Olympia Snowe

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today to introduce the ``Local Development Business Loan Program Act of 2005.'' This bill will improve the Small Business Administration's (SBA) Certified Development Company Loan Program, also known as the ``504 Loan Program,'' by streamlining the lending process and providing small businesses with greater opportunities to obtain affordable financing. The 504 Loan Program provides small businesses with long-term, fixed-rate financing for real estate and machinery. As Chair of the Senate Committee on Small Business and Entrepreneurship, one of my primary responsibilities is to ensure small businesses are afforded the best possible environment to grow and flourish. The fundamental purpose of the SBA is to maintain and strengthen the nation's economy by aiding, counseling, assisting, and protecting the interests of small business concerns. This bill would strengthen the SBA's ability to pursue those goals. The legislation responds to one of the primary needs of small businesses: access to affordable capital. For many small businesses, expansion plans face constraints imposed by facilities that are too small, or equipment that has insufficient capacity or outdated features. These small businesses often lack capital to remedy these needs, and without the SBA they would be limited to obtaining short- term financing with higher, often variable, rates. As a result, the 504 loan program is a key element of these small businesses' eventual success, because the program provides long-term capital, at fixed rates, that allows businesses to obtain new facilities, expand existing facilities, and update their machinery. In Fiscal Year 2004, the SBA's financing programs, combined, supported over $20 billion in loans and venture capital for small businesses. In the 504 program alone, small businesses obtained 8,357 loans in 2004. Through those loans the SBA guaranteed over $4 billion in financing. The SBA portion of each 504 program loan is only 40 percent of the total loan size. This program thus produced approximately $10 billion in financing for small businesses in 2004! That financing allowed small businesses to create or retain 140,000 jobs in 2004. Although the 504 program is already assisting entrepreneurial small businesses throughout the nation, it can be improved. The program works by combining in each financing package provided to a small business a loan from a Certified Development Company (CDC) that is guaranteed by the SBA, this is 40 percent of the total package; a non-guaranteed loan provided by a private ``first-mortgage'' lender, 50 percent of the total package; and a 10 percent down-payment provided by the small business. This bill offers improvements to all three aspects of the program, to increase the program's efficiency and impact. If approved by the Congress and signed into law, this bill will increase the number of small businesses that can utilize the program to grow and succeed. Job creation and retention is a bedrock element of local development efforts throughout the country. One of the statutory purposes of the 504 loan program is to create new jobs and to help small businesses retain existing jobs. This bill's purpose is to further strengthen the local development impact of the 504 loan program. To reflect that, the bill re-names the 504 loan program as the ``Local Development Business Loan Program'' (Local Development Program). This new name will also help borrowers to understand the intent of the program; many small business owners had commented to the Committee that the name ``504 program'' was neither clear nor indicative of the program's purposes. The bill will not require the SBA to waste money by discarding existing program materials that refer to the previous name; the SBA may continue to use those materials, but it will use the new name on any new materials produced after the bill's enactment. If the Local Development Program continues to grow at its recent pace, it may exceed $6 billion in guaranteed loans during 2006. The bill would authorize a maximum program level of $8 billion in guaranteed loans in fiscal year 2007, and $8.5 billion for fiscal year 2008. This legislation will also reduce regulatory barriers that have constrained CDCs from expanding their operations into new areas. By increasing competitive opportunities for CDCs, the bill seeks to increase the number and qualify of financing options available to small businesses. For instance, existing SBA regulations require CDCs to have a separate loan committee for each State and to account for all revenue and expenses separately for each state. Regulations of this type have made compliance both costly and difficult and have deterred many CDCs from expanding into new areas. Simplifying these regulations will result in increased access to capital for small business. The bill allows borrowers to provide more than the required minimum amount of equity when initiating their loan, and to use the excess equity to reduce the amount of the first-lien mortgage made by a private lender in the program. By contributing a larger down-payment at the onset of the loan, this provision will provide an opportunity for these borrowers to reduce their periodic payment obligations. This legislation would also designate Local Development Program loans that qualify under the New Markets Tax Credit Program as a public policy goal under the Local Development Program, and thus make them eligible for larger financing packages. The New Market Tax Credit Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities. The Act will also permit the ownership interest of two or more small business owners to be combined to determine whether the small business is 51 percent owned by minorities, women, or veterans in order to qualify as a business eligible for a public policy loan. The Act's goal of improving access to capital for small businesses is also furthered by another provision that permits Local Development Program borrowers to obtain financing in the maximum amount permitted under this program and also under the SBA's ``7(a) loan program.'' This legislation would also allow a borrower to refinance a limited amount of existing debt. The amount that could be refinanced could not exceed 50 percent of the expansion project funded by the loan, and would be limited to certain situations. By giving these small businesses the opportunity to refinance and obtain lower-cost capital, the bill would provide them a greater chance to succeed. The bill would also eliminate a fee now imposed on the first mortgage lenders, private banks, in a Local Development Program financing package. The lender's fee is a one-time fee equal to 0.5 percent of the first mortgage loan. Currently, the first mortgage lenders pass this fee on to CDCs and to borrowers. The bill will not increase the total fees paid by the CDCs or the borrowers, but clarifies that the CDC's stipulated annual fee would be increased by 0.06 percent, 6/100ths of one percent, and the borrower's stipulated fee would increase by approximately 0.06 percent, to replace the fees currently imposed on CDCs and borrowers by private lenders. In other words, instead of a fee imposed on CDCs and borrowers by the private lenders, which is not always clearly identifiable to those outside the program, this provision will specify the fee be paid directly by the CDCs and borrowers. It is hoped that this provision will clarify the fee obligations owed within the program, and will clearly identify to banks the total costs of participating in the program. The SBA's current 504 Program provides our Nation's small businesses with low-cost, long-term financing that is absolutely critical to starting and developing a successful business. In turn, small businesses create the majority of new jobs created in the United States. This program, re-named as the Local Development Business Loan Program, will continue to help small businesses create jobs and support their local communities. In fact, the provisions in this bill will improve those efforts significantly. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Ms. SNOWE. Mr. President, I rise today to introduce the Medicare Drug Benefit Protections Act of 2005 with my colleague, Senator Bill Nelson. Our bill provides additional protections for Medicare beneficiaries enrolling in the new Medicare Part D prescription drug benefit, protections which we believe are essential. Our bill extends the initial enrollment period for the new benefit until the end of 2006, provides more flexibility for beneficiaries to change plans, and adds crucial protections for those enrolled in a plan. We are now in the midst of the rollout of the new Medicare drug benefit, and, as of November 15, seniors and individuals with disabilities on Medicare have begun enrolling in various plans. Unfortunately, many seniors are confused and angry, frustrated and concerned that they do not have adequate information about the plans being offered. Seniors may ultimately decide not to enroll in a plan if they do not have enough expert assistance--readily available and accessible--to help them choose an appropriate plan. To make matters worse, many say the information available from the Centers for Medicare and Medicaid Services, CMS, the agency overseeing the plan, is either not helpful or simply overwhelming. Beneficiaries are worried they could make a poor choice in selecting a plan and that, once enrolled, the drugs offered by the plan they choose may not be the drugs they need. We must assure them that they will not be saddled with monthly premiums for plans which, in the end, do not adequately cover their prescription drug needs. Our bill would address these concerns in several ways. The bill includes two provisions from Senator Nelson's bill, the Medicare Informed Choice Act of 2005, which give beneficiaries additional protection. The bill extends the initial six-month period for enrolling in a plan from May 15, 2006, to December 31, 2006, thus delaying late enrollment penalties until 2007 and giving beneficiaries the rest of this year and all of next year to decide whether to enroll in a plan. Once beneficiaries have enrolled in a plan, the bill provides a one- time opportunity during 2006 to change to another plan without penalty, should they wish to do so. The Medicare Drug Benefit Protections Act includes additional safeguards, as well. Seniors are getting misinformation from the CMS website, especially in regard to the cost of drugs being offered by certain plans. Seniors in my home State of Maine have experienced serious problems with inaccurate drug pricing information being provided by the CMS website devoted to the new Medicare Part D plans, www.medicare.gov. In one instance, the CMS website quoted one price for a senior's drug costs for 2006 but the plan itself quoted a cost of approximately $2,000 more than the CMS website. Under our bill, beneficiaries could change plans without penalty if they relied on misinformation from CMS to their detriment. Beneficiaries would also be allowed to change plans without penalty should their circumstances change significantly, due to medical reasons, for example. Beneficiaries who meet these criteria would have an extended period of time to change plans, a minimum of four months rather than the current 90 days. The bill would also extend the annual open season, as of 2007, from November 15th through December 31st, to a full two months, from November 1st through December 31st, in order to allow all beneficiaries more time outside the busy and travel-filled holiday season to study and compare plans should they wish to make a change. Finally, our bill authorizes $25 million in funding for grants to States, non-profit organizations, and other entities to conduct additional education and outreach efforts on the drug benefit during fiscal years 2007 and 2008. Our goal is to ensure that beneficiaries have sufficient time, comfort, and peace of mind to understand the new drug benefit and enroll in a plan well-suited to their needs so they can derive the much-needed assistance with their prescription drugs offered by these plans. We must provide flexibility, safeguards, and outreach efforts beyond what currently exists to reduce the anxiety and frustration that too many seniors are experiencing today. The new Medicare drug benefit is the first comprehensive outpatient prescription drug benefit in the 40-year history of Medicare. The benefit is not perfect by any means, but rather a beginning. I will continue working to improve this benefit so that it will truly deliver the assistance that our seniors so desperately need and deserve to have.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today to introduce the Medicare Drug Benefit Protections Act of 2005 with my colleague, Senator Bill Nelson. Our bill provides additional protections for Medicare beneficiaries enrolling in the new Medicare Part D prescription drug benefit, protections which we believe are essential. Our bill extends the initial enrollment period for the new benefit until the end of 2006, provides more flexibility for beneficiaries to change plans, and adds crucial protections for those enrolled in a plan. We are now in the midst of the rollout of the new Medicare drug benefit, and, as of November 15, seniors and individuals with disabilities on Medicare have begun enrolling in various plans. Unfortunately, many seniors are confused and angry, frustrated and concerned that they do not have adequate information about the plans being offered. Seniors may ultimately decide not to enroll in a plan if they do not have enough expert assistance--readily available and accessible--to help them choose an appropriate plan. To make matters worse, many say the information available from the Centers for Medicare and Medicaid Services, CMS, the agency overseeing the plan, is either not helpful or simply overwhelming. Beneficiaries are worried they could make a poor choice in selecting a plan and that, once enrolled, the drugs offered by the plan they choose may not be the drugs they need. We must assure them that they will not be saddled with monthly premiums for plans which, in the end, do not adequately cover their prescription drug needs. Our bill would address these concerns in several ways. The bill includes two provisions from Senator Nelson's bill, the Medicare Informed Choice Act of 2005, which give beneficiaries additional protection. The bill extends the initial six-month period for enrolling in a plan from May 15, 2006, to December 31, 2006, thus delaying late enrollment penalties until 2007 and giving beneficiaries the rest of this year and all of next year to decide whether to enroll in a plan. Once beneficiaries have enrolled in a plan, the bill provides a one- time opportunity during 2006 to change to another plan without penalty, should they wish to do so. The Medicare Drug Benefit Protections Act includes additional safeguards, as well. Seniors are getting misinformation from the CMS website, especially in regard to the cost of drugs being offered by certain plans. Seniors in my home State of Maine have experienced serious problems with inaccurate drug pricing information being provided by the CMS website devoted to the new Medicare Part D plans, www.medicare.gov. In one instance, the CMS website quoted one price for a senior's drug costs for 2006 but the plan itself quoted a cost of approximately $2,000 more than the CMS website. Under our bill, beneficiaries could change plans without penalty if they relied on misinformation from CMS to their detriment. Beneficiaries would also be allowed to change plans without penalty should their circumstances change significantly, due to medical reasons, for example. Beneficiaries who meet these criteria would have an extended period of time to change plans, a minimum of four months rather than the current 90 days. The bill would also extend the annual open season, as of 2007, from November 15th through December 31st, to a full two months, from November 1st through December 31st, in order to allow all beneficiaries more time outside the busy and travel-filled holiday season to study and compare plans should they wish to make a change. Finally, our bill authorizes $25 million in funding for grants to States, non-profit organizations, and other entities to conduct additional education and outreach efforts on the drug benefit during fiscal years 2007 and 2008. Our goal is to ensure that beneficiaries have sufficient time, comfort, and peace of mind to understand the new drug benefit and enroll in a plan well-suited to their needs so they can derive the much-needed assistance with their prescription drugs offered by these plans. We must provide flexibility, safeguards, and outreach efforts beyond what currently exists to reduce the anxiety and frustration that too many seniors are experiencing today. The new Medicare drug benefit is the first comprehensive outpatient prescription drug benefit in the 40-year history of Medicare. The benefit is not perfect by any means, but rather a beginning. I will continue working to improve this benefit so that it will truly deliver the assistance that our seniors so desperately need and deserve to have.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today for one very simple reason--to ask for the support of my colleagues for the Reed-Collins-Kennnedy- Snowe motion to instruct the conferees to S. 1932, to add $2.92 billion for the Low Income Home Energy Assistant Program, or LIHEAP. This funding, along with the expected $2.18 billion in fiscal year 2006 appropriations, will confirm the commitment we made just this past July and bring LIHEAP up to the level of $5.1 billion we authorized in the 2005 Energy bill. In the Nation's colder States such as Maine, the days are relentlessly marching toward winter, the clock is ticking as the thermometer edges ever downward and it would be unconscionable for Congress to adjourn for the year without providing critical, additional assistance for LIHEAP at a time when home heating oil prices have been predicted to increase by up to 44 percent this coming winter. There should be no mistake--this is an emergency and a crisis that is no longer an impending crisis as I have been saying for months--it is now here. I feel very strongly that it would be an abrogation of our responsibility to stand by and allow more and more of our elderly on fixed incomes and low-income people, including children, to suffer because of a lack of heat. This past week, it was reported to one of my Maine offices that two elderly people--who have already used up their entire LIHEAP allotment for a winter that has not yet officially arrived--were admitted to the hospital with hypothermia. In one of the households, the residence was so cold the water in the toilet bowl was frozen. It has been said that a society is judged by how it treats its most vulnerable citizens. What a failing grade we would get for LIHEAP. The fact is, countless Americans don't have room in their budget for such a surge in home heating prices--but surely, in looking at our national priorities, we can find room in our budget to help Americans stay warm this winter. It does not take a crystal ball to predict the dire consequences when home heating oil in Maine has risen to $2.59 per gallon, up 66 cents from a year ago, kerosene prices average $2.72 a gallon, 52 cents higher than this time last year, and propane is at $2.20 per gallon, 17 cents higher than last year. Some projections have a gallon of heating oil reaching $3.00 later in the winter. So understandably, we are hearing the mounting concern ``how will I pay for home heating oil when it's already almost 30 percent more than last year, and I struggled to make ends meet then?'' ``How will I afford to pay half again as much for natural gas?'' People need to know now that they can count on us--U.S. Congress--for assistance, not the most disruptive country leader in the Western Hemisphere who comes bearing gifts of discounted oil to our communities and States. This country should take care of its own. Home heating oil in my State is a necessity of life--so much so that 73 percent of households in a recent survey reported they would cut back on, and even go without, other necessities such as food, prescription drugs, and mortgage and rent payments. Churches, food pantries, and local service organizations are all hearing the cry and sensing the growing need. Because of the supply disruptions caused by the Gulf hurricanes at a time when prices were already spiraling up, prices have been driven even higher and are directly affecting low-come Mainers and how they Will be able to pay for their home heating oil, propane and kerosene this winter. A recent Wall Street Journal quoted Jo-Ann Choate, who heads up Maine's LIHEAP program. Ms. Choate said, ``This year we've got a very good chance of running out.'' Eighty-four percent of the applicants for the LIHEAP program in the State use oil heat. Over 46,000 applied for and received State LIHEAP funds last winter. Each household received $480, which covered the cost of 275 gallons of heating oil. The problem this winter is that the same $480 will buy only 172 gallons, which a household will use up in the first 3 to 4 weeks in Maine. What will these people do to stay warm for the four or five months left of winter? The water pipes will freeze and then break, damaging homes. People will start using their stoves to get heat. The Mortgage Bankers Association expects that the steep energy costs could increase the number of missed payments and lost homes beginning later this year. My State is anticipating at least 48,000 applicants this winter, so there will be less money distributed to each household unless we can obtain higher funding for the LIHEAP program. Ms. Choate says that Maine plans to focus on the elderly, disabled, and families with small children, and is studying how to move others to heated shelters. This is why our efforts are so very important. And it isn't just Maine. It is happening in all of the Nation's cold weather States. Quite simply, without increased funding, we are forcing the managers of State LIHEAP programs to make a Solomon's choice as to who gets served. The facts are that LIHEAP is projected to help 5 million households nationwide this winter. But that is only about one-sixth of households across the country that actually can qualify for the assistance. So this is a perennial fight we wage even when prices aren't as high as today. And now, that battle becomes all the more pivotal. I Thank Senators Reed and Collins for their leadership on this motion to instruct the conferees for increased LIHEAP funding, and I am proud to stand shoulder to shoulder with them to secure what is, in essence, literally life-or-death funding for our most vulnerable Americans. The cold weather won't wait--and neither should we when it comes to helping citizens survive through the coming winter. I thank the Chair.

Ms. SNOWE

Ms. SNOWE. Mr. President, as chair of the Senate Committee on Small Business and Entrepreneurship, I rise in support of amendment No. 2529 which was unanimously adopted into S. 1042, the National Defense Authorization Act for fiscal year 2006. This amendment will restore much needed transparency in the small business contract goaling program administered by the Small Business Administration, promote international competitiveness of our Nation's small businesses, and ensure fair access of small businesses to Federal prime contracts and subcontracts for performance overseas. Currently, many small contractors play a critical role in maintaining a strong domestic defense industrial base and supporting the Global War on Terror. Yet many of these small firms face serious obstacles obtaining prime contracts and subcontracts to perform internationally the work they are already performing so ably domestically. Simply put, this amendment would clarify that the Small Business Act applies to Federal overseas contracts. In the 2001 report, ``Small Business: More Transparency Needed in Prime Contract Goaling Progam,'' the Government Accountability Office criticized the Small Business Administration, SBA, the Department of Defense, DOD, and other agencies for excluding contracts from the calculations of small business contracting achievements toward the statutory goals established in the Small Business Act based on tenuous rationales. On its face, the Small Business Act applies to all Federal procurements, including all overseas contracts. However, recently there has been some resistance to implementing the Small Business Act as written. Some agencies, like the Department of Defense, go as far as to exempt all overseas-related contracts from the act. Others, such as the Department of State, exempt contracts for performance abroad if they are also awarded abroad but not if they awarded domestically. As a result, prime contracting and subcontracting requirements of the Small Business Act are rendered unenforceable with regard to many military and reconstruction projects, and fair access for small businesses is seriously diminished. Based on fiscal year 2000 dollars, the GAO found that approximately $8.4 billion in overseas defense contracts were excluded from counting toward the Federal Government's small business performance. Under the Small Business Act, $1.93 billion of these contracts should have been awarded to small businesses. The SBA's and the DOD's rationale for excluding overseas contracts was that small firms have little chance of competing for these contracts in the first place. The excuse given by the SBA and other agencies to the GAO in 2001 did not hold then, and it surely does not hold now. With an expanded Federal presence in recent years, the dollar volume of overseas contracts has been steadily increasing, and small firms have been playing a substantial part in supporting Federal operations abroad. Indeed, every major contract for the reconstruction for the reconstruction of Iraq funded by the $18.4 billion in 2003 emergency supplemental appropriations has a minimum 10 percent requirement for small business subcontracting and a 23-percent subcontracting goal. Our experience with Iraq reconstruction proves that American small businesses are capable to perform overseas even in the most dire circumstances. Congress clearly meant what it said in the Small Business Act that procurement goals must be calculated against ``total purchases'' of the Federal Government. My amendment reaffirms congressional policy that the Small Business Act applies to all contracts and subcontracts regardless of geographic place of award or performance. This amendment directs Federal agency heads with jurisdiction over acquisitions to ensure that all contracts and subcontracts, regardless of geography, are covered by the Small Business Act. Under my amendment, agencies will be able to give due note and recognition to the specific requirements and procedures of any other Federal statute or treaty, such as the provisions governing foreign military sales, which may exempt any Federal prime contract or subcontract from the application of the Small Business Act in whole or in part. I urge my colleagues to help keep America's defense industrial base and America's global competitiveness strong by supporting fair access to prime contracts and subcontracts by our small businesses. Mr. President, as chair of the Senate Committee on Small Business and Entrepreneurship, I rise today in support of my amendment No. 2530 to S. 1042, the National Defense Authorization Act for fiscal year 2006, to promote fair access to multiple-award contracts. I am pleased that this amendment was adopted unanimously, and I urge my colleagues to support it in conference. Since the enactment of the Federal Acquisition Streamlining Act, FASA, in 1994, Federal agencies are increasingly relying on contracts and acquisition services offered by other agencies, specifically, the General Services Administration's Multiple Award Schedule/Federal Supply Schedule contracts, MAS/FSS, Government-wide acquisition contracts, GWACs, and multiagency contracts, MACs, to purchase goods and services. These contracting mechanisms were authorized by Congress in the belief that they would encourage the Government to buy commercially available products and services and would open the Federal contracting market to businesses, especially small businesses, which have previously focused only on the private, commercial markets. Essentially, these indefinite-delivery, indefinite-quantity contracts are framework agreements on prices and other terms for any future sales to the Government. In the procurement community, these contracts are popularly known as ``hunting licenses'' because they permit preapproved contract holders to secure Government work with very limited competition as a result of direct marketing to Federal agencies. Federal contracting officials can place task orders against these contracts with their preferred, preapproved vendors. This amendment is a modest response to numerous complaints from representatives of small businesses and small business trade associations that the actual process for receiving task orders under multiple award contracts, such as the Federal Supply Schedules and multiagency contracts, tends to be biased in favor of large businesses and experienced Government contractors. Small business representatives testified before my committee that they invest time, effort, and resources to negotiate multiple award and multiagency contracts with the GSA or with another executive agent managing a Government-wide acquisition contract or a multiagency contract. Consultants have been known to charge small firms as much as $25,000 for guiding them through dense, time-consuming paperwork required to receive Government preapproval for one such contract. However, there are serious concerns that small firms do not reap commensurate benefits in the form of task orders. For instance, in recent proceedings before the White House Acquisition Advisory Panel, a representative of the General Services Administration, GSA, indicated that total Multiple Award Schedule/Federal Supply Schedule sales reached $31.1 billion in fiscal year 2004. GSA further indicated that small businesses hold 79.6 percent of total MAS/FSS contracts, but account only for 37.1 percent of sales dollars. At first glance, this level of small business participation is commendable. It exceeds the statutory Government-wide goal of awarding 23 percent of Federal contract dollars to small businesses. However, the significant disparity between these numbers confirms the complaints of small businesses about the barriers they have been facing in Federal indefinite-delivery, indefinite-quantity contracts. I look forward to working with the GSA, the Small Business Administration, and other agencies towards a greater parity between small business participation in the Schedule program itself and their share of contract dollars awarded through this program. In the acquisition world, there is a perception that contracting officers routinely persist in limiting upcoming task order opportunities to a maximum of three companies on any particular GSA Schedule instead of the three-company minimum as required by law. This situation is a recurring subject of bid protest decisions. In addition, many multiple-award contract holders do not receive a fair notice of upcoming task orders. Earlier this year, an article in the Veterans Business Journal asked ``What Happened to Public Law 108-183?'' This law, codified in the Small Business Act, created the contracting preference for small businesses owned by service-disabled veterans. The article pointed out that many service-disabled veterans feel frustrated at the multiple- award contract regulations which undermine the weight of the congressionally established preference and preclude disabled veterans from obtaining set-aside multiple-award acquisitions. The Senate Committee on Small Business and Entrepreneurship has attempted to mitigate many of these problems. Back in 1994, the Federal Acquisition Streamlining Act included a change to the Small Business Act that created an exclusive reservation for small businesses consisting of all contracts valued at more than $2,500 but not more than $100,000. Federal agencies attempted to exempt themselves from this provision by regulation. In response, I inserted corrective language in S. 1375, the 50th Anniversary Small Business Administration Reauthorization Act. This act, passed unanimously by the Senate during the 108th Congress, included a provision to ensure that task orders on multiple award schedules and multiagency contracts valued at more than $2,500 but not more than $100,000 are reserved for small businesses. This amendment builds on my prior efforts by establishing a congressional policy that each agency's orders placed under multiple awards contracts must meet statutory small business goals. To facilitate this policy, the amendment authorizes Federal agencies using defense contracting authorities to conduct small business set-aside competitions in the context of multiple-award contracts. My amendment also directs the SBA administrator to provide to my committee a comprehensive report on participation of small businesses in multiple- award contracting. The measures adopted by the Senate through this amendment are only some of many steps and initiatives which my committee has been pursuing to increase the access of multiple-award contracts to small businesses. I hope that my colleagues will join me in supporting these efforts. Mr. President; as chair of Senate Committee on Small Business and Entrepreneurship, I rise today to address a bipartisan amendment to S. 1042, the National Defense Authorization Act for fiscal year 2006 from the Senate Committee on Small Business and Entrepreneurship concerning much needed improvements to the Small Business Innovation Research, SBIR, Program and the Small Business Technology Transfer, STTR, Program. Amendment No. 2531 is based on my original amendments S.A. 1536 and S.A. 1537 and builds on language reported by the Senate Armed Services Committee and on legislative initiatives proposed by the Small Business Committee's ranking member, Senator Kerry. I would like to commend Senator Kerry, as well as Senators Warner and Levin, the leaders of the Senate Armed Services Committee, for their bipartisan cooperation on the important subject of accelerating innovation and procurement of innovative technologies by the Federal Government. I also want to thank Dr. Charles Wessner and others at the National Academy of Sciences who have worked on a congressionally authorized study of the SBIR program, the Small Business Technology Council, the Association for Manufacturing Technology, and numerous representatives of Federal agencies, small businesses, and representatives of large prime contractors for the insights into the work of the SBIR and the STTR programs which they have provided to my committee over the years. Today, the Federal Government spends approximately $2.3 billion on phase I and phase II awards for the SBIR and the STTR programs, with $2.2 billion spent through the SBIR awards to small businesses. The Department of Defense is the major participant in this program, accounting for approximately $1.1 billion in SBIR spending and approximately $50 million in STTR spending. These funds provide a substantial stimulus to the American innovation system, and it is the task of this Congress to ensure that these funds are wisely spent. A key part of this effort is strengthening the existing science and research requirements for the small business research and development programs. This amendment directs the Department of Defense to base its SBIR and STTR research and development priorities on the Department's most current Joint Warfighting Science and Technology Plan, the Defense Technology Area Plan and the Basic Research Plan and to solicit input from program management officials. In addition to the phase I and phase II awards, the Department of Defense awarded over $456 million in phase III contracts in fiscal year 2004. But the need for innovative technologies in our defense procurement is far greater. The SBIR and the STTR authorities enable contracting officers to quickly buy high-tech products and services for our warfighters. Unfortunately, the commercialization rate from research and development to product acquisition has been hampered by poor commercialization planning and increasing SBIR program administration costs. Since 1998, Congress and the Department of Defense have sought to increase commercialization but without much progress. To address this problem, my amendment authorizes a Commercialization Pilot Program at the Department of Defense and component military departments. Under this program, the Secretary of Defense and the military Secretaries would be required to identify SBIR programs with potential for accelerated transition into the acquisition process. The amendment authorizes the use of one percent of SBIR phase I and phase II funds for administrative expenses of this pilot. Congress will be kept abreast of this pilot through detailed evaluative reports. As cochair of the Senate Task Force on Manufacturing, I have been concerned about the deteriorating manufacturing base of our Nation and especially the impact of this trend on the defense industrial base. To stem this decline, President George W. Bush signed Executive Order 13329, Encouraging Innovation in Manufacturing, in February 2004. This order directs Federal agencies which participate in the Small Business Innovation Research Program and the Small Business Technology Transfer Program to give ``high priority'' to manufacturing-related research and development projects to the extent permitted by law. The amendment incorporates this Executive order into law and directs the Small Business Administration and all other relevant agencies to fully implement its tenets. Finally, the amendment will expand the ability of Federal agencies and prime contractors to use phase II and phase III awards under SBIR and STTR for testing and evaluation of innovative technologies developed by small businesses for use in technical or weapons systems. Insertion of SBIR or STTR technologies into large, integrated systems is often not possible without significant testing efforts. By clarifying that either phase II or phase III may be used for these purposes, the amendment will provide additional incentives to agency program managers and to large systems integrators to commercialize the fruits of the SBIR and the STTR research. Our Nation's small businesses are also our Nation's innovators. They secure approximately 13 times more patents than large businesses. I urge this Congress to support in conference my measure for keeping America secure in war and in competitive internationally.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today to introduce the Community and Rural Medical Residency Preservation Act of 2005, which will serve to ensure the continued viability of medical residency training programs in our local communities. I am particularly pleased to introduce this bill with several of my colleagues, Senators Bingaman, Collins, Dorgan, and Rockefeller, who share my concerns about the need to clarify congressional intent so that teaching hospitals will be able to offer these essential residency training programs in the community and so that medical residents, as well as many who live in these communities, will be able to continue to benefit from these programs. Many medical residency training programs have traditionally operated in sites located outside the hospital setting for their educational programs. These nonhospital settings are, in fact, where most of this type of physician training occurs. The community and rural sites which operate these programs include physician offices, nursing homes, and community health centers--cornerstones of ambulatory training for graduate medical education, GME, programs. These programs often rely upon volunteer physician faculty to provide educational opportunities in practice settings which are similar to those in which these physicians in training will ultimately practice. Congress clearly stated support for this concept as part of the Balanced Budget Act of 1997, when they reformed the GME funding formulas to allow funding for residents training in nonhospital settings. However, recent rulemaking, agency interpretations, and guidance issued by the Centers for Medicare and Medicaid Services, CMS, are creating a chilling effect on these training programs. Teaching programs across the Nation are facing audits and scrutiny as a result of confusing and unclear CMS policies and guidance on this issue. This has happened in my State, as well as many others, and is posing a serious threat to our future physician workforce and to teaching hospitals and medical schools which offer these programs. If these agency policies are not halted and reversed, teaching hospitals throughout the country will be forced to train all residents in the hospital setting or potentially eliminate their residency programs. Not only does this do a disservice to medical residents who are able to obtain practical experience and be exposed to settings where they may ultimately practice, but these programs provide individuals living in medically underserved and rural areas with access to health care which might otherwise not be available. Training medical residents outside the hospital setting is sound educational policy and a worthwhile public policy goal that Congress clearly mandated in 1997. In an effort to preserve the utilization of nonhospital training sites, I am therefore introducing legislation today which would clarify the meaning of the term ``all, or substantially all, of the costs for the training program,'' a phrase which has been subject to differing, and confusing, interpretations by CMS. My legislation would clarify that, for teaching hospitals and entities operating training programs outside the hospital setting, the teaching hospital shall not be required to pay the entity operating the nonhospital setting any amounts other than those determined by the hospital and the entity for the hospital to be considered to have incurred all, or substantially all, of the costs for the training program. Medical associations, teaching hospitals, and academic medicine all strongly support this legislation. This language will also make clear that hospitals shall not be required to pay an entity operating a nonhospital setting for any actual or imputed costs of time voluntarily spent supervising interns or residents as a condition for computing residents for purposes of receiving either direct graduate medical education payments or indirect medical education payments. We have received strong support from a number of organizations who are in the forefront of training America's future physicians and who have confirmed the critical need for this legislation, including the Association of American Medical Colleges, the Academic Family Medicine Advocacy Alliance, representing the Society of Teachers of Family Medicine, the Association of Departments of Family Medicine, the Association of Family Medicine Residency Directors, and the North American Primary Care Research Group, and the American Osteopathic Association. I ask unanimous consent that the text of the bill and the letters of support from these organizations printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise today to introduce the Community and Rural Medical Residency Preservation Act of 2005, which will serve to ensure the continued viability of medical residency training programs in our local communities. I am particularly pleased to introduce this bill with several of my colleagues, Senators Bingaman, Collins, Dorgan, and Rockefeller, who share my concerns about the need to clarify congressional intent so that teaching hospitals will be able to offer these essential residency training programs in the community and so that medical residents, as well as many who live in these communities, will be able to continue to benefit from these programs. Many medical residency training programs have traditionally operated in sites located outside the hospital setting for their educational programs. These nonhospital settings are, in fact, where most of this type of physician training occurs. The community and rural sites which operate these programs include physician offices, nursing homes, and community health centers--cornerstones of ambulatory training for graduate medical education, GME, programs. These programs often rely upon volunteer physician faculty to provide educational opportunities in practice settings which are similar to those in which these physicians in training will ultimately practice. Congress clearly stated support for this concept as part of the Balanced Budget Act of 1997, when they reformed the GME funding formulas to allow funding for residents training in nonhospital settings. However, recent rulemaking, agency interpretations, and guidance issued by the Centers for Medicare and Medicaid Services, CMS, are creating a chilling effect on these training programs. Teaching programs across the Nation are facing audits and scrutiny as a result of confusing and unclear CMS policies and guidance on this issue. This has happened in my State, as well as many others, and is posing a serious threat to our future physician workforce and to teaching hospitals and medical schools which offer these programs. If these agency policies are not halted and reversed, teaching hospitals throughout the country will be forced to train all residents in the hospital setting or potentially eliminate their residency programs. Not only does this do a disservice to medical residents who are able to obtain practical experience and be exposed to settings where they may ultimately practice, but these programs provide individuals living in medically underserved and rural areas with access to health care which might otherwise not be available. Training medical residents outside the hospital setting is sound educational policy and a worthwhile public policy goal that Congress clearly mandated in 1997. In an effort to preserve the utilization of nonhospital training sites, I am therefore introducing legislation today which would clarify the meaning of the term ``all, or substantially all, of the costs for the training program,'' a phrase which has been subject to differing, and confusing, interpretations by CMS. My legislation would clarify that, for teaching hospitals and entities operating training programs outside the hospital setting, the teaching hospital shall not be required to pay the entity operating the nonhospital setting any amounts other than those determined by the hospital and the entity for the hospital to be considered to have incurred all, or substantially all, of the costs for the training program. Medical associations, teaching hospitals, and academic medicine all strongly support this legislation. This language will also make clear that hospitals shall not be required to pay an entity operating a nonhospital setting for any actual or imputed costs of time voluntarily spent supervising interns or residents as a condition for computing residents for purposes of receiving either direct graduate medical education payments or indirect medical education payments. We have received strong support from a number of organizations who are in the forefront of training America's future physicians and who have confirmed the critical need for this legislation, including the Association of American Medical Colleges, the Academic Family Medicine Advocacy Alliance, representing the Society of Teachers of Family Medicine, the Association of Departments of Family Medicine, the Association of Family Medicine Residency Directors, and the North American Primary Care Research Group, and the American Osteopathic Association. I ask unanimous consent that the text of the bill and the letters of support from these organizations printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I rise to speak in favor of my amendment No. 2528, unanimously adopted into the National Defense Authorization Act for fiscal year 2006, to provide targeted size standard relief for small U.S. contractors incurring extraordinary security and protection costs on foreign battlefields in the global war on terror. Right now, in Iraq and Afghanistan, there are many brave, small contracting businesses working alongside our uniformed soldiers in many cases. Employees of these small contracting firms get shot at and encounter roadside bombs, suicide attacks, ambushes, and kidnapings. Yet, in order to provide our military with desperately needed goods and services, these small battlefield firms diligently endure these daily risks. These daily dangers force small conflict zone firms to hire well armed, private security guards, and to incur extraordinary security expenses in order to protect their employees. The violence towards civilian contractors in Iraq and Afghanistan has become so prevalent that the government often requires companies to provide security services, and treats these extraordinary security costs as reimbursable contractor expenses. These security expense reimbursements do not increase or expand small contracting firms' core business capabilities. Instead the money the government pays to small battlefield contractors for security expenses is passed directly through to the security subcontractor providing protection to the small firms' employees. Unfortunately, the Government's valid reimbursement of conflict-zone security expenses artificially inflates the size of many small battlefield firms causing them to out grow the Small Business Administration's small businesses size standards. It is important to understand that the SBA size standards were established on the basis of normal revenues for small businesses operating in North America. But, currently, these domestic size standards are penalizing our small contractors operating outside the U.S. and in war zones by eliminating their ability to obtain crucial small business contracts and loans once they exceed the domestic standards. Our most reliable and dependable small battlefield firms, because they operate overseas, are.in danger of artificially outgrowing the SBA's domestic size standards. Not only does this artificial growth hurt small business ability to survive, it also harms the U.S. Government's ability to secure contracts for much needed goods and services that are used to support our troops in war zones. This ultimately reduces the Federal Government's access to experienced small contractors and hampers the Government's efforts to comply with the Government's annual statutory small business contracting goals. My amendment directs the SBA to conduct a study and provide a report to Congress on the fairness of exempting reimbursement for subcontracts for private security services from the size standards caps applicable to small firms that perform contracts and subcontracts on overseas battlefields. I urge my colleagues to support our small battlefield contractors currently in harms' way by retaining this important amendment in the Defense authorization conference report.

Ms. SNOWE

Ms. SNOWE. Mr. President, I call up amendment No. 2667 that was filed earlier, along with Senators Bingaman, Collins, and Reid.

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

Ms. SNOWE. Mr. President, for months we have seen escalating petroleum and natural gas prices, magnified by the effects of three hurricanes. Now with the onset of winter, home heating oil prices are predicted to increase 44 percent in Maine, while natural gas is predicted to be 41 percent higher nationwide. My colleagues and I have called for LIHEAP funding increases for months on each spending bill. This amendment here may be our last chance this year to keep our seniors and disadvantaged from choosing between eating and heating. No American should face this choice. My amendment would add $2.92 billion in LIHEAP funding, bringing it up to the fully authorized level. It is fully offset. The offset addresses a longstanding problem: government contractors aren't paying taxes. It requires government agencies to withhold income tax for the employees of government contractors at a rate of 1.75 percent when they purchase goods and services from government contractors. There should be no mistake--this is an emergency and a crisis we know is coming, and it would be an abrogation of our responsibility to stand by and allow it to occur. It does not take a crystal ball to predict the dire consequences when home heating oil in Maine is $2.45 per gallon, up 38 cents from a year ago, and kerosene prices average $2.75 a gallon, 51 cents higher than this time last year and it's not even winter yet. This is a necessity of life--so much so that 73 percent of households in a recent survey reported they would cut back on, and even go without, other necessities such as food, prescription drugs, and mortgage and rent payments. The facts are that LIHEAP is projected to help 5 million households nationwide this winter. On November 4, a representative of the Senior Companion Program called my Bangor Office to say that they already had to admit an elderly client into the hospital due to hypothermia, because she couldn't afford enough heating oil. And, it is only the beginning of November. This simply should not be allowed to happen again.

Ms. SNOWE

Ms. SNOWE. Mr. President, I want to commend Senators Enzi, Kennedy, Frist, and Clinton for their work in addressing the inadequate state of our individual health records today. The Wired for Health Care Quality Act will accelerate the development of essential standards to protect investment in health information technology. Very soon the Federal Government will require compliance with these standards for its purchases--a long overdue step in modernizing health care information management. I began work with on this issue in the last Congress when we learned from the Institute of Medicine that an estimated 98,000 Americans die each year as a result of medical errors. Technology can help us prevent these deaths and injuries from medical mistakes. That is one reason I joined with Senator Stabenow to assure that we implement live saving technology. A second reason for our work is that information technology, IT, will help us reduce the cost of health care. As health care costs increase far more rapidly than inflation, care becomes less affordable and the ranks of the uninsured grow. Each of us appreciates that technology will help us reduce that unsustainable trend. Recent reports demonstrate that the cost of implementing health IT is exceeded by a single year of savings. That is a remarkable return on investment, but since an estimated 89 percent of savings accrues to payers, not providers, standards alone will not spur adoption. Since the rewards for adoption primarily accrue to payers and patients, it is wholly appropriate that payers--including the Federal Government--act in their best interest to reduce costs. That means we must ensure adoption not just by those providers for whom investment is relatively easy, but by those with lesser resources, such as the many who provide care for our Medicare, Medicaid, and SCHIP beneficiaries. I look forward to working with my colleagues to see that we implement financing--including grants and tax incentives--to allow all providers to adopt this promising technology. Otherwise we will see a two-tiered system develop. If some patients do not receive the benefits of the electronic health record the President has set as a goal, their care will suffer. In fact, if their providers cannot adopt technology, their clinical data may not be not properly integrated in pay-for-performance methodologies. If the resulting criteria don't account for such patients, they then pose the risk of inadequate compensation to providers, and many may decline to serve them. So it is critical that we assure all providers can adopt health IT. I thank Chairman Enzi and the Senator Kennedy for their commitment to a hearing next spring on the adoption and financing issue. I also thank the majority leader for his assistance. The issue of adoption certainly multiple committees, and we appreciate his efforts in helping the full Senate to consider promising financing proposals to assure broad adoption. As we move forward together, we should also remember to follow the physician's adage--certainly one the leader knows so well--to ``first do no harm''. We are all agreed that genetic information, which may indicate probability of disease, must be protected. One's medical record includes even more than probability--it is indisputable evidence of the presence of disease, the drugs one uses, your full physical and mental health history. Consequently, Americans are worried about their health records. A recent survey demonstrates that two-thirds of all consumers have substantial concerns about the privacy of their medical records. The same proportion say that recent reports of privacy breaches have actually increased these concerns. So it comes as no surprise that consumers engage in behaviors to avoid such data from even being created--such as paying out-of-pocket for medical expenses, using a different physician on occasion, or simply asking that vital information not be included in their chart. Patients even forgo treatment altogether in fear of disclosure. This compromises health, so we simply must provide Americans with confidence in the security of their health record. We simply must have the highest levels of data security. So first we must see procedures established to assure that inappropriate disclosure does not occur. Next, if a data breach does occur, the patient must be informed. To do otherwise is unconscionable. I am pleased to see that the managers amendment requires such notification for those handling data under the programs established by this legislation, and the bill also establishes a process to address concerns on medical data privacy by directing a GAO study to guide us in providing the assurance all Americans must have that their medical data is protected. I thank my colleagues for including these essential provisions. Today marks the beginning of a process to offer all Americans a safer, more affordable system of health care. I look forward with Senator Stabenow to working with the majority leader and Senators Enzi, Kennedy, and Clinton, as well as Senators Grassley and Baucus, as we move forward to realizing the full potential of health IT become reality for our constituents. The rewards in lives and dollars saved compels us to act promptly.

Ms. SNOWE

Ms. SNOWE. Mr. President, as Chair of the Senate Committee on Small Business and Entrepreneurship, I have fought to ensure that small businesses across the country are treated fairly by the Federal Government. Unfortunately, in far too many cases, Federal agencies take arbitrary or abusive enforcement actions against small businesses. Few repercussions deter the Federal Government from taking these unwarranted and unjust actions, which can irreparably injure the reputation and financial viability of a small business. Enacted in 1980 on a bipartisan basis, the Equal Access to Justice Act (EAJA) intended to allow small businesses to collect legal fees after prevailing in litigation against the Federal Government. However, a number of barriers and inefficiencies exist within EAJA that prevent its effectiveness. For example, EAJA currently requires a small business that has prevailed in litigation against the Federal Government to enter into a costly second proceeding with the government. At the second proceeding, the government can assert a ``substantial justification'' defense to prevent the small business from recovering its legal costs, even though the small business prevailed on the merits of the underlying case in court. Even in instances when the Federal Government based its actions entirely on erroneous facts or without any legal basis, if the Federal Government can show that it was ``substantially justified'' in taking its actions, then a small business will be barred from EAJA recovery. In practice, courts typically give a very wide berth to the government's substantially justified defense--a reality that means that prevailing small businesses can rarely, if ever, recover their legal fees under EAJA. And while a second proceeding may be in the best interest of the Federal agency-- especially because its case is being funded by the General Treasury-- the second proceeding may ultimately be more costly and more time consuming to the small business than the original, underlying case. I believe that this is a flawed system. Small businesses are a driving force of the United States economy, representing 99.7 percent of all employer firms and generating approximately 75 percent of net new jobs annually. It is in our Nation's best interest to protect and watch over small businesses, as their success and vitality are key to America's economy and job growth. It's plain and simple: We should not idly stand by while the Federal Government mistreats our Nation's small businesses. That is why today I introduce with my colleague Senator Feingold the Equal Access to Justice Reform Act of 2005 (EAJRA). This bill would ensure that small businesses are adequately protected from unreasonable regulations and actions, as well as update EAJA to better serve today's small businesses. Under our legislation, small parties would be more likely to recover their legal fees when they prevail in litigation against the Federal Government. First, the EAJRA would eliminate the ``substantial justification'' defense, which would increase the likelihood that small businesses will be able to recover their legal costs after their winning their case. Second, our legislation would modernize the EAJA by updating eligibility qualifications for small businesses. It would raise the threshold for qualifying small businesses from $7 million to $10 million net worth, and index that threshold for inflation. Given modern economic realities, a net worth of $7 million is no longer sufficient. Third, the EAJRA would remove the hourly rate cap on attorney's fees. The current hourly rate cap of $125 was set during EAJA's enactment in 1980, and has yet to be adjusted for inflation. However, the market rate for competent legal services, especially for complex and high-risk litigation against the Federal Government, is far greater than the cap of $125 per hour. This limit prevents small businesses from receiving fair and just reimbursement of attorney's fees, placing them at a notable disadvantage. Finally, the EAJRA would require agencies that lose lawsuits, other than the National Labor Relations Board, the Occupational Safety and Health Administration, the Mine Safety and Health Administration, and the Equal Employment Opportunity Commission, to pay legal fees awarded under EAJA out of their own budgets and not the General Treasury. This would eliminate inefficient uses of Federal agency resources and would discourage marginal or abusive Federal enforcement actions directed at small parties. In addition, the Federal budget would no longer be unnecessarily burdened. The EAJRA creates a fair and even playing field. It would equalize the level of accountability to Federal law among governments in the United States. It is a ``good government'' statute that would promote justice and equality of treatment between small and large entities, and would greatly increase transparency in the Federal Government. This legislation is absolutely necessary. I urge my colleagues to support the Equal Access to Justice Reform Act so that we can ensure that our nation's small businesses are protected from unfair and unreasonable governmental actions.

Ms. SNOWE

Ms. SNOWE. Mr. President, as Chair of the Senate Committee on Small Business and Entrepreneurship, I have fought to ensure that small businesses across the country are treated fairly by the Federal Government. Unfortunately, in far too many cases, Federal agencies take arbitrary or abusive enforcement actions against small businesses. Few repercussions deter the Federal Government from taking these unwarranted and unjust actions, which can irreparably injure the reputation and financial viability of a small business. Enacted in 1980 on a bipartisan basis, the Equal Access to Justice Act (EAJA) intended to allow small businesses to collect legal fees after prevailing in litigation against the Federal Government. However, a number of barriers and inefficiencies exist within EAJA that prevent its effectiveness. For example, EAJA currently requires a small business that has prevailed in litigation against the Federal Government to enter into a costly second proceeding with the government. At the second proceeding, the government can assert a ``substantial justification'' defense to prevent the small business from recovering its legal costs, even though the small business prevailed on the merits of the underlying case in court. Even in instances when the Federal Government based its actions entirely on erroneous facts or without any legal basis, if the Federal Government can show that it was ``substantially justified'' in taking its actions, then a small business will be barred from EAJA recovery. In practice, courts typically give a very wide berth to the government's substantially justified defense--a reality that means that prevailing small businesses can rarely, if ever, recover their legal fees under EAJA. And while a second proceeding may be in the best interest of the Federal agency-- especially because its case is being funded by the General Treasury-- the second proceeding may ultimately be more costly and more time consuming to the small business than the original, underlying case. I believe that this is a flawed system. Small businesses are a driving force of the United States economy, representing 99.7 percent of all employer firms and generating approximately 75 percent of net new jobs annually. It is in our Nation's best interest to protect and watch over small businesses, as their success and vitality are key to America's economy and job growth. It's plain and simple: We should not idly stand by while the Federal Government mistreats our Nation's small businesses. That is why today I introduce with my colleague Senator Feingold the Equal Access to Justice Reform Act of 2005 (EAJRA). This bill would ensure that small businesses are adequately protected from unreasonable regulations and actions, as well as update EAJA to better serve today's small businesses. Under our legislation, small parties would be more likely to recover their legal fees when they prevail in litigation against the Federal Government. First, the EAJRA would eliminate the ``substantial justification'' defense, which would increase the likelihood that small businesses will be able to recover their legal costs after their winning their case. Second, our legislation would modernize the EAJA by updating eligibility qualifications for small businesses. It would raise the threshold for qualifying small businesses from $7 million to $10 million net worth, and index that threshold for inflation. Given modern economic realities, a net worth of $7 million is no longer sufficient. Third, the EAJRA would remove the hourly rate cap on attorney's fees. The current hourly rate cap of $125 was set during EAJA's enactment in 1980, and has yet to be adjusted for inflation. However, the market rate for competent legal services, especially for complex and high-risk litigation against the Federal Government, is far greater than the cap of $125 per hour. This limit prevents small businesses from receiving fair and just reimbursement of attorney's fees, placing them at a notable disadvantage. Finally, the EAJRA would require agencies that lose lawsuits, other than the National Labor Relations Board, the Occupational Safety and Health Administration, the Mine Safety and Health Administration, and the Equal Employment Opportunity Commission, to pay legal fees awarded under EAJA out of their own budgets and not the General Treasury. This would eliminate inefficient uses of Federal agency resources and would discourage marginal or abusive Federal enforcement actions directed at small parties. In addition, the Federal budget would no longer be unnecessarily burdened. The EAJRA creates a fair and even playing field. It would equalize the level of accountability to Federal law among governments in the United States. It is a ``good government'' statute that would promote justice and equality of treatment between small and large entities, and would greatly increase transparency in the Federal Government. This legislation is absolutely necessary. I urge my colleagues to support the Equal Access to Justice Reform Act so that we can ensure that our nation's small businesses are protected from unfair and unreasonable governmental actions.

Ms. SNOWE

Ms. SNOWE. Mr. President, today I rise to introduce legislation that would provide a tax credit for home energy costs to low- and middle- income taxpayers. This legislation will help those who are struggling to simply heat their homes as winter approaches and while fuel prices remain so high. Home heating oil in Maine is $2.52 per gallon, up 59 cents from a year ago. Kerosene prices average $2.95 a gallon, 75 cents higher than this time last year. Some projections have a gallon of heating oil reaching $3.00! And I am told that rolling blackouts on cold days this winter may be a possibility because of a high demand for electricity. According to the National Energy Assistance Directors Association, heating costs for the average family using heating oil are projected to hit $1,666 for the upcoming winter. This represents an increase of $403 over last winter's prices and $714 over the winter heating season of 2003-2004. Should colder weather prevail, these costs will surely increase, especially for States like Maine. So understandably, my constituents are asking how they will be able to afford to pay home heating oil bills that are 30 percent more expensive than last year. This is a crisis that has arrived. Heating one's home is a necessity of life--so much so that 73 percent of households in a recent survey reported they would cut back on, and even go without, other necessities such as food, prescription drugs, and mortgage and rent payments. Churches, food pantries, local service organizations--they are all deeply concerned, and the leaves have barely fallen from the trees. In order to help low- and middle-income families heat their homes this winter, I am proposing a tax credit for home energy costs up to $500. The credit would be available to married couples earning less than $100,000 and single taxpayers making less than $50,000. My legislation also directs the Treasury Department to assist individuals to adjust their withholding amounts for 2006, which will immediately increase take home pay. Without adjusting their withholding, taxpayers would not benefit from the credit until they file their taxes sometime in 2007, possibly long after energy prices have returned to a normal level. As a result, this is a crucial provision to ensure that these individuals and families get a helping hand exactly when they need it most. Finally, any unused credit amount could be carried back to the prior two taxable years or carried forward to future taxable years. It is critical that those who would benefit from the home energy credit are not at the same time required to shoulder the burden of the cost of the credit through an increase in the national debt. This credit should be paid for, and it makes sense to me that costs of the credit should be financed by those who profit the most by high energy prices, namely large oil companies. I am concerned that while many individuals are forced to make the choice of heating one's home or meeting the other basic necessities of life, large oil companies are showing record profits. Therefore, the Home Energy Cost Tax Assistance Act includes an offset provision to disallow the tax benefit that large oil companies with revenues in excess of $1 billion in 2005 receive by use of the Last-In, First-Out (LIFO) tax accounting method. Instead, these companies would be required to use the First-In, First-Out (FIFO) method of accounting for 2005. Put another way, the proposal would scale back a tax provision that allows oil companies to take an enormous tax deduction when prices are sky high and allows them to boost after-tax profits even further. As big oil companies show record profits on the backs of ordinary Americans, they have less of a need for such a tax break, and I believe it is fair to scale back this tax break in order to lend a helping hand to low- and middle-income workers. It is critical that Congress act to help low and middle income Americans absorb the increased home energy costs associated with the drastic increase in price of fuel. Temperatures are falling, prices are rising and we must move swiftly. I ask unanimous consent that the text of the bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, today I rise to introduce legislation that would provide a tax credit for home energy costs to low- and middle- income taxpayers. This legislation will help those who are struggling to simply heat their homes as winter approaches and while fuel prices remain so high. Home heating oil in Maine is $2.52 per gallon, up 59 cents from a year ago. Kerosene prices average $2.95 a gallon, 75 cents higher than this time last year. Some projections have a gallon of heating oil reaching $3.00! And I am told that rolling blackouts on cold days this winter may be a possibility because of a high demand for electricity. According to the National Energy Assistance Directors Association, heating costs for the average family using heating oil are projected to hit $1,666 for the upcoming winter. This represents an increase of $403 over last winter's prices and $714 over the winter heating season of 2003-2004. Should colder weather prevail, these costs will surely increase, especially for States like Maine. So understandably, my constituents are asking how they will be able to afford to pay home heating oil bills that are 30 percent more expensive than last year. This is a crisis that has arrived. Heating one's home is a necessity of life--so much so that 73 percent of households in a recent survey reported they would cut back on, and even go without, other necessities such as food, prescription drugs, and mortgage and rent payments. Churches, food pantries, local service organizations--they are all deeply concerned, and the leaves have barely fallen from the trees. In order to help low- and middle-income families heat their homes this winter, I am proposing a tax credit for home energy costs up to $500. The credit would be available to married couples earning less than $100,000 and single taxpayers making less than $50,000. My legislation also directs the Treasury Department to assist individuals to adjust their withholding amounts for 2006, which will immediately increase take home pay. Without adjusting their withholding, taxpayers would not benefit from the credit until they file their taxes sometime in 2007, possibly long after energy prices have returned to a normal level. As a result, this is a crucial provision to ensure that these individuals and families get a helping hand exactly when they need it most. Finally, any unused credit amount could be carried back to the prior two taxable years or carried forward to future taxable years. It is critical that those who would benefit from the home energy credit are not at the same time required to shoulder the burden of the cost of the credit through an increase in the national debt. This credit should be paid for, and it makes sense to me that costs of the credit should be financed by those who profit the most by high energy prices, namely large oil companies. I am concerned that while many individuals are forced to make the choice of heating one's home or meeting the other basic necessities of life, large oil companies are showing record profits. Therefore, the Home Energy Cost Tax Assistance Act includes an offset provision to disallow the tax benefit that large oil companies with revenues in excess of $1 billion in 2005 receive by use of the Last-In, First-Out (LIFO) tax accounting method. Instead, these companies would be required to use the First-In, First-Out (FIFO) method of accounting for 2005. Put another way, the proposal would scale back a tax provision that allows oil companies to take an enormous tax deduction when prices are sky high and allows them to boost after-tax profits even further. As big oil companies show record profits on the backs of ordinary Americans, they have less of a need for such a tax break, and I believe it is fair to scale back this tax break in order to lend a helping hand to low- and middle-income workers. It is critical that Congress act to help low and middle income Americans absorb the increased home energy costs associated with the drastic increase in price of fuel. Temperatures are falling, prices are rising and we must move swiftly. I ask unanimous consent that the text of the bill be printed in the Record.

Ms. SNOWE

Ms. SNOWE. Mr. President, I ask unanimous consent to modify my amendment with the changes at the desk.

Mr. SNOWE

Mr. SNOWE. Mr. President, the amendment that I and Senator Collins have offered, which is cosponsored by Senators Wyden, Corzine, and Landrieu, would require that, when making determinations concerning the transfer of property at installations to be closed or realigned under the current BRAC round, the Secretary of Defense must first offer that property to the affected communities--and if they accept the offer-- transfer it to those communities free of cost. It is a perverse situation when communities that have already contributed toward the more than $200 billion spent on the war in Iraq--$28.5 billion of which was spent on redevelopment efforts in that country--and now face base realignments or closures--are being told that, if they want property for economic recovery, they will have to buy it at fair market value. Our communities should be in the driver seat concerning their economic development, but that is not what current statute allows-- instead, putting these irrevocable decisions in the hands of the Department of Defense. Our amendment puts the priority where it belongs--with our towns and cities, not a Federal bureaucracy. Now, some have argued the amendment would change a time-tested framework of laws that dictate how properties should be transferred following a base closure or realignment and that ensure that all base rounds are treated consistently. I say Defense Base Closure and Realignment Act is not sacrosanct--it has changed many times in the past--and will again. In fact, for the first time ever, the Secretary of Defense is mandated to seek fair market value, in the case of an economic development conveyance to a community for redevelopment purpose. Now that's a change that should engender concern! Opponents also expressed concerns that the amendment would in some way affect existing reversionary interests in deeds, which provide that upon a closure or realignment, installation property would revert back to a community interest. We have modified it today, clarifying that nothing in the amendment shall be construed to affect any reversionary interest in property at the installation. As for protecting the pre-existing rights of Native Americans my friend and colleague, Senator Warner, was correct in noting that my amendment contains a provision explicitly retaining those rights. Additionally, the amendment would not inhibit various military or Federal agency uses of this property--or impede public benefit transfers for schools or parks. Communities would retain the ability to proceed with such opportunities, if they deem them beneficial. Conversely, if there is a use that a community drastically opposes, like an oil refinery prison--it should have the ability to oppose it . . . which the amendment allows. Still, the amendment does contain an exception providing the Secretary of Defense the authority to make transfers in the national security interest of the United States. Finally, to suggestions that base property is owned by the entire nation, and that it is not necessarily fair to provide it to affected communities, I could not disagree more. According to the Government Accountability Office, the DoD has saved as a result of BRAC closures--about $28.9 billion in net savings through fiscal year 2003 from the prior four closure rounds, and is projected to save $7 billion annually thereafter. While the entire Nation can financially benefit from these savings associated with BRAC closures, it is crucial to note that the negative impacts of base closures are disproportionately and unfairly borne by the communities where bases have closed. That is why it is a responsible course of action for the government to provide these communities with the tools and resources, such as required no-cost economic development conveyances, needed to recover from a closure. The modification to the amendment that I offered yesterday would address the concerns raised about whether my amendment would have changed reversionary interests in deeds, which would provide that upon closure and realignment, installation property would revert back to a community interest. We have modified it today, clarifying that nothing in the amendment shall be construed to affect any reversionary interest in property at the installation, and that was to address some of the concerns raised with respect to my amendment. To remind Members, the amendment I am offering today, on behalf of myself, Senator Collins, Senator Lott, Senator Landrieu, Senator Wyden, and Senator Corzine, would allow for the free transfer of closed military bases to communities directly affected rather than allowing the Secretary of Defense to demand fair market value.

Ms. SNOWE

Ms. SNOWE. Mr. President, the Chair wishes to inform Members that the Committee on Small Business and Entrepreneurship will hold a public hearing entitled, ``Strengthening Hurricane Recovery Efforts for Small Businesses'' on Tuesday, November 8, 2005, at 10 a.m., in room 428A Russell Senate Office Building. The Chair urges every Member to attend. Committee on Energy and Natural Resources

Ms. SNOWE

Ms. SNOWE. Mr. President, in August the Base Realignment and Closure Commission issued its fifth round of base closures since 1988. Soon the Department of Defense will begin implementing the BRAC report, undoubtedly having a direct and lasting impact on States across this country, including my own State of Maine. I rise today as a congressional veteran of all five previous base-closing rounds to introduce this amendment along with my colleague from Maine, Senator Collins. It is as well being cosponsored by Senators Corzine, Wyden, and Landrieu, and endorsed by the Association of Defense Communities, to place the communities that are directly affected by base closures in this recent round in the driver's seat with respect to the critical economic development decisions our base-closing communities are going to be confronting, and not placing the Department of Defense in control of their economic development and their economic futures. Our amendment would require that, when making determinations concerning the transfer of property and installations, the Secretary of Defense must offer that property first to the local redevelopment authority, or the LRA, that represents the community and is required to be established under the law. If the LRA accepts the offer, the Secretary is required to transfer the property to the LRA free of cost. Incredibly, the Defense Base Closure and Realignment Act now provides for the first time in any base-closing round the Secretary shall seek fair market value in the case of an economic development conveyance through which the Secretary transfers product to affected communities for economic development purposes. In short, the law now says the first order of business is for the Department of Defense to receive fair market value, no matter the cost in economic development, no matter the cost to the communities themselves. What kind of a perverse situation do we have, when the taxpayers and communities are facing closures or realignments and they are now confronted with a triple burden? They have already contributed mightily toward the cost of Iraq--more than $200 billion, $28.5 billion of which was spent on redevelopment efforts in that country. Now their facilities are being realigned or closed and now the statute is requiring of them, if you want this property for economic recovery, for economic development--because now they are reeling from the impact of a base closure--you will be required as a community or communities to buy it back from the Department of Defense at fair market value. That obviously is going to cost millions upon millions of dollars to these communities that are already reeling from the economic impact as a result of base closure. It is no wonder communities are going to feel slighted and, indeed, abandoned by those they have supported for so long. Is this the message we want to send, that we are going to make the recovery process Defense Department centered and not community centered? As I said earlier, I have been a veteran of five previous base- closing rounds when they first started in 1988. I have been through every one of those rounds. It has always been, What can we do to mitigate the economic impact on the communities directly affected by base closures? But now, regrettably, we are seeing a reversal in that approach under the current statute. Now we are saying the U.S. Defense Department is better equipped to move the development decisions in the Department as opposed to concentrating and allowing the communities to make those decisions. Are we to believe the Department of Defense is better equipped to make decisions as to which property transfers will be most beneficial to a community's economic development, that the Department of Defense has a greater understanding of the individual challenges confronted by our towns and communities in the aftermath of base closures than the towns and communities themselves? I suggest such a notion is on its face absurd. Indeed, it is so preposterous I can hardly believe we are standing here today to offer this amendment, that we are in a situation that we have to offer this amendment. Why would we continue to require the economic future of our BRAC-affected communities to be determined by the highest bidder the Defense Department can identify? So it is going to be the Defense Department that is going to be driving the sale, the transfer, and the future economic plans of a particular community and not the communities themselves. It contradicts the purpose of what we need to do as a result of the base closures. In fact, in the aftermath of decisions that were made by the Base Realignment and Closure Commission, I had the opportunity to speak with one of the commissioners, who said one of the purposes in making this decision--regrettably, on Brunswick--was the fact that we wanted to put the communities in the driver's seat. We wanted the communities to be able to dictate their own future economic destiny, not the Department of Defense, because the original decision was a proposal for realignment, and they recognized they could close the facility, the Navy could take the personnel and transfer the squadrons to Florida and keep the facility and hold the communities hostage to an idle facility that would not generate jobs. So they decided to allow the communities to make those decisions. They made the decision, regrettably, to close the facility, but because they wanted the community to be able to take charge of its own future economic destiny and be able to dictate what the use of that abandoned base would be. So it makes no sense now to discover that we have in statute where it says the Department of Defense is going to require, is going to insist on fair market value for transferring these properties to the community. Ultimately, obviously, the Defense Department is going to be looking for the highest bidder. Ultimately the Defense Department could potentially dictate the use of those facilities, even if it contravenes the interest, the position, and the decisions by the local communities in terms of how they want to use that facility. What happens if the Federal Government's idea of opportunity is a Federal prison or an oil refinery that a community strongly opposes? Legislation has already been introduced in the House which, if enacted, could impose oil refineries on these communities. In fact, it has been part of their Energy bill in the House of Representatives. Ultimately, under current statutes, these decisions would rest not with the State, not with the town, or the city, but with the Department of Defense. Rather, we ought to look at the model established in the State of Maine by the success achieved after I secured a free transfer of land of the former Loring Air Force Base in Limestone, ME, that was closed in the 1991 round and subsequently closed its doors in 1994 as a result of that 1991 round. At the height of its activity, the Loring Air Force Base augmented the native population of Aroostook County by 10,000 individuals. Today the community is only now beginning to see progress in recovering from its prior base closing loss, replacing 1,100 lost civilian jobs with 1,400 new civilian jobs. I could not imagine where we would be today if not for the free land transfer. Can you imagine if they cannot have the ability to make decisions about their future without being handicapped about paying fair market value for this property? It would have handicapped them from making the kind of decisions to allow them to move forward, if they were first required to pay for this property to the Department of Defense. It was bad enough they lost the base. It was bad enough they lost 10,000 people who were located on that base. I might add 10,000 is larger than many of the communities in the State of Maine. Thousands of jobs depended on that base. And we now say to the community, Well, sorry. You are now going to have to pay fair market value to get it back. With the current base- closing round, America faces 22 major base closures and 33 alignments. Outside Maine, leaders and residents in States such as California, Georgia, Indiana, Kansas, Michigan, Mississippi, Texas, Utah, Oregon, New Jersey, Virginia, Pennsylvania, Alaska, Wisconsin, and New Mexico will face considerable challenges as they attempt to successfully transition local economies following base closures and realignments. In fact, according to the data contained in the 2005 base-closing round, almost 33,000 civilian jobs will be lost in base closures and realignments. The Naval air station had a $211 million direct impact on the local economy in 2004. But now the communities surrounding the air station are expected to directly lose 3,275 military and civilian jobs, as well as indirectly losing another 2,590 jobs, for a total of 5,865 jobs, or 15 percent of this labor market. While there are only 32,000 people who live in Brunswick and the neighboring town of Topsham combined, such a significant loss will cause a catastrophic unemployment increase in the area to an incredible 15 percent. These communities need tools, not obstacles. For those of you who are confronting the base-closure process for the first time, I can assure you that this will undoubtedly have a substantial and detrimental impact on these communities. In the final analysis, the base-closing act, as it stands today, places a very difficult burden on the community because it places an inappropriately high priority on the Secretary of Defense to obtain fair market value at the expense of the best interests of the community's economic recovery. I know you will hear opponents in the Department of Defense make its arguments. They will say, Well, suppose the community doesn't want to accept the property for any reason. Of course, our amendment says if the community doesn't want it, and it would be mutually beneficial to the community and the Department of Defense to have the property transferred through another channel, the community need only to refuse the offer process. Similarly, the amendment would not require that the community request or accept all the property at an installation in order to receive any portion of that property. The Department of Defense will also say we need the funds we would recoup from selling property at fair market value to contribute to the account used for closing or realigning military installations or environmental restoration and mitigation. The Department of Defense may also claim that it requires the proceeds for the sale of closed base property in order to pay for that property's cleanup and redevelopment. However, history tells us that this is absolutely not the case. In fact, according to the January 2004 GAO report, over the previous four base-closing rounds, proceeds from land transfers account for only 2.6 percent of the Department of Defense budget for cleanup, redevelopment, closure, and realignment costs. Selling off closed base property is clearly not necessary to these efforts and are certainly unwarranted when one considers the harm that it can cause to these communities that it purports to help. Finally, it is critical to know that this amendment also incorporates the safeguards currently applicable to these economic conveyances to ensure the integrity of these types of transfers. For instance, a property conveyance can only be provided to an LRA for economic development or job generation. Moreover, once the property is transferred to an LRA, the proceeds from the sale or lease of the property within the next 7 years must be spent in support of economic redevelopment of the installation. That is an important point because that would mean that it could reduce the Federal expenditures and environmental mitigation or other expenditures that are required and are associated with the closure of military installations. In addition, this amendment retains safeguard provisions currently contained in the BRAC Act to ensure the integrity of a transfer to a community. For instance, it retains the provisions covered under the Comprehensive Environmental Response and Liability Act of 1980 to ensure that the property will be environmentally restored. The amendment also includes an exception that protects the ability of the Secretary of Defense to make transfers necessary for our national security. I hope that we can work with my colleagues in addressing these issues with this amendment. I certainly will invite the chairman of the committee and members of the committee to critically think about the impact of the current statute on those communities that will be directly affected by base closures. Are we intending the Department of Defense to be the economic developer for these communities, for my communities in Maine, for Brunswick and Topsham that will not be able to plan for their economic futures and their economic well-being? They want to be able to dictate those choices. Are we now saying we are going to hamstring them where we say it will require fair market value for the property of the closed installation? Ultimately, they are going to be at the mercy of the Defense Department. The Defense Department is going to say we are going to sell it to the highest bidder, and it is one of several options under the statute. The Department of Defense could sell it at auction to the highest bidder. It could sell to a private entity, to an LRA. It could do a number of various things under the statute. In the final analysis, they could override the interests of the community, not to mention the fact that it will require the community to pay fair market value. This is the first time for this to occur under the base-closing statute. This is the fifth round. In the four previous rounds, this was not the case. I hope that we will reverse this course because it will have an enormous impact on my communities in Maine and the 22 other States across this country that will be in similar positions. I hope we can work through these issues. I implore my colleagues to support this amendment on behalf of the base-closing communities, those directly impacted by the devastating loss of a military installation that will cost hundreds of millions of dollars, the thousands of jobs in my communities in the State of Maine and communities and taxpayers across this country who continue to spend hundreds of billions, $30 billion of which we are spending on the reconstruction of Iraq. We have even closed bases in order to finance not only the war but the expenditures within the Pentagon. And now we are saying to communities, You are going to pay a price for a third time. We are going to make you pay for those closed installations if you want to develop them. You are going to have to pay fair market value. I submit that is unacceptable, it is unreasonable, and it is not fair to the communities that are directly on the line. To dispel any misconceptions, let me clarify the goals of the amendment and what it would and would not do. If there is property that a community does not want, or it would be mutually beneficial to the community and the DoD to have the property transfer through other channels, the community need only refuse the offer of property. Similarly, the amendment would not require that the community request or accept all of the property at an installation in order to receive any portion of that property. Moreover, it is critical to note that, while it is true that the revenue that the DoD receives from selling installation property goes into accounts that are used for such purposes as closing or realigning military installations, or environmental restoration and mitigation, this amendment would not significantly deplete those funds to the detriment of affected communities. The fact remains, the BRAC account has historically been funded primarily with congressional appropriations from the general treasury, rather than proceeds from property sales and leases. While the DoD may point to a few isolated examples where it recently obtained a large amount of money in return for a property transfer--for instance for transfers in places like Orange County, CA--those isolated examples are not indicative of what it can be expected to receive elsewhere in the Nation, where property values are considerably lower. According to the BRAC Report, there have been a total of 97 base and 5 installation closures categorized by DoD as ``major'' as a result of the 1988 through 1995 processes. In addition, the DoD has stated that there were 55 ``major'' realignments and at least 235 smaller-sized closures and realignments as a result of past actions. Yet, a January 2005 Government Accountability Office report found that DoD's total land sales and related revenue was only about $595 million for the prior four base rounds combined. The $595 million is minimal in comparison to the approximately $23 billion Congress appropriated to the BRAC accounts for the four prior BRAC rounds. In fact, the revenue from sales only represented about 2.6 percent of those accounts. Furthermore, that $595 million figure is dwarfed by the amount that the DoD has saved as a result of BRAC closures--about $28.9 billion in net savings through fiscal year 2003 from the prior four closure rounds, according to GAO, and a projected $7 billion annually thereafter. And these are net savings, that already take into account BRAC implementation cost! Unlike these BRAC savings, which accrue to taxpayers across the Nation, the negative impacts of base closures are disproportionately and unfairly borne by the communities where bases have closed. This amendment also incorporates the safeguards currently applicable to EDCs to ensure the integrity of these types of transfers. For instance, the property conveyances could only be provided to an LRA for economic redevelopment or job generation. Moreover, once the property is transferred to an LRA, the proceeds from a sale or lease of the property, within the next 7 years, must be spent in support of economic redevelopment for the installation. I have not been informed of any abuses that these safeguards would not address, and from what I understand, the DoD tracks and audits such transactions to ensure compliance. If further oversight is necessary, I would not oppose it. Some would contend that local towns and communities would not be best served by their own, unsupervised redevelopment efforts. In response, I ask, are we saying that the United States Department of Defense is better equipped to make decisions as to which property transfers will be most beneficial to an individual community's economic development? That the DoD has a greater understanding of the individual challenges faced by our towns and cities in the aftermath of base closures than the towns and cities themselves? I would suggest that such a notion is, on its face, absurd. So why would we continue to require the economic future of our BRAC-affected communities to be determined by the highest bidder the Department of Defense can identify? Rather, we should look to the model established in my own State, by the success achieved at the site of the former Loring Air Force Base in Limestone, ME, closed in 1994 as a result of a BRAC round. At the height of its activity, the Loring Air Force Base augmented the native population of Aroostook County by 10,000 individuals. That is why I worked tirelessly to ensure that the base was transferred to the community's redevelopment authority for free. And I can tell you firsthand that the redevelopment of Loring-- replacing the 1,100 lost civilian jobs with 1,400 new civilian jobs-- would not have been as successful, if the community had not been placed in charge of its own redevelopment and had not received the majority of the installation property for free as an indispensable redevelopment tool. I am open to continuing to work with my colleagues on any reasonable concerns about this amendment, but would emphasize the importance of passing it now. Should additional reasonable changes be necessary, we can always address those issues through future legislation--but we should not lose this opportunity to enact meaningful and necessary change. I implore my colleagues to support this amendment on behalf of the BRAC affected communities across our Nation, who continue to contribute to the Iraqi war and reconstruction efforts, while simultaneously struggling to convince our Government to support their economic recovery, right here at home. I reserve the remainder of my time.

Ms. SNOWE. I ask unanimous consent the reading of the amendment be dispensed with.

Ms. SNOWE. Mr. President, pursuant to the pending unanimous consent agreement, I send an amendment to the desk and ask for its immediate consideration.

Ms. SNOWE. I respond to several of the issues raised by the chairman and ranking member of the Committee on Armed Services. It is important. We have to establish the fact that this is the first time we are applying the statute in this fashion. It is the first time this statutory language is applying to a base-closing round that allows the Department of Defense to establish and impose fair market value for the use of this property as opposed to transferring it for free to a local redevelopment authority. This is not some special interest authority. These are local communities, State officials who have a genuine interest in the future of their communities, whereas the Department of Defense is interested in a one-time sale. I hope we would respect the interests of the community that is directly affected. After all, they are the ones who are disproportionately bearing the burden of the base closure. Why isn't it that they wouldn't have a direct interest in shaping it? This is the first time this statute is going to apply to a base- closing round. Is it fair, at a time we are asking our citizens, our constituents, to pay $200 billion for the reconstruction of Iraq, losing your bases, and then we are saying, If you want them back and you want that property, you pay for it? We have had four previous base-closing rounds. We had 97 major base closures. Then we had 235 smaller sized closures and 55 major realignments. And we never asked for fair market value. We have never said the Department of Defense was in the business of economic development. We said they were in the business of national security and running the defense of our country and wars, not being real estate developers. Do they have an interest of where the future is going to go in Brunswick and Topsham, ME? I say not. At Loring Air Force Base, it worked out very well. They had a compatible relationship with the Defense Department. We have a defense agency there which is great. We have Job Corps there. We have private sector entities. We didn't disregard public benefits or the public agencies. In fact, the DOD, under this statute, does not have to consider, does not have to transfer to any public agency, could consider transferring some of this property to another public agency but does not have to. It is no different from the LRA. This is wrong. This is contravening the intent. The chairman raises the question about deeds. Reversion will stand as it is. It will not revert back to the owner, as the Congressional Research Service said, to the original owner. This language will not do anything to reverse that in any way. I make that clear. We are moving in an entirely different track. All of America will benefit from the savings, but not all of America is going to bear the disproportionate burden of the base closure. For the Department of Defense now to say we are going to take charge and hold these communities, such as Brunswick and Topsham, hostage to the decisions that are made by the Department of Defense and how they will use that property, frankly, I find it rather surprising, dismaying, and disappointing we are at this point, and I have been through all five base-closing rounds. I have been through it all. We talk about environmental cleanup. Supposedly, according to the Department of Defense, they have a net savings of $28 billion. They should have been able to clean up all of the bases by now. Under my legislation, what it would allow is that the LRAs for the next several years, for any money they made, would go back to the installation for job generation and for helping to clean up so it can mitigate the Federal costs for environmental litigation, which, by the way, the Department of Defense is not doing a very good job of in other installations. That is a serious concern. They have diverted those proceeds for purposes other than those for which they were intended. That is the issue. They have had a net savings, according to their numbers, of $28 billion, but they have not used it for what it was intended, which was to clean up other facilities from the four base- closing rounds. They have not done it, so the local communities would be in control, be able to help dictate their futures, so we do not have the Department of Defense saying: Well, you better take this or else-- or else you get nothing. I do not think that is fair. I do not think that is fair to communities that have embraced the military for generations. At a time in which we are exacting a great cost from our constituents and taxpayers, with more than $200 billion in Iraq--supplemental upon supplemental, reconstruction, schools, security, sewage systems, power--we are saying now to communities that have just lost their bases: Oh, by the way, you are going to have to pay hundreds of millions of dollars if you want it back and if you want to generate jobs. Now, tell that to my communities, which are going to lose more than 5,000 jobs, that if they want to create jobs, they are going to have to pay hundreds of millions of dollars before they can start that process. If they don't, the Department of Defense is going to tell them how their future is going to go. They will tell them whether they want an oil refinery because they are not going to have any choice. I cannot imagine that is the direction we want to take with this statute. It has worked very well in the past. As I have said, for hundreds and hundreds of base closures, it has worked well. It worked very well for the former Loring Air Force Base. There has been a very compatible relationship up there that has been a success, but that is because I was able to secure a free transfer for facilities like Loring back in 1991 so they could start with the tools they needed to help shape their future. It has worked. Allow that process to work. It has been demonstrated it can work. But let's not create another obstacle by now having the Department of Defense in the business of developing real estate. I think it is a very unfortunate direction. I hope my colleagues will support this amendment, support what is right for the communities that are going to bear a tremendous burden, and allow this process to work. It is in the best interests of the communities and in the best interests of this country, Mr. President, I yield the floor.

Ms. SNOWE. How much time remains?

Ms. SNOWE

Ms. SNOWE. Mr. President, every year, the cost of higher education and vocational education increases dramatically. College tuition and fees have been rising more rapidly than household income over the past two decades. The divergence is particularly pronounced for low-income households. The sad result is that with every year more students and families are forced to decide whether they can afford higher education while knowing their choice is limited by price. It is imperative that Congress work to make higher education more accessible to all. Our Nation must make a solid commitment to ensure that every individual has the opportunity to pursue higher education, and our policies should reflect this commitment. Education has always been the great equalizer in our society that provides every American the same opportunity to succeed. That is why today I, along with Senator Schumer, am introducing legislation that would provide for a simpler, more borrower-friendly method for reporting and deducting capitalized interest and origination fees in connection with qualified education loans. In May 2004, the Treasury Department issued final regulations with respect to the student loan interest deduction under the tax code. Among other things, these Treasury regulations provide that the ``original issue discount rules'' (OID) shall apply for purposes of students claiming this deduction. In particular, they would apply to the portion of the student loan that relates to federally mandated student loan origination fees and the capitalized interest that does not accrue on the loan while the student attends school (i.e., the government essentially pays this interest for the student on the loan during the years the student attends school). OID rules are complicated and confusing. In general, these rules attempt to prevent taxpayers from claiming inflated interest deductions stemming from debt obligations. When a borrower issues a debt obligation at a discount, that is the note's face amount exceeds the amount that the lender advances to the borrower, the amount of the discount represents additional interest on the obligation. The OID rules reflect Congress' attempt to square the tax treatment of this unstated or disguised interest into conformity with economic reality. The OID rules, then, ``limit'' a borrower's tax deduction because whereas the tax code generally permits borrowers to deduct the interest they pay on debt obligations, such as student loans, the tax code generally prevents borrowers from deducting any OID they might pay on such debt. For example, assume that a corporation issues thirty-year bonds with a face value of $1,000 each and, according to their terms, paying 10 percent interest each year. Assume, though, that the corporation actually sells these bonds to investors for $850 because the 10 percent interest rate is below market rates. Under these facts, there is $150, $1,000 - $850, that the corporation essentially is ``re-classifying'' as interest that it will pay to the investor; that is, the investors would not be satisfied with a 10 percent return upon giving the corporation $1,000 so that the corporation essentially treats a portion of the principle, $150, as interest. The tax code classifies this $150 as OID. The $150 of OID serves the same function as the stated annual interest of $100, 10 percent of $1,000. As such, the $150 of OID is an additional cost to the corporation in borrowing $850 from the investor, and it is additional compensation that the corporation pays to the lender for lending that amount. The only differences to the parties are that the corporation is not required to pay the OID of $150 until the bond matures and that the investor does not receive the discount in cash until then, unless the bond is sold in the interim. As I noted earlier, the OID rules prevent borrowers from deducting the entire amount of ``interest'' they pay to a borrower on a loan. Specifically, in the previous example, although the parties treat the loan principle as being $850, the application of the OID rules treats the loan as $1,000, which is significant because it means the IRS classifies the $150 of OID as not being interest. In turn, the borrower cannot deduct this $150 payment to the borrower because it is a return of principle on the loan rather than interest. Consequently, applying OID rules to student loans would have several negative effects. First, with respect to students, they would not be able to deduct the entire amount of ``interest'' they pay to their lender. In general, whereas the tax code generally permits students to deduct student loan interest, subject to certain limitations, it does not permit taxpayers to deduct OID. The Treasury regulations, then, will reduce the cash flow of students who are repaying student loans by limiting their student loan interest deduction. In addition, applying the OID rules will have an enormous impact on the compliance burden. Indeed, the interaction of the OID rules and the loan provisions of the Higher Education Act greatly magnifies the complexity of rules that lenders must follow. As such, lenders and servicers will be forced to create accounting systems, at enormous expenses that ultimately will be passed on to student borrowers, to enable them to track and report the origination fees and capitalized interest in accordance with the OID rules. Furthermore, given that there is no track record of applying the OID rules to student lenders, there is no guarantee that they can preform these tasks accurately. Congress enacted the OID rules to prevent taxpayers, mostly large corporations, from altering the terms of loan agreements to claim inflated interest deduction. Clearly, applying them to student loans is unreasonable and frankly unintended. To remedy this problem, my legislation would permit lenders to account for the OID treatment of student loans under the ``immediate accrual method, which colloquially is referred to as the ``bucket method.'' Under this approach, the origination fee would accrue as soon as it is charged to or paid by the borrower, and capitalized interest would accrue under the terms of the promissory note. Accrued origination fee and capitalized interest would go into a ``bucket'' as soon as they accrue, until such time as the borrower begins to make payments on the loan. Amounts in the ``bucket'' would be applied against principal payments until the bucket is empty. Capitalized interest and origination fees would be reported to and deductible by the eligible taxpayer in the year in which they are paid. My legislation would, as I stated, provide for a simpler, more borrower-friendly method for reporting and deducting capitalized interest and origination fees in connection with qualified education loans. Consequently, it would not reduce the need to engage in the burdensome task of calculating the OID on loans, and the student borrowers would be able to deduct more of the interest they pay. This bill is good policy and common sense. Senator Schumer and I look forward to working with Finance Committee Chairman Grassley and Ranking Member Baucus in seeking swift action to resolve this issue.