Floor Statements

Mr. President, I rise today with Senator Dorgan to introduce a bill of critical importance to the security of our borders: the Border Infrastructure and Technology Modernization Act.

It was two decades ago when an American border last underwent a comprehensive infrastructure overhaul. That was when Senator Dennis DeConcini of Arizona and I put forth a $357 million effort to modernize the southwest border. A great deal has changed since 1986, and more importantly, since September 11, 2001. Congress has acted to improve security at airports and seaports, but we have not yet addressed our busiest ports, located on our land borders. This is where our infrastructure is its weakest, and we must act to prevent terrorists from exploiting this weakness. It is critical that we give our northern and southern borders the resources they need to address their vulnerabilities.

In 2001, the General Services Administration completed a comprehensive assessment of infrastructure needs on the southwestern and northern borders of the United States. This assessment found that overhauling both borders would cost $784 million.

Since the publication of that assessment, many of the needs identified remain outstanding, and new needs have arisen as facilitating commerce has become more complicated in the face of new security concerns.

Congress must address these needs. We must give the Department of Homeland Security the tools it needs to secure our borders. The Border Infrastructure and Technology Modernization Act creates a number of those tools.

The bill requires the General Service Administration (GSA) to identify port of entry infrastructure and technology improvement projects that would enhance homeland security. The GSA would work with the Department of Homeland Security to prioritize and implement these projects based on need.

The Secretary of Homeland Security would have to prepare a Land Border Security Plan to assess the vulnerabilities at each port of entry on the northern border and the southern border. This plan will require the cooperation of Federal, State and local entities involved at our borders to ensure that the individuals with first hand knowledge of our border needs are consulted about the plan.

My bill would also modernize homeland security along the United States' borders by implementing a program to test and evaluate new technologies.

Because equipment and technology alone will not solve the security problems on our border, these test sites will also house facilities so personnel who must use these technologies can train under realistic conditions.

I believe that these measures are an important part of addressing this nation's homeland security needs, and I am pleased to introduce the bill with Senator Dorgan.

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

Madam President, am I correct, I was scheduled to speak next?

Madam President, I want to ask, does the Senator want to speak for a short time?

The Senator does not mind listening. I thank her so much. I would have yielded, if she had a short speech.

Madam President, I ask unanimous consent that whatever time I had be extended, if necessary, to 15 minutes.

Madam President, I rise to speak about the great success of the Energy Policy Act of 2005. I recall when we passed the bill, you, Madam President, and everyone else were, in the well, very happy and joyous that we passed--after 15 or 20 years without one--a major energy bill. And then, right away, the next year, people wanted another energy bill. Now, this year, they want another one.

I would like to tell the Senate why the bill we have is doing so much good and how and why there is still room to try to implement it and, in doing that, to do it a lot more without a new bill. We need a bill to cover some things we did not cover, but I would like to end this, with people understanding this bill provides many things we have not done and many things that have been very successful.

First, I urge policy makers in the administration and Congress to commit themselves to investing time, energy, and economic resources to fully implement this important act. We must achieve all we envisioned in passing this comprehensive energy policy.

This past week marked the 18-month anniversary of the enactment of the Energy Policy Act. I rise today to speak about the gains we have made in strengthening our Nation's energy security and the even greater promise that lies ahead.

On August 8, 2005, the President of the United States signed the Energy Policy Act of 2005 in my home State of New Mexico. This legislation is the catalyst of our Nation's nuclear renaissance and the driving force behind new investments in clean coal technology. Passage of the Energy bill also marks the genesis of a secure American electricity grid and the transformation of an agricultural enterprise into an energy industry.

This act has helped strengthen our energy security, stimulate our economy, create American jobs, and diversify our Nation's fuel supply. Simply put, since the passage of the Energy bill, America is on the move. We are starting up a renewable fuels industry in America through the first ever renewable fuels standard and a production tax credit. These policies have helped create approximately 160,000 American jobs across almost all sectors of our Nation's economy.

In the last 18 months, 73 new ethanol plants have broken ground, spurring us to exceed the biofuel mandate for 2006 by at least 800 million gallons. As a result of the Energy bill, 759 E85 ethanol pumps have been installed around the country. Today, there are over 6 million alternative-fuel vehicles on the road.

I stand here today to tell you that even more can be done. I am pleased President Bush and my colleagues on both sides of the aisle have committed to an even stronger, more robust biofuels policy. The President spoke of it. We are all interested in enforcing it and seeing it is done in the biomass area. We will work together on this important energy issue. Chairman Bingaman of the Energy Committee and I, as ranking member, will build on our Energy bill success.

Because of the Energy Policy Act, we are making significant breakthroughs in coal--America's most abundant and affordable energy resource. Because of the clean coal provisions in the legislation, there are 159 new coal-based facilities in various planning stages.

Over the next 5 years, the United States will add an estimated 60,000 coal miners to the American workforce. The Energy bill will accelerate the development of a new generation of clean coal technologies. Because of title XIII of the Energy bill, the administration has appropriately and recently announced that it would award $1 billion in tax credits for clean coal projects such as IGCC projects for electricity generation, gasification projects, and other projects using innovative technologies. With $650 million in tax credits to

come next year, we are providing incentives for the American people to make better choices about the kind of energy we will use. And because of the Energy bill, those choices will be clean energy choices.

Today, 50 percent of our Nation's electricity comes from coal, and the EIA estimates that by 2025, 54 percent of electricity consumed will be generated from coal. In China, they are building a coal-fired powerplant every 10 days. Let it be our mission to invest both the human and capital resources to the goal of zero-emission, coal-based power generation.

Having made the statement about China, let me hope that we will find a way to negotiate with China so that they, too, will begin to be concerned about what they are generating and begin some mutual programs of restraint. Wouldn't that be good news for the world? Let us dedicate ourselves to choosing a free-market, incentive approach rather than a punitive, regulatory approach to solving this global problem.

On nuclear energy, what did we do? In advancing nuclear power, Congress affirmed sound science and technology and rejected irrational fear. By doing this, we strengthened the nuclear renaissance in America. We provided Federal risk insurance for the first six nuclear reactors, production tax credits, and loan guarantees, and we renewed the Price-Anderson Act. All these initiatives and more provided evidence of our renewed support for clean nuclear power.

Until the passage of the Energy bill 18 months ago, the world was passing us by on nuclear power. The renaissance was fading. Then Congress acted. Since that time, as many as 32 new nuclear reactors are in the planning stages. These nuclear plants would provide enough electricity to power 29 million homes. If these plants come into fruition, they will displace 270 million metric tons of carbon dioxide each year.

Consider this: When all of those plants are operating for 5 years, it is estimated that they will have displaced the same amount of carbon emissions that the 230 million cars on the road in America today produce each year.

This is what is at stake as we implement the various provisions of the Energy Policy Act of 2005. We must do more to solve our growing nuclear waste problem, and we must do more to show Americans what the rest of the world already knows: nuclear power is the largest source of clean, carbon-free energy in the world. Advancing nuclear power is essential for our economic strength and environmental well-being. While we do it, we will not be able to stop using other kinds of energy. So the coal people need not worry. They will be used, too, because this great land needs both and more.

With the passage of the Energy Policy Act, we helped to stabilize long-term prices of natural gas by providing the Federal Energy Regulatory Commission with the tools necessary to ensure the safe operation and reliability of our Nation's liquid natural gas assets. Since the passage of the Energy bill in August of 2005, FERC has approved seven new LNG terminals or terminal expansions. Working with private sector operators, FERC has brought on line the capacity equivalent of 1.34 billion cubic feet per day of natural gas, with the potential to increase that to 13.3 billion cubic feet per day. We must continue to look for ways domestically to find additional supplies of natural gas, as we did last year with the passage of the Gulf of Mexico Energy Security Act of 2006.

In passing the Energy Policy Act, we substantially advanced renewable sources of energy in America. By the end of 2007, 2 million American homes will be powered by wind as we bring on line 6,000 megawatts of new wind power this year, part of the $4.5 billion in wind power investments spurred by the Energy bill. As a result of the wind power brought on line, we will displace 11 billion pounds of carbon dioxide annually.

And there is so much more that we did. We promoted a modernized electricity grid, invested in solar energy, tax provisions that helped add almost 340,000 hybrid vehicles, and the list goes on. I continue to look for more to be done. In this Congress, we all will focus our efforts on convincing colleagues and the American people that the solutions to our energy and environmental challenges lie in the genius of the American people. I will not support energy policies that burden the people with higher energy costs and undue regulations. I oppose the creation of additional unmanageable bureaucracy with its potential for punitive and burdensome regulations that harm the American worker. We will meet the challenge of providing clean, affordable, and abundant energy supplies in this Nation by facilitating and unlocking the ingenuity of the American people with more capital investment, more loans guaranteed for people with new ideas to build new things. That is what we did in the Energy Policy Act of 2005, and that is what we will continue to do, hopefully.

I yield the floor.

Mr. President, I rise today along with my colleagues Senator Kennedy and Senator Enzi to introduce the Mental Health Parity Act of 2007. I want to thank my colleagues for all of their hard work on this issue and I am glad we are able to introduce this paramount legislation.

Simply put, our legislation will provide parity between mental health coverage and medical and surgical coverage. No longer will people be treated differently only because they suffer from a mental illness. This means 113 million people in group health plans will benefit from our bill.

We are here today after years of hard work. We have worked with the mental health community, the business community, and insurance groups to carefully construct a fair bill. A sampling of the groups include the National Alliance on Mental Illness, the American Psychological Association, the American Psychiatric Association, the National Retail Federation, and Aetna Insurance.

This bill will no longer apply a more restrictive standard to mental health coverage and another more lenient standard be applied to medical and surgical coverage. What we are doing is a matter of simple fairness. Statistics demonstrate that there is a significant need for this change in policy. Currently, 26 percent of American adults or nearly 58 million people suffer from a diagnosable mental illness each year. Six percent of those adults suffer from a serious mental illness. Additionally, more than 30,000 people commit suicide each year in the United States. We need to reduce these numbers, and I believe expanding access to mental health services will allow us to do so.

This bill will provide mental health parity for about 113 million Americans who work for employers with 50 or more employees and ensure health plans do not place more restrictive conditions on mental health coverage than on medical and surgical coverage. Additionally, the legislation includes parity for financial requirements such as deductibles, copayments, and annual lifetime limits. Also, this bill includes parity for treatment limitations regarding the number of covered hospital days and visits. This bill does not Mandate the coverage of mental health nor does it prohibit a health plan from managing mental health benefits in order to ensure only medically necessary treatments are covered.

Again, I would like to thank everyone who contributed to the development of this legislation. I believe we are making a difference today and I look forward to working with my colleagues to move this bill forward.

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

Mr. President, I rise today along with my colleagues Senator Kennedy and Senator Enzi to introduce the Mental Health Parity Act of 2007. I want to thank my colleagues for all of their hard work on this issue and I am glad we are able to introduce this paramount legislation.

Simply put, our legislation will provide parity between mental health coverage and medical and surgical coverage. No longer will people be treated differently only because they suffer from a mental illness. This means 113 million people in group health plans will benefit from our bill.

We are here today after years of hard work. We have worked with the mental health community, the business community, and insurance groups to carefully construct a fair bill. A sampling of the groups include the National Alliance on Mental Illness, the American Psychological Association, the American Psychiatric Association, the National Retail Federation, and Aetna Insurance.

This bill will no longer apply a more restrictive standard to mental health coverage and another more lenient standard be applied to medical and surgical coverage. What we are doing is a matter of simple fairness. Statistics demonstrate that there is a significant need for this change in policy. Currently, 26 percent of American adults or nearly 58 million people suffer from a diagnosable mental illness each year. Six percent of those adults suffer from a serious mental illness. Additionally, more than 30,000 people commit suicide each year in the United States. We need to reduce these numbers, and I believe expanding access to mental health services will allow us to do so.

This bill will provide mental health parity for about 113 million Americans who work for employers with 50 or more employees and ensure health plans do not place more restrictive conditions on mental health coverage than on medical and surgical coverage. Additionally, the legislation includes parity for financial requirements such as deductibles, copayments, and annual lifetime limits. Also, this bill includes parity for treatment limitations regarding the number of covered hospital days and visits. This bill does not Mandate the coverage of mental health nor does it prohibit a health plan from managing mental health benefits in order to ensure only medically necessary treatments are covered.

Again, I would like to thank everyone who contributed to the development of this legislation. I believe we are making a difference today and I look forward to working with my colleagues to move this bill forward.

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

Mr. President, I would like to recognize the service of General Casey and speak in support of his confirmation as Chief of Staff of the Army.

General Casey has had a long and distinguished career. After his graduation from Georgetown University in 1970, he received his commission and served in the mechanized infantry. During his career, he has commanded the 3rd Brigade of the 1st Cavalry Division and acted as the assistant division commander of the 1st Armored Division. In 1999, General Casey assumed command of the 1st Armored Division. Additionally, General Casey has served as Director of Strategic Plans and Policy at the Pentagon and as Director of the Joint Staff.

As we all know, General Casey has most recently served as the commander of Multi-National Forces--Iraq. As commander of our forces in Iraq, General Casey faced extremely difficult issues everyday.

I believe General Casey to be a good man, and I would like to again congratulate him on his promotion and thank him for his continued service to our country. I look forward to working with him while he serves as Chief of Staff of the Army.

Mr. President, today I wish to express my gratitude to Richard H. Shapiro for 18 years of service to the Congress in his capacities as program director and executive director of the Congressional Management Foundation, CMF. As he enters retirement, I wish the best for Richard and his family. They should know that the contributions he made during his tenure at the CMF have had positive impacts, direct or indirect, on the way every office in the Congress is managed.

Rick started working for the Congress in the late 1970s, when he was

hired as a staff investigator for what was then the Senate Permanent Subcommittee on Investigations. Following the completion of his graduate education in public administration at Princeton, Rick returned to the House of Representatives as staff director for a number of subcommittees. His work in the Congress and as a management consultant in the private sector helped Rick develop a sense of the importance of effective management to the oversight responsibilities of Congress.

During his work at the CMF, Rick has helped the organization mature from a small and little known nonprofit into an established and highly used resource for congressional offices. Over the past 18 years, the CMF has doubled the size of its staff and quadrupled the size of its budget. More importantly, under Rick's leadership, the CMF has greatly increased the variety of services it offers to Member offices and committees. The CMF has prepared books specifically tailored to address management issues faced by congressional staff members; it provides confidential consulting services to offices struggling with problems of organization, operations, and performance. Lastly, the CMF has also increased the variety of training programs it offers to senior congressional staff members on topics as varied as strategic planning and interoffice communications.

I thank Rick for all his years of service to Congress. During his career, he dedicated himself to improving the efficiency and productivity of Congress. Rick's commitment to supporting this legislative body is unmatched and I know that Members of Congress and their staff will suffer a great loss when he retires. Rick, you have accomplished a lot during your time with us, and we are forever appreciative. Again, thank you for all of your hard work.

Madam President, I rise today in support of the Fair Minimum Wage Act of 2007, H.R. 2.

It has been 10 years since Congress last voted to raise the minimum wage. In the meantime, our cost of living has increased annually and working families have struggled to meet their most basic needs. The current Federal minimum wage just isn't sufficient. Now is the time to raise the minimum wage. It is time to give America's hard-working, low- wage workers a raise.

This bill will increase the Federal minimum wage by $2.10 an hour to $7.25 an hour. This increase will be done in three phases over a 26 month period. The minimum wage has proven to be an important tool in fighting poverty in our country and I believe that this modest increase will help to improve the situation of low-wage workers and their families.

The Fair Minimum Wage Act also contains several key tax credits. These tax credits will encourage small businesses to continue to explore new investments and make improvements to their business property. This bill will extend the tax credit provided to employers who hire workers who have experienced barriers to entering the workforce, such as low-income workers welfare and food stamp recipients, and high-risk youth. The work opportunity tax credit will also apply to the hiring of veterans disabled after the September 11, 2001, attacks. I believe that these tax credits will be of benefit to our small businesses owners and I hope that my colleagues will support this package.

Mr. President, I rise today to with Senator Bingaman to introduce legislation that provides resources that the U.S. Marshals Service desperately needs for their role in improving the security of our borders and enforcing our immigration laws.

Our U.S. Marshals are involved in several aspects of immigration matters, including helping to transport criminal immigrants and guarding them in federal courthouses. As we improve border security and interior enforcement, our Marshals need increased staff to handle the increased caseload that will be associated with those improvements.

Therefore, my legislation calls for hiring 50 new deputies each year for five years. Increasing the number of Deputy U.S. Marshals by 250 new law enforcers will make a great impact on this service that is stretched thin in their role relating to border security and immigration enforcement. Without such legislation, we will only be adding to the workload of our already thinly-stretched Marshals Service.

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

Mr. President, I rise today to with Senator Bingaman to introduce legislation that provides resources that the U.S. Marshals Service desperately needs for their role in improving the security of our borders and enforcing our immigration laws.

Our U.S. Marshals are involved in several aspects of immigration matters, including helping to transport criminal immigrants and guarding them in federal courthouses. As we improve border security and interior enforcement, our Marshals need increased staff to handle the increased caseload that will be associated with those improvements.

Therefore, my legislation calls for hiring 50 new deputies each year for five years. Increasing the number of Deputy U.S. Marshals by 250 new law enforcers will make a great impact on this service that is stretched thin in their role relating to border security and immigration enforcement. Without such legislation, we will only be adding to the workload of our already thinly-stretched Marshals Service.

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

Mr. President, I rise in support of the nomination of GEN David Petraeus to be commander of American and allied forces in Iraq.

General Petraeus has had a long and distinguished career in the U.S. Army. From the moment he graduated from the U.S. Military Academy in 1974, General Petraeus has shown himself to be a dedicated officer and leader. He has held numerous leadership positions in the Army and has served throughout the world. Most recently, General Petraeus was the commander of the NATO training mission to Iraq and before that commanded the 101st Airborne Division during the first year of Operation Iraqi Freedom. Additionally, General Petraeus has earned MPA and Ph.D. degrees in international relations from Princeton University's Woodrow Wilson School of Public and International Affairs and has received many awards and decorations including the Distinguished Service Medal and the Bronze Star for valor. Furthermore, he is widely regarded for having written the book on how to conduct counterinsurgency operations.

I recently met with General Petraeus to discuss the current situation in Iraq and our need to achieve a stable and secure, self-governing Iraq. He is clearly aware of the difficult challenges that he will face. In our meeting and in his testimony to the Senate Armed Services Committee, General Petraeus clearly outlined what is at stake in Iraq and has convinced me that he is the best man to command Multi-national Force-Iraq at a most challenging time for the United States and the Iraqi Government.

I have confidence in his pledge to me that he will openly and honestly tell Congress the situation on the ground as it unfolds and provide forthright advice regarding the new strategy in Iraq, and I am heartened by his commitment to the Armed Services Committee to provide periodic updates on the situation in Iraq.

I have made clear to General Petraeus that I will support him, his efforts, and our troops in every way, but my support for the President's new strategy for Iraq is conditioned on seeing measurable progress by Iraqis in securing and reconstructing their country.

Clearly, based upon his intellect and experience in Iraq and elsewhere, General Petraeus is an excellent choice to command American and allied forces in Iraq, and I support his nomination.

Mr. President, I rise today to introduce again legislation to eliminate one of the great inconsistencies in the Internal Revenue Code. I would like to thank my colleague, the senior Senator from New York, Senator Schumer, for again working with me on this important piece of legislation.

The bill we are introducing today is designed to restore some internal consistency to the tax code as it applies to art and artists. No one has ever said that the tax code is fair even though it has always been a theoretical objective of the code to treat similar taxpayers similarly.

Our bill would address two areas where similarly situated taxpayers are not treated the same. These two areas are internal inconsistencies contained within the tax code. Internal inconsistency number one deals with the long-term capital gains tax treatment of investments in art and collectibles. The second internal inconsistency involves how charitable contributions of art by the artist are treated under the law.

Long-term capital gains tax treatment of art is inherently unfair. If a person invests in stocks or bonds and sells at a gain, the tax treatment is long term capital gains. The top capital gains tax rate is 15 percent. However, if the same person invests in art or collectibles the top rate is hiked up to 28 percent. Art for art's sake should not incur a higher tax rate simply for revenue's sake. That is a big impact on the pocketbook of the investor.

Art and collectibles are alternatives to financial instruments as an investment choice. To create a tax disadvantage with respect to one investment compared to another creates an artificial market and may lead to poor investment allocations. It also adversely impacts those who make their livelihood in the cultural sectors of the economy.

Santa Fe, NM, is the third largest art market in the country. We have a diverse colony of artists, collectors and

gallery owners. We have fabulous Native American rug weavers, potters and carvers. Creative giants like Georgia O'Keeffe, Maria Martinez, E. L. Blumenshein, Allan Houser, R.C. Gorman, and Glenna Goodacre have all chosen New Mexico as their home and as their artistic subject. John Nieto, Wilson Hurley, Clark Hulings, Veryl Goodnight, Bill Acheff, Susan Rothenberg, Bruce Nauman, Agnes Martin, Doug Hyde, Margaret Nez, and Dan Ostermiller are additional examples of living artists creating art in New Mexico.

Art, antiques, and collectibles are a $12 to $20 billion annual industry nationwide. In New Mexico, it has been estimated that art and collectible sales range between $500 million and one billion a year.

Economists have always been interested in the economics of the arts. Adam Smith is a well-known economist. He was also a serious, but little-known essayist on painting, dancing, and poetry. Similarly, Keynes was both a famous economist and a passionate devotee of painting. However, even artistically inclined economists have found it difficult to define art within the context of economic theory.

When asked to define jazz, Louis Armstrong replied: ``If you gotta ask, you ain't never going to know.'' A similar conundrum has challenged Galbraith and other economists who have grappled with the definitional issues associated with bringing art within the economic calculus. Original art objects are, as a commodity group, characterized by a set of attributes: every unit of output is differentiated from every other unit of output; art works can be copied but not reproduced; and the cultural capital of the nation has significant elements of public good.

Because art works can be resold, and their prices may rise over time, they have the characteristics of financial assets, and as such may be sought as a hedge against inflation, as a store of wealth, or as a source of speculative capital gain. A study by Keishiro Matsumoto, Samuel Andoh and James P. Hoban, Jr. assessed the risk-adjusted rates of return on art sold at Sotheby's during the 14-year period ending September 30, 1989. They concluded that art was a good investment in terms of average real rates of return. Several studies found that rates of return from the price appreciation on paintings, comic books, collectibles and modern prints usually made them very attractive long- term investments. Also, when William Goetzmann was at the Columbia Business School, he constructed an art index and concluded that painting price movements and stock market fluctuations are correlated.

I conclude that with art, as well as stocks, past performance is no guarantee of future returns, but the gains should be taxed the same.

In 1990, the editor of Art and Auction asked the question: ``Is there an `efficient' art market?'' A well-known art dealer answered ``Definitely not. That's one of the things that makes the market so interesting.'' For everyone who has been watching world financial markets lately, the art market may be a welcome distraction.

Why do people invest in art and collectibles? Art and collectibles are something you can appreciate even if the investment doesn't appreciate. Art is less volatile. If buoyant and not so buoyant bond prices drive you berserk and spiraling stock prices scare you, art may be the appropriate investment for you. Because art and collectibles are investments, the long-term capital gains tax treatment should be the same as for stocks and bonds. This bill would accomplish that.

Artists will benefit. Gallery owners will benefit. Collectors will benefit. And museums benefit from collectors. About 90 percent of what winds up in museums like New York's Metropolitan Museum of Art comes from collectors.

Collecting isn't just for the hoyty toity. It seems that everyone collects something. Some collections are better investments than others. Some collections are just bizarre. The internet makes collecting big business, and flea market fanatics are avid collectors. In fact, people collect the darndest things. Books, duck decoys, chia pets, snowglobes, thimbles, handcuffs, spectacles, baseball cards, teddy bears, and guns are a few such ``collectibles''.

For most of these collections, capital gains isn't really an issue, but you never know. You may find that your collecting passion has created a tax predicament--to phrase it politely. Art and collectibles are tangible assets. When you sell them, capital gains tax is due on any appreciation over your purchase price.

The bill provides capital gains tax parity because it lowers the top capital gains rate from 28 percent to 15 percent.

As I stated earlier, the second internal inconsistency deals with the charitable deduction for artists donating their work to a museum or other charitable cause. When someone is asked to make a charitable contribution to a museum or to a fund raising auction, it shouldn't matter whether that person is an artist or not. Under current law, however, it makes a big difference. As the law stands now, an artist/ creator can only take a deduction equal to the cost of the art supplies. Our bill will allow a fair market deduction for the artist.

It's important to note that our bill includes certain safeguards to keep the artist from ``painting himself a tax deduction.'' This bill applies to literary, musical, artistic, and scholarly compositions if the work was created at least 18 months before the donation was made, has been appraised, and is related to the purpose or function of the charitable organization receiving the donation. As with other charitable contributions, it is limited to 50 percent of adjusted gross income (AGI). If it is also a capital gain, there is a 30 percent of AGI limit. Mr. President, I believe these safeguards bring fairness back into the code and protect the Treasury against any potential abuse.

I hope my colleagues will help us put this internal consistency into the Internal Revenue Code.

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

Mr. President, I rise today to introduce again legislation to eliminate one of the great inconsistencies in the Internal Revenue Code. I would like to thank my colleague, the senior Senator from New York, Senator Schumer, for again working with me on this important piece of legislation.

The bill we are introducing today is designed to restore some internal consistency to the tax code as it applies to art and artists. No one has ever said that the tax code is fair even though it has always been a theoretical objective of the code to treat similar taxpayers similarly.

Our bill would address two areas where similarly situated taxpayers are not treated the same. These two areas are internal inconsistencies contained within the tax code. Internal inconsistency number one deals with the long-term capital gains tax treatment of investments in art and collectibles. The second internal inconsistency involves how charitable contributions of art by the artist are treated under the law.

Long-term capital gains tax treatment of art is inherently unfair. If a person invests in stocks or bonds and sells at a gain, the tax treatment is long term capital gains. The top capital gains tax rate is 15 percent. However, if the same person invests in art or collectibles the top rate is hiked up to 28 percent. Art for art's sake should not incur a higher tax rate simply for revenue's sake. That is a big impact on the pocketbook of the investor.

Art and collectibles are alternatives to financial instruments as an investment choice. To create a tax disadvantage with respect to one investment compared to another creates an artificial market and may lead to poor investment allocations. It also adversely impacts those who make their livelihood in the cultural sectors of the economy.

Santa Fe, NM, is the third largest art market in the country. We have a diverse colony of artists, collectors and

gallery owners. We have fabulous Native American rug weavers, potters and carvers. Creative giants like Georgia O'Keeffe, Maria Martinez, E. L. Blumenshein, Allan Houser, R.C. Gorman, and Glenna Goodacre have all chosen New Mexico as their home and as their artistic subject. John Nieto, Wilson Hurley, Clark Hulings, Veryl Goodnight, Bill Acheff, Susan Rothenberg, Bruce Nauman, Agnes Martin, Doug Hyde, Margaret Nez, and Dan Ostermiller are additional examples of living artists creating art in New Mexico.

Art, antiques, and collectibles are a $12 to $20 billion annual industry nationwide. In New Mexico, it has been estimated that art and collectible sales range between $500 million and one billion a year.

Economists have always been interested in the economics of the arts. Adam Smith is a well-known economist. He was also a serious, but little-known essayist on painting, dancing, and poetry. Similarly, Keynes was both a famous economist and a passionate devotee of painting. However, even artistically inclined economists have found it difficult to define art within the context of economic theory.

When asked to define jazz, Louis Armstrong replied: ``If you gotta ask, you ain't never going to know.'' A similar conundrum has challenged Galbraith and other economists who have grappled with the definitional issues associated with bringing art within the economic calculus. Original art objects are, as a commodity group, characterized by a set of attributes: every unit of output is differentiated from every other unit of output; art works can be copied but not reproduced; and the cultural capital of the nation has significant elements of public good.

Because art works can be resold, and their prices may rise over time, they have the characteristics of financial assets, and as such may be sought as a hedge against inflation, as a store of wealth, or as a source of speculative capital gain. A study by Keishiro Matsumoto, Samuel Andoh and James P. Hoban, Jr. assessed the risk-adjusted rates of return on art sold at Sotheby's during the 14-year period ending September 30, 1989. They concluded that art was a good investment in terms of average real rates of return. Several studies found that rates of return from the price appreciation on paintings, comic books, collectibles and modern prints usually made them very attractive long- term investments. Also, when William Goetzmann was at the Columbia Business School, he constructed an art index and concluded that painting price movements and stock market fluctuations are correlated.

I conclude that with art, as well as stocks, past performance is no guarantee of future returns, but the gains should be taxed the same.

In 1990, the editor of Art and Auction asked the question: ``Is there an `efficient' art market?'' A well-known art dealer answered ``Definitely not. That's one of the things that makes the market so interesting.'' For everyone who has been watching world financial markets lately, the art market may be a welcome distraction.

Why do people invest in art and collectibles? Art and collectibles are something you can appreciate even if the investment doesn't appreciate. Art is less volatile. If buoyant and not so buoyant bond prices drive you berserk and spiraling stock prices scare you, art may be the appropriate investment for you. Because art and collectibles are investments, the long-term capital gains tax treatment should be the same as for stocks and bonds. This bill would accomplish that.

Artists will benefit. Gallery owners will benefit. Collectors will benefit. And museums benefit from collectors. About 90 percent of what winds up in museums like New York's Metropolitan Museum of Art comes from collectors.

Collecting isn't just for the hoyty toity. It seems that everyone collects something. Some collections are better investments than others. Some collections are just bizarre. The internet makes collecting big business, and flea market fanatics are avid collectors. In fact, people collect the darndest things. Books, duck decoys, chia pets, snowglobes, thimbles, handcuffs, spectacles, baseball cards, teddy bears, and guns are a few such ``collectibles''.

For most of these collections, capital gains isn't really an issue, but you never know. You may find that your collecting passion has created a tax predicament--to phrase it politely. Art and collectibles are tangible assets. When you sell them, capital gains tax is due on any appreciation over your purchase price.

The bill provides capital gains tax parity because it lowers the top capital gains rate from 28 percent to 15 percent.

As I stated earlier, the second internal inconsistency deals with the charitable deduction for artists donating their work to a museum or other charitable cause. When someone is asked to make a charitable contribution to a museum or to a fund raising auction, it shouldn't matter whether that person is an artist or not. Under current law, however, it makes a big difference. As the law stands now, an artist/ creator can only take a deduction equal to the cost of the art supplies. Our bill will allow a fair market deduction for the artist.

It's important to note that our bill includes certain safeguards to keep the artist from ``painting himself a tax deduction.'' This bill applies to literary, musical, artistic, and scholarly compositions if the work was created at least 18 months before the donation was made, has been appraised, and is related to the purpose or function of the charitable organization receiving the donation. As with other charitable contributions, it is limited to 50 percent of adjusted gross income (AGI). If it is also a capital gain, there is a 30 percent of AGI limit. Mr. President, I believe these safeguards bring fairness back into the code and protect the Treasury against any potential abuse.

I hope my colleagues will help us put this internal consistency into the Internal Revenue Code.

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

Mr. President, today I rise to introduce an uncontroversial piece of legislation that I hope will receive prompt committee action and will make its way quickly to the President's desk for his signature.

I would first like to familiarize the Senate with the important mission and related work of the Chihuahuan Desert Nature Park in Las Cruces, NM. The Chihuahuan Desert is the largest desert in North America and contains a great variety of unique plant and animal species. The ecosystem makes up an indispensable part of the Southwest's treasured ecological diversity. As such, it is important that we teach our youth an appreciation for New Mexico's biological diversity and impart upon them the value of this ecological treasure.

The Chihuahuan Desert Nature Park is a non-profit institution that has spent the past six years providing hands-on science education to K- 12th graders. To achieve this mission, the Nature Park provides classroom presentations, field trips, schoolyard ecology projects and teacher workshops. The Nature Park serves more than 11,000 students and 600 teachers annually. This instruction will enable our future leaders to make informed decisions about how best to manage these valuable resources. I commend those at the Nature Park for taking the initiative to create and administer a wonderfully successful program that has been so beneficial to the surrounding community.

The Chihuahuan Desert Nature Park was granted a 1,000 acre easement in 1998 at the southern boundary of USDA--Agriculture Research Service (USDA-ARS) property just north of Las Cruces, NM. This easement will expire soon. It is important that we provide them a permanent location so that they are able to continue their valuable mission.

The bill I introduce today would transfer an insignificant amount of land: 1,000 of 193,000 USDA acres to the Desert Nature Park so that they may continue their important work. The USDA-ARS has approved the land transfer, noting the critically important mission of the Desert Park. In addition, this bill was passed by the Senate in the 109th Congress without amendments by unanimous consent. I have no doubt that Senators on both sides of the aisle will recognize the importance of this land transfer.

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

Mr. President, today I rise to introduce an uncontroversial piece of legislation that I hope will receive prompt committee action and will make its way quickly to the President's desk for his signature.

I would first like to familiarize the Senate with the important mission and related work of the Chihuahuan Desert Nature Park in Las Cruces, NM. The Chihuahuan Desert is the largest desert in North America and contains a great variety of unique plant and animal species. The ecosystem makes up an indispensable part of the Southwest's treasured ecological diversity. As such, it is important that we teach our youth an appreciation for New Mexico's biological diversity and impart upon them the value of this ecological treasure.

The Chihuahuan Desert Nature Park is a non-profit institution that has spent the past six years providing hands-on science education to K- 12th graders. To achieve this mission, the Nature Park provides classroom presentations, field trips, schoolyard ecology projects and teacher workshops. The Nature Park serves more than 11,000 students and 600 teachers annually. This instruction will enable our future leaders to make informed decisions about how best to manage these valuable resources. I commend those at the Nature Park for taking the initiative to create and administer a wonderfully successful program that has been so beneficial to the surrounding community.

The Chihuahuan Desert Nature Park was granted a 1,000 acre easement in 1998 at the southern boundary of USDA--Agriculture Research Service (USDA-ARS) property just north of Las Cruces, NM. This easement will expire soon. It is important that we provide them a permanent location so that they are able to continue their valuable mission.

The bill I introduce today would transfer an insignificant amount of land: 1,000 of 193,000 USDA acres to the Desert Nature Park so that they may continue their important work. The USDA-ARS has approved the land transfer, noting the critically important mission of the Desert Park. In addition, this bill was passed by the Senate in the 109th Congress without amendments by unanimous consent. I have no doubt that Senators on both sides of the aisle will recognize the importance of this land transfer.

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