Tornado Family Safety Act of 2013

Mr. President, today, along with my colleagues, Senator Grassley, Senator Feinstein, and Senator Harkin, I am reintroducing the Incorporation Transparency and Law Enforcement Assistance Act, a bill designed to combat terrorism, money laundering, tax evasion, and other wrongdoing facilitated by U.S. corporations with hidden owners. This commonsense bill would end the practice of our States forming about 2 million new corporations each year for unidentified persons, and instead require a list of the real owners to be submitted so that, if misconduct later occurred, law enforcement could access the owners list and have a trail to chase, instead of confronting what has all too often been a dead end.

Our bill is supported by key law enforcement organizations, including the Federal Law Enforcement Officers Association, the Fraternal Order of Police, the National Association of Assistant United States Attorneys, and the Society of Former Special Agents of the Federal Bureau of Investigation, as well as by Manhattan District Attorney Cyrus Vance. It is also endorsed by a number of small business, public interest, and good government groups, including the Main Street Alliance, American Sustainable Business Council, National Money Transmitters Association, AFL-CIO, SEIU, Global Financial Integrity, Global Witness, U.S. Public Interest Research Group, Transparency International, Public Citizen, Project on Government Oversight, Jubilee USA Network, Tax Justice Network USA, Human Rights Watch, Friends of the Earth, Open Society Policy Center, Revenue Watch Institute, the FACT Coalition, and more. .

This is the fourth Congress in which this bill has been introduced to provide a solution to a problem that has gained only more urgency with time. In 2008,

when the bill was first introduced, President Obama was a member of the U.S. Senate and an original cosponsor. In 2013, President Obama stood with other international leaders at a G8 summit in June to condemn corporations with hidden owners who commit crimes, tax evasion, and other wrongdoing. The G8 leaders made a joint commitment to combat that problem. President Obama immediately responded with a U.S. action plan that, among other measures, calls for enacting legislation to end the shameful practice in this country of forming U.S. corporations with unnamed owners and unleashing them on, not only our own communities, but the international community as well.

A World Bank study found that the United States forms more corporations per year than all the rest of the countries in the world put together. Under current law, those U.S. corporations can be established anonymously, by hidden owners who don't reveal their identity. According to another recent study by Griffith University examining multiple jurisdictions, it is easier to obtain an anonymous shell company in the United States than almost anywhere else in the world. That study also found that ``only a tiny portion of U.S. providers of any kind met the international standard of requiring notarized identity documents.''

Right now, in the United States, it takes more information to get a driver's license or to open a U.S. bank account than to form a U.S. corporation. Our bill would change that by requiring any State that accepts crime-fighting grants from the Department of Justice to add one new question to their existing incorporation forms asking applicants to identify the company's true owners.

That is it. One new question on an existing form. It is not a complicated question, yet the answer could play a key role in helping law enforcement do their jobs. Our bill would not require States to verify the information, but penalties would apply to persons who submit false information. States, or licensed formation agents if a State has delegated the task to them, would supply the ownership information to law enforcement upon receipt of a subpoena or summons.

The Problem. We have all seen the news reports about U.S. corporations involved in wrongdoing--from facilitating terrorism to money laundering, financial fraud, tax evasion, corruption, and more. Let me give you a few examples that indicate the scope of the problem.

We now know that some terrorists use U.S. corporations to carry out their activities. Viktor Bout, an arms dealer who was found guilty in November 2011 of conspiring to kill U.S. nationals and selling weapons to a terrorist organization, used corporations around the world in his work, including a dozen formed in Texas, Delaware, and Florida. At the time of Mr. Bout's extradition to face justice here in America, Attorney General Eric Holder stated: ``Long considered one of the world's most prolific arms traffickers, Mr. Bout will now appear in federal court in Manhattan to answer to charges of conspiring to sell millions of dollars worth of weapons to a terrorist organization for use in trying to kill Americans.'' It is unacceptable that Mr. Bout was able to set up corporations in three of our States and use them in illicit activities without ever being asked for the names of the corporate owners.

In another case, a New York company called the Assa Corporation owned a Manhattan skyscraper and, in 2007, wire transferred about $4.5 million in rental payments to a bank in Iran. U.S. law enforcement tracking the funds had no idea who was behind that corporation, until another government disclosed that it was owned by the Alavi Foundation which had known ties to the Iranian military. In other words, a New York corporation was being used to ship millions of U.S. dollars to Iran, a notorious supporter of terrorism.

U.S. corporations with hidden owners have also been involved in financial crimes. In 2011, a former Russian military officer, Victor Kaganov, pled guilty to operating an illegal money transmitter business from his home in Oregon, and using Oregon shell corporations to wire more than $150 million around the world on behalf of Russian clients. U.S. Attorney Dwight Holton of the District of Oregon used stark language when describing the case: ``When shell corporations are illegally manipulated in the shadows to hide the flow of tens of millions of dollars overseas, it threatens the integrity of our financial system.''

Another financial fraud case involves Florida attorney Scott Rothstein who, in 2010, pled guilty to fraud and money laundering in connection with a $1.2 billion Ponzi investment scheme, in which he used 85 U.S. limited liability companies to conceal his participation and ownership stake in various business ventures. In still another case earlier this year, the Securities and Exchange Commission suspended trading in 61 shell corporations suspected of being misused to defraud investors.

Shell corporations are also notorious for their role in health care fraud. One example involves an individual named Michel Huarte who formed 29 shell companies in several states including Florida, Louisiana, and North Carolina, used them to make fraudulent health care claims, and bilked Medicare out of more than $50 million. In 2010, he was sentenced to 22 years in prison. He is one in a long line of fraudsters who have hidden behind U.S. corporations to defraud Medicare and Medicaid.

Tax evasion is another type of misconduct which all too often involves the use of U.S. corporations with hidden owners. One Subcommittee investigation showed, for example, how Kurt Greaves, a Michigan businessman, worked with Terry Neal, an offshore promoter, to form shell corporations in Nevada, Canada, and offshore secrecy jurisdictions, to hide more than $400,000 in untaxed business income. Both Mr. Greaves and Mr. Neal later pled guilty to federal tax evasion. The Subcommittee also showed how two brothers from Texas, Sam and Charles Wyly, created a network of 58 trusts and shell corporations to dodge the payment of U.S. taxes, including using a set of Nevada corporations to move offshore over $190 million in stock options without paying taxes on that compensation.

Still another area of abuse involves corrupt foreign officials using U.S. corporations to hide and spend their illicit funds. One example involves Teodoro Obiang, who is the son of the President of Equatorial Guinea, holds office in that country, and has purchased luxury homes, cars, and even a personal jet here in the United States. A Subcommittee investigation disclosed that, as part of his actions, Mr. Obiang used U.S. lawyers to form several California shell corporations with names like Beautiful Vision, Unlimited Horizon, and Sweet Pink to open bank accounts in the names of those corporations, move millions of dollars in suspect funds into the United States, and use those funds to support an affluent lifestyle. The Department of Justice has since filed suit to seize his U.S. property, alleging that Mr. Obiang acquired it through corruption and money laundering.

One last example involves 800 U.S. corporations whose hidden owners have stumped U.S. law enforcement trying to investigate their suspect conduct. In October 2004, the Homeland Security Department's division of Immigration and Customs Enforcement or ICE identified a single Utah corporation that had engaged in $150 million in suspicious transactions. ICE found that the corporation had been formed in Utah and was owned by two Panamanian entities which, in turn, were owned by a group of Panamanian holding corporations, all located at the same Panama City office. By 2005, ICE had located 800 U.S. corporations in nearly all 50 states associated with the same shadowy group in Panama, but was unable to obtain the name of a single natural person who owned any one of the corporations. ICE had learned that the 800 corporations were associated with multiple U.S. investigations into tax fraud and other wrongdoing, but no one had been able to find the corporate owners. The trail went cold, and ICE closed the case. Yet it may be that many of those U.S. corporations are still enaged in wrongdoing.

These examples of U.S. corporations with hidden owners facilitating terrorism, financial crime, health care fraud, tax evasion, corruption, and other misconduct provide ample evidence of the need for legislation to find out who is behind the mayhem. That's

why law enforcement officials are among the bill's strongest supporters.

The Federal Law Enforcement Officers Association or FLEOA, which represents more than 26,000 Federal law enforcement officers, has explained its strong support for the bill as follows:

Suspected terrorists, drug trafficking organizations and

other criminal enterprises continue to exploit the anonymity

afforded to them through the current corporate filing process

in a few states. Hiding behind a registered agent, these

criminals are able to incorporate without disclosing who the

beneficial owners are for their company(s). This enables them

to establish corporate flow-through entities, otherwise known

as shell companies,' to facilitate money laundering and

narcoterrorist financing.

Even through the due process of proper service of a court

order, law enforcement officers are unable to determine who

the beneficial owners are of these entities. This has to

stop. While we fully recognize and respect the privacy

concerns of law abiding citizens, we need to install a

baseline of checks and balances to deter the criminal

exploitation of our corporate filing process.

The Fraternal Order of Police, which has 330,000 members across the country, offers a similar explanation for its support of the bill:

For years corporations have been used as front

organizations by criminals conducting illegal activity such

as money laundering, fraud, and tax evasion. . . . This bill

is critical to our work because, all too often,

investigations are stymied when we encounter a company with

hidden ownership. . . . [T]he sharing of beneficial ownership

information with law enforcement will greatly assist our

investigations. When we are able to expose the link between

shell companies and drug trafficking, corruption, organized

crime and terrorist finance, the law enforcement community is

better able to keep America safe from these illegal

activities and keep the proceeds of these crimes out of the

U.S. financial system.

The National Association of Assistant United States Attorneys, which represents more than 1,500 federal prosecutors, has urged Congress to take legislative action to strengthen inadequate state incorporation practices: ``[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. The legislation will guard against that and no longer permit criminals to exploit the lack of transparency in the registration of corporations.''

Manhattan District Attorney Cyrus Vance Jr. has publicly urged Congress to enact this bill. He wrote: ``I have spoken with many colleagues in the law enforcement community, and every one of us supports the bill as a simple and common sense movement to help prevent white collar crime. . . . Because there is no national standard requiring disclosure of beneficial ownership, criminals can set up U.S. corporations anonymously and use them as fronts for all kinds of illicit activity without having to identify who actually controls and profits from the activity. In a simple stroke, the proposed bill would eliminate this needless barrier to the detection and prosecution of financial crimes.''

Some members of the U.S. financial industry with obligations under U.S. anti-money laundering laws to know their customers, including when doing business with a shell corporation, support the legislation because it will help them know who is behind U.S. corporations seeking to open accounts with them. The National Money Transmitters Association, NMTA, for example, which represents state-licensed money transmitters, has written in support of the bill, explaining: ``The NMTA urges you to give us the KYC, know-your-customer, tools we need to do our job efficiently and make sure that our nation's standards are brought up to a level equal to that of other advanced countries.''

We need legislation not only to stop the abuses being committed by U.S. corporations with hidden owners, but also to meet our international commitments. 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 two years, until 2008, to make progress toward complying with the FATF standard on beneficial ownership information. But that deadline passed five years ago, with no real progress. Enacting the bill we are introducing today would help 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 help ensure that the United States meets its international anti-money laundering commitments.

Combating the misuse of corporations with hidden owners has increasingly become a global priority. In a letter to President Obama earlier this year, prominent prosecutors and corruption hunters from across the globe urged the United States to collect company beneficial ownership information to fight wrongdoing. According to the letter: ``Grand corruption would not be possible without the help of the global financing system--in particular, banks that accept corrupt assets and secrecy rules that allow money launderers to disguise their activity. . . . We believe that part of the solution is for governments to require existing company registers to collect information on the ultimate owners of companies.''

As I mentioned earlier, countries around the world have begun to take action to tackle the problem. Just last month, during the G8 summit in Northern Ireland, leaders announced their commitment to ending the practice of establishing anonymous shell companies and declared: ``Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.'' To implement that principle, the G8 leaders pledged to publish national Action Plans outlining the concrete steps each country will take to ensure that law enforcement and tax authorities have ready access to information on who owns and controls the companies formed under their laws.

In announcing the U.S. Action Plan, the White House expressed its commitment to ensuring that law enforcement and tax authorities have access to ownership information for companies formed within U.S. borders. The Plan explicitly calls for enactment of legislation that meets certain principles, all of which are met by the bill introduced today. Those principles are the following:

``Requirements for covered legal entities to disclose beneficial ownership to states or regulated corporate formation agents at the time of company formation.

``Requirements for verification of the identity of the beneficial owner.

``Options for covering legal entities depending on whether the applicant forms the legal entity directly or uses a regulated company formation agent.

``Requirements for law enforcement authorities, including tax authorities, to be able to access beneficial ownership information upon appropriate request through a central registry at the state level.

``An extension of anti-money laundering obligations to company formation agents, including an obligation to identify and verify beneficial ownership information.

``A mandate that entities provide updated information when changes of beneficial ownership occur within 60 days; and

``The imposition of civil and criminal penalties for knowingly providing false information.''

The White House and the international community have made the collection of beneficial ownership information for corporations a global priority this year. It is time for Congress to step up to the plate and take the necessary action.

The bill introduced today is the product of years of work by the Senate Permanent Subcommittee on Investigations, which I chair. Over twelve years ago, in 2000, the Government Accountability Office, 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.'' That report revealed that one person was able to set up more than 2,000 Delaware shell corporations and, without disclosing the identity of any 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 hidden owners. The alarm it sounded years ago is still ringing.

In April 2006, in response to a second Subcommittee request, GAO released a report entitled, ``Corporation 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 limited liability companies, or LLCs, formed under their laws. The report also found that several States had established automated procedures that allow a person to form a new corporation or LLC in the State within 24 hours of filing an online application without any prior review of that application by State personnel. 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 caused for a range of law enforcement investigations.

In November 2006, our Subcommittee held a hearing on the problem. At that hearing, representatives of the U.S. Department of Justice, the Internal Revenue Service, and the Department of Treasury's Financial Crimes Enforcement Network or FinCEN testified that the failure of States to collect adequate information on the beneficial owners of the legal entities they form had impeded federal efforts to investigate and prosecute criminal acts such as terrorism, money laundering, securities fraud, and tax evasion. At the hearing, the Justice Department 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.'' As part of its testimony, FinCEN described identifying 768 incidents of suspicious international wire transfer activity involving U.S. shell corporations.

The next year, in 2007, in a ``Dirty Dozen'' list of tax scams active that year, the IRS highlighted shell corporations with hidden owners as number four on the list. It wrote:

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.

In 2008, we first introduced our bipartisan legislation to stop the formation of U.S. corporations with hidden owners. It was a Levin- Coleman-Obama bill, S. 2956, back then. When asked about the bill in 2008, then DHS Secretary Michael Chertoff wrote: ``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.''

In 2009, the Senate Homeland Security and Governmental Affairs Committee held two hearings which examined not only the problem, but also possible solutions, including our revised bill, S. 569. At the first hearing entitled, ``Examining State Business Incorporation Practices: A Discussion of the Incorporation Transparency and Law Enforcement Assistance Act,'' held in June 2009, DHS testified that ``shell corporations established in the United States have been utilized to commit crimes against individuals around the world.'' The Manhattan District Attorney's office testified: ``For those of us in law enforcement, these issues with shell corporations are not some abstract idea. This is what we do and deal with every day. We see these shell corporations being used by criminal organizations, and the record is replete with examples of their use for money laundering, for their use in tax evasion, and for their use in securities fraud.''

At the second hearing, ``Business Formation and Financial Crime: Finding a Legislative Solution,'' held in November 2009, the Justice Department again testified about criminals using U.S. shell corporations. It noted that ``each of these examples involves the relatively rare instance in which law enforcement was able to identify the perpetrator misusing U.S. shell corporations. Far too often, we are unable to do so.'' The Treasury Department testified that ``the ability of illicit actors to form corporations in the United States without disclosing their true identity presents a serious vulnerability and there is ample evidence that criminal organizations and others who threaten our national security exploit this vulnerability.''

The 2009 hearings also presented evidence of dozens of Internet websites advertising corporate formation services that highlighted the ability of corporations to be formed in the United States without asking for the identity of the beneficial owners. Those websites explicitly pointed to anonymous ownership as a reason to incorporate within the United States, and often listed certain States alongside notorious offshore jurisdictions as preferred locations in which to form new corporations, essentially providing an open invitation for wrongdoers to form entities within the United States.

One website, for example, set up by an international incorporation firm, advocated setting up corporations in Delaware by saying: ``DELAWARE--An Offshore Tax Haven for Non US Residents.'' It cited as one of Delaware's advantages that: ``Owners' names are not disclosed to the state.'' Another website, from a U.K. firm called ``formacorporation-offshore.com,'' listed the advantages to incorporating in Nevada. Those advantages included: ``Stockholders are not on Public Record allowing complete anonymity.''

During the 2009 hearings, I presented evidence of how one Wyoming outfit was selling so-called shelf corporations--corporations formed and then left ``on the shelf'' for later sale to purchasers who could then pretend the corporations had been in operation for years. A June 2011 Reuters news article wrote a detailed expose of how that same outfit, Wyoming Corporate Services, had formed thousands of U.S. corporations all across the country, all with hidden owners. The article quoted the website as follows: ``A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy. A person you control . . . yet cannot be held accountable for its actions. Imagine the possibilities!''

The article described a small house in Cheyenne, Wyoming, which Wyoming Corporate Services used to provide a U.S. address for more than 2,000 corporations that it had helped to form. The article described ``the walls of the main room'' as ``covered floor to ceiling with numbered mailboxes labeled as corporate suites.'' The article reported that among the corporations using the address was a shell corporation controlled by a former Ukranian prime minister who had been convicted of money laundering and extortion; a corporation indicted for helping online-poker operators evade a U.S. ban on Internet gambling; and two corporations barred from U.S. federal contracting for selling counterfeit truck parts to the Pentagon. The article observed that Wyoming Corporate Services continued to sell shelf corporations that existed solely on paper but could show a history of regulatory and tax filings, despite having had no real U.S. operations. That's the type of deceptive conduct going on right now, here in our own backyard, with respect to U.S. corporations with hidden owners.

Despite the evidence of U.S. corporations being misused by organized

crime, terrorists, tax evaders, and other wrongdoers, and despite years of law enforcement complaints, many of our States are reluctant to admit there is a problem in establishing U.S. corporations and LLCs with hidden 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.

Beginning in 2006, the Subcommittee worked with the States to encourage them to recognize the law enforcement and national security problem they'd created and to come up with their own solution. After the Subcommittee's 2006 hearing on this issue, for example, the National Association of Secretaries of State or 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 on the issue.

In July 2007, the NASS task force issued a proposal. Rather than cure the problem, however, the proposal had multiple serious 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 would 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 corporation's ``owners of record'' who can be, and often are, offshore corporations or trusts with their own hidden owners. The NASS proposal also did not require the States to maintain the beneficial ownership information, or to supply it to law enforcement upon receipt of a subpoena or summons. Instead, law enforcement would have to get the information from the suspect corporation or one of its agents, thereby tipping off the corporation to the investigation. The proposal also failed to require the beneficial ownership information to be updated over time. These and other flaws in the proposal were identified by the Treasury Department, the Department of Justice, and others, but NASS continued on the same course.

NASS enlisted the help of the National Conference of Commissioners on Uniform State Laws or NCCUSL, which produced a proposed model law for States that wanted to adopt the NASS approach. NCCUSL presented its proposal at the Homeland Security and Governmental Affairs Committee's June 2009 hearing, where it was subjected to significant criticism. The Manhattan District Attorney's office, for example, testified: ``I say without hesitation or reservation--that from a law enforcement perspective, the bill proposed by NCCUSL would be worse than no bill at all. And there are two very basic reasons for this. It eliminates the ability of law enforcement to get corporate information without alerting the target of the investigation that the investigation is ongoing. That is the primary reason. It also sets up a system that is time-consuming and complicated.''

The Department of Justice testified: ``Senator, I would submit to you that in a criminal organization everyone knows who is in control and this will not be an issue of determining who is in control. What we are concerned about here from the law enforcement perspective are the criminals and the criminal organizations and so what we are asking is that when criminals use shell companies, they provide the name of the beneficial owner. That is the person who is in control, the criminal in control, as opposed to the NCCUSL proposal where they are suggesting that instead two nominees are provided--two nominees between law enforcement and the criminal in control.''

Despite these criticisms, NCCUSL finalized its model law in July 2009, issuing it under the title, ``Uniform Law Enforcement Access to Entity Information Act.'' At the November 2009 hearing, law enforcement again criticized the NCCUSL model for failing to provide the names of the true owners of the corporations being formed. The Justice Department testified: ``To allow companies to provide anything less than the beneficial owner information merely provides criminals with an opportunity to evade responsibility and put nominees between themselves and the true perpetrator.'' With regard to NCCUSL's proposal, Treasury testified: ``[T]here is not an obligation for that live person to not be a nominee. And what I think is important in the legislation is that we get at the true beneficial owner and not someone who may be a nominee.''

In addition to its flaws, the NCCUSL model law has proven unpopular with the States for whom it was written. Despite the effort and fanfare attached to the uniform model, after four years of sitting on the books, not a single State has adopted it or given any indication of doing so.

It is deeply disappointing that the States, despite the passage of many years, have been unable to devise an effective proposal to stop the formation of corporations with hidden owners. One key difficulty is that the States are competing against each other to attract persons who want to set up U.S. corporations. That competition creates pressure for each individual State to favor procedures that allow quick and easy incorporations, with no questions asked. It's a classic case of competition causing a race to the bottom, making it difficult for any one State to do the right thing and ask for the identity of the persons behind the corporations being formed.

That is why Federal legislation in this area is critical. 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 ask incorporation applicants for a list of the beneficial owners of each corporation or LLC formed under their laws, to maintain this information for a period of years after a corporation is terminated, and to provide the information to law enforcement upon receipt of a subpoena or summons. The bill would also require corporations and LLCs to update their beneficial ownership information on a regular basis. The ownership information would be kept by the State or, if a State maintains a formation agent licensing system and delegates this task, by a State's licensed formation agents.

The particular information that would have to be provided for each beneficial owner is the owner's name, address, and a unique identifying number from a State driver's license or a U.S. passport. The bill would not require States to verify this information, but penalties would apply to persons who submit false information.

In the case of U.S. corporations formed by individuals who do not possess a driver's license or passport from the United States, the bill would permit them to submit their names, addresses, and identifying information from a non-U.S. passport to a formation agent residing within the State. They would have to include a copy of a passport photograph. The incorporation application would have to include a written certification that the formation agent had obtained the information and verified the identity of the non-U.S. corporate owners. The formation agent would have to retain the information in the State for a specified period of time and produce it upon receipt of a subpoena or summons from law enforcement.

To ensure that its provisions are tightly targeted, the bill would exempt a wide range of corporations from the disclosure obligation. It would exempt, for example, virtually all highly regulated corporations, because we already know who owns them. That includes all publicly- traded corporations, banks, broker-dealers, commodity brokers, registered investment funds, registered accounting firms, insurers, and utilities. The bill would also exempt corporations with a substantial U.S. presence, including at least 20 employees physically located in the United States, since those individuals could provide law enforcement with the leads needed to trace a corporation's true

owners. In addition, the bill would exempt businesses set up by governments, churches, charities, and nonprofit corporations, since disclosure of their beneficial ownership information would not advance the public interest or assist law enforcement. These exemptions dramatically reduce the number of corporations who would actually have to file beneficial ownership information on state incorporation forms in order to ensure that the bill's disclosure obligations focus only on owners whose identities are currently hidden.

The bill does not take a position on the issue of whether the States should make beneficial ownership information available to the public. Instead, the bill leaves it entirely up to the States to decide whether, under what circumstances, and to what extent 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 with a subpoena or summons is given ready access to the beneficial ownership information.

Relative to the costs of compliance, the bill provides States with access to two separate funding sources, neither of which involves appropriated funds. For the first three years after the bill's enactment, the bill requires both the Justice and Treasury Departments to make funds available from their individual forfeiture programs to States incurring reasonable expenses to comply with the Act. These forfeiture funds do not contain taxpayer dollars; instead they contain the proceeds of forfeiture actions taken against persons involved in money laundering, drug trafficking, or other wrongdoing. The bill would direct a total of $40 million over 3 years to be provided to the States from the two funds to carry out the Act. These provisions would ensure that States have adequate funds for the modest compliance costs involved with adding a new question to their incorporation forms requesting the names of the covered corporations' beneficial owners.

The compliance costs would be modest, because the bill does not require any State to change its laws, set up new forms, create new databases of information, or verify the information provided. To the contrary, the only steps that a State would need to take would be to add one question to its existing incorporation form asking for the corporation's beneficial owners, keep that incorporation application on file which all States do already, and make the ownership information available to law enforcement upon receipt of a subpoena or summons.

It is common for bills establishing minimum Federal standards to seek to ensure State action by making some Federal funding dependent upon a State's meeting the specified standards. Our bill, however, states explicitly that nothing in its provisions authorizes the withholding of federal funds from a State for failing to modify its incorporation practices to meet the beneficial ownership information requirements of the act. Instead, the bill calls for a GAO report within 5 years of enactment to identify any States that had 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 in the event there are any noncompliant States.

The bill also contains a provision that would require corporations bidding on federal contracts to provide the same beneficial ownership information to the federal government as provided to the relevant State. The Subcommittee has become aware of instances in which the federal government has found itself doing business with U.S. corporations whose owners are hidden, including owners under investigation for suspect conduct. It is important that when the federal government contracts to do business with someone, it knows who it is dealing with.

Finally, the bill would require the Treasury Department to issue a rule requiring U.S. formation agents to establish anti-money laundering programs to ensure they are not forming U.S. corporations or LLCs for wrongdoers. The bill requires the programs to be risk based so that formation agents can target their preventative efforts toward persons who pose a high risk of being involved with wrongdoing. GAO would also be asked to conduct a study of existing State formation procedures for partnerships, trusts, and charitable organizations to see if additional ownership disclosure requirements are warranted.

We have worked with the Departments of Justice, Treasury, and Homeland Security to craft a bill that would address, in a fair and reasonable way, the significant law enforcement problems created by States allowing the formation of millions of U.S. corporations and LLCs with hidden owners. When those corporations commit crimes, they affect not only interstate commerce with U.S. victims, but also our relationships with other countries whose citizens may become victims of U.S. corporate wrongdoing. What the bill comes down to is a simple requirement that States strengthen their incorporation applications to add a single question requesting identifying information for the true owners of the corporations they form. That is not too much to ask to protect this country and the international community from wrongdoers misusing U.S. corporations.

For those who say that, if the United States tightens its incorporation rules, new corporations will be formed elsewhere, it is appropriate to ask exactly where they will go. A recent report found that virtually every other country is already tougher than the United States in terms of demanding and verifying beneficial ownership information. Most offshore tax havens, for example, already require this information to be collected, including the Bahamas, Cayman Islands, and the Channel Islands. Countries around the world already request beneficial ownership information, in part because of their commitment to FATF's international anti-money laundering standards. Our 50 States should be meeting the same standards, but there is no indication that they will, unless required to do so.

I wish Federal legislation weren't necessary. I wish the States could solve this law enforcement problem on their own, but ongoing competitive pressures make it unlikely that the States will do the right thing. It's been nearly seven years since our 2006 hearing on this issue and more than four years since the States came up with a model law on the subject, with no progress to speak of, 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 hidden 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 protect owners from personal liability for corporate acts. Unfortunately, today, the corporate form has too often been corrupted into serving those who wish to conceal their identities. 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 join us in supporting this legislation and putting 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 hidden owners.

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

Mr. President, today Senator Murkowski and I are introducing legislation to promote a new form of hydropower, marine hydrokinetic renewable energy, or MHK. An MHK project generates energy from waves, currents, and tides in the ocean, an estuary or a tidal area as well as from the free-flowing water in a river, lake, or stream.

Our bill will help commercialize MHK technologies through research and development and a more efficient and timely regulatory process for the siting of pilot projects intended to demonstrate the viability of these technologies. It is an ideal follow-up to a pair of bills, H.R. 267 and H.R. 678, to streamline the regulatory process for low-impact conventional hydropower that were reported by the Committee on Energy and Natural Resources by unanimous bipartisan votes a few months ago. Considered together, the two conventional hydropower bills approved by the Committee along with this MHK legislation are a major step forward in advancing carbon-free hydropower technologies.

MHK has tremendous potential to generate a substantial amount of clean renewable energy in the United States and across the globe. It is poised to be a key participant in the transition to a low carbon economy.

What distinguishes MHK from conventional hydropower is that it generates energy without the use of a dam or other impoundment. This gets MHK off on the right foot in terms of minimizing any adverse environmental impact. Investments to capture our nation's rich domestic marine energy resources can also play a major role in the creation of essential domestic engineering and manufacturing jobs.

The energy contained in predictable waves, tidal flows and currents is the basis for worldwide investments in this emerging industry. Water is approximately 800 times denser than air, providing great potential power density along with predictability. These characteristics mean that MHK technologies could provide predictable

base-load renewable power in the future.

At the present time there are many different types of MHK technologies with multiple applications under development that are intended to capture the power contained in waves, tides and currents.

Wave energy devices capture the heave and/or surge power of waves and convert them via hydraulic or geared direct drive systems into electricity. Some of these devices are moored to the ocean floor, some are floating on the surface, while others are attached to breakwaters near shore. By last count, there are over 100 wave energy devices under development worldwide. Tidal energy technologies capture the ebb and flow of tides. It is estimated that 60 different tidal energy technologies are under development worldwide. There are other technologies that include run-of-river systems and offshore ocean current technologies. Most of these technologies under development capture uni-directional water flows and look similar to the tidal devices.

The United States has not been a world leader in the development of these cutting edge technologies to date. Instead, our country is seen as a huge potential market for our international competitors in this new industrial sector. The United States has significant wave, tidal, current and in-stream energy resources. The Electric Power Research Institute has estimated that the commercially available wave energy potential off the coast of the United States is roughly 252 million megawatt hours--equal to 6.5 percent of today's entire generating portfolio. This is approximately the amount of electricity presently being produced by the existing fleet of American conventional hydroelectric dams.

The Department of Energy, DOE, has released two nationwide resource assessments that indicate the waves, tides, and ocean currents off the nation's coasts could contribute significantly to the United States' total annual electricity production. DOE is currently developing an aggressive strategy to support its vision of producing at least fifteen percent of our nation's electricity from water power, including conventional hydropower, by 2030.

Our goal should be the establishment of a commercially viable U.S. MHK renewable energy industry, supported by a robust domestic supply chain for fabrication, installation, operations and maintenance of MHK devices. The development of a substantial marine hydrokinetic industry in the U.S. could drive billions of dollars of investment in heavy industrial and maritime sectors, as well as in advanced electrical systems and materials common to many renewable technologies. Federal investments would stimulate private funds and jobs in the construction, manufacturing, engineering, and environmental science sectors.

I am very pleased that my home State of Oregon has made a strategic decision to be an international leader in the commercialization of the marine renewable energy industry. Led by the Oregon Wave Energy Trust, the Northwest National Marine Renewable Energy Center co-located at Oregon State University, and several private companies that are part of the MHK supply chain, Oregon is positioning itself to be a leading force supporting this newly emerging industry.

Unfortunately, the U.S. is falling behind in the race to capture the rich energy potential of our oceans and the jobs that will come with this new industry. The United Kingdom, Ireland, Portugal, Scotland, Australia, and other countries are committed to producing emission- free, renewable energy from MHK sources. Scotland has had a grid- connected, wave energy convertor unit in operation since 2001 and maintains a national goal of producing 2 GW of generation capacity from MHK renewable energy. The U.K. and Ireland have also set aggressive goals for MHK generation by 2020.

The Ocean Renewable Energy Coalition, the industry's trade group here in Washington DC, calculates that more than $782 million has been spent by the UK government on wave energy R&D over the past 10 years. That total approaches $1 billion over the same period if you add in the commitments to ocean energy R&D from France, Portugal, Spain, Norway, and Denmark.

Early funding support, along with development of full-scale device testing centers, demonstrates that the significant technological advances and the competitive advantages in this industry are trending in Europe's direction. As an example of the disparity in investments, Europe currently has several wave and tidal energy test facilities, led by the European Marine Energy Center in Scotland, that are helping technology developers commercialize their wave and tidal energy convertors. The United States clearly has a need for such infrastructure. I know that Oregon State University has a strong desire to compete for funding to help establish a testing center in the Pacific Northwest. Unfortunately, recent funding levels have not supported development of such offshore testing infrastructure in the U.S. to date.

Given this internationally competitive situation, I believe that Congress must make targeted Federal investments to close the gap. Commercialization of technologies to harness marine renewable energy resources will require Federal funding to augment research and development efforts already underway in the private sector. Just as the wind and solar industries have received DOE funding support for over 3 decades, which has resulted in the rapid deployment of these technologies in recent years, the nascent marine energy industry seeks similar Federal assistance to develop promising technologies that are on the verge of commercial viability.

Unfortunately, in addition to the limited private sector funding available to these startup companies, permitting and regulatory obstacles are tremendous disincentives to technology developers of marine energy projects in the United States. While other countries have adopted permitting and regulatory regimes that appear to be more efficient, the United States is still struggling with how to permit and regulate these technologies. I cannot overstate the seriousness of this problem. To give just one example, it took one MHK developer 5 years and $2 million to obtain a license from the Federal Energy Regulatory Commission for a 1.5 megawatt project.

The regulatory situation is simply unacceptable and is greatly slowing progress in the MHK industry. Until companies get projects in the water, Congress and the public will not learn about the environmental impacts, engineering challenges or the true costs of offshore renewables.

Capturing the benefits of our vast marine-based renewable resources will require a mix of new incentives, updated regulatory regimes and general outreach and education. However, the most important actions that can be taken by the Federal Government in the short term are to provide the necessary resources for research, development and demonstration of various marine renewable energy technology platforms and a workable and efficient regulatory process. Increased federal support will accelerate deployment of these technologies, create thousands of high paying jobs, give confidence to investors, and help attract private capital.

The Marine and Hydrokinetic Renewable Energy Act of 2013 helps accomplish these goals in a number of ways. It reauthorizes the DOE's MHK research, development and demonstration 3 programs, including the National Marine Renewable Energy Research, Development, and Demonstration Centers.

Increased resources for the DOE Water Power Program will enable the United States to leverage its technological superiority in shipbuilding and offshore oil and gas production. This will create jobs and diversify these maritime industries. In the absence of such funding, however, the United States will have to depend on foreign suppliers for ocean energy technologies, and will have missed a significant opportunity to expand our economic competiveness in this renewable energy sector.

The regulatory component of the bill makes the regulatory process for MHK of not more than 10 MW more efficient and timely. It modifies and improves the FERC ``pilot license'' process in many ways. Improvements include a goal to complete the pilot license process in 12 months or less; a designation of FERC as the ``Lead Agency'' for the purpose of coordinating environmental review; a clarification that any shut

down requirement be ``reasonable,'' and a clarification that an MHK project does not need to be removed when it is shut down if FERC deems leaving it in place is preferable for environmental and other reasons

MHK is a clean, home-grown, emissions-free source of electricity that can improve the security and reliability of the electric grid. Investing in MHK research, development and demonstration today will pay great dividends in the future. MHK has tremendous potential to benefit the United States and the entire world. Now is the time to move forward on MHK and the Marine and Hydrokinetic Renewable Energy Act is the way to do it.

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

Mr. President, today I rise to introduce a bill that will give Oregon State University the flexibility to continue its important agricultural work in Hermiston, Oregon. I am pleased to be joined on this bill with my colleague from Oregon, Senator Merkely. I look forward to working with Senator Merkley, other colleagues, and supporters of the bill to update the federal interests in the land to match current needs and conditions.

The Hermiston Agricultural Research & Extension Center, HAREC, provides support to one of the most unique and important agricultural areas in the world: the Columbia Basin region of Oregon and Washington. As one of Oregon State University's, OSU, 12 Agricultural Experiment Stations, HAREC concentrates on the discovery and implementation of agricultural opportunities while also providing solutions to production issues for regional growers and beyond.

Research at HAREC emphasizes identification of new crop opportunities, improved production practices that save money while reducing inputs, plant breeding and varietal evaluation of cereals and potatoes. Through this work it has developed new lines with higher nutritional value, integrated pest management of insects and insect-

transmitted diseases, and provided information related to environmental issues and salmon restoration. In recent years the center provided leadership, research, and new knowledge essential to allow growers to diversify production and convert 30,000 acres of commodity crops to high-value crops. The station has led efforts to cultivate value-added agriculture in Morrow and Umatilla counties, resulting in over $50,000,000 in annual economic return.

The history of HAREC and a Umatilla agricultural research center spans more than a century. The Federal Government paved the way in the development of farming and ranching in the Umatilla Basin. In 1954, the Bureau of Land Management granted land to the State of Oregon on the condition that the land is used for cooperative agricultural experimental work. Over the past nearly 60 years, OSU has developed a center with state-of-the-art laboratories, irrigation technology abilities, greenhouses, screenhouses and research and extension faculty. HAREC now supports nearly 500,000 acres of irrigated agriculture.

Just as agriculture in the Columbia Basin has grown by leaps and bounds since 1954, so has the community of Hermiston. This bill removes the reversionary clause from the original land grant while conditioning that any consideration gained by OSU from the sale, lease, or other use of the land be put back into agricultural experimental and research work. It gives OSU the flexibility to adapt to the population growth and city expansion that will ultimately necessitate the relocation of HAREC from inside the urban growth boundary to a more rural location. Without this bill, moving the station would mean triggering the federal reversionary clause and losing HAREC land and all the buildings and improvements over nearly six decades to the Federal Government. I'm sponsoring this bill to ensure HAREC can continue for another hundred years.

Regional leaders and Oregon State University support removing the barriers to the continued operation of the center. I express my gratitude for their work with me on this legislation. I also look forward to working with Senator Merkley to advance this bill and support the agricultural heart of the regional economy.

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

Mr. President. I am honored to join my colleague from Georgia, Senator Johnny Isakson, in introducing a bill essential to expanding health care options for rural hospitals and beneficiaries living in rural areas, the Medicare Access to Rural Anesthesiology Act.

As it stands today, low Medicare Part B anesthesia payments and low patient volume in rural areas makes it difficult for rural hospitals to attract and retain anesthesiologists. Our legislation would take an important step towards leveling the playing field between urban and rural health care by ensuring that rural Medicare beneficiaries have similar access to anesthesia services.

Generally, Medicare pays for anesthesia services under the Medicare Part B fee schedule, but in order to attract anesthesia providers to rural areas, a statutory exception was created in the 1980s that allows eligible rural hospital to use Part A funds to employ or contract with non-physician anesthesiologist assistants, AA, or certified registered nurse anesthetists, CRNA. This policy however, does not permit eligible hospitals to use pass-through funds to pay anesthesiologists. Leaving anesthesiologists out also prevents AAs from receiving pass through payment because AAs must have an anesthesiologist on premises in order to practice. As a result, many folks in rural areas only have access to one type of anesthesia provider compared to folks in urban areas who can easily visit an anesthesiologist, CRNA, or an AA.

Our legislation would allow eligible rural hospitals to use ``pass- through'' Part A funds to employ CRNAs, AAs, and anesthesiologists. This common

sense change would give eligible rural hospitals the power to choose the anesthesia providers that best suit the medical needs of their patients, and would provide these hospitals with another tool to recruit and retain anesthesiology professionals as well as expand the availability of anesthesiology care in medically underserved areas.

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

Mr. President, I rise today to again discuss the need to restore and protect Lake Tahoe. Lake Tahoe is a national treasure. Her alpine beauty has drawn and inspired people for centuries: artists and poets, John Muir and Mark Twain, and countless millions the world over.

As a girl, I went to Lake Tahoe to ride horses through the woods, to swim in the clear blue waters and to bike around the magnificent Basin.

For over 16 years, representatives from different ends of the political spectrum have come together to Keep Tahoe Blue.

The challenges are great. Climate change and drought have created a persistent threat from catastrophic wildfire. Sedimentation and pollution threaten water quality and the lake's treasured clarity. And invasive species threaten the economy of the region.

The time to act is now, and the federal government must take a leading role--78 percent of the land surrounding Lake Tahoe is public land, primarily the Eldorado, Toiyabe and Tahoe National Forests.

That is why today I am reintroducing the Lake Tahoe Restoration Act of 2013, which is co-sponsored by Senators Harry Reid, Dean Heller and Barbara Boxer.

The bill would continue the Federal commitment at Lake Tahoe by authorizing $415 million over ten years to improve water clarity, reduce the threat of catastrophic fire, combat invasive species, and restore and protect the environment in the Lake Tahoe Basin.

Specifically, it would do the following:

Provide $243 million over 10 years for the highest priority restoration projects, according to scientific data. The legislation authorizes at least $138 million for stormwater management and watershed restoration projects scientifically determined to be the most effective ways to improve water clarity.

This bill also requires prioritized ranking of environmental restoration projects and authorizes $80 million for State and local agencies to implement these projects with costs being split evenly between the Federal agencies and non-federal partners.

Eligible projects must demonstrate their cost effectiveness, stakeholder support, ability to leverage non-federal contributions and meet environmental improvement goals.

Implementation of priority projects will improve water quality, forest health, air quality and fish and wildlife habitat around Lake Tahoe.

Authorizes $135 million over ten years to reduce the threat of wildfire in Lake Tahoe. These funds will finance hazardous fuels reduction projects including grants to local fire agencies, who must contribute at least 25 percent of project costs.

The bill also authorizes important restoration work related to the devastating 2007 Angora fire, which destroyed 242 residences and 67 commercial structures. Fuels treatment on Washoe Tribal lands, wildfire prevention planning, and improvements to

local water district infrastructure to fight wildfires that reach urban areas are eligible for grant funding.

The bill also creates incentives for local communities to have dedicated funding for defensible space inspections and enforcement.

Protecting Lake Tahoe from the threat of quagga mussels and other invasive aquatic species. Protecting Lake Tahoe from the threat of quagga mussels and other invasive aquatic species is a major priority because of the serious threats posed to Lake Tahoe.

University of California, Davis and University of Nevada, Reno scientists report that they have found up to 3,000 Asian clams per square meter at spots between Zephyr Point and Elk Point in Lake Tahoe. The spreading Asian clam population could put sharp shells and rotting algae on the Lake's beaches and help spread other invasive species such as quagga mussels.

The bill would authorize $30 million for watercraft inspections and removal of existing invasive species. It would require all watercraft to be inspected and decontaminated if they are determined to be a risk to the lake.

These invasive species threats are serious. For example, one quagga or zebra mussel can lay 1 million eggs in a year. This means that a single boat carrying quagga could devastate the lake's biology, local infrastructure, and the local economy.

The threat to Lake Tahoe cannot be overstated. In 2007 quagga mussels were discovered in Lake Mead. In the 6 years since, there population has swelled exponentially. Today there are more than 3 trillion. The infestation is probably irreversible.

There is good news. There is promising news on this front. Scientists have begun testing a new strategy by placing long rubber mats across the bottom of Lake Tahoe to cut off the oxygen to the Asian clams. Early research suggests that these mats were very effective at killing the clams. We continue to learn from this important research about how best to manage invasive species.

We can fight off these invaders. But it will require drive and imagination and the help authorized within this bill.

Supports reintroduction of the Lahontan Cutthroat Trout. The legislation authorizes $20 million over 10 years for the Lahontan Cutthroat Trout Recovery Plan. The Lahontan Cutthroat Trout is an iconic species that has an important historic legacy in Lake Tahoe.

When John C. Fremont first explored the Truckee River in January of 1844, he called it the Salmon Trout River because he found the Pyramid Lake Lahontan Cutthroat Trout. The trout relied on the Truckee River and its tributaries for their spawning runs in spring, traveling up the entire river's length as far as Lake Tahoe and Donner Lake, where they used the cool, pristine waters and clean gravel beds to lay their eggs. But dams, pollution and overfishing caused the demise of the Lahontan Cutthroat Trout.

Lake Tahoe is one of the historic 11 lakes where Lahontan Cutthroat Trout flourished in the past, and it's a critical part of the strategy to recover the species.

Funds scientific research. The legislation authorizes $30 million over ten years for scientific programs and research which will produce information on long-term trends in the Basin and inform the most cost- effective projects.

Prohibiting mining operations in the Tahoe Basin. This legislation would prohibit new mining operations in the Basin, ensuring that the fragile watershed and Lake Tahoe's water clarity are not threatened by pollution from mining operations.

Increases accountability and oversight. Every project funded by this legislation will have monitoring and assessment to determine the most cost-effective projects and best management practices for future projects.

The legislation also requires the Chair of the Federal Partnership to work with the Forest Service, Environmental Protection Agency, Fish and Wildlife Service and regional and state agencies, to prepare an annual report to Congress detailing the status of all projects undertaken, including project scope, budget and justification and overall expenditures and accomplishments.

This will ensure that Congress can have oversight on the progress of environmental restoration in Lake Tahoe.

Provides for public outreach and education. The Forest Service, Environmental Protection Agency, Fish and Wildlife Service and Tahoe Regional Planning Agency will implement new public outreach and education programs including encouraging Basin residents and visitors to implement defensible space, conducting best management practices for water quality and preventing the introduction and proliferation of invasive species. In addition, the legislation requires signage on federally financed projects to improve public awareness of restoration efforts.

Allows for increased efficiency in the management of public land. Under this legislation, the Forest Service would have increased flexibility to exchange land with state agencies which will allow for more cost-efficient management of public land. There is currently a checkerboard pattern of ownership in some areas of the Basin.

Under this new authority, the Forest Service could exchange land with the California Tahoe Conservancy and the California Department of Parks and Recreation of approximately equal value without going through a lengthy process to assess the land.

For example, if there are several plots of Forest Service land that surround or are adjacent to Tahoe Conservancy or California State Parks land, the state could transfer that land to the Forest Service so that it can be managed more efficiently.

This legislation is needed because the ``Jewel of the Sierra'' is in big trouble. If we don't act now, we could lose Lake Tahoe, lose it with stunning speed, to several devastating threats.

Anyone doubting that climate change poses a severe threat to Lake Tahoe should read an alarming recent report by the UC Davis Tahoe Environmental Research Center.

It was written for the U.S. Forest Service by scientists who have devoted their professional careers to studying Lake Tahoe. And it paints a distinctly bleak picture of the future for the ``Jewel of the Sierra.''

Among its findings are the Tahoe Basin's regional snowpack could decline by as much as 60 percent in the next century, with increased floods likely by 2050 and prolonged droughts by 2100.

Even ``under the most optimistic projections,'' average snowpack in the Sierra Nevada around Tahoe will decline by 40 to 60 percent by 2100, according to the report.

This would likely bankrupt Tahoe's ski industry, threaten the water supply of Reno and other communities, and degrade the lake's fabled water clarity. It is devastating.

According to the UC Davis report, an all-out attack on pollution and sedimentation may be the lake's last best hope.

Geoff Schladow, director of the UC Davis Tahoe Environmental Research Center and one of the report's authors, noted the need to restore short-term water quality in Lake Tahoe--while there's still time to do it.

``Reducing the load of external nutrients entering the lake in the coming decades may be the only possible mitigation measure to reduce the impact of climate change on lake clarity . . . ,'' the report said.

Without such an effort, the ``internal loading of nutrients'' could fundamentally change the lake and fuel algal growth, creating a downward spiral in water quality and clarity.

Water clarity is one of the central problems the legislation would address.

Pollution and sedimentation have threatened Lake Tahoe's water clarity for years now. In 1968, the first year UC Davis scientists made measurements using a device called a Secchi disk, clarity was measured at an average depth of 102.4 feet. Clarity declined over the next three decades, hitting a low of 64 feet in 1997.

There has been some improvement in this decade. Last year scientists recorded average clarity at 75.3 feet--the clearest readings in a decade. But it is a fragile gain. Sedimentation and stormwater runoff pose a persistent threat.

Climate change has already made itself apparent at Lake Tahoe. It makes the basin dry and tinder-hot, raising the risks of catastrophic wildfire. Daily air temperatures have increased 4 degrees since 1911. Snow has

declined as a fraction of total precipitation, from an average of 52 percent in 1910 to just 36 percent in recent years.

Climate change has caused Lake Tahoe's surface water temperature to rise over 2 degrees in 44 years. That means the cyclical deep-water mixing of the lake's waters will occur less frequently, and this could significantly disrupt Lake Tahoe's ecosystem.

This legislation is intended to address these problems.

Last year, the Senate Environment and Public Works Committee reported out the bill favorably, but there was not enough time for a floor vote. It is my hope that this legislation can move through committee quickly and be passed later this year.

A lot of good work has been done. But there's a lot more work to do, and time is running out.

Mark Twain called Lake Tahoe ``the fairest picture the whole world affords.'' We must not be the generation who lets this picture fall into ruin. We must rise to the challenge, and do all we can to preserve this ``noble sheet of water.''

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

Mr. President, I rise to introduce legislation to modernize the Congressional budget scoring process with respect to health spending and the effects of preventive health care.

Although the United States spends more than any other Nation in the world on health care, $2.6 trillion in 2010, our citizens' health status lags behind that of most developed countries, and we have the highest rate of preventable deaths among 19 industrialized nations. One reason is that the United States' expenditures for the treatment of disease far exceed our investments in preventive health.

Our neglect of prevention has been costly. Spending on the treatment of chronic diseases is overwhelming our health care budgets, particularly those of the Medicare and Medicaid programs. The following statistics come from the U.S. Centers for Disease Control and Prevention: 7 out of 10 deaths among Americans each year are from chronic diseases. Heart disease, cancer and stroke account for more than 50 percent of all deaths each year.

In 2005, 133 million Americans almost 1 out of every 2 adults had at least one chronic illness.

About \1/4\ of people with chronic conditions have one or more daily activity limitations.

Arthritis is the most common cause of disability, with nearly 19 million Americans reporting activity limitations.

Diabetes continues to be the leading cause of kidney failure, nontraumatic lower-extremity amputations, and blindness among adults, aged 20-74.

Excessive alcohol consumption is the third leading preventable cause of death in the U.S., behind diet, physical activity, and tobacco.

CDC also tells us that four health risk behaviors--lack of physical activity, poor nutrition, tobacco use, and excessive alcohol consumption--are responsible for much of the illness, suffering, and early death related to chronic diseases.

More than \1/3\ of all adults do not meet recommendations for aerobic physical activity based on the 2008 Physical Activity Guidelines for Americans, and 23 percent report no leisure-time physical activity at all in the preceding month.

In 2007, 22 percent of high school students and only 24 percent of adults reported eating 5 or more servings of fruits and vegetables per day.

More than 43 million American adults, approximately 1 in 5, smoke. Lung cancer is the leading cause of cancer death, and cigarette smoking causes almost all cases. Compared to nonsmokers, men who smoke are about 23 times more likely to develop lung cancer and women who smoke are about 13 times more likely. Smoking causes about 90 percent of lung cancer deaths in men and almost 80 percent in women. Smoking also causes cancer of the voicebox, mouth and throat, esophagus, bladder, kidney, pancreas, cervix, and stomach, and causes acute myeloid leukemia.

Excessive alcohol consumption contributes to over 54 different diseases and injuries, including cancer of the mouth, throat, esophagus, liver, colon, and breast, liver diseases, and other cardiovascular, neurological, psychiatric, and gastrointestinal health problems.

Binge drinking, the most dangerous pattern of drinking, defined as consuming more than 4 drinks on an occasion for women or 5 drinks for men, is reported by 17 percent of U.S. adults, averaging 8 drinks per binge.

By addressing just these four behaviors, we can alter the trajectory of chronic disease and the health costs associated with them. That is the power of prevention. As Dr. Albert Reece of the University of Maryland School of Medicine once said, ``Lifestyle is primary care.''

Prevention also means early screening. In addition to increasing survival rates, identifying diseases early reduces health care costs. In the case of colorectal cancer, Medicare will pay under $400 for a colonoscopy, but if the patient is not diagnosed until the disease has metastasized, the costs of care can exceed $58,000 over the patient's lifetime. A screening mammography costs the Medicare program a small fraction of the tens of thousands of dollars that treatment of breast cancer costs, depending on when the cancer is found and the course of treatment used. One drug used to treat late stage breast cancer can cost as much as $40,000 a year.

Research has shown that increasing to 90 percent the number of women aged 40 and older who have been screened for breast cancer in the past two years would save more than 100,000 lives each year in the United States.

One of the most compelling cases for prevention is in the area of oral health. The tragic, preventable death of 12 year-old Marylander Deamonte Driver in 2007 illustrated the consequences of poor access to oral health care. His untreated tooth abscess spread to his brain and after two extensive operations, he died. Although a tooth extraction would have cost about $80, the final total cost of his medical care exceeded $250,000.

The American Academy of Pediatric Dentistry tells us that dental decay is the most common chronic childhood disease among children in the United States. It affects one in five children aged 2 to 4, half of those aged 6 to 8, and nearly \3/5\ of 15 year olds. But it is also the most preventable disease if basic oral care is provided starting at an early age.

The good news in that for nearly every category of chronic disease we can reduce its prevalence by making preventive health care a priority. All around us are examples of why prevention is an essential part of health care

and why effective use of preventive measures, such as screening and smoking cessation can save lives and lower health care costs in the long run.

But the current Congressional budget process has hindered our ability to get appropriate credit for the cost savings that prevention can bring. For this reason, investing in initiatives that can move our Nation forward toward optimal health often requires us to cut funding in other important areas because of the budget rules.

Today, budget resolutions, budget reconciliation, and CBO scoring analyses use a ten-year ``scoring'' window. But the research performed at the National Institutes of Health in Bethesda, MD and at research centers across the nation has demonstrated that some expenditures for preventive services result in cost savings when considered in the long term. Unfortunately, Congressional budget scoring rules only permit taking into account the first ten years, a time frame in which savings may not be apparent.

We want to change that. Today, with Senators Mike Crapo, Angus King, Tom Udall, and Jeanne Shaheen, I am introducing the Preventive Health Savings Act of 2013. It would allow the Chairman or Ranking Member of the House or Senate Budget Committee, or the health committees--HELP, Finance, Ways and Means, or Energy and Commerce--to request an analysis of preventive measures extending beyond the existing 10-year window to two additional ten-year periods.

Re-evaluating our budget rules is not a new phenomenon. In recent years, Congress has increasingly looked for ways to assess long-term budget consequences. For example, Congress currently requests that CBO report on measures that would cause a large future increase in the deficit--more than $5 billion in the following four decades.

The Preventive Health Savings Act would direct CBO to incorporate credible data on prevention. Because we want to ensure that CBO's projections are tied to scientific data, our bill would define preventive health as ``an action designed to avoid future health care costs that is demonstrated by credible and publicly available epidemiological projection models, incorporating clinical trials or observational studies in humans, longitudinal studies, and meta- analysis.'' This narrow, responsible approach encourages a sensible review of health policy that Congress believes will promote public health, and it will make it easier for us to invest in proven methods of saving lives and money.

CBO would be required to conduct an initial analysis to determine whether the provision would result in substantial savings outside the 10-year scoring window and to include a description of those future- year savings in its budget projections.

The broad coalition of groups supporting this bill includes: the Academy of Nutrition and Dietetics, Aetna, Allscripts, American Association of Diabetes Educators, American College of Occupational Medicine, American College of Preventative Medicine, American Diabetes Association, BlueCross BlueShield Tennessee, Building Healthier America, Care Continuum Alliance, Council for Affordable Health Coverage, Dialysis Patient Citizens, The Endocrine Society, Healthcare Leadership Council, Healthways, IHRSA: International Health Racquet & Sportsclub Association, Johnson & Johnson, Marshfield Clinic, Memorial Care Health System, National Association of Public Hospitals and Health Systems, National Retail Federation, National Kidney Foundation, Novo Nordisk, the Partnership to Fight Chronic Disease, Sanofi, Texas Health Resources, and Weight Watchers.

I also wish to applaud the bipartisan House sponsors of this legislation--two physicians--Representatives Michael Burgess of Texas and Donna Christensen of the U.S. Virgin Islands, for their vision in introducing the companion bill, HR 2663, which now has 19 cosponsors.

I urge my colleagues to cosponsor this legislation, which will give our budget process the flexibility needed to dramatically bend the health care cost curve.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 225) to amend title IV of the Public Health Service Act to provide for a National Pediatric Research Network, including with respect to pediatric rare diseases or conditions.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and insert extraneous materials into the Record on the bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support and urge my colleagues to vote for H.R. 225, the National Pediatric Research Network Act of 2013.

Simply put, this legislation will foster important research on diseases that affect children. The bill will allow the National Institutes of Health to establish a national research network compromised of pediatric research consortia. According to NIH, there are between 6,000 and 7,000 diseases considered rare that affect 25 to 30 million people. Most of the approximately 7,000 rare diseases are pediatric diseases and often genetic.

Sadly, there are insufficient therapies for doctors to treat such diseases. The use of pediatric research consortia is a proven way to support pediatric applied research and to promote coordinated research activities that focus on translating research to practice. This will help improve care for children.

As an example, it is important to note that this bill will address some devastating diseases such as spinal muscular atrophy. This is a rare pediatric disease that kills more babies than any other genetic disease. Right now, it is incurable, untreatable, and fatal.

H.R. 225, introduced by Representatives Lois Capps and Cathy McMorris Rodgers, amends the Public Health Service Act so that the director of the NIH, acting through the director of the National Institute of Child Health and Human Development, could provide for the establishment of a national pediatric research network compromised of pediatric research consortia.

The director could award cooperative agreements to those that strengthen and provide basic support to pediatric research consortia and train researchers. Consortia that receive an award would be comprised of cooperating institutions and coordinated by a lead institution. No more than 20 pediatric research consortia could receive awards.

In addition, the Director of NIH would be able to establish a data- coordinating center to support research and distribute scientific findings and provide reports to the Director of the NIH and the Commissioner of the Food and Drug Administration.

The bill would result in no new or increased budget authority, entitlement authority, tax expenditure, or revenues. Nor does the bill contain any earmarks.

So I am pleased to support this legislation. It is my hope that the National Pediatric Research Network will improve our understanding of pediatric diseases, improve treatment and therapies, and provide better health care outcomes for our Nation's children.

I urge my colleagues to vote in favor of H.R. 225, and I reserve the balance of my time.

Mr. Speaker, at this time, I yield such time as he may consume to the chairman of the full committee, the gentleman from Michigan (Mr. Upton).

Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from Mississippi (Mr. Harper).

Mr. Speaker, I would like to include in the Record CBO's cost estimate for H.R. 225. The cost estimate was not available when the committee filed its report on the bill.

I urge all Members to support this important legislation. With that, I yield back the balance of my time.

U.S. Congress,

Congressional Budget Office,

Washington, DC, February 4, 2013.

Hon. Fred Upton,

Chairman, Committee on Energy and Commerce, House of

Representatives, Washington, DC.

Dear Mr. Chairman: The Congressional Budget Office has

prepared the enclosed cost estimate for H.R. 225, the

National Pediatric Research Network Act of 2013.

If you wish further details on this estimate, we will be

pleased to provide them. The CBO staff contact is Jamease

Miles, who can be reached at 226-9010.

Sincerely,

Douglas W. Elmendorf.

Enclosure.

H.R. 225--National Pediatric Research Network Act of 2013

H.R. 225 would authorize the Director of the National

Institutes of Health (NIH) to establish a National Pediatric

Research Network that could provide support for research and

training at up to 20 pediatric research consortia for up to

five years. The bill would require the Director of NIH to

establish a data coordinating center for the consortia. Upon

request by the Centers for Disease Control and Prevention

(CDC), consortia participating in the program would be

required to provide assistance to the CDC to establish or

expand surveillance systems, such as patient registries.

NIH currently supports many research networks that support

research and training focused on pediatric health care needs

and operates data coordinating centers for those networks.

Those networks perform essentially the same activities as the

consortia described in the bill. Existing networks do not

routinely provide assistance to the CDC to establish

surveillance systems. Based on information provided by NIH,

CBO estimates that implementing H.R. 225 would have no effect

on the number of research consortia or data coordinating

centers that NIH would support. CBO expects that CDC would

request assistance from a few networks to establish

surveillance systems. Based on past coordination involving

patient registries, CBO expects that the cost of providing

such support would total about $1 million over five years.

Thus, CBO estimates that implementing H.R. 225 would cost $1

million over the 2014-2018 period, assuming the availability

of appropriated funds.

Enacting the bill would not affect direct spending or

revenues; therefore, pay-as-you-go procedures do not apply.

H.R. 225 contains no intergovernmental or private-sector

mandates as defined in the Unfunded Mandates Reform Act and

would not affect the budgets of state, local, or tribal

governments.

The CBO staff contact for this estimate is Jamease Miles.

The estimate was approved by Holly Harvey, Deputy Assistant

Director for Budget Analysis.

Mr. Speaker, on that I demand the yeas and nays.