John Chafee

Mr. CHAFEE

Mr. CHAFEE. Madam President, I ask unanimous consent that the Senate proceed to executive session to consider the following nominations on the Executive Calendar: Nos. 528, 531, 532 and 533. I further ask unanimous consent that the nominations be confirmed, the motions to reconsider be laid upon the table, the President be immediately notified of the Senate's action, and the Senate then return to legislative session.

Mr. CHAFEE

Mr. CHAFEE. Mr. President, the Senator from Michigan is quite right; this amendment is acceptable at this time.

Mr. CHAFEE. Mr. President, I am pleased to strongly support the amendment offered by the chairman of the Finance Committee which adds the revenue title to the Intermodal Surface Transportation Efficiency Act of 1997. Along with extending the motor fuel excise taxes, this amendment includes several changes to the nation's tax laws that will further the goal of improving the quality of transportation in our country. I want to take a few moments to discuss a few of those provisions. expansion of commuter choice benefits The Internal Revenue Code allows employers to provide parking or transit benefits to employees on a tax-free basis. These benefits are limited to parking valued at no more than 175 dollars per month and transit or commercial vanpool benefits valued at no more than 65 dollars per month. Prior to this year, these tax exempt benefits had to be offered by an employer on a take-it-or-leave-it basis. That created a strong inducement for employees to drive to work, even in those instances where an employee would prefer alternative methods of commuting. Given the choice between free parking or nothing at all, most commuters will choose to drive to work and take advantage of the free parking. Last year's tax bill corrected this problem by giving employers flexibility in offering transportation benefits. Under that change, employers who want to offer employees a choice between free parking or a raise in salary can do so without jeopardizing the tax benefits for employees who want to keep their parking spaces. The Finance Committee amendment extends this flexibility to transit and vanpool benefits. Under this change, an employee now can choose between taxable cash compensation and tax-free transit or vanpool benefits. This puts transit benefits on a level playing field with employer-provided parking. expand tax-free transit benefits In addition to providing flexibility in the provision of transit benefits, the Finance Committee amendment, as modified by Chairman Roth, increases the level of tax-free transit benefits. Currently, the tax code is tilted heavily in favor of commuters who drive to work. Up to $175 per month of parking benefits can be provided to an employee on a tax-free basis. That results in a tax savings of almost 600 dollars per year for a typical middle-income family working in a major metropolitan area of this country. Employees who commute to work by other means, however, are not provided commensurate tax benefits. The current limit for tax-free transit benefits is 65 dollars per month. The Finance Committee amendment begins to narrow this gap by increasing the amount of tax-free transit benefits to $100 beginning in the year 2002. highway infrastructure privatization act The Finance Committee amendment also includes a pilot program that will make it easier to finance public-private partnerships for the provision of transportation infrastructure projects. This proposal is modeled after legislation which I introduced last year along with my distinguished colleagues, Senators Warner, Moynihan, and Bond. Senators Boxer and Graham are also cosponsors of that bill. One needs only to venture a few blocks from here to see the terrible condition of many of the nation's roads and bridges. Regrettably, the United States faces a significant shortfall in funding for our highway and bridge infrastructure needs. This investment need comes at a time when we in Congress are desperately looking for ways to constrain federal spending to keep the budget balanced. State governments face similar budget pressures. It is incumbent upon us to look at new and innovative ways to make the most of limited resources to address significant needs. In the United States, highway and bridge infrastructure is the responsibility of the government. Governments build, own and operate public highways, roads and bridges. In many other countries, however, the private sector, and private capital, construct and operate important facilities. These countries have found that increasing the private sector's role in major transportation projects offers opportunities for construction cost savings and more efficient operation. They also open the door for new construction techniques and technologies. To help meet the nation's infrastructure needs, we must take advantage of private sector resources by opening up avenues for the private sector to take the lead in designing, constructing, financing and operating highway facilities. A substantial barrier to private sector participation in the provision of highway infrastructure is the cost of capital. Under current Federal tax law, highways built by government can be financed using tax-exempt debt, but those built by the private sector, or those with substantial private-sector participation, cannot. As a result, public/private partnerships for the provision of highway facilities are unlikely to materialize, despite the potential efficiencies in design, construction, and operation offered by such arrangements. To increase the amount of private sector participation in the provision of highway infrastructure, the tax code's bias towards public sector financing must be addressed. The Finance Committee amendment creates a pilot program aimed at encouraging the private sector to help meet the transportation infrastructure needs for the 21st century. It makes tax exempt financing available for a total of 15 highway privatization projects. The total face value of bonds that can be issued under this program is limited to $15 billion. The 15 projects authorized under the program will be selected by the Secretary of Transportation, in consultation with the Secretary of Treasury. To qualify under this program, projects selected must: serve the general public; be on public owned rights-of-way; revert to public ownership; and, come from a state's 20-year transportation plan. These criteria ensure that the projects selected meet a state or locality's broad transportation goals. The bonds issued under this pilot program will be subject to the rules and regulations governing private activity bonds. Moreover, the bonds issued under the program will not count against a state's tax exempt volume cap. two-year delay on terminal dyeing mandate for kerosene Finally, I am pleased that the Finance Committee has worked with Senator Nickles and me on a compromise that delays the implementation of the terminal dyeing mandate for kerosene for 2 years. Coming from the Northeast, this is an important matter for me, and I think the chairman's proposal is a reasonable approach to a contentious issue. Last year's tax bill included a provision which required that kerosene used for nontaxable purposes be dyed to distinguish it from kerosene during the winter to prevent diesel fuel from congealing. As you may know, diesel used as a motor fuel is subject to the highway excise tax. When kerosene is mixed with diesel motor fuel, the excise tax applies to the kerosene added. In the Northeast, however, essentially the same diesel fuel is used as home heating oil. As home heating oil, diesel is not subject to the excise tax. Therefore, kerosene mixed with diesel that is destined for home heating oil use is also not taxed. When Congress decided to dye kerosene, there was considerable concern about whether terminals would invest in the equipment necessary to make sure dyed, nontaxable kerosene would be available for use in home heating oil. If terminals chose not to add this equipment, the only recourse would be for home heating oil dealers to purchase taxed kerosene and pass the cost along to home heating oil customers. Customers purchasing home heating oil on which tax has been paid would be eligible to file for a refund with the IRS, but you can imagine how cumbersome that would be for both the homeowner and the Service. So, when Congress imposed the dyeing regime, it also included a mandate that all terminals make dyed kerosene available. This mandate has proven to be burdensome on many terminal operators. Chairman Roth, Senator Nickles, and I were able to work out a compromise that delays that terminal dyeing mandate for 2 years. That will give Congress ample time to determine whether the market will accommodate the need for dyed kerosene without the mandate. I am confident that the marketplace will meet the demand for dyed kerosene in those areas where it is needed. However, if that does not turn out to be the case I can assure the Senate that I will fight to reimpose the terminal dyeing mandate so that home heating oil customers are not left out in the cold. amendment to correct the flow of tax revenues Mr. President, I had intended to offer an amendment to correct a provision included in last year's Taxpayer Relief Act that could have dramatic effects on the highway program in the future. That provision, which granted those collecting highway taxes an unprecedented 75-day delay in depositing those taxes with the Federal Government, will affect future apportionment formulas used to distribute highway money to the States. This provision was not included in either the House or the Senate tax bills. Nevertheless, this measure was slipped into the conference agreement purportedly to make the path to a balanced budget by the year 2002 more uniform. Now that we are on track to reach balance this year, the proposal included in last year's tax bill is no longer necessary. The provision allows those collecting excise taxes from July 15 through September 30 of this year to hold onto that money and deposit it with the Federal Government no later than October 5, 1998. From a Federal budget standpoint, what this proposal does is shift highway tax revenue from the current fiscal year to the next fiscal year. Switching revenue from one year to another could affect the highway program because the State apportionment formulas use revenues collected from each of the States as the key factor. Senators may remember the contentious debate this body had in 1996 during consideration of the fiscal year 1997 Transportation appropriations bill when we attempted to correct an error made by the Department of Transportation in interpreting Treasury excise tax collection data. My amendment would have attempted to avoid a similar problem that may be caused by this excise tax deposit shift. The problem facing the Environment and Public Works Committee is that there is a strong likelihood that any problems created by this excise tax revenue shift will not be crop up until well after the damage is done. This special benefit--which I might add was also extended to the airlines on the collection of their excise taxes--will expire on October 5 of this year. The effect on the state allocation formulas will not appear, however, until the year 2000. At that point, there will be no way to undo the effect of the delay in receiving those receipts. I remain very concerned that this deposit shift will come back to haunt the Senate. I also believe that the only sure way to prevent that from occurring would be to repeal the provision that was included in last year's tax bill. Nevertheless, the chairman of the Finance Committee has convinced me that my amendment should be reviewed further, and I accept his opinion. Therefore, I will not offer my amendment at this time.

Mr. CHAFEE. Thank you. First, although it is not explicitly referenced in the wording of the amendment whether its terms would apply to rail corridors that already are railbanked, and which already have been transferred from the railroad to the railbanking agency, it is my understanding that your amendment does not apply to corridors where a notice or certificate of interim trail use under section 1247(d) of title 23, United States Code, already has been issued by the Surface Transportation Board. The amendment only will be applied prospectively. Am I correct in my understanding?

Mr. CHAFEE. Mr. President, it's my understanding that the yeas and nays have been ordered on this amendment; is that correct?

Mr. CHAFEE. Mr. President, I ask unanimous consent that this amendment, No. 1726, be laid aside and be in order at a later time, regardless of the outcome of the cloture vote.

Mr. CHAFEE. Mr. President, I suggest the absence of a quorum.

Mr. CHAFEE. Mr. President, this amendment is acceptable to this side.

Mr. CHAFEE. I move to lay it on the table. The motion to lay on the table was agreed to. Amendment No. 1726 (Purpose: To provide that demonstration projects shall be subject to any limitation on obligations established by law that applies to Federal-aid highways and highway safety construction programs)

Mr. CHAFEE. Mr. President, I am delighted to be a cosponsor of this amendment offered by the Senator from Missouri. Now we all recognize trucks are essential to the Nation's economic health. There is no argument to that. But we believe allowing increasing the number of the larger trucks to operate on our highway is a dangerous way to increase productivity. Triple-trailer trucks impose, I believe, a triple threat to safety, to the environment, and to the highway infrastructure. This amendment is a sense of the Senate that we will stay as we are. That is what the underlying legislation does. It does not change what the States allow, or roads they are permitted to operate under now, and does not increase the ability to operate where they are not operating now. I am for that. I thank the Senator for his amendment.

Mr. CHAFEE. I thank the very distinguished senior Senator for the kind remarks about what we did for South Carolina.

Mr. CHAFEE. I move to reconsider the vote.

Mr. CHAFEE

Mr. CHAFEE. Madam President, I also ask unanimous consent that at 10:30 a.m. the Senate resume consideration of S. 1173, the highway bill, and immediately proceed to a vote on or in relation to the McCain amendment No. 1726 regarding demonstration projects.

Mr. CHAFEE. Madam President, I further ask unanimous consent that Members have until the hour of 10 a.m. to file first-degree amendments to S. 1173.

Mr. CHAFEE. Madam President, I ask unanimous consent that when the Senate completes its business today, it stand in adjournment until 9:30 a.m. on Thursday, March 12, 1998, and that immediately following the prayer, the routine requests through the morning hour be granted and the Senate begin a period for the transaction of morning business until the hour of 10:30 a.m. with Senators permitted to speak for up to 5 minutes each, with the following exceptions: Senator Dorgan, 15 minutes; Senator Leahy, 15 minutes.

Mr. CHAFEE

Mr. CHAFEE. I ask unanimous consent that the amendment be agreed to.

Mr. CHAFEE. Madam President, I ask unanimous consent that the preamble, as amended, be agreed to; that the motions to reconsider the above actions be laid upon the table; and, finally, that any statements regarding this legislation appear at the appropriate place in the Record.

Mr. CHAFEE. I suggest the absence of a quorum.

Mr. CHAFEE. I ask unanimous consent that the resolution be agreed to, as amended.

Mr. CHAFEE. Madam President, I ask unanimous consent that the Senate proceed to the immediate consideration of calendar No. 319, S. Res. 174.

Mr. CHAFEE. Madam President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. CHAFEE. Madam President, Senator Roth has an amendment to the resolution at the desk. I ask for its consideration.

Mr. CHAFEE

Mr. CHAFEE. Tomorrow, the Senate, Madam President, will be in a period of morning business from 9:30 a.m. to 10:30 a.m. At 10:30 a.m., by a previous order, the Senate will proceed to a rollcall vote on the McCain amendment to S. 1173, the so-called ISTEA II legislation. Following that vote, the Senate will attempt to complete action on the bill. In addition, the Senate may begin the consideration of S. 414, the international shipping bill, and H.R. 2646, the A-plus education bill. Therefore, Members should anticipate a busy voting day with votes occurring into the early evening.

Mr. CHAFEE. Yes.

Mr. CHAFEE

Mr. CHAFEE. Madam President, I ask unanimous consent that the bill be considered read a third time and passed, as amended; that the motion to reconsider be laid upon the table; and that any statements relating to the bill appear at the appropriate place in the Record.