Olympia Snowe

Ms. SNOWE

Ms. SNOWE. Mr. President, as Chair of the Senate Committee on Small Business and Entrepreneurship, I rise today to address the impact of amendment No. 3810 proposed by the distinguished Senator from Illinois, Mr. Obama. Strengthening competition in the Hurricanes Katrina and Rita reconstruction contracts is a worthy goal. Along with my Senate colleagues from both sides of the aisle, I have watched with disappointment the rush of Federal agencies such as the Department of Homeland Security, DHS, and the Federal Emergency Management Agency, FEMA, to award hundreds of millions in no-bid contracts. Since last fall, my Committee held three oversight hearings on the Gulf Coast hurricane response and reconstruction efforts. Testimony at these hearings clearly established that small businesses have often been the victims of no-bid reconstruction contracting. We received strong commitments from the Army Corps of Engineers, the Department of Homeland Security, and the Small Business Administration to work hard to remedy this problem. In response to the efforts of my committee and our counterpart committee in the House, positive results are already starting to show for small contractors. As recently as March 31, 2006, the SBA and FEMA jointly announced 36 contracts valued at $3.6 billion which will be set aside for small and small disadvantaged businesses, aimed at maintenance and deactivation of roughly 150,000 housing units. Priority for award of these contracts would go to local businesses. Federal agencies are also beginning to award disaster relief contracts to small businesses located in Historically Underutilized Business Zones, HUBZones, as called for by the Office of Management and Budget Guidelines for Using Emergency Procurement Flexibilities. The Senate fully supported these efforts by unanimously passing amendment No. 3627 cosponsored by myself and Senators Vitter, Kerry, Landrieu, and Lott to make the gulf coast area a HUBZone and to waive a law prohibiting small business set-asides in certain industries. All these acquisition strategies enlarge the Federal Government's supplier base, and are mandated by the Federal Acquisition Regulation when qualified small businesses are available. It is my understanding that amendment No. 3810 was not intended to prohibit spending on these and similar efforts. I ask whether my distinguished colleague, the sponsor of the amendment, Senator Obama, had the same understanding?

Ms. SNOWE

Ms. SNOWE. Mr. President, the chair would like to inform the Members of the Committee that the Committee will hold a hearing on Wednesday, April 26, 2006 at 10:30 a.m. in Russell 428A to address the reauthorization of Finance and Entrepreneurial Development programs administered by the Small Business Administration.

Ms. SNOWE

Ms. SNOWE. Mr. President, as Chair of Senate Committee on Small Business and Entrepreneurship, I rise today to introduce The Small Business Partners In Reconstruction Act of 2006. This legislation, co- sponsored by Senator David Vitter, is the product of 3 hearings held in my Committee in September and November 2005, and in February 2006, which examined the response of the Small Business Administration, the Army Corps of Engineers, the Department of Homeland Security and its Federal Emergency Management Agency, and other Federal agencies to the devastation wrought by the Hurricanes Katrina and Rita on our Gulf Coast states. Speaking on September 15, 2005 from New Orleans' historic Jackson Square, President Bush declared that ``It is entrepreneurship that creates jobs and opportunity; it is entrepreneurship that helps break the cycle of poverty; and we will take the side of entrepreneurs as they lead the economic revival of the Gulf region.'' Unfortunately, the Federal Government's performance has not matched the President's declaration. This is particularly true with regards to the role of small firms, especially Gulf Coast small firms, with regards to contracts and subcontracts for recovery and reconstruction. Too often, small contractors have been treated in the disaster contracting process less like the partners in disaster recovery and economic revitalization they are, and more like unwanted stepchildren. Eight months after Hurricane Katrina, it is time for this to change. To begin with, some Federal bureaucrats have used the Katrina and Rita disasters to exclude small business from contracting in the name of emergency and speed. Contracting with small firms, it was said, does not provide sufficient flexibility to the contracting officers in time of crisis. Quite the opposite is true. The Small Business Act contains flexible contracting authorities as part of the 8(a) program, the HUBZone program, and the service-disabled veteran-owned program, which allow Federal agencies to quickly buy goods and services in emergency situations. Indeed, on May 30, 2003, the Office of Federal Procurement Policy issued guidance on Emergency Procurement Flexibilities, which encouraged Federal agencies to use contracting flexibilities, such as the HUBZone flexibilities, which are part of the Small Business Act. This guidance was largely ignored, as billions of dollars went to large corporations through non-competitive mechanisms such as no-bid contracts or the so called micro-purchase authority, originally intended by Congress to cover small purchase card transactions. My legislation requires the Office of Federal Procurement Policy and the Small Business Administration (SBA) to ensure that Federal contracting officials have the most comprehensive and up-to-date guidance on the full use of available small business emergency procurement flexibilities, and that such guidance is published in the Federal Register. My legislation also ensures that the SBA provides government-wide training for procurement agencies on using small business contracting flexibilities in emergency situations, and directs the SBA to designate at least one advisor for small business emergency contracting who would help Federal agencies apply small business procurement flexibilities in emergency situations. Small contractors have also been denied access to reconstruction dollars by paperwork and bureaucracy. Red tape had the most serious effect on small disadvantaged businesses. Many of these contractors have been certified to do business under the Federally-funded, Congressionally-established Disadvantaged Business Enterprise Program (DBE) for transportation contracting such as highway or bridge construction. In the Federal procurement system, a parallel Small Disadvantaged Business (SDB) Program exists. According to law and the Memorandum of Understanding between the SBA and the U.S. Department of Transportation, the DBE certifications are based on the SDB certification requirements under the Small Business Act. Unfortunately, DBEs have been unable to secure recognition as SDBs by the Federal agencies or by Federal prime contractors. As a result, agencies and prime contractors had little assurance that SDB goals may be met by doing business with DBEs. My measure will ensure that capable small contractors enjoy full reciprocity among contracting programs instead of the red tape they currently face. Lack of comprehensive procurement data on Katrina and Rita contracting is another flaw which my bill is trying to correct. It is hard to believe that almost 8 months since the Hurricane Katrina struck, the Federal Government's disaster contracting ship is literally sailing blind. Both the Small Business Act and the Office of Federal Procurement Policy Act require that accurate and comprehensive data on government contracting and subcontracting, especially including small business participation, be collected and maintained. Although the government-wide procurement spending database, the Federal Procurement Data System (FPDS), collects the data related to Hurricane Katrina and Rita reconstruction, this data is demonstrably incomplete. According to the Government Accountability Office and admissions of Federal procurement officials, the FPDS data is not accurate and omits billions in Defense and Homeland Security contracts. As a result of these deficiencies, the Executive Branch made exaggerated claims concerning the share of reconstruction work that went to small businesses. For instance, last October, the Commerce Department claimed that small businesses received 72 percent of Katrina contracting dollars, and the SBA claimed the small business share to be at 45 percent. During hearings before my Committee, the GAO confirmed that the Administration's claimed numbers are unrealistic and unsubstantiated. My legislation directs the Administrators of the SBA and the OFPP to ensure that the Federal Procurement Data System reflects comprehensive government-wide contracting spending on Katrina and Rita reconstruction. For years, the Historically Underutilized Business Zone (HUBZone) program, created to direct Federal contacting dollars to small firms in economically distressed areas, has been recognized as a potent economic development stimulus. Since its inception in 1997, the HUBZone program stimulated the hiring of over 124,000 HUBZone residents and investment of over half a billion dollars in HUBZones by HUBZone-certified firms. With the support of the Administration, I propose extending the HUBZone designation to the disaster region. A HUBZone designation would enable small businesses located in the disaster area and employing people in that area to receive contracting preferences and price evaluation preferences to offset greater costs of doing business. Extending the HUBZone designation to the Gulf Coast would bring needed businesses development tools to affected areas of the Gulf Coast. Under my proposal, the SBA Administrator would have the discretion to define the geographic scope or duration of this designation to ensure that the HUBZone preference is targeted to those who need it the most. Small businesses vying for government contracts or subcontracts often must post bid or performance bonds in order to convince Federal contracting officials or prime contractors that small business are a good project risk. In turn, small firms must seek bonding from private bonding companies. The SBA, through its surety bond program, has provided guarantees on bonds awarded to small businesses up to $2 million. But small firms need an increase in bonds to handle larger projects for hurricane relief. Local small businesses in the Gulf Coast can use higher bonds to compensate for the damage to their assets from the hurricanes. My legislation would increase the maximum size of SBA surety bonds from $2 million to $5 million, and provide the SBA with authority to increase the maximum size to $10 million upon request of another Federal agency. In its proposal to re-build the Gulf Coast region, the Administration suggested making the $5 million increase. My legislation also directs the SBA to create a contracting outreach program for small businesses located or willing to locate in the Katrina disaster area for the next five years. Federal contracts and subcontracts can provide critical assistance to small businesses located in the areas devastated by the hurricanes in the form of solid business opportunities and prompt, steady pay. In addition, government procurement would open doors for many local small businesses to participate in the long-term reconstruction work in the Gulf Coast areas. While many small businesses would benefit from other forms of disaster assistance, many of them want to get back to work and into business as soon as possible. Technical assistance and outreach through the SBA, the Procurement Technical Assistance Centers, the Federal Offices of Small and Disadvantaged Business Utilizations, and other organizations could prove invaluable to these firms. Yet, outreach alone would not ensure fair participation of small businesses in Gulf Coast reconstruction contracts. To promote jobs creation and development in the disaster region, the Federal Government must set and follow definitive goals for small business participation. Prior to the disaster, small construction companies in Alabama, Mississippi, and Louisiana received nearly $500 million in Federal contracts a year. Total small business contracts in the Gulf Coast region exceeded $3 billion a year. With the Federal cost of hurricane relief and rebuilding estimated at over $100 billion, small businesses, particularly those located in the disaster area and that employ individuals in the affected areas, should receive their fair share of Federal contracting and subcontracting dollars. My legislation establishes a 30 percent prime contracting goal and a 40 percent subcontracting goal on each agency's hurricane-related reconstruction contracts. These goals are compatible with the Department of Homeland Security's and the Army Corps of Engineers' history of small business achievements. My legislation would also address two unfortunate provisions in the Second Katrina Supplemental Appropriations that unwisely changed the emergency procurement authority Congress granted to contracting officers in the aftermath of 9/11 and reclassified many reconstruction contracts into categories that excluded small firms from prime contracting or subcontracting. I spoke out against these provisions, and Congress ultimately repealed them last year. Nonetheless, this bill puts in place safeguards to ensure that small firms do not fall prey to such actions again. My legislation protects the Small Business Reservation (SBR) for disaster-related contracts below the Simplified Acquisition Threshold (SAT). The SAT and the SBR are normally set at $100,000. The Federal Acquisition Streamlining Act allowed Federal agencies to use simplified procedures for all contracts below the SAT, but only if they attempt to place, or ``reserve'', these contracts to qualified small businesses. Many small businesses qualify for contracts under expedited procedures under the Small Business Act, which would help to move the reconstruction process forward. The SBR does not delay relief contracting. If no qualified small business is available to do the job, agencies can place the contract with any qualified supplier. This provision restores the parity between the SBR and the SAT any time the SAT is increased for disaster-related contracts. My legislation also restores small business subcontracting requirements in emergency procurements. The Second Katrina Supplemental abolished small business subcontracting requirements for all Katrina- related contracts by treating contracts for hundreds of millions of dollars as purchases of commercial items, like contracts for office supplies. This is an improper and unjustified procurement practice. The Army Corps of Engineers currently imposes a 73 percent subcontracting requirement on hurricane-related contracts, demonstrating that the subcontracting requirements are not onerous. Under the Small Business Act, only a ``good faith effort'' to provide subcontracting opportunities is required. The legislation allows a grace period of 30 days to negotiate an acceptable plan (subject to a 50 percent payment limitation until the plan is concluded). Looking forward, my legislation directs the Administrators of the OFPP and the SBA to work with other Federal agencies to ensure creation of multiple-award contracts for disaster recovery which are set aside for small business concerns. As the GAO testified before the Senate Committee on Small Business and Entrepreneurship last year, Federal agencies lacked adequate acquisition planning for hurricane disaster relief. This measure would reverse this practice both for ongoing and for future disaster recovery efforts. I am a firm believer that the reconstruction acquisition process must be not only efficient, but also transparent. In this regard, the Federal Government provides central website postings for all Katrina- related opportunities through the SBA's Sub-NET. Unfortunately, the SBA's Sub-NET subcontracting database, though recommended by the Government, has been until recently unused by the Katrina prime contractors. My legislation directs all prime contractors which received substantial Federal contracts related to the Hurricanes Katrina and Rita for which subcontracting plans are required to post subcontracting announcements on the SBA's Sub-NET online database. Finally, my legislation addresses the government's failure to direct contract dollars to those who need them the most--local small businesses. During the hearings in my Committee last November, I was deeply troubled to discover that Federal agencies failed to grant business opportunities to qualified Gulf Coast small firms. These shocking practices make a mockery of our national commitment to rebuild the Gulf Coast. For instance, while investigating Hurricane Katrina contracts at my request, the GAO found a memorandum from an official in the Army Corps of Engineers informing the SBA that the Corps has successfully concealed the information about millions of dollars in upcoming contracts for mobile classrooms in Mississippi from, among others, local small businesses. The Corps requested that SBA approve giving this work to an out-of-state company without any prior experience. As a result, the Corps excluded a local small business, licensed by the Mississippi Department of Education, from bidding. Incredibly, the SBA obliged and approved the contract three times, eventually increasing its value from $10 million to $47 million. Practices such as these violate Section 15 of the Small Business Act, which unequivocally directs priority in government contracts ``to small business concerns which shall perform a substantial proportion of the production on those contracts and subcontracts within areas of concentrated unemployment or underemployment or within labor surplus areas.'' It is hard to imagine a clearer example of an ``area of concentrated unemployment or underemployment'' or a area with labor surplus than the devastated Gulf Coast region. Nonetheless, some have ignored the clear command of the statute. My legislation would designate the Gulf Coast disaster area as a labor surplus area for purposes of the Small Business Act's preference for labor surplus area contractors. In addition, this provision authorizes Federal agencies to use contractual set-asides, incentives, and penalties to enhance participation of local small business concerns in disaster recovery contracts and subcontracts. Finally, my legislation suspends the application of the Small Business Competitiveness Demonstration (Comp Demo) program to Gulf Coast disaster contracts. The Comp Demo Program denies the protections of the Small Business Act like set-asides to small businesses involved in construction and specialty trade contracting, refuse systems and related services, landscaping, pest control, non-nuclear ship repair, and architectural and engineering services, including surveying and mapping. Historically, small businesses have been the backbone of these industries, and these industries are in heavy demand for disaster recovery efforts. The Comp Demo Program, ostensibly a test program, denies Federal agencies likes the Departments of Defense and nine other agencies the ability to do small business set-asides. Essentially, the Comp Demo Program reserves whole industries for big business. Last year, at the request of the Department of Defense, I supported an amendment to terminate the Comp Demo Program. The Senate agreed that small businesses in all industries should receive the full protections of the Small Business Act, and unanimously voted to repeal this Program. Suspending this Program for Katrina and Rita contracts would go a long way towards restoring fair treatment for small businesses affected by this disaster. I believe this legislation will find broad support in this body. Indeed, the HUBZone designation, the outreach programs, and the surety bonding increase have already been adopted by the Senate on a vote of 96-0 as part of my amendment to the Science, State, Commerce, and Justice Appropriations Act for Fiscal Year 2006. The provisions dealing with the small business reservation offset and retention of small business subcontracting in emergency procurements were cosponsored by a bi-partisan group of Senators as part of my bi-partisan disaster relief bill, S. 1807. With the Senate leadership and every Senator of both parties on the record in support of greater access of small businesses to Federal contracts, I look forward to speedy consideration of this legislation and its support by the Senate.

Ms. SNOWE. Mr. President, as Chair of the Senate Committee on Small Business and Entrepreneurship, I have long believed that it is my responsibility and the duty of this chamber to help small businesses, as they are the driver of this Nation's economy, responsible for generating approximately 75 percent of net new jobs annually. Today, I rise with Senator Bennett to introduce legislation that would address the crisis that faces small businesses when it comes to purchasing quality, affordable health insurance. This is not a new crisis. Nearly 46 million Americans are currently uninsured. We've now experienced double digit percentage increases in health insurance premiums in four of the past five years. Small businesses face difficult choices in seeking to provide affordable health insurance to their employees. We must act now. Study after study tells us that the smallest businesses are the ones least likely to offer insurance and most in need of assistance. According to the Employee Benefit Research Institute, of the working uninsured, who make up 83 percent of our nation's uninsured population, 60.6 percent either work for a small business with fewer than 100 employees or are self-employed. Furthermore, many of the small businesses who we meet with tell us how they feel like the cost and complexity of the health care system has moved health insurance far beyond their reach. That is why today we introduce the Small Business Health Education and Awareness Act of 2006. This bill establishes a pilot, competitive matching-grant program for Small Business Development Centers (SBDCs) to provide educational resources and materials to small businesses designed to increase awareness regarding health insurance options available in their areas. Recent research conducted by the Healthcare Leadership Council has found that a short, less than 10 minute education session, can increase small business knowledge and interest in offering health insurance by about 33 percent. For those of you who are not familiar, SBDCs are one of the greatest business assistance and entrepreneurial development resources provided to small businesses that are seeking to start, grow, and flourish. Currently, there are over 1,100 service locations in every state and territory delivering management and technical counseling to prospective and existing small business owners. Our legislation would require the Small Business Administration (SBA) to provide up to 20 matching grants to qualified SBDCs across the country. No more than two SBDCs, one per State, would be chosen from each of the SBA's 10 regions. The grants shall be more than $150,000, but less than $300,000 and shall be consistent with the matching requirement under current law. In creating the materials for their grant programs, participating SBDCs should evaluate and incorporate relevant portions existing health insurance options, including materials created by the Healthcare Leadership Council. In addition, SBDCs participating in the pilot program would be required to submit a quarterly report to the SBA. Enacting this legislation is an important step in the right direction towards assisting small businesses as they work to strengthen themselves, remain competitive against larger businesses that are able to offer affordable health insurance, and in turn bolster the entire economy. We encourage our colleagues to join us in supporting this bill, and to continue to work to address the issues facing the small business community. Thank you. I ask unanimous consent that the text of our bill be printed in the Record.

Ms. SNOWE. Mr. President, I rise today with Senator Collins to introduce legislation to help reverse the devastating population decline and economic distress that has plagued individuals and businesses in Aroostook County, the northernmost county in Maine. What the bill does is simple, it will bring all of Aroostook County under the Empowerment Zone (EZ) program. The legislation is identical to a bill that we introduced in the 108th Congress and was included in the FY 2004 Agriculture Appropriations bill in 2003 as passed by the Senate. To fully grasp the importance of this legislation, it is necessary to understand the unique situation facing the residents of Aroostook County. ``The County'', as it is called by Mainers, is a vast and remote region of Maine. As the northernmost county, it shares more of its border with Canada than its neighboring Maine counties. It has the distinction of being the largest county east of the Mississippi River. Its geographic isolation is even more acute when considering that the county's relatively small population of 73,000 people are scattered throughout 6,672 square miles of rural countryside. Aroostook County is home to 71 organized townships, as well as 125 unorganized townships much of which is forest land and wilderness. As profound as this geographic isolation may seem, it is the economic isolation and the recent out-migration that has had the most devastating impact on the region. The economy of northern Maine has a historical dependence upon its natural resources, particularly forestry and agriculture. While these industries served the region well in previous decades, and continue to form the underpinnings of the local economy, many of these sectors have experienced decline and can no longer provide the number and type of quality jobs that residents need. While officials in the region have put forward a Herculean effort to redevelop the region, with nearly 1,000 new jobs at the Loring Commerce Centre alone, Aroostook County is still experiencing a significant ``job deficit'', and as a result continues to lose population at an alarming rate. Since its peak in 1960, northern Maine's population has declined by 30 percent. Unfortunately, the Main State Planning Office predicts that Aroostook County will continue losing population as more workers leave the area to seek opportunities and higher wages in southern Maine and the rest of New England. In January 2002, a portion of Aroostook County was one of two regions that received Empowerment Zone status from the USDA for out-migration. The entire county experienced an out-migration of 15 percent from 86,936 in 1990 to 73,938 in 2000. Moreover, a shocking 40 percent of 15 to 29-year-olds left during the last decade. The current zone boundaries were chosen based on the criteria that Empowerment Zones be no larger than 1,000 square miles, and have a maximum population of 30,000 for rural areas. The lines drawn for the Aroostook County Empowerment Zone were considered to be the most inclusive and reasonable given the constraints of the program. It should be noted as well that the boundaries were drawn based on the 1990 census, making the data significantly outdated at the start and included the former Loring Air Force Base and its population of nearly 8,000 people, which had closed nearly 8 years before the designation, taking its military and much of its civilian workforces with it. The Maine State Planning Office estimated that the base closure resulted in the loss of 3,494 jobs directly related to the base and another 1,751 in associated industry sectors for a total loss of $106.9 million annual payroll dollars. Some of the most distressed communities that have lost substantial population are not in the Empowerment Zone, and other communities like Houlton literally are divided simply by a road, having one business on the south side of the street with no Empowerment Zone designation look out their window to a neighboring business on the north side of the street with full Empowerment Zone benefits. The economic factors for these communities and for these neighbors are the same as those areas within the Empowerment Zone. This designation is not meant to cause divisiveness within communities, it is created to augment a partnership for growth and to level the playing field for all Aroostook County communities who have equally suffered through continuing out migration whether it be in Madawaska or Island Falls. The legislation I am introducing would provide economic development opportunities to all reaches of Aroostook County by extending Empowerment Zone status to the entire county. This inclusive approach recognizes that the economic decline and population out-migration are issues that the entire region must confront, and, as evidenced by their successful Round III EZ application, they are attempting to confront. I believe the challenges faced by Aroostook County are significant, but not insurmountable. This legislation would make great strides in improving the communities and business in northern Maine, and I urge my colleagues to support this bill. I ask unanimous consent that the text of the bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today with Senator Collins to introduce legislation to help reverse the devastating population decline and economic distress that has plagued individuals and businesses in Aroostook County, the northernmost county in Maine. What the bill does is simple, it will bring all of Aroostook County under the Empowerment Zone (EZ) program. The legislation is identical to a bill that we introduced in the 108th Congress and was included in the FY 2004 Agriculture Appropriations bill in 2003 as passed by the Senate. To fully grasp the importance of this legislation, it is necessary to understand the unique situation facing the residents of Aroostook County. ``The County'', as it is called by Mainers, is a vast and remote region of Maine. As the northernmost county, it shares more of its border with Canada than its neighboring Maine counties. It has the distinction of being the largest county east of the Mississippi River. Its geographic isolation is even more acute when considering that the county's relatively small population of 73,000 people are scattered throughout 6,672 square miles of rural countryside. Aroostook County is home to 71 organized townships, as well as 125 unorganized townships much of which is forest land and wilderness. As profound as this geographic isolation may seem, it is the economic isolation and the recent out-migration that has had the most devastating impact on the region. The economy of northern Maine has a historical dependence upon its natural resources, particularly forestry and agriculture. While these industries served the region well in previous decades, and continue to form the underpinnings of the local economy, many of these sectors have experienced decline and can no longer provide the number and type of quality jobs that residents need. While officials in the region have put forward a Herculean effort to redevelop the region, with nearly 1,000 new jobs at the Loring Commerce Centre alone, Aroostook County is still experiencing a significant ``job deficit'', and as a result continues to lose population at an alarming rate. Since its peak in 1960, northern Maine's population has declined by 30 percent. Unfortunately, the Main State Planning Office predicts that Aroostook County will continue losing population as more workers leave the area to seek opportunities and higher wages in southern Maine and the rest of New England. In January 2002, a portion of Aroostook County was one of two regions that received Empowerment Zone status from the USDA for out-migration. The entire county experienced an out-migration of 15 percent from 86,936 in 1990 to 73,938 in 2000. Moreover, a shocking 40 percent of 15 to 29-year-olds left during the last decade. The current zone boundaries were chosen based on the criteria that Empowerment Zones be no larger than 1,000 square miles, and have a maximum population of 30,000 for rural areas. The lines drawn for the Aroostook County Empowerment Zone were considered to be the most inclusive and reasonable given the constraints of the program. It should be noted as well that the boundaries were drawn based on the 1990 census, making the data significantly outdated at the start and included the former Loring Air Force Base and its population of nearly 8,000 people, which had closed nearly 8 years before the designation, taking its military and much of its civilian workforces with it. The Maine State Planning Office estimated that the base closure resulted in the loss of 3,494 jobs directly related to the base and another 1,751 in associated industry sectors for a total loss of $106.9 million annual payroll dollars. Some of the most distressed communities that have lost substantial population are not in the Empowerment Zone, and other communities like Houlton literally are divided simply by a road, having one business on the south side of the street with no Empowerment Zone designation look out their window to a neighboring business on the north side of the street with full Empowerment Zone benefits. The economic factors for these communities and for these neighbors are the same as those areas within the Empowerment Zone. This designation is not meant to cause divisiveness within communities, it is created to augment a partnership for growth and to level the playing field for all Aroostook County communities who have equally suffered through continuing out migration whether it be in Madawaska or Island Falls. The legislation I am introducing would provide economic development opportunities to all reaches of Aroostook County by extending Empowerment Zone status to the entire county. This inclusive approach recognizes that the economic decline and population out-migration are issues that the entire region must confront, and, as evidenced by their successful Round III EZ application, they are attempting to confront. I believe the challenges faced by Aroostook County are significant, but not insurmountable. This legislation would make great strides in improving the communities and business in northern Maine, and I urge my colleagues to support this bill. I ask unanimous consent that the text of the bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, as Chair of Senate Committee on Small Business and Entrepreneurship, I rise today to introduce The Small Business Partners In Reconstruction Act of 2006. This legislation, co- sponsored by Senator David Vitter, is the product of 3 hearings held in my Committee in September and November 2005, and in February 2006, which examined the response of the Small Business Administration, the Army Corps of Engineers, the Department of Homeland Security and its Federal Emergency Management Agency, and other Federal agencies to the devastation wrought by the Hurricanes Katrina and Rita on our Gulf Coast states. Speaking on September 15, 2005 from New Orleans' historic Jackson Square, President Bush declared that ``It is entrepreneurship that creates jobs and opportunity; it is entrepreneurship that helps break the cycle of poverty; and we will take the side of entrepreneurs as they lead the economic revival of the Gulf region.'' Unfortunately, the Federal Government's performance has not matched the President's declaration. This is particularly true with regards to the role of small firms, especially Gulf Coast small firms, with regards to contracts and subcontracts for recovery and reconstruction. Too often, small contractors have been treated in the disaster contracting process less like the partners in disaster recovery and economic revitalization they are, and more like unwanted stepchildren. Eight months after Hurricane Katrina, it is time for this to change. To begin with, some Federal bureaucrats have used the Katrina and Rita disasters to exclude small business from contracting in the name of emergency and speed. Contracting with small firms, it was said, does not provide sufficient flexibility to the contracting officers in time of crisis. Quite the opposite is true. The Small Business Act contains flexible contracting authorities as part of the 8(a) program, the HUBZone program, and the service-disabled veteran-owned program, which allow Federal agencies to quickly buy goods and services in emergency situations. Indeed, on May 30, 2003, the Office of Federal Procurement Policy issued guidance on Emergency Procurement Flexibilities, which encouraged Federal agencies to use contracting flexibilities, such as the HUBZone flexibilities, which are part of the Small Business Act. This guidance was largely ignored, as billions of dollars went to large corporations through non-competitive mechanisms such as no-bid contracts or the so called micro-purchase authority, originally intended by Congress to cover small purchase card transactions. My legislation requires the Office of Federal Procurement Policy and the Small Business Administration (SBA) to ensure that Federal contracting officials have the most comprehensive and up-to-date guidance on the full use of available small business emergency procurement flexibilities, and that such guidance is published in the Federal Register. My legislation also ensures that the SBA provides government-wide training for procurement agencies on using small business contracting flexibilities in emergency situations, and directs the SBA to designate at least one advisor for small business emergency contracting who would help Federal agencies apply small business procurement flexibilities in emergency situations. Small contractors have also been denied access to reconstruction dollars by paperwork and bureaucracy. Red tape had the most serious effect on small disadvantaged businesses. Many of these contractors have been certified to do business under the Federally-funded, Congressionally-established Disadvantaged Business Enterprise Program (DBE) for transportation contracting such as highway or bridge construction. In the Federal procurement system, a parallel Small Disadvantaged Business (SDB) Program exists. According to law and the Memorandum of Understanding between the SBA and the U.S. Department of Transportation, the DBE certifications are based on the SDB certification requirements under the Small Business Act. Unfortunately, DBEs have been unable to secure recognition as SDBs by the Federal agencies or by Federal prime contractors. As a result, agencies and prime contractors had little assurance that SDB goals may be met by doing business with DBEs. My measure will ensure that capable small contractors enjoy full reciprocity among contracting programs instead of the red tape they currently face. Lack of comprehensive procurement data on Katrina and Rita contracting is another flaw which my bill is trying to correct. It is hard to believe that almost 8 months since the Hurricane Katrina struck, the Federal Government's disaster contracting ship is literally sailing blind. Both the Small Business Act and the Office of Federal Procurement Policy Act require that accurate and comprehensive data on government contracting and subcontracting, especially including small business participation, be collected and maintained. Although the government-wide procurement spending database, the Federal Procurement Data System (FPDS), collects the data related to Hurricane Katrina and Rita reconstruction, this data is demonstrably incomplete. According to the Government Accountability Office and admissions of Federal procurement officials, the FPDS data is not accurate and omits billions in Defense and Homeland Security contracts. As a result of these deficiencies, the Executive Branch made exaggerated claims concerning the share of reconstruction work that went to small businesses. For instance, last October, the Commerce Department claimed that small businesses received 72 percent of Katrina contracting dollars, and the SBA claimed the small business share to be at 45 percent. During hearings before my Committee, the GAO confirmed that the Administration's claimed numbers are unrealistic and unsubstantiated. My legislation directs the Administrators of the SBA and the OFPP to ensure that the Federal Procurement Data System reflects comprehensive government-wide contracting spending on Katrina and Rita reconstruction. For years, the Historically Underutilized Business Zone (HUBZone) program, created to direct Federal contacting dollars to small firms in economically distressed areas, has been recognized as a potent economic development stimulus. Since its inception in 1997, the HUBZone program stimulated the hiring of over 124,000 HUBZone residents and investment of over half a billion dollars in HUBZones by HUBZone-certified firms. With the support of the Administration, I propose extending the HUBZone designation to the disaster region. A HUBZone designation would enable small businesses located in the disaster area and employing people in that area to receive contracting preferences and price evaluation preferences to offset greater costs of doing business. Extending the HUBZone designation to the Gulf Coast would bring needed businesses development tools to affected areas of the Gulf Coast. Under my proposal, the SBA Administrator would have the discretion to define the geographic scope or duration of this designation to ensure that the HUBZone preference is targeted to those who need it the most. Small businesses vying for government contracts or subcontracts often must post bid or performance bonds in order to convince Federal contracting officials or prime contractors that small business are a good project risk. In turn, small firms must seek bonding from private bonding companies. The SBA, through its surety bond program, has provided guarantees on bonds awarded to small businesses up to $2 million. But small firms need an increase in bonds to handle larger projects for hurricane relief. Local small businesses in the Gulf Coast can use higher bonds to compensate for the damage to their assets from the hurricanes. My legislation would increase the maximum size of SBA surety bonds from $2 million to $5 million, and provide the SBA with authority to increase the maximum size to $10 million upon request of another Federal agency. In its proposal to re-build the Gulf Coast region, the Administration suggested making the $5 million increase. My legislation also directs the SBA to create a contracting outreach program for small businesses located or willing to locate in the Katrina disaster area for the next five years. Federal contracts and subcontracts can provide critical assistance to small businesses located in the areas devastated by the hurricanes in the form of solid business opportunities and prompt, steady pay. In addition, government procurement would open doors for many local small businesses to participate in the long-term reconstruction work in the Gulf Coast areas. While many small businesses would benefit from other forms of disaster assistance, many of them want to get back to work and into business as soon as possible. Technical assistance and outreach through the SBA, the Procurement Technical Assistance Centers, the Federal Offices of Small and Disadvantaged Business Utilizations, and other organizations could prove invaluable to these firms. Yet, outreach alone would not ensure fair participation of small businesses in Gulf Coast reconstruction contracts. To promote jobs creation and development in the disaster region, the Federal Government must set and follow definitive goals for small business participation. Prior to the disaster, small construction companies in Alabama, Mississippi, and Louisiana received nearly $500 million in Federal contracts a year. Total small business contracts in the Gulf Coast region exceeded $3 billion a year. With the Federal cost of hurricane relief and rebuilding estimated at over $100 billion, small businesses, particularly those located in the disaster area and that employ individuals in the affected areas, should receive their fair share of Federal contracting and subcontracting dollars. My legislation establishes a 30 percent prime contracting goal and a 40 percent subcontracting goal on each agency's hurricane-related reconstruction contracts. These goals are compatible with the Department of Homeland Security's and the Army Corps of Engineers' history of small business achievements. My legislation would also address two unfortunate provisions in the Second Katrina Supplemental Appropriations that unwisely changed the emergency procurement authority Congress granted to contracting officers in the aftermath of 9/11 and reclassified many reconstruction contracts into categories that excluded small firms from prime contracting or subcontracting. I spoke out against these provisions, and Congress ultimately repealed them last year. Nonetheless, this bill puts in place safeguards to ensure that small firms do not fall prey to such actions again. My legislation protects the Small Business Reservation (SBR) for disaster-related contracts below the Simplified Acquisition Threshold (SAT). The SAT and the SBR are normally set at $100,000. The Federal Acquisition Streamlining Act allowed Federal agencies to use simplified procedures for all contracts below the SAT, but only if they attempt to place, or ``reserve'', these contracts to qualified small businesses. Many small businesses qualify for contracts under expedited procedures under the Small Business Act, which would help to move the reconstruction process forward. The SBR does not delay relief contracting. If no qualified small business is available to do the job, agencies can place the contract with any qualified supplier. This provision restores the parity between the SBR and the SAT any time the SAT is increased for disaster-related contracts. My legislation also restores small business subcontracting requirements in emergency procurements. The Second Katrina Supplemental abolished small business subcontracting requirements for all Katrina- related contracts by treating contracts for hundreds of millions of dollars as purchases of commercial items, like contracts for office supplies. This is an improper and unjustified procurement practice. The Army Corps of Engineers currently imposes a 73 percent subcontracting requirement on hurricane-related contracts, demonstrating that the subcontracting requirements are not onerous. Under the Small Business Act, only a ``good faith effort'' to provide subcontracting opportunities is required. The legislation allows a grace period of 30 days to negotiate an acceptable plan (subject to a 50 percent payment limitation until the plan is concluded). Looking forward, my legislation directs the Administrators of the OFPP and the SBA to work with other Federal agencies to ensure creation of multiple-award contracts for disaster recovery which are set aside for small business concerns. As the GAO testified before the Senate Committee on Small Business and Entrepreneurship last year, Federal agencies lacked adequate acquisition planning for hurricane disaster relief. This measure would reverse this practice both for ongoing and for future disaster recovery efforts. I am a firm believer that the reconstruction acquisition process must be not only efficient, but also transparent. In this regard, the Federal Government provides central website postings for all Katrina- related opportunities through the SBA's Sub-NET. Unfortunately, the SBA's Sub-NET subcontracting database, though recommended by the Government, has been until recently unused by the Katrina prime contractors. My legislation directs all prime contractors which received substantial Federal contracts related to the Hurricanes Katrina and Rita for which subcontracting plans are required to post subcontracting announcements on the SBA's Sub-NET online database. Finally, my legislation addresses the government's failure to direct contract dollars to those who need them the most--local small businesses. During the hearings in my Committee last November, I was deeply troubled to discover that Federal agencies failed to grant business opportunities to qualified Gulf Coast small firms. These shocking practices make a mockery of our national commitment to rebuild the Gulf Coast. For instance, while investigating Hurricane Katrina contracts at my request, the GAO found a memorandum from an official in the Army Corps of Engineers informing the SBA that the Corps has successfully concealed the information about millions of dollars in upcoming contracts for mobile classrooms in Mississippi from, among others, local small businesses. The Corps requested that SBA approve giving this work to an out-of-state company without any prior experience. As a result, the Corps excluded a local small business, licensed by the Mississippi Department of Education, from bidding. Incredibly, the SBA obliged and approved the contract three times, eventually increasing its value from $10 million to $47 million. Practices such as these violate Section 15 of the Small Business Act, which unequivocally directs priority in government contracts ``to small business concerns which shall perform a substantial proportion of the production on those contracts and subcontracts within areas of concentrated unemployment or underemployment or within labor surplus areas.'' It is hard to imagine a clearer example of an ``area of concentrated unemployment or underemployment'' or a area with labor surplus than the devastated Gulf Coast region. Nonetheless, some have ignored the clear command of the statute. My legislation would designate the Gulf Coast disaster area as a labor surplus area for purposes of the Small Business Act's preference for labor surplus area contractors. In addition, this provision authorizes Federal agencies to use contractual set-asides, incentives, and penalties to enhance participation of local small business concerns in disaster recovery contracts and subcontracts. Finally, my legislation suspends the application of the Small Business Competitiveness Demonstration (Comp Demo) program to Gulf Coast disaster contracts. The Comp Demo Program denies the protections of the Small Business Act like set-asides to small businesses involved in construction and specialty trade contracting, refuse systems and related services, landscaping, pest control, non-nuclear ship repair, and architectural and engineering services, including surveying and mapping. Historically, small businesses have been the backbone of these industries, and these industries are in heavy demand for disaster recovery efforts. The Comp Demo Program, ostensibly a test program, denies Federal agencies likes the Departments of Defense and nine other agencies the ability to do small business set-asides. Essentially, the Comp Demo Program reserves whole industries for big business. Last year, at the request of the Department of Defense, I supported an amendment to terminate the Comp Demo Program. The Senate agreed that small businesses in all industries should receive the full protections of the Small Business Act, and unanimously voted to repeal this Program. Suspending this Program for Katrina and Rita contracts would go a long way towards restoring fair treatment for small businesses affected by this disaster. I believe this legislation will find broad support in this body. Indeed, the HUBZone designation, the outreach programs, and the surety bonding increase have already been adopted by the Senate on a vote of 96-0 as part of my amendment to the Science, State, Commerce, and Justice Appropriations Act for Fiscal Year 2006. The provisions dealing with the small business reservation offset and retention of small business subcontracting in emergency procurements were cosponsored by a bi-partisan group of Senators as part of my bi-partisan disaster relief bill, S. 1807. With the Senate leadership and every Senator of both parties on the record in support of greater access of small businesses to Federal contracts, I look forward to speedy consideration of this legislation and its support by the Senate.

Ms. SNOWE

Ms. SNOWE. Mr. President, as Chair of the Senate Committee on Small Business and Entrepreneurship, I have long believed that it is my responsibility and the duty of this chamber to help small businesses, as they are the driver of this Nation's economy, responsible for generating approximately 75 percent of net new jobs annually. Today, I rise with Senator Bennett to introduce legislation that would address the crisis that faces small businesses when it comes to purchasing quality, affordable health insurance. This is not a new crisis. Nearly 46 million Americans are currently uninsured. We've now experienced double digit percentage increases in health insurance premiums in four of the past five years. Small businesses face difficult choices in seeking to provide affordable health insurance to their employees. We must act now. Study after study tells us that the smallest businesses are the ones least likely to offer insurance and most in need of assistance. According to the Employee Benefit Research Institute, of the working uninsured, who make up 83 percent of our nation's uninsured population, 60.6 percent either work for a small business with fewer than 100 employees or are self-employed. Furthermore, many of the small businesses who we meet with tell us how they feel like the cost and complexity of the health care system has moved health insurance far beyond their reach. That is why today we introduce the Small Business Health Education and Awareness Act of 2006. This bill establishes a pilot, competitive matching-grant program for Small Business Development Centers (SBDCs) to provide educational resources and materials to small businesses designed to increase awareness regarding health insurance options available in their areas. Recent research conducted by the Healthcare Leadership Council has found that a short, less than 10 minute education session, can increase small business knowledge and interest in offering health insurance by about 33 percent. For those of you who are not familiar, SBDCs are one of the greatest business assistance and entrepreneurial development resources provided to small businesses that are seeking to start, grow, and flourish. Currently, there are over 1,100 service locations in every state and territory delivering management and technical counseling to prospective and existing small business owners. Our legislation would require the Small Business Administration (SBA) to provide up to 20 matching grants to qualified SBDCs across the country. No more than two SBDCs, one per State, would be chosen from each of the SBA's 10 regions. The grants shall be more than $150,000, but less than $300,000 and shall be consistent with the matching requirement under current law. In creating the materials for their grant programs, participating SBDCs should evaluate and incorporate relevant portions existing health insurance options, including materials created by the Healthcare Leadership Council. In addition, SBDCs participating in the pilot program would be required to submit a quarterly report to the SBA. Enacting this legislation is an important step in the right direction towards assisting small businesses as they work to strengthen themselves, remain competitive against larger businesses that are able to offer affordable health insurance, and in turn bolster the entire economy. We encourage our colleagues to join us in supporting this bill, and to continue to work to address the issues facing the small business community. Thank you. I ask unanimous consent that the text of our bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today to introduce a bill that will offer small businesses greater flexibility in complying with their tax obligations. This legislation is one of a series of proposals that, once enacted, will reduce not only the amount of taxes that small businesses pay, but also will reduce the administrative burden that saddles small companies when trying to comply with the tax laws. The proposal that I am introducing today will permit start-up small business owners to use a taxable year other than the calendar year if they generally earn fewer than $5 million during the tax year. Before I talk about the specifics of this particular provision, let me first explain why it is so critical that we begin evaluating how we can reduce the administrative burden of the tax code. As is well-known small businesses are the backbone of our Nation's economy. According to the Small Business Administration, small businesses represent 99 percent all employers, employ 51 percent of the private-sector workforce, and contribute 51 percent of the private sector output. Yet, despite the fact that small businesses are the real job-creators for our Nation's economy, the current tax system is placing an entirely unreasonable burden on them when trying to satisfy their tax obligations. The current tax code imposes a large, and expensive, burden on all taxpayers in terms of satisfying their reporting and recordkeeping obligations. The problem, though, is that small companies are disadvantaged most in terms of the money and time spent in satisfying their tax obligation. For example, according to the Small Business Administration's Office of Advocacy, small businesses spend an astounding 8 billion hours each year complying with government reports. They also spend more than 80 percent of this time on completing tax forms. What's even more troubling is that companies that employ fewer than 20 employees spend nearly $1,304 per employee in tax compliance costs; an amount that is nearly 67 percent more than larger firms. These statistics are disturbing for several reasons. First, the fact that small businesses are being required to spend so much money on compliance costs means they have fewer earnings to reinvest into their business. This, in turn, means that they have less money to spend on new equipment or on worker training, which unfortunately has an adverse effect on their overall production and the economy as a whole. Second, the fact that small business owners are required to make such a sizeable investment of their time into completing paperwork means they have less time to spend on doing what they do best--namely running their business and creating jobs. Let me be clear that I am in no way suggesting that small business owners are unique in having to pay income taxes, and I'm certainly not expecting them to receive a free pass. What I'm asking for, though, is a change to make the tax code fairer and simpler so that small companies can satisfy this obligation without having to expend the amount of resources that they do currently. For that reason, the package of proposals that I have introduced will provide not only targeted, affordable tax relief to small business owners, but also simpler rules under the tax code. By simplifying the tax code, small business owners will be able to satisfy their tax obligation in a cheaper, more efficient manner, allowing them to be able to devote more time and resources to their business. Specifically, the proposal that I am introducing today will permit more taxpayers to use the taxable year most suitable to their business cycle. Until 1986, businesses could elect the taxable year-end that made the most economic sense for the business. In 1986, Congress passed legislation requiring partnerships and S corporations, many of which are small businesses, to adopt a December 31 year-end. The tax code does provide alternatives to the calendar year for small businesses, but the compliance costs and administrative burdens associated with these alternatives prove to be too high for most small businesses to utilize. Meanwhile, C corporations, as large corporations often are, receive much more flexibility in their choice of taxable year. A C corporation can adopt either a calendar year or any fiscal year for tax purposes, as along as it keeps its books on that basis. This creates the unfair result of allowing larger businesses with greater resources greater flexibility in choosing a taxable year than smaller firms with fewer resources. This simply does not make sense to me. My bill changes these existing rules so that more small businesses will be able to use the taxable year that best suits their business. Importantly, these changes will not reduce the amount of taxes a small business pays by even one dollar. The overall amount of taxes a qualifying small business pays will remain the same. This bill simply permits more taxpayers to use a taxable year other than the calendar year and makes tax compliance easier. This bill is good policy and common sense. I look forward to working with the bill's cosponsor, Senator Lincoln, in providing small businesses with more flexibility in meeting their tax obligations. I ask unanimous consent that the text of the bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today to introduce a bill that will offer small businesses greater flexibility in complying with their tax obligations. This legislation is one of a series of proposals that, once enacted, will reduce not only the amount of taxes that small businesses pay, but also will reduce the administrative burden that saddles small companies when trying to comply with the tax laws. The proposal that I am introducing today will permit start-up small business owners to use a taxable year other than the calendar year if they generally earn fewer than $5 million during the tax year. Before I talk about the specifics of this particular provision, let me first explain why it is so critical that we begin evaluating how we can reduce the administrative burden of the tax code. As is well-known small businesses are the backbone of our Nation's economy. According to the Small Business Administration, small businesses represent 99 percent all employers, employ 51 percent of the private-sector workforce, and contribute 51 percent of the private sector output. Yet, despite the fact that small businesses are the real job-creators for our Nation's economy, the current tax system is placing an entirely unreasonable burden on them when trying to satisfy their tax obligations. The current tax code imposes a large, and expensive, burden on all taxpayers in terms of satisfying their reporting and recordkeeping obligations. The problem, though, is that small companies are disadvantaged most in terms of the money and time spent in satisfying their tax obligation. For example, according to the Small Business Administration's Office of Advocacy, small businesses spend an astounding 8 billion hours each year complying with government reports. They also spend more than 80 percent of this time on completing tax forms. What's even more troubling is that companies that employ fewer than 20 employees spend nearly $1,304 per employee in tax compliance costs; an amount that is nearly 67 percent more than larger firms. These statistics are disturbing for several reasons. First, the fact that small businesses are being required to spend so much money on compliance costs means they have fewer earnings to reinvest into their business. This, in turn, means that they have less money to spend on new equipment or on worker training, which unfortunately has an adverse effect on their overall production and the economy as a whole. Second, the fact that small business owners are required to make such a sizeable investment of their time into completing paperwork means they have less time to spend on doing what they do best--namely running their business and creating jobs. Let me be clear that I am in no way suggesting that small business owners are unique in having to pay income taxes, and I'm certainly not expecting them to receive a free pass. What I'm asking for, though, is a change to make the tax code fairer and simpler so that small companies can satisfy this obligation without having to expend the amount of resources that they do currently. For that reason, the package of proposals that I have introduced will provide not only targeted, affordable tax relief to small business owners, but also simpler rules under the tax code. By simplifying the tax code, small business owners will be able to satisfy their tax obligation in a cheaper, more efficient manner, allowing them to be able to devote more time and resources to their business. Specifically, the proposal that I am introducing today will permit more taxpayers to use the taxable year most suitable to their business cycle. Until 1986, businesses could elect the taxable year-end that made the most economic sense for the business. In 1986, Congress passed legislation requiring partnerships and S corporations, many of which are small businesses, to adopt a December 31 year-end. The tax code does provide alternatives to the calendar year for small businesses, but the compliance costs and administrative burdens associated with these alternatives prove to be too high for most small businesses to utilize. Meanwhile, C corporations, as large corporations often are, receive much more flexibility in their choice of taxable year. A C corporation can adopt either a calendar year or any fiscal year for tax purposes, as along as it keeps its books on that basis. This creates the unfair result of allowing larger businesses with greater resources greater flexibility in choosing a taxable year than smaller firms with fewer resources. This simply does not make sense to me. My bill changes these existing rules so that more small businesses will be able to use the taxable year that best suits their business. Importantly, these changes will not reduce the amount of taxes a small business pays by even one dollar. The overall amount of taxes a qualifying small business pays will remain the same. This bill simply permits more taxpayers to use a taxable year other than the calendar year and makes tax compliance easier. This bill is good policy and common sense. I look forward to working with the bill's cosponsor, Senator Lincoln, in providing small businesses with more flexibility in meeting their tax obligations. I ask unanimous consent that the text of the bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise to introduce legislation that would address the crisis that faces small businesses when it comes to purchasing quality, affordable health insurance. This isn't a new crisis. Nearly 46 million Americans are uninsured, and we've now experienced double digit percentage increases in health insurance premiums in four of the past five years. Last year, I introduced the Small Business Health Fairness Act, S. 406, which would allow small businesses to pool together, through national Association Health Plans, also known as Small Business Health Plans, SBHPs, to offer uniform health insurance products to their employees. Small businesses would receive the same benefits currently enjoyed by larger employers and union plans under Federal law. I am encouraged by the considerable progress that has been made on SBHPs in this Senate. I would like to commend Senator Mike Enzi for his continuing commitment to the SBHP issue, and for marking-up SBHP legislation in the Health, Education, Labor, and Pensions Committee. Plain and simple, the Senate must take up--and pass--SBHP legislation to provide small businesses with much-needed, long-awaited relief. While I continue to believe that SBHPs are a crucial solution to the small business health insurance crisis, we in Congress must look for other means by which to encourage small businesses to offer health insurance. I believe that we should do this by: 1. providing targeted tax incentives that encourage the smallest businesses to offer health insurance; and 2. using the tax code to inject much-needed competition in dysfunctional State small group markets. The Small Business Health Insurance Relief Act of 2006 would achieve both of these objectives. First, I propose a targeted tax credit that would encourage our Nation's smallest businesses to offer health insurance as a workplace benefit. Study after study tells us that the smallest businesses are the ones least likely to offer insurance and most in need of assistance. According to the Employee Benefit Research Institute, of the working uninsured, who make up 83 percent of our Nation's uninsured population, 60.6 percent either work for a small business with fewer than 100 employees or are self-employed. Small businesses in my own State of Maine have it particularly bad. Last summer, the Maine Center for Economic Policy, MECEP, reported a 15 percent average premium increase for small businesses in Maine over the past three years. The MECEP report also highlighted several other alarming trends: Half of the small businesses surveyed raised deductibles over the past three years. Over one quarter have either increased co-payments or reduced coverage, or have delayed pay raises to cover increased costs. Eight percent of Maine's small businesses have dropped health coverage entirely. Furthermore, coverage trends for small businesses are getting worse, not better. According to the Kaiser Family Foundation's Employer Health Benefits 2005 Annual Survey: only 47 percent of the smallest employers, those with 3 to 9 workers, now offer health insurance as a workplace benefit. This is down from 52 percent in 2004, and 58 percent in 2002. In sharp contrast, 98 percent of larger businesses, those with 200 or more workers, offer health insurance as a benefit. The targeted tax incentives in my bill would help ensure that our Nation's smallest businesses can offer health insurance--in the same way that larger businesses currently do. My legislation targets small businesses with 50 or fewer employees because these are the small businesses most desperately in need. The maximum tax credit under the proposal would be $1,500 for single coverage and $3,000 for family coverage. The tax credit would phase out as a business increases in size. Notably, my proposal is neutral between types of insurance: small businesses and their employees can choose what works best for them--traditional employer-sponsored health insurance or health savings accounts, HSAs. Under my legislation, a small business with five employees would be eligible for a per-participant tax credit of $3,000 for a family health insurance plan, and a potential total tax credit of $15,000. Small businesses cite escalating cost as the number one impediment to providing health insurance. Putting $15,000 in the hands of a small business owner could certainly help to overcome this barrier. My proposal would also allow small businesses to establish cafeteria tax plans so that they can provide their employees with nontaxable benefits. Under current law, many larger businesses and the Federal Government enable their employees to purchase health insurance and other qualified benefits with tax-free dollars. However, small businesses face difficulty in offering cafeteria plans because they must satisfy strict nondiscrimination rules under the tax code. Although these non-discrimination rules serve a legitimate purpose, many small businesses simply cannot satisfy those mechanical rules because, through no fault of their own, they have relatively few employees and a high proportion of owners considered highly compensated individuals. This makes it difficult for small firms to offer benefits through a cafeteria plan. It is vital that we allow small businesses to offer their employees nontaxable benefits so that they can effectively compete with their larger counterparts. Small businesses are the engine that drives economic growth and job creation, and it is critical that we put them on an equal footing with large businesses in the quest for talent. Second, my legislation also would provide a necessary reform of the State small group health insurance markets. Plain and simple, there is no competition in the small group market, and coverage and affordability are real problems. I recently requested, along with Senators Christopher Bond and Jim Talent, that the Government Accountability Office, GAO, survey: 1. the number of insurance carriers licensed in the small group market; 2. the largest carriers and their market share; 3. the market share of the five largest carriers in the small group market; and 4. the combined market share of all Blue Cross and Blue Shield, BCBS, carriers in each State. The GAO reported a frightening consolidation of control over State insurance markets. The five largest carriers now have more than 75 percent market share in 26 States, up from 19 in 2002, and more than 90 percent market share in 12 States, as opposed to 7 in 2002. In Maine, BCBS carriers now have a 63 percent market share, up from 39.1 percent in 2002, and the five largest carriers have a 98 percent share. Across the country, BCBS carriers now control 44 percent of small group market, up from 34 percent in 2002. To counter this market consolidation, my legislation would provide insurers with a 50 percent tax deduction for claims and expenses incurred in serving the small group market and Small Business Health Plans, SBHPs. I believe this incentive will serve as a powerful motivator for new insurers to enter this dysfunctional marketplace. My legislation would reduce barriers insurance companies face in entering new markets. Specifically, it would provide a tax credit to defray the cost of State licensing requirements. Under the proposal, an insurer can claim a tax credit of the lesser of 50 percent of qualified costs or $10,000 to cover the administrative costs and expenses incurred in satisfying State licensing requirements. Available with respect to each State in which an insurer operates, this incentive should encourage a host of insurers to provide products in the State small group market. Finally, my legislation would establish a pilot grant program for Small Business Development Centers to provide educational programs to small businesses designed to increase awareness regarding health insurance options available in their areas. Recent research has found that with a short, less than 10 minute education session, organizations can increase small business knowledge and interest in offering health insurance by about 33 percent. Together with SBHP legislation, I believe that these proposals could help to solve the small business health insurance crisis. I look forward to working in a bipartisan fashion, with my colleagues on both the Finance and HELP Committees to push these proposals through the Senate. The time for words has long passed. Now is a time for action. The Senate must take action this year to provide small businesses with much-needed relief. I ask unanimous consent that the text of my bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise to introduce legislation that would address the crisis that faces small businesses when it comes to purchasing quality, affordable health insurance. This isn't a new crisis. Nearly 46 million Americans are uninsured, and we've now experienced double digit percentage increases in health insurance premiums in four of the past five years. Last year, I introduced the Small Business Health Fairness Act, S. 406, which would allow small businesses to pool together, through national Association Health Plans, also known as Small Business Health Plans, SBHPs, to offer uniform health insurance products to their employees. Small businesses would receive the same benefits currently enjoyed by larger employers and union plans under Federal law. I am encouraged by the considerable progress that has been made on SBHPs in this Senate. I would like to commend Senator Mike Enzi for his continuing commitment to the SBHP issue, and for marking-up SBHP legislation in the Health, Education, Labor, and Pensions Committee. Plain and simple, the Senate must take up--and pass--SBHP legislation to provide small businesses with much-needed, long-awaited relief. While I continue to believe that SBHPs are a crucial solution to the small business health insurance crisis, we in Congress must look for other means by which to encourage small businesses to offer health insurance. I believe that we should do this by: 1. providing targeted tax incentives that encourage the smallest businesses to offer health insurance; and 2. using the tax code to inject much-needed competition in dysfunctional State small group markets. The Small Business Health Insurance Relief Act of 2006 would achieve both of these objectives. First, I propose a targeted tax credit that would encourage our Nation's smallest businesses to offer health insurance as a workplace benefit. Study after study tells us that the smallest businesses are the ones least likely to offer insurance and most in need of assistance. According to the Employee Benefit Research Institute, of the working uninsured, who make up 83 percent of our Nation's uninsured population, 60.6 percent either work for a small business with fewer than 100 employees or are self-employed. Small businesses in my own State of Maine have it particularly bad. Last summer, the Maine Center for Economic Policy, MECEP, reported a 15 percent average premium increase for small businesses in Maine over the past three years. The MECEP report also highlighted several other alarming trends: Half of the small businesses surveyed raised deductibles over the past three years. Over one quarter have either increased co-payments or reduced coverage, or have delayed pay raises to cover increased costs. Eight percent of Maine's small businesses have dropped health coverage entirely. Furthermore, coverage trends for small businesses are getting worse, not better. According to the Kaiser Family Foundation's Employer Health Benefits 2005 Annual Survey: only 47 percent of the smallest employers, those with 3 to 9 workers, now offer health insurance as a workplace benefit. This is down from 52 percent in 2004, and 58 percent in 2002. In sharp contrast, 98 percent of larger businesses, those with 200 or more workers, offer health insurance as a benefit. The targeted tax incentives in my bill would help ensure that our Nation's smallest businesses can offer health insurance--in the same way that larger businesses currently do. My legislation targets small businesses with 50 or fewer employees because these are the small businesses most desperately in need. The maximum tax credit under the proposal would be $1,500 for single coverage and $3,000 for family coverage. The tax credit would phase out as a business increases in size. Notably, my proposal is neutral between types of insurance: small businesses and their employees can choose what works best for them--traditional employer-sponsored health insurance or health savings accounts, HSAs. Under my legislation, a small business with five employees would be eligible for a per-participant tax credit of $3,000 for a family health insurance plan, and a potential total tax credit of $15,000. Small businesses cite escalating cost as the number one impediment to providing health insurance. Putting $15,000 in the hands of a small business owner could certainly help to overcome this barrier. My proposal would also allow small businesses to establish cafeteria tax plans so that they can provide their employees with nontaxable benefits. Under current law, many larger businesses and the Federal Government enable their employees to purchase health insurance and other qualified benefits with tax-free dollars. However, small businesses face difficulty in offering cafeteria plans because they must satisfy strict nondiscrimination rules under the tax code. Although these non-discrimination rules serve a legitimate purpose, many small businesses simply cannot satisfy those mechanical rules because, through no fault of their own, they have relatively few employees and a high proportion of owners considered highly compensated individuals. This makes it difficult for small firms to offer benefits through a cafeteria plan. It is vital that we allow small businesses to offer their employees nontaxable benefits so that they can effectively compete with their larger counterparts. Small businesses are the engine that drives economic growth and job creation, and it is critical that we put them on an equal footing with large businesses in the quest for talent. Second, my legislation also would provide a necessary reform of the State small group health insurance markets. Plain and simple, there is no competition in the small group market, and coverage and affordability are real problems. I recently requested, along with Senators Christopher Bond and Jim Talent, that the Government Accountability Office, GAO, survey: 1. the number of insurance carriers licensed in the small group market; 2. the largest carriers and their market share; 3. the market share of the five largest carriers in the small group market; and 4. the combined market share of all Blue Cross and Blue Shield, BCBS, carriers in each State. The GAO reported a frightening consolidation of control over State insurance markets. The five largest carriers now have more than 75 percent market share in 26 States, up from 19 in 2002, and more than 90 percent market share in 12 States, as opposed to 7 in 2002. In Maine, BCBS carriers now have a 63 percent market share, up from 39.1 percent in 2002, and the five largest carriers have a 98 percent share. Across the country, BCBS carriers now control 44 percent of small group market, up from 34 percent in 2002. To counter this market consolidation, my legislation would provide insurers with a 50 percent tax deduction for claims and expenses incurred in serving the small group market and Small Business Health Plans, SBHPs. I believe this incentive will serve as a powerful motivator for new insurers to enter this dysfunctional marketplace. My legislation would reduce barriers insurance companies face in entering new markets. Specifically, it would provide a tax credit to defray the cost of State licensing requirements. Under the proposal, an insurer can claim a tax credit of the lesser of 50 percent of qualified costs or $10,000 to cover the administrative costs and expenses incurred in satisfying State licensing requirements. Available with respect to each State in which an insurer operates, this incentive should encourage a host of insurers to provide products in the State small group market. Finally, my legislation would establish a pilot grant program for Small Business Development Centers to provide educational programs to small businesses designed to increase awareness regarding health insurance options available in their areas. Recent research has found that with a short, less than 10 minute education session, organizations can increase small business knowledge and interest in offering health insurance by about 33 percent. Together with SBHP legislation, I believe that these proposals could help to solve the small business health insurance crisis. I look forward to working in a bipartisan fashion, with my colleagues on both the Finance and HELP Committees to push these proposals through the Senate. The time for words has long passed. Now is a time for action. The Senate must take action this year to provide small businesses with much-needed relief. I ask unanimous consent that the text of my bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I stand before my colleagues today to announce the introduction of a bill that will preserve an important resource needed during times of an emergency--free, local, over-the-air radio broadcasting. The Local Emergency Radio Service Preservation Act ensures that terrestrial radio service does not suffer from the entry of subscription-based satellite services into local markets. The most reliable form of communication today is radio. Oftentimes during natural disasters and other emergencies, many forms of communications become unavailable to the public. Wireless systems can be overloaded with calls. Satellite television service is interrupted by extreme weather conditions. Internet service connections are frequently disconnected. In contrast, over-the-air radio is an ubiquitous form of mass media that is available to nearly every car and household in the nation. The system cannot be overloaded and operates well under extreme weather conditions. Radio has been meeting the demands of local communities for nearly a century and is equipped to continue its service well into the next century. In 1997 satellite digital audio radio service, SDARS, was licensed by the Federal Communications Commission, FCC, to provide a national radio programming service. Today satellite radio companies provide their service to consumers on a subscription basis. The cost of the radio equipment needed to receive the service is reasonable for the enthusiast, but too costly for low income households. For many families, satellite radio is not an option. Instead, these people must rely on traditional over-the-air radio for weather, traffic, news and local information. Should satellite companies begin to enter into local markets, going against the original spirit of the license agreement, local radio stations would suffer revenue loss. Advertising dollars are the radio broadcast industry's sole source of revenue. The technology exists for satellite companies to deliver local content, including local advertisements. Satellite industry players have publically stated that local advertising dollars could quickly become a new revenue source. This threat to free radio is a threat to the public interest. The Local Emergency Radio Service Preservation Act eases the threat to radio broadcasting. First the bill prohibits the use of satellite terrestrial repeaters to insert local content into specific local markets. Second, this legislation clarifies that future technologies cannot be used to distribute local satellite programming. Lastly, the act requires the Federal Communications Commission, FCC, to conduct a rulemaking on the distribution of region-specific content on a nationwide basis.

Ms. SNOWE

Ms. SNOWE. Mr. President, the amendment which Senator Wyden and I are offering will address the high cost of our Medicare prescription drug benefit. It does this not by price setting or mandating a drug formulary, but by providing our drug plans with the resource of the HHS Secretary. Since Medicare is paying 75 percent of a beneficiary's drug costs from $250 up to $2,250 in spending, and the cost of this benefit over the next ten years is estimated to exceed $700 billion, it is simply common sense that the Secretary should be able to assist when the plans need help. Our amendment states two circumstances in which the Secretary must participate in drug price negotiation. If the Secretary needs to provide a drug plan due to lack of competition, he must negotiate competitive prices for his own ``fallback'' plan. And just as reasonable, if a drug plan requests his assistance in negotiations, then he should be responsive to that need. The Congressional Budget Office has told us that when a drug lacks competition, a manufacturer may not negotiate in good faith. So when a plan calls for help in this circumstance, the Secretary shouldn't be forced to be unresponsive. As CBO has described, the savings could be substantial. For example, if 29 million beneficiaries enroll in Part D, and 1 in 4 used a single source ``blockbuster'' drug such as a lipid- lowering drug costing $250 per month, the annual cost for that single product would exceed $21 billion. If the Secretary could help plans raise the discount on such a drug by just 10 percent, the annual savings would amount to $2.18 billion. This illustrates how in this special situation, the role of the Secretary could be vital. Let me be clear--this amendment does not allow price-setting. The language is clear: ``the Secretary may not require a particular formulary or institute a price structure for the reimbursement of Part D drugs.'' The AMA, the AARP, and many other are advocating for this authority, because they want to protect our seniors access to drugs as much as we do. I urge my colleagues to join us in assuring we keep our promise to our seniors.

Ms. SNOWE

Ms. SNOWE. Mr. President, I stand before my colleagues today to announce the introduction of a bill that will preserve an important resource needed during times of an emergency--free, local, over-the-air radio broadcasting. The Local Emergency Radio Service Preservation Act ensures that terrestrial radio service does not suffer from the entry of subscription-based satellite services into local markets. The most reliable form of communication today is radio. Oftentimes during natural disasters and other emergencies, many forms of communications become unavailable to the public. Wireless systems can be overloaded with calls. Satellite television service is interrupted by extreme weather conditions. Internet service connections are frequently disconnected. In contrast, over-the-air radio is an ubiquitous form of mass media that is available to nearly every car and household in the nation. The system cannot be overloaded and operates well under extreme weather conditions. Radio has been meeting the demands of local communities for nearly a century and is equipped to continue its service well into the next century. In 1997 satellite digital audio radio service, SDARS, was licensed by the Federal Communications Commission, FCC, to provide a national radio programming service. Today satellite radio companies provide their service to consumers on a subscription basis. The cost of the radio equipment needed to receive the service is reasonable for the enthusiast, but too costly for low income households. For many families, satellite radio is not an option. Instead, these people must rely on traditional over-the-air radio for weather, traffic, news and local information. Should satellite companies begin to enter into local markets, going against the original spirit of the license agreement, local radio stations would suffer revenue loss. Advertising dollars are the radio broadcast industry's sole source of revenue. The technology exists for satellite companies to deliver local content, including local advertisements. Satellite industry players have publically stated that local advertising dollars could quickly become a new revenue source. This threat to free radio is a threat to the public interest. The Local Emergency Radio Service Preservation Act eases the threat to radio broadcasting. First the bill prohibits the use of satellite terrestrial repeaters to insert local content into specific local markets. Second, this legislation clarifies that future technologies cannot be used to distribute local satellite programming. Lastly, the act requires the Federal Communications Commission, FCC, to conduct a rulemaking on the distribution of region-specific content on a nationwide basis.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today to commend the President of Cyprus, Tassos Papadopoulos, for promoting a new U.N.-sponsored initiative to resolve the division of the island of Cyprus. Cyprus has been divided for more than 30 years, following a 1974 invasion by Turkey. The time is ripe for resolving this longstanding split, and I applaud President Papadopoulos for taking the initiative to end the division. On February 28, 2006, President Papadopoulos met with U.N. Secretary- General Kofi Annan and proposed that the U.N. appoint a special envoy for Cyprus to lay the groundwork for negotiations to end the division of Cyprus. President Papadopoulos also proposed a number of cross- community confidence-building measures to strengthen the foundation for reunification. After the meeting, Secretary-General Annan and President Papadopoulos issued a joint statement agreeing on the resumption of bicommunal discussions on the technical aspects necessary to prepare the ground for full peace negotiations. There have been significant developments in Cyprus over the past 2 years that make this the right time for reunification. Nearly 2 years ago, Cyprus joined the European Union, and in that time, the Government of Cyprus has promoted the opening up of several crossing points through the U.N.-patrolled cease-fire line. As a result, the Government of Cyprus has transformed the everyday realities on Cyprus to that unlike any other divided nation. Unlike other divisions with which my colleagues may be familiar, such as East and West Berlin, the people of Cyprus are able to cross the dividing line to visit their ancestral lands, work, and shop. Indeed, since the opening of crossing points, there have been more than 9 million incident-free crossings. Every day, more than 10,000 Turkish Cypriots cross from the occupied territory to the government-controlled area to work. This increased economic activity and trade across the dividing line has contributed in more than doubling the per-capita income of the Turkish-Cypriots in the past 2 short years. As confidence building measures, President Papadopoulos has proposed to take additional steps to build on the gains of the past 2 years. The Government of Cyprus has already proposed the reopening of the occupied Port of Famagusta and the return of the adjacent city of Varosha to its original inhabitants; a ``ghost'' city that has been abandoned since the 1974 Turkish invasion. Famagusta would operate under the joint administration of the two communities, bringing the two communities closer together, and also under the EU's regulatory auspices, enhancing trade opportunities. President Papadopoulos has also proposed to open additional crossing points to make travel and trade between the two communities easier. Last week, the European Union announced economic aid to the Turkish Cypriots of 139 million eurodollars--approximately $165 million. The Government of Cyprus had pushed strongly for this aid, despite unfortunate attempts by others to attach preconditions and political stipulations to its release. This aid from the EU further demonstrates the positive effect of Cyprus's EU membership on the prospects for reunification. I applaud the steps that the Government of Cyprus and President Papadopoulos have taken to encourage a just and lasting solution to the Cyprus division. His meeting with Secretary-General Annan is a positive first step toward the resumption of reunification negotiations. On Cyprus today, the two communities are closer together than at any time since the invasion. Although prior reunification efforts have failed, the developments of the past 2 years offer the greatest prospect for a peaceful and lasting solution to the division.

Ms. SNOWE

Ms. SNOWE. I am glad to answer the Senator's question. Obviously, I cannot forecast the future in terms of the extent of the needs that are required by any State. But I remain unchallenged when it comes to my fiscal credentials in the Senate. I have been more than happy to work with the Senator in terms of meeting our fiscal responsibilities on this issue and on any other question that benefits every State in America. From that standpoint, I would be more than happy to work with the Senator.

Ms. SNOWE. Mr. President, do I have any time remaining?

Ms. SNOWE. Mr. President, I am offering an amendment that essentially preserves the emergency funding that has been consistently part of the low-income fuel assistance program. I am offering my amendment as a second degree to the Kyl amendment that removes the emergency funding that has been part of this program for the last 5 years. So it would be a marked departure from historical practice and, unfortunately, a 100- percent appropriation through a formula for low-income fuel assistance would not allow the President to respond to any situation that is clearly an emergency. Last fall, the President had the discretion, because we had an emergency funding under the legislation, under low-income fuel assistance, that, in fact, was supported by the Senate and the House and the President, and it became law a month ago that basically embraced the approach that we have here today pending before the Senate. The Senator from Arizona and the Senator from Nevada are suggesting that somehow we no longer need any emergency funding, that we will distribute all of those funds through a specific formula. But we cannot predict where or when that emergency will occur, denying the President the ability to respond to an emergency. Last fall the President had the discretion, because he had this emergency funding, to provide $14 million to Louisiana, Mississippi, Alabama, and to Florida as a result of the hurricane damage. The President had that capability. That will be removed by the underlying amendment. It simply does not make any sense to say that we should have a formula in the distribution of emergency funding when we don't know where the emergency is going to occur and when. We cannot predict that. That is why the President has it in a contingency fund so in the event that there are such emergencies, we can release that funding. That is what it has always been about. This is a historical departure from previous precedent, policy, and practice; in fact, a practice and policy that was embraced and endorsed by the Senate and by the House of Representatives and the President a month ago that became law in the Deficit Reduction Act. I am surprised we are here today to suggest that somehow we should now no longer have emergency funding, no longer have any contingency funding. In fact, the Senator from Nevada says that there is no remaining funding for warm States. I should mention to the Senator from Nevada that the President has set aside $101 million in fiscal year 2006 emergency funds. This money has not been released. In fact, it is at the disposal of the administration to release in the event that there are potential emergencies this summer, so that there is money. And certainly we can address the concerns of the Senator from Nevada if he feels it is not sufficient. I, for one, felt we should increase the funding for the low-income fuel assistance program because the real value of this program has eroded over the last two decades. It essentially has the same value as it did in 1983. In 1983, it provided 50 percent of the cost of energy for a family. Today it provides 19 percent. That is not accommodating all the demands, all the people who are on the list in various States across this country. Thirty-four Governors wrote a letter to the leadership of both the House and Senate saying how they have run out of funds. Even in addition to the significant State contributions for this purpose, they have run out of money. And rightfully so, understanding the cost of energy today. Now some have suggested--and they have suggested it from their positions in Arizona, in Nevada, in Alabama--that it has been a mild winter. But come to Maine and tell us about it being a mild winter. Then add to that the 30- to 50-percent increase in the cost of home heating oil and natural gas, in addition to the increases this last year. The amendment I am offering today preserves the emergency funding. It provides for the formula funding as supported by the Senator from Nevada which I supported. It has two tiers of funding. One allows for emergencies and the other allows for emergency distributions. I regret that last week there was a chart distributed that misrepresented the distribution of funds. That was for that snapshot in time when there were emergencies so those States benefited from the release of funding because they had emergencies. But if you looked at it the next month, you would have discovered that there would have been a different distribution because we don't know when or where, nor can we possibly predict where, the emergencies will occur. So the White House supports this approach, supports the emergency funding. It supports the 50-50 distribution in my amendment that I am offering as a second degree to the Kyl amendment which essentially does away with the emergency funding and provides 100 percent through a formula. So any State that requires support from the emergency funds under this program would be denied if such an emergency should arise. I believe my second degree is a positive step in providing additional assistance for those in need of energy assistance this year. The Secretary of Health and Human Services supports this amendment to advance the funding, the 2007 funds to 2006, in order to provide for this billion dollar increase. We are just advancing the funding. This is budget neutral because there is no net increase in Federal spending. It is important to understand the facts. There is no net increase in Federal funding. We are advancing the billion dollars. We have compromised. We asked for $2 billion, which is what I thought we agreed to before we adjourned for the Christmas recess on December 23, that we would have a 50-50 percent allocation, 50 percent to emergency, 50 percent to formula. Here we are today, now having to say: You know, we can't afford the billion dollars because it increases spending, which it does not, and now we decide that we don't need emergency funding for this purpose, and we will allocate all the funding through a formula so that the States that depend upon this money in the event there is an emergency will not be able to have it. I hope the Senate will support my amendment to the Kyl amendment. My amendment is fair. It is equitable. It is reasonable. This legislation should not be divisive. This isn't regional legislation. It is for all of the country. It is to benefit any region of the country. It is designed to ensure that regardless of where you live in America, if for some reason you have an emergency that affects your ability to have access to natural gas, to propane, to home heating oil, to the need for air-conditioning, for electricity, that this emergency funding will help to mitigate the impact of those disasters. That is what this is all about. I should add, it is very specific in the mandate in law in terms of how the contingency funds are used and where do these go. I should quote from the law and what it means. It says: To meet the additional home energy assistance needs of one or more States arising from a natural disaster or other emergency. That is why it simply makes no sense to distribute emergency funds through a formula because how do you know who is going to have an emergency? Why would you be distributing money to States that don't have an emergency for that distribution? That wasn't the attempt of this program. I would hope that we could come to an agreement on this question. At the very least, I would hope that the Senate would endorse my approach, which is a second-degree amendment that preserves the emergency funding and provides for a 50-50 allocation between emergency and formulas. I think that is patently fair to all of the States, all of the regions in this country. I yield the floor.

Ms. SNOWE. That is enough to respond. The Senator from Nevada is incorrect with respect to my amendment and the way in which States it would benefit. Twenty-nine States would gain under my amendment. Unfortunately, the information the Senator is providing is inaccurate, as was the chart distributed last week that fundamentally misrepresented not only how this funding was distributed, but the fact is it was done on the basis of an emergency. If all 50 States had the benefit of the emergency funding, it is because emergencies existed in those States. That is the point. It is at the discretion of the President to distribute and release that funding in order to enable the President to respond immediately to any natural disasters or emergencies. That is what it is all about. Under a formula for funding, States would receive it irrespective of whether an emergency occurred in their States. So 29 States would gain under my amendment. It is unfortunate that we are where we are, talking about this in that fashion, because the Senator released a chart last week that suggested this is the historical pattern. If it is the historical pattern, it is because there were emergencies. It wasn't distributed just for the sake of distributing it that way. It was done because there were emergencies in those particular States.

Ms. SNOWE

Ms. SNOWE. Mr. President, I wish to inform Members that the Committee on Small Business & Entrepreneurship will hold a public hearing to consider, ``The President's fiscal year 2007 Budget Request and Legislative Proposals for the SBA'' on Thursday, March 9, 2006 at 10 a.m., in room 428A Russell Senate Office Building. The Honorable Hector Barreto, SBA Administrator, will testify. The Chair urges every member to attend. Subcommittee on National Parks

Ms. SNOWE

Ms. SNOWE. Mr. President, first of all, I thank the majority leader for his considerable effort, patience, and perseverance in bringing this legislation to the floor on the basis of the commitment which the leader made in December prior to our adjournment that we would have this legislation to increase low-income fuel assistance for those States that clearly need it, given the rising prices of home heating oil and natural gas, given the fact that we are in the midst of the winter, and given the fact that this has a major impact on families across the country. I hope we will get beyond today, beyond the cloture vote and be able to secure the additional funding that is so essential to so many of the States and to so many individuals and families who depend upon it. It is absolutely critical that we provide these funds for this fiscal year in order to prepare for the summer and also to address the contingency necessity of providing additional funding this winter. I am joined in my efforts and I wish to thank my colleague, Senator Coleman, my colleague from Maine, Senator Collins, Senator Grassley, Senator Sununu, Senator Specter, and Senator Santorum, as well as Senator Smith and Senator Kerry. I express my deep appreciation for their support. I first want to address some of the criticisms that were engendered last week because I think there has been a lot of misunderstanding and misinterpretation about exactly where we stand today and what the facts are. First of all, my underlying bill shifts the funding from fiscal year 2007 to 2006. There is an additional $1 billion for the purposes of ``contingency'' funding, otherwise known as emergency funding for emergency purposes. So it is budget neutral. We are just advancing it 1 year because of the unusual circumstances and because of events between rising oil prices and a difficult winter which have eroded the value of the low-income fuel assistance. This would help to make it more consistent with the authorization level because of the dire need in so many States across the country, including my own. It does nothing to modify how those funds are disbursed to the States. The Senate decided 1 month ago when it passed the Deficit Reduction Act that 25 percent of the $1 billion would be appropriated through a formula funding and 75 percent would go to emergency contingency funding. The Congress decided--including the Senate, and it became law just a month ago--that the President would continue to have the emergency funding capability in order to disburse that part of the funding, 75 percent to those States that needed it at that moment in time because there was an emergency. Emergencies are just that--emergencies. What the critics are saying about my approach is they now want to change it for the first time ever and take away the capability of having emergency funding under the low-income fuel assistance. It doesn't make sense. Because the States are facing an emergency, they ought to be able to have their funding. That would be taken away by the Kyl amendment, and it would be distributed to States irrespective of whether they need it, irrespective of the fact that no emergency occurred in their State. I understand that under the low-income fuel assistance program, you have part emergency and part formula. That is what it is all about. All my underlying bill says is advance the funding from 2007 to 2006 for $1 billion. So we are not increasing the net level of funding for low-income fuel assistance. We have already agreed to it in the budget. It is not increasing spending. It is budget neutral. I don't change the way it is distributed. I am doing just exactly what was dictated by the U.S. Senate, and it became law in the Deficit Reduction Act a month ago. Now we are saying let us change the entire formula, let us change the entire approach through the Kyl amendment by distributing all of the funds through a formula and we will have no emergency funding. Let me remind my colleagues that just last fall, we had four States that benefited from the emergency funding as a result of the hurricane. Alabama received $2 million; Florida, $1.35 million; Louisiana, $12 million; Mississippi $11.75 million--exactly because it was an emergency. The President had the authority, had the discretion to disburse those funds from the contingency funds under the low-income fuel assistance program. Under the Kyl amendment, the President wouldn't have that capability. It would be given to States that didn't experience the hurricane, that didn't have an emergency. We would not be able to have any emergency funding if we passed the Kyl amendment. I hope the Senate will continue the way in which we have approached it in the past. I hope we pass the underlying bill at the very least to advance that funding. Emergency contingency funds exist because we cannot predict the weather, whether it is in the South or the Northeast or the West. We can't predict. That is why we created an emergency fund under low- income fuel assistance. Now, for the first time ever, we take away that capability. I think it is important for my colleagues to understand what is at stake. All of the funding under low-income fuel assistance would be distributed according to a formula. There would be no separate funding for emergency purposes as we provided in the gulf last fall. So four States were able to benefit from the emergency distribution as a result of the President's action. We need that discretionary capability because we are not weather forecasters. We do not know what will happen in America wherever it is going to happen. This is not a regional program. This benefits all 50 States. In fact, in January 2005, in looking at the distribution, all 50 States historically have benefited at some point from the emergency funding. Unfortunately, on Thursday night there was a chart distributed in the Senate that was misrepresentative of the facts. Even the Congressional Research Service said it was misleading. The fact is, it did not portray the facts. It showed a distribution of the funds in January 2005 according to the emergency funding at that moment in time. But if you looked at it in February or March or April or this year, it might be radically different because the emergencies might have occurred elsewhere. That distribution was for that moment in time because of the emergencies that resulted. That is not a constant pattern of distribution. It was a misleading chart. I don't blame my colleagues for voting for the interests of their respective States, absolutely. But I want my colleagues to realize and understand that chart was misleading. It does not represent what the emergency funding is all about. We cannot predict an emergency. So there were emergencies back in January 2005 that represented those distributions, but that is not the way it happens all the time because we do not know when the emergencies are going to occur. I regret that chart was distributed on the basis that it represents how these funds are circulated and dispensed according to the States. They are dispensed according to need and necessity. That is what the emergency funding is all about. It is important to realize the value of the low-income fuel assistance program overall. In fact, it is one that many of the States have come to depend on, rightfully. I was in the House of Representatives when we first created this program during an energy crisis back in 1979 on the essential basis of helping to mitigate people's fuel bills, particularly for the low income and those who are disadvantaged who cannot possibly pay for the total cost of their oil bills, or in the summer for air-conditioning bills. We know it has profound implications on people's budgets, their inability to meet the rising costs, and especially so this year with 30 to 50 percent increases in their energy bills. That is in addition to the increases that occurred last year that were 20 to 30 percent. My constituents in the State of Maine cannot meet those rising prices. We are just attempting to hold them harmless with this funding, to hold them harmless to last year to maintain the status quo. What is the status quo? It is about meeting maybe a quarter of their fuel bill during the winter. Maybe. That depends on the rising price, and as we know, it has been an unpredictable pattern of rising prices. It is a very different thing when we have a price for a barrel of oil at $29 compared to where we are today, with a fluctuation anywhere from $61 or $66 for a barrel of oil. That has a major impact on a family's budget. The value of low-income fuel assistance today from where it was back in the mid-1980s has declined to 19 percent of the real value of this program based on what we have provided under low-income fuel assistance. Back in the 1980s it represented, in real terms, 50 percent to families across this country. Now it has declined to more than 19 percent. There was a survey recently conducted that illustrated this situation and why this program is so critical to so many families in my State and across America. It illustrated this point. It is tragic. It said that 73 percent of households would cut back and even go without other necessities such as food and prescription drugs and mortgage and rent payments to pay for heat. We have seen that illustrated in the State of Maine. We have had some very dire and tragic situations where people have had to be hospitalized because of hypothermia. People say it is a mild winter. I invite Members to come to Maine and tell me about it. It has been a very cold winter. But this is also about the price. In the State of Maine, the price has risen 30 to 50 percent in addition to the price increases last year. Yet the funding for low-income fuel assistance has maintained the status quo. So there has been an erosion of support for families who depend upon this program just barely to meet, perhaps, a quarter of their overall fuel bills depending on the price. That is why I have asked, along with my colleague from Minnesota, Senator Coleman, my colleague from Maine, Senator Collins, and so many others who have cosponsored this legislation, to advance the funding by 1 year. It has already been provided for. It is budget neutral. I heard one possibility of using TANF funds to pay for this. Let me remind my colleagues, under the law, TANF funds are to go for families with children. It does not allow for the use of TANF funds for any other purpose. If States do so for ineligible individuals or families, the State is penalized up to 5 percent. Using TANF funds cannot be allowed for low-income seniors, for example, who otherwise are not eligible under the TANF law. I remind my colleagues that it is important to look at the facts and how the law works and what the implications are. I hope we can get beyond the regionalization of this low-income fuel assistance program bill and look at what is in the best interest of America, irrespective of where the necessity lies. Whether it is in the North, East, South or West, is it a need? Is it vital? Is it important? That is what this legislation is all about. That is why, in the wisdom of the Congress and the President, we established the contingency fund for emergency purposes so the President would have the discretionary authority to distribute those funds on the basis of need at that moment in time. The other funding is distributed according to a formula. I don't change any of that. I do not change existing law. I do not change what this Senate and the House passed that became law a month ago. I do not change that. The amendment offered by Senator Kyl changes all of that and places 100 percent of the funding under the low-income fuel assistance program on a formula basis so there is no emergency funding. I hope my colleagues would vote for cloture so we can proceed. Whether we have amendments remains to be seen. But I am prepared to work with my colleagues, those who have differences of opinion regarding this legislation, to work it out, work it out for their State and what is in the best interest of their State, our States, and for all of America. This should not be a North, South, East, West issue. This should be an issue on the basis of what is right, what is fair, what is required, and what is needed. That is what this is all about. An emergency is an emergency. That is what the emergency funding is. That is what this contingency funding is. I impress upon my colleagues how important it is. It would be a dramatic departure to accept the amendment offered by the Senator from Arizona to redistribute all of the funds through a formula and have no capacity whatever for the President to distribute it on an emergency basis. I remind my colleagues this is not just about Maine or the North, it is about the South and the East and the West. This shouldn't be about a compass. This should be about America. I hope Members will look at the facts. The facts are we distributed funding under the emergency contingency fund last fall to help those States in the gulf as a result of the hurricanes for four States, including Florida, Alabama, Louisiana, and Mississippi. We gave them $15 or $14 million distributed by the President, rightfully, in response to an emergency. Taking the emergency funding and distributing it on the basis of a formula means that States are going to receive funding when there is no emergency. How did that make sense? That was not the intent, ever. The intent was to maintain the separate funding for this capability. That is what it was all about. Eleven States have totally obligated their winter heating fund for this winter, including my own State: Arkansas, California, Georgia, Iowa, Maine, New Hampshire, Oklahoma, Oregon, South Dakota, Rhode Island, Utah, and many of the other States. In fact, 34 Governors have written requesting this additional assistance. They are facing a crisis because applications are up and the funding is down. Increases of at least 20 percent are expected in 15 States alone. The funds expended for the low-income fuel assistance is equivalent to the amount Congress allocated in 1983. That was 23 years ago. What about the price of a barrel of oil? It is important to my State of Maine where 84 percent of the people qualify for low-income fuel assistance, and the State in general is around 80 percent; 80 percent for those dependent on home heating oil. A barrel of oil in 1983 was $29. By the way, the price should be going down as we go away from winter and toward the summer. But there is a dramatic change this year. The price is actually going up. And the future price for oil is much higher in January of 2007. That should raise a serious concern among all Members about the potential for price increases with respect to home heating oil and natural gas. A barrel of oil in 1983 was $29; today it is at least $61 a barrel. That is a difference of $32. We are basically losing the value of low- income fuel assistance because the funding has remained the same. It has declined to about 19 percent of the real value of what it represented when we first created the program almost 27 years ago when I was serving in the House of Representatives. I have offered the underlying bill to advance the funding based on the recent formula. I do not change the funding. It is 75-25, 75 for emergency and 25 percent on formula. I am prepared to offer a 50-50 that would actually allow many States to gain or stay the same if we want to talk about the formula but do not do away with the emergency funding. That would be the first time ever under this program, and we will not have the capability and the President will not have the authority or the prerogative to respond to those States that are in an emergency crisis, as was the case last fall with Hurricanes Katrina and Rita. That is the major departure, historically, from how we have obligated funds, both to formula and for emergency. Mr. President, 54 percent of my colleagues have voted for an increase in funding for low-income fuel assistance last year, requiring 60 votes. That was requiring 60 votes. We worked very hard. We got 66 votes last week on proceeding to this vital issue. So I hope my colleagues will support this cloture motion so we can move beyond and get to the heart of the matter, so we can discuss the differences and the implications of the underlying bill versus the amendments offered. I am prepared to work with my colleagues in any way to work it out. It is not, in my view, a matter of North versus South, East versus West or whatever. It is not sectional interests we are talking about. What we are talking about is doing what is right for whoever needs this program and depends upon it in a moment in time. That is what the emergency funding provides. It gives us that flexibility and that capability that will be done away with by the Kyl amendment. I truly regret there was this chart that was distributed last week because it gave an erroneous picture of the accurate distribution of funding because with emergency funding you cannot have a fixed picture because it depends on the emergency. And unless someone around here is a soothsayer, there is no way to know how that funding will be distributed. Yes, it was distributed at that moment in time that way. That is precisely because there were emergencies. But you do not know what the emergency is going to be a year from now, a month from now, 6 months from now. We are coming upon the hurricane season again. God forbid if anything else happens. The fact is, we need to have that flexibility, as we did last fall. We need to have that capability similarly for our States that need it, in Maine and the other cold-weather States currently. If we need more funding, I am all for it. But I know there is resistance by many to increasing the funding, regrettably. But this has fallen far short of the real value of this program, as I illustrated. We have not provided a real increase in the low-income fuel assistance program since it was created back in 1979 during my first term in the House of Representatives. Those are the facts. So I urge my colleagues to vote to proceed to the final consideration of this bill. I reserve the remainder of my time.

Ms. SNOWE. Mr. President, I commend Senator Coleman for his leadership and all the efforts he has made in regard to the pending legislation. I suggest the absence of a quorum.

Ms. SNOWE. Mr. President, I yield the remainder of my time to my colleague, Senator Collins from Maine.

Ms. SNOWE. Mr. President, how much time is remaining?