expenses that are preventing private businesses from creating jobs for our fellow citizens during these difficult times.

The billions of dollars wasted on frivolous lawsuits cost Americans jobs and severely damage our economy. The precise cost of America's lawsuit culture is staggering. The tort system's direct costs in 2002 were $233 billion, the equivalent of a 5 percent tax on wages. Today that number is even higher; the annual direct cost of American tort litigation exceeds $250 billion.

Indeed, frivolous lawsuits are helping to prevent the ``innovation'' that the Obama administration is touting as the key to ``job creation'' and economic recovery. For example, firms with recent initial public offerings are most at risk to be sued. In fact, companies are most likely to be sued in their second year of public trading. In other words, the very corporations most likely to be the source of significant new job creation are at the highest risk of being sued just when they are seeking expansion capital through public offerings.

In particular, frivolous lawsuits hurt small businesses. Small businesses rank the cost and availability of liability insurance as second only to the cost of health care as their top concerns, and both problems are fueled by frivolous lawsuits.

Our front-line defense against frivolous lawsuits and the misuse of our legal system is Rule 11 of the Federal Rules of Civil Procedure. This rule is intended to deter frivolous lawsuits by sanctioning the offending party. The power of Rule 11 was diluted in 1993. This weakening is unacceptable to those of us who want to preserve courts as neutral forums for dispute resolution.

That is why I am introducing the Lawsuit Abuse Reduction Act of 2011, ``LARA,'' which amends Rule 11 to restore its strength and ability to truly deter frivolous lawsuits. Senator Mike Lee of Utah is cosponsoring this bill.

Representative Lamar Smith, the Chairman of the House Judiciary Committee, is introducing an identical bill today in the House of Representatives.

Specifically, LARA takes three strong steps to help thwart frivolous lawsuits.

First, LARA reverses the 1993 amendments to Rule 11 that made sanctions discretionary rather than mandatory.

One of the most harmful changes that took effect in 1993 was to make sanctions for proven violations of Rule 11 discretionary. This means that if a party files a lawsuit simply to harass another party, and the court decides that this is in fact the case, the offending party still might not be sanctioned. This is unacceptable. The offending

party might not be punished at all, which provides no deterrence for the offending party or anyone else who wants to misuse the courts. My bill reinstates the requirement that if there is a violation of Rule 11, there are sanctions.

Second, LARA requires that judges impose monetary sanctions against lawyers who file frivolous lawsuits. Those monetary sanctions will include the attorney's fees and costs incurred by the victim of the frivolous lawsuit.

Finally, LARA reverses the 1993 amendments to Rule 11 that allow parties and their attorneys to avoid sanctions for making frivolous claims by withdrawing them within 21 days after a motion for sanctions has been served.

Because of Rule 11's ``safe harbor'' provision, many frivolous claims are never fully reviewed by federal judges. Under the ``safe harbor'' provision, a person who is victimized by a frivolous claim must hire an attorney to draft a motion for sanctions. That motion cannot, however, be filed immediately. Rather, under Rule 11(c)(2), the motion is served on the offending attorney 21-days before it is filed. During that period, the offending attorney can withdraw the frivolous claim and thereby avoid any sanction. LARA would prevent such injustices by eliminating the ``safe harbor'' provision.

Although LARA would only amend Rule 11 of the Federal Rules of Civil Procedure, the procedural rules in State courts are often amended to track changes in the Federal rules. Consequently, it is our hope that many states would amend their rules governing frivolous lawsuits to reflect the changes implemented by LARA, just as they did when Rule 11 was last changed in 1993.

Without the serious threat of punishment for filing frivolous lawsuits, innocent individuals and companies will continue to face the harsh economic reality that simply paying off frivolous claimants through monetary settlements is often cheaper than litigating the case. This perverse dynamic not only results in legalized extortion, but it leads to increases in the insurance premiums all individuals and businesses must pay. That is money that could be going to create new jobs.

I want to work with those who are willing to be reasonable. I know that some have expressed concerns with similar bills in the past. We have considered those concerns and have drafted a bill that takes them into account. For example, this bill expressly provides that nothing in it ``shall be construed to bar or impede the assertion or development of new claims, defenses, or remedies under Federal, State, or local laws, including civil rights laws.''

Requiring mandatory sanctions is not an extreme position. It is a reasonable and effective solution to the problem of runaway frivolous lawsuits.

Indeed, a mandatory sanctions requirement is currently the law in the area of securities litigation. In 1995, we enacted the Private Securities Litigation Reform Act, PSLRA, over President Clinton's veto. It essentially reinstates the 1983 version of Rule 11 for the purposes of securities litigation that falls within its coverage, and makes the imposition of sanctions mandatory. Upon a final adjudication of a case, the PSLRA requires courts to make written findings on whether the parties have complied with Rule 11. In other words, no motion for sanctions needs to be filed.

At the conclusion of the case, a judge must review the case for compliance with Rule 11 and, if he finds that there has been a violation, he must impose sanctions.

So addressing the damaging impact of frivolous lawsuits has had bipartisan support in the past. That bipartisan support should be even greater during these difficult economic times.

Let's look at a few examples of the type of lawsuits that businesses must contend with:

In July 2009, three New Jersey residents, backed by an advocacy group, filed a class action lawsuit against several hot dog manufacturers claiming they were exposed to carcinogens by eating hot dogs. None of the plaintiffs had actually developed cancer. The lawsuit sought damages in the amount of the total cost of the plaintiffs' hot dog purchases and a requirement that the companies place a new label on packages and advertising reading: ``Warning: Consuming hot dogs and other processed meats increases the risk of cancer.''

The case was dismissed on a Rule 12(b)(6) motion. Thus, a Federal court held that the plaintiffs had failed to even allege a claim, as a matter of law.

In another case, a customer alleged that a wild bird ``attacked'' her while in a Lowe's outdoor garden center, causing her head injuries. She claimed negligence and a violation of the Illinois Animal Control Act. She maintained that the wild birds created a dangerous condition on the property and that Lowe's failed to exercise ordinary care to ensure that the premises were reasonably safe and failed to prevent the birds from entering the garden center.

A Federal court entered summary judgment in favor of Lowe's holding that a ``reasonable plaintiff'' either would have noticed the birds or understood that contact with them was possible in any outdoor area with plants. The court also held that Lowe's was not the ``owner'' of the birds, a necessary element of the customer's statutory claim.

These are just two examples of the scores of frivolous lawsuits that American businesses must contend with each year.

Requiring sanctions when judges find lawsuits are frivolous will deter these types of cases from being brought. The savings will result in cost savings for businesses and new jobs for American workers.

The time for words and rhetoric has long since passed. If the President means what he is saying about creating jobs, then we must take action. We need to help private business spur job creation. LARA is action. LARA is a step in the right direction.

I urge all of my colleagues to work with me and to support this legislation.

Mr. President, I rise today to reintroduce legislation with my friend, Senator Mike Crapo of Idaho, that will exempt Veterinary Medicine Loan Repayment Program, VMLRP, awards from federal income taxation. I drafted this bipartisan bill with the intention of increasing veterinary services in underserved shortage areas that lack adequate veterinary expertise.

The United States Department of Agriculture's, USDA, Veterinary Medicine Loan Repayment Program was authorized in 2003 by the National Veterinary Medical Services Act, NVMSA, to help qualified veterinarians offset a significant amount of the debt they accrue while pursuing their degrees if they in turn serve in high-priority veterinary shortage areas for a certain length of time. However, the awards are currently taxed at a rate of 39 percent. This taxation is counterproductive and only delays delivery of veterinary services to areas that are in desperate need.

In determining whether an area is eligible for assistance under the VMLRP, USDA has the ability to declare ``shortage situations,'' in which the Department makes declarations of veterinary shortage areas. Currently, there are two circumstances that lead to such designations. The first is by geography, when a given geographic area suffers a shortage of veterinarians overall. The second occurs when areas suffer a shortage of veterinarians who practice in a particular field of veterinary specialty. My home State of South Dakota currently has four designated shortage situations. Two of these designations are statewide designations noting a shortage of practitioners in veterinary specialties. On a national scale, there are 1,300 counties in the United States that have less than one food animal veterinarian per 25,000 farm animals. Additionally, there are 500 counties that have at least 5,000 farm animals and not a single veterinarian. Bear in mind, the demand for veterinarians across our country could increase 14 percent by 2016.

South Dakota is truly a wonderful place to call home, but it is not always an easy place to earn a living. This is especially true for young people who are just starting out and are saddled with crushing levels of school debt. I have long fought for legislation that makes it easier for students to pay off their loans and to encourage others who may be reluctant to pursue higher education degrees, due to a lack of financial resources, especially when it comes to costly professional degrees including veterinary medicine. My legislation will help students pursue their educational goals, while also providing important services to underserved rural areas by enhancing the assistance veterinary graduates receive in exchange for meaningful public service.

Agriculture is the top contributor to our South Dakota economy. For those farmers and ranchers who make their living in agriculture, this is more than a job; it is a way of life. Our ranchers, many of whom operate in very rural areas, rely on the access they have to qualified veterinarians to care for their livestock. Adequate access to veterinary care in rural areas is critical for both human and animal health, as well as animal welfare, disease surveillance, public safety and economic development across America. Everyone in America benefits from the veterinary services provided in even the most remote areas of our nation. As such, I am committed to doing all I can to help bring veterinarians to underserved parts of our state.

I am proud to have fought for the establishment of the VMLRP program, and through my seat on the Senate Appropriations Committee, I have worked year after year to secure its proper funding. Unfortunately, however, the taxes assessed on these benefits prevent us from using congressionally appropriated funding to the fullest extent. For every three veterinarians selected for the loan repayment awards, an additional veterinarian could also be selected to serve in an underserved shortage area if the program was made exempt from taxes. Such a tax exemption is not without precedent; Congress exempted from taxation the assistance received by participants in the National Health Services Corps, NHSC, in 2004, and I hope that my colleagues will join me in extending this same type of assistance to veterinarians participating in the VMLRP program.

It should be noted that nearly 140 organizations from across the nation have announced their support for a tax exemption for VMLRP, including the American Veterinary Medical Association, American Association of Equine Practitioners, the American Farm Bureau Federation, the American Sheep Industry Association, the National Farmers Union, and the South Dakota Veterinary Medical Association, South Dakota Farm Bureau, South Dakota Farmers Union, South Dakota Cattlemen's Association, South Dakota Stockgrowers Association and many, many others.

Agriculture is the economic engine that drives our rural communities, and without viable family farms and ranchers, our small towns and Main Street businesses throughout South Dakota and our nation would face significant hardships. It is absolutely essential that our agricultural producers have access to the services they need to be successful and responsible, and the Veterinary Medicine Loan Repayment Program Enhancement Act will help make that possible.

Mr. President, I ask unanimous consent that a letter of support be printed in the Record.

Mr. President, I am pleased to join my colleague from Maryland, Senator Mikulski, in introducing the Positive Aging Act, which will help to increase older Americans' access to quality mental health screening and treatment services in community-based care settings.

The legislation we are introducing today is particularly important for States like Maine that have a disproportionate number of older persons. Fifteen percent of Maine's population is 65 or older, and, with the highest median age, Maine is the ``oldest'' State in the nation. Moreover, our percentage of older adults is increasing, and, by 2030, more than one in five Mainers will be over the age of 65.

One of the most daunting public health challenges facing our Nation today is how to increase access to quality mental health services for the more than 44 million Americans with severe, disabling mental disorders that can devastate their lives and the lives of the people around them.

What is often overlooked, however, is the prevalence of mental illness among our Nation's elderly. Studies have shown that more than one in five Americans aged 65 and older experience mental illness, and that as many as 80 percent of elderly persons in nursing homes suffer from some kind of mental impairment. Particularly disturbing is the fact that the mental health needs of older Americans are often overlooked or not recognized because of the mistaken belief that they are a normal part of aging and therefore cannot be treated.

While older Americans experience the full range of mental disorders, the most prevalent mental illness afflicting older people is depression. Ironically, while recent advances have made depression an eminently treatable disorder, only a minority of elderly depressed persons are receiving adequate treatment. Unfortunately, the vast majority of depressed elderly don't seek help. Many simply accept their feelings of profound sadness and do not realize that they are clinically depressed.

Moreover, those who do seek help are often underdiagnosed or misdiagnosed, leading the National Institute of Mental Health to estimate that 60 percent of older Americans with depression are not receiving the mental health care that they need. Failure to treat this kind of disorder leads to poorer health outcomes for other medical conditions, higher rates of institutionalization, and increased health care costs.

Fortunately, important research is being done that is developing innovative approaches to improve the delivery of mental health care for older adults by integrating it into primary care settings. This research demonstrates that older adults are more likely to receive appropriate mental health care if there is a mental health professional on the primary care team, rather than simply referring them to a mental health specialist outside the primary care setting. Multiple appointments with multiple providers in multiple settings simply don't work for older patients who must also cope with concurrent chronic illnesses, mobility problems, and limited transportation options. The research also shows that there is less stigma associated with psychiatric services when they are integrated into general medical care.

The Positive Aging Act builds upon this research and authorizes funding for projects that integrate mental health screening and treatment services into community sites and primary care settings. Specifically, the Positive Aging Act of 2011 would authorize the Substance Abuse and Mental Health Services Administration to fund demonstration projects to support integration of mental health services in primary care settings. It would also support grants for community- based mental health treatment outreach teams to improve older Americans' access to mental health services. To ensure that these geriatric mental health programs have proper attention and oversight, it would mandate the designation of a Deputy Director for Older Adult Mental Health Services in the Center for Mental Health Services, and it would also include representatives of older Americans or their families and geriatric mental health professionals on the Advisory Council for the Center for Mental Health Services. Finally, it would require state plans under Community Mental Health Services Block Grants to include descriptions of the states' outreach to and services for older individuals.

We are fortunate today to have a variety of effective treatments to address the mental health needs of American seniors. The Positive Aging Act will help to ensure that older Americans have access to these important services. I therefore urge my colleagues to sign on as cosponsors of the legislation, which has been endorsed by a broad coalition of mental health and senior organizations, including the Alzheimer's Association, the American Geriatrics Society, the American Psychiatric Association, the American Psychological Association, the American Association for Geriatric Psychiatry, and the National Council on Aging.

Mr. President, I ask uanimous consent that a letter of support be printed in the Record.

Mr. President, I rise today to introduce the Katie Sepich Enhanced DNA Collection Act of 2011. I am pleased that Senators Kyl, Udall of New Mexico, Schumer, and Bennet of Colorado are joining me today in sponsoring this important piece of legislation. Congressman Schiff and Reichert are also introducing this bipartisan bill in the House.

Similar legislation, which was championed in the House of Representatives by Congressman Teague, overwhelmingly passed that body last year with a bipartisan vote of 357 to 32. Unfortunately, efforts to move the legislation last year were unsuccessful in the Senate. I look forward to working with my colleagues to pass this bipartisan bill in the Senate this Congress.

The bill is named after Katie Sepich, a promising graduate student attending New Mexico State University who was tragically murdered in 2003. The man who killed Katie was arrested for aggravated assault about 3 months after the murder. Although police had collected the killer's DNA from the crime scene, because there was no requirement that DNA be taken from individuals arrested for serious felonies, police weren't able to get a match until about 3 years after the murder when the man was sent to prison after being convicted of unrelated crimes.

If New Mexico had the arrestee law then that it has today it would have taken 3 months, not 3 years, to solve the crime. Katie's mother, Jayann, has worked tirelessly at the state and Federal level to give law enforcement the tools they need to promptly solve crimes and ensure that other mothers don't have to suffer the same horrible ordeal that her family has.

We can't get Katie back, or the other lives that have been lost to these senseless crimes, but we can do something to help solve cases and prevent similar crimes from occurring in the future. One such step is to enhance the capacity of States to collect the DNA of individuals arrested for certain felony crimes, which would substantially increase the ability of law enforcement to match DNA found at crimes scenes with that of suspects and individuals who have been previously arrested, charged, or convicted of crimes.

The Federal Government and about half the states, including New Mexico, currently collect arrestee DNA for serious offenses. This has proven to be a very effective tool in solving cases, and it makes sense to incentivize States to continue and to expand this effort. Since New Mexico implemented ``Katie's Law'' in 7007, there have been about 100 matches of arrestees. It is also important to note that DNA collection has not only demonstrated its effectiveness in terms of saving lives and preventing crimes, but it has also proved to be an important means of ensuring that innocent individuals are not mistakenly jailed for crimes they did not commit.

Let me take a moment to specifically describe what this legislation would, and would not, do. First, this legislation is aimed at creating an incentive for states to enact arrestee DNA collection program's. It is not a mandate. States that meet minimum collection guidelines could apply for DOJ grant assistance in covering the first-year costs that they have incurred or will incur in implementing the standards. If they enact laws in accordance with the enhanced guidelines, States would be eligible for an additional bonus payment.

Second, the bill encourages DNA testing for serious felonies, such as murder, sex crimes, aggravated assault, and burglary. It is narrowly tailored to apply to the most serious crimes. Third, the legislation provides that all of the expungement provisions under Federal law are applicable. Arrestees who have their DNA included in the Federal database may have their records expunged if their conviction is overturned, they are acquitted, or charges are dismissed or not filed within the applicable time period. Furthermore, the bill provides that as a condition of receiving a grant States must notify individuals who submit samples of the relevant expungement procedures and post the information on a public Web site.

Lastly, I would like to address the concerns some have raised about the constitutionality of collecting arrestee DNA. Although courts have upheld the collection of arrestee DNA, I recognize that the question of whether the collection of a DNA sample from an arrestee is consistent with the Fourth Amendment isn't a completely settled question of law. Some courts have viewed the collection as something akin to fingerprinting and other courts have viewed it as a more intrusive search, such as the taking of a blood sample. However, the Department of Justice has stated that it believes that this legislation is constitutional and is supportive of encouraging states to pass DNA arrestee laws. I believe that such programs, with appropriate safeguards in place, have demonstrated that they can be a very effective mechanism to save lives, solve crimes, and prevent wrongful convictions.

For these reasons, I urge my colleagues to support this important legislation.

Mr. President, today Senator Crapo and I are reintroducing legislation to assist small brewers across the country. The Brewer's Employment and Excise Relief, BEER, Act of 2011 would reduce the excise tax on domestic small beer producers as well as update the definition of what constitutes a small brewer to reflect today's market. Senators Wyden, Snowe, Schumer, Cornyn, Leahy, Burr, Mikulski, Scott Brown, Merkley, Wicker, Sherrod Brown, Chambliss, Tester, Cochran, and Cantwell are cosponsors of this legislation.

As our economy continues on a track to recovery, we should remain focused on reducing unemployment and putting American's back to work. This legislation will do just that by helping an industry that is hiring and plans on expanding. Massachusetts is home to 38 small breweries.

Though there has been a continued increase in consumer demand for the unique brews created by these small brewers, these beer producers operate at a distinct disadvantage when compared to the largest brewers in this country. While demand is growing, small brewers account for just 5 percent of beer sales nationwide and they face higher costs for production, raw materials, and market entry when compared to their much larger counterparts.

The BEER Act legislation will revise the classification of a domestic small brewer, a definition that has not been updated since 1976. Under current law, small brewers are limited to those that produce 2 million barrels of beer per year. This legislation would update and raise the ceiling for the small brewer tax rate to 6 million barrels per year to reflect the original intent of differentiation between the large and small brewers. The largest beer producer in America used to produce 45 million barrels annually and that has increased to over 100 million barrels.

This legislation will also lower the excise tax rate on these small brewers on their first 60,000 barrels produced from $7 per barrel to $3.50 per barrel. Currently for the production over 60,000 barrels up to 2 million barrels, these brewers pay $18 per barrel in taxes, the same amount that the large brewers pay. This legislation would reduce that rate for small brewers to $16 per barrel.

Small brewers employ nearly 100,000 people nationwide. This legislation will provide tax relief for this important industry, and allow these companies to expand both their production and their work force. A March 2010 economic analysis of this legislation done by Dr. John Friedman of Harvard University has estimated that the legislation will stimulate job creation at a rate of 2,700 new jobs in the first year to 18 months, with an additional 375 new jobs each year for the following 4 years.

The benefits do not simply begin and end with the ability for these small breweries to grow. This legislation would benefit the consumer buying a 6 pack of Sierra Nevada or Harpoon in their local supermarket where prices on craft beer would be reduced by about 20 cents per case. The farms in the states that produce the barely, hops, and other materials that go into these fine brews would also see an increased demand for their products.

This legislation would provide important benefits to America's small brewers and spur economic activity. It will provide relief and allow them to expand to meet the demands of a growing marketplace. I urge my colleagues to support this legislation and support small, domestic beer producers.