Statements On Introduced Bills And Joint Resolutions
Floor Speech
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By Ms. CANTWELL (for herself and Mr. Grassley):
S. 1589. A bill to amend the Internal Revenue Code of 1986 to modify the incentives for the production of biodiesel; to the Committee on Finance.
Ms. CANTWELL. Mr. President, I am pleased to join with my colleague, Senator Grassley, and introduce an important piece of legislation that will modernize the tax incentive for domestic biodiesel production. The Biodiesel Tax Incentive Reform and Extension Act of 2009 will provide predictability to investors, to producers, and to researchers so we can move forward and continue to displace imported fossil fuels with low carbon, renewable biodiesel that is produced here in the United States.
Last year, we all saw the devastating effects that $140 per barrel oil had on our economy and our constituents. For economic reasons, national security reasons, and environmental reasons, we cannot allow ourselves to remain dependent on foreign oil. We have to redouble our efforts to deploy alternative fuels that can be produced in the United States and that can help us address the growing crisis of climate change.
Biodiesel is a diesel replacement fuel that is produced from vegetable oils, animal fats and waste oils. It is refined to meet a commercial fuel specification that is readily accepted in the marketplace. Typically biodiesel is blended with conventional diesel fuel, and it is not necessary to modify a vehicle's engine to use the fuel.
There are compelling public policy benefits associated with the production and use of biodiesel. It is an extremely efficient fuel that can be produced domestically so we do not have to rely on imported fuel. Biodiesel creates 3.2 units of energy for every unit of fuel that is required to produce the fuel and the 690 million gallons of biodiesel produced in the U.S. in 2008 displaced 38.1 million barrels of petroleum.
Replacing fossil fuel use with biodiesel also can play a constructive role in addressing the issue of climate change. When compared to conventional diesel fuel, pure biodiesel reduces direct carbon lifecycle emissions by 78 percent, which in 2008 was the equivalent of removing 980,000 passenger vehicles from the road.
Congress first enacted a tax incentive for biodiesel in 2004 and since that time, this tax credit has helped encourage the production and use of this alternative fuel. U.S. production of biodiesel increased from 25 million gallons in 2004 to 690 million gallons last year, and the industry has built the commercial scale production capacity. There currently are 176 plants in operation with the capacity to produce more than 2.61 billion gallons of biodiesel.
The 39 new plants that are either under construction or being expanded would add nearly 849.9 million gallons of production capacity. We have to be sure these plans for expansion go forward. Unfortunately, limited access to capital, uncertainty surrounding the Federal commitment to biodiesel, and the current state of the economy threaten to undermine the progress the U.S. biodiesel industry has made to build the production capacity and infrastructure needed to aggressively displace petroleum diesel fuel with renewable, low-carbon biodiesel. Right now, less than one-third of the industry's facilities are currently producing fuel.
The 51,893 jobs that are currently supported by the U.S. biodiesel industry show there is real job growth potential in this industry. Much of that job growth and economic activity will happen in our rural communities who continue to be hard hit right now.
The current law tax credit will expire at the end of this year and Congress must act or we will threaten the future of this promising domestic industry. The National Biodiesel Board estimates that if Congress does not provide some predictability to the industry, U.S. production will likely fall from 690 million gallons in 2008 to 300-350 million gallons in 2009. This could cost the U.S. economy more than 29,000 jobs. These are not jobs we can afford to lose.
In addition to the looming expiration, the current structure of the tax credit has administrative problems and is subject to abuse that makes it difficult to ensure that that only qualified fuel benefits from the incentive. We owe it to taxpayers to make sure that we are getting the results we want from the tax incentives we enact so in addition to extending the tax credit we need to make the structural changes that Sen. Grassley and I are proposing today.
The centerpiece of the bill is changing the incentive from a blender credit to a production tax credit so that we focus the benefits of the incentive on building the domestic production industry. Under current law, the credit was targeted at the blending of biodiesel with petroleum diesel. While this was helpful in getting us to the point we are now, it is time we move even farther in the direction of promoting the production of petroleum fuel alternatives.
In addition, the legislation we are introducing today will simplify administration of the incentive for both taxpayers and the Internal Revenue Service, IRS, and will eliminate any remaining opportunity for abuse of the tax credit through schemes like ``splash and dash'' in which oil companies add a few drops of biodiesel to their petroleum diesel just to qualify for the tax credits.
Under our bill, the $1 per gallon tax credit will be provided for the production of biodiesel, renewable diesel and aviation jet fuel that complies with established fuel standards and Clean Air Act requirements.
For small producers, those with an annual production capacity of less than 60 million gallons, we increase the $1 to $1.10 for the first 15 million gallons of biodiesel produced.
We simplify the definition of biodiesel so that we encourage production
from any biomass-based feedstock or recycled oils and fats. Hopefully this will unleash even more research and commercialization of alternative fuel sources.
The bill also simplifies the coordination between the income tax credit and the excise tax liability to, again, tighten up compliance and reduce administrative burdens on taxpayers. Most importantly, our bill would extend this tax credit for 5 years, giving needed financial predictability to the industry.
I thank Senator Grassley for joining with me on this bill and look forward to working with our colleagues on the Finance Committee to adopt this worthwhile, commonsense proposal that is consistent with sound energy and sound tax policy.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be printed in the RECORD
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By Ms. CANTWELL (for herself, Mrs. Murray, Ms. Murkowski, and Mr. Begich):
S. 1609. A bill to authorize a single fisheries cooperative for the Bering Sea Aleutian Islands longline catcher processor subsector, and for other purposes; to the Committee on Commerce, Science, and Transportation.
Ms. CANTWELL. Mr. President, today I introduce the Longline Catcher Processor Subsector Single Cooperative Act.
In Washington State, our history is based on a rich maritime tradition that contributes billions of dollars to the state's economy each year. There are 3,000 vessels in Washington's fishing fleet that employ 10,000 fishermen. Seafood processors employ another 3,800 Washingtonians. And fish wholesalers employ an additional 1,000 people.
For many communities along this nation's coastlines, the economy literally ebbs and flows with the tide. It is important to remember that the ocean resources these communities depend on are a public trust and a resource to be both treasured and protected.
As guardians of the ocean and its plentiful resources, it is necessary that we examine all issues of ``ownership'' with care, transparency, and fairness. The issue of fishery cooperatives has proved to be an issue that demands nothing less.
In July of 2008, I chaired a hearing in the Commerce Committee's Subcommittee on Oceans, Atmosphere, Fisheries and Coast Guard, examining the impact of fishery management regimes on fishing safety and conservation. Following that hearing and numerous meetings with stakeholders to discuss the policy, safety, economic, and environmental implications of fishing cooperatives, I am here today to introduce the Longline Catcher Processor Subsector Single Cooperative Act, legislation that would allow for the formation of a single fishing cooperative in the Pacific cod catcher processor fleet.
Instead of fishermen racing against each other and the elements to catch as much as they can, this bill would allow the fishermen to bring some sanity back to their livelihoods. Under this legislation, the Pacific cod catcher processor fishery can allocate the catch among their members, putting an end to the very dangerous ``race for fish.''
The cooperative would empower commercial fishermen with the framework and incentives to police themselves while still preserving the crucial regulatory and oversight responsibilities of the federal government and the North Pacific Fishery Management Council.
By adopting this bill, we can improve fishing safety in the Pacific cod catcher processor fishery by putting an end to the ``race for fish.'' Doing so would lessen the fishery's environmental footprint, and give these fishermen the financial certainty that has worked for others across this Nation.
Fishing safety is a real concern that must be addressed at the federal level. In 2006, the Coast Guard reported that in the decade from 1994 to 2004, 1,398 fishing vessels were lost tragic--reminders of what can go wrong at sea.
Most of these fishing-related fatalities occur in the North Pacific, where the fishermen from my home state of Washington make their living. The difficult waters equate to the highest casualty rates in the nation, and highest rates of fatality and injury among fisherman.
But the North Pacific's rough waters are not the only factor these fishermen have to cope with.
It is a tough business--tough for those who work the boats and those who make the business-end decisions. It's a business that is driven by incentives and dangerous conditions that work in tandem to place countless numbers of fishermen at risk.
When things go wrong, it is usually because of failures at multiple levels. You see, it's not always about vessels. Nor is it all about inspections, safety equipment, or training. Fishing safety is closely related to how fisheries are managed and the very foundation fishing has come to be built upon: competition.
Without legislation such as this, the fisheries will continue to operate on a foundation of destructive competition, or a ``race for fish.'' And this race for fish is a very dangerous race.
According to Lieutenant Christopher Woodley, the former fishing Vessel Safety Coordinator of the 13th U.S. Coast Guard District based in Seattle:
This race encourages fishermen to operate in all weather and sea conditions, to operate without rest, and encourages risk-taking behaviors.
But we can change that.
By instituting a cooperative style of fishery management through this legislation, we dramatically change the incentives. And by changing the incentives to put a new premium on safety, we can change the way people fish and hopefully prevent future tragedies at sea.
Safety is not the only goal of this legislation. This legislation aims to make environmental and economic improvements to the process of fishing.
By eliminating the ``race for fish,'' as I mentioned before, we effectively slow the pace of fishing meaning commercial fishermen can optimize onboard processing facilities. The result is an increase in the product recovery rate per pound of fish caught, meaning they can use more parts of the fish and make wiser and more efficient use of our precious ocean resources. A slower pace also decreases bycatch and promotes ownership of the fishery, which will facilitate a conservation mindset in the fishermen.
We have once again shifted the incentive from reckless speed to doing things slower, better, smarter, and more environmentally conscious.
Furthermore, the Longline Catcher Processor Subsector Fisheries Cooperative Act means greater job stability for the Pacific cod freezer longliner fleet's workers.
When fishermen no longer race, the fishing season lasts longer. This means more stability and predictability for crew members, and eliminates the boom and bust cycle that often prevails today.
I want to be clear that this bill is not yet a finished product. I welcome comments, suggestions, and criticisms to help make this bill good public policy for everyone involved.
As we discuss issues like safety of our fisherman and environmental implications to our oceans, it's imperative that we commit to an open and transparent process that shines the light of accountability.
Both in fisheries management, fishing safety, and those areas where the two intersect, transparency must be the rule.
We owe it to our coastal communities, our fisherman, and the American public collectively as stewards of one of our greatest public resources--our oceans.
Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the text of the bill was ordered to be printed in the RECORD
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By Ms. CANTWELL (for herself, Mr. Vitter, Ms. Landrieu, Mrs. Murray, and Mr. Martinez):
S. 1610. A bill to amend the Internal Revenue Code of 1986 to repeal the shipping investment withdrawal rules in section 955 and to provide an incentive to reinvest foreign shipping earnings in the United States; to the Committee on Finance.
Ms. CANTWELL. Mr. President, I am pleased to join with my colleagues Senators Vitter, Landrieu, Murray, and Martinez and introduce the American Shipping Reinvestment Act of 2009. This legislation will build on work Congress started in 2004 to strengthen the U.S. merchant marine, create needed jobs in U.S. ship building, and stimulate economic activity in our maritime sector.
Since our Nation's founding, the maritime sector has been integral to U.S. national security and economic security. American companies own and operate both U.S. flag ships and a significant number of vessels under international registries. The U.S. flag fleets of these companies generally are built in the United States and are manned with U.S. seafarers. These U.S. flag fleets support not only the shipbuilding industrial base in this country and the pool of qualified seafarers, but they also create the shipping assets that are needed for military sealift in time of war or national emergency.
Most people understand commercial shipping and understand that we maintain a fleet of ships for military purposes. What may not be as well known is that the international ships of some American-owned companies are part of what is called the effective U.S.-controlled fleet, EUSC fleet. The EUSC is the fleet of merchant vessels registered in certain foreign nations that are available for requisition, use, or charter by the U.S. Government in the event of war or national emergency.
For example, U.S. flag commercial vessels and their American crews transported the majority of the cargo--more than 25 million measurement tons of cargo--in support of Operations Enduring Freedom and Iraqi Freedom during the period of 2002-2008.
What people also may not know is that the EUSC fleet has been in decline for the past quarter century, largely because of U.S. tax policy. Following enactment of certain 1986 tax law changes, there was a precipitous decline in American-owned international shipping. To remain competitive, many American-owned shipping companies either became foreign companies or simply divested themselves of their foreign assets.
A 2002 study commissioned by the Department of Defense and performed by professors at the Massachusetts Institute of Technology found that the EUSC fleet dropped by 38 percent in terms of numbers of ships and nearly 55 percent in terms of deadweight tonnage between 1986 and 2000. Perhaps more importantly, these declines have been largely experienced in militarily-useful vessel types. For example, the results of a 2002 DOD study found that if the EUSC fleet continues its present decline, DOD's ability to support U.S. military tanker requirements will diminish over time.
Fortunately, Congress recognized this problem in 2004 and addressed it by enacting the tonnage tax regime as part of the American Jobs Creation Act. Our legislation today builds on that policy by correcting an oversight in the 2004 act that has continued to stymie the ability of U.S. shipbuilding companies to invest in new ships in the United States.
We have very strong economic and national security reasons to support U.S. owned shipowning companies and to maintain a vibrant maritime industry in this country. We also have to continue to support needed changes in our tax code so that we provide operators of U.S. flag vessels in international trade the opportunity to be competitive with their tax-advantaged foreign competitors.
Notwithstanding the significant competitive disadvantages between 1986 and 2004 for American companies operating international ships, there continues to be several U.S. owned shipping companies with foreign operations, and our legislation is directed as helping them sustain and grow their U.S. flag fleets and to maintain their EUSC fleets. This bill will help these companies make needed investment in the U.S. economy, and create jobs in a way that also will enhance national security.
Specifically, The American Shipping Reinvestment Act of 2009 would repeal an outdated section of the Internal Revenue Code and allow U.S. shipping companies with foreign income earned prior to 1986 to reinvest it into the U.S. for the purpose of growing their U.S. flag operations.
Congress first included foreign shipping income in Subpart F in 1975, which meant that all shipping income was taxable at the full U.S. corporate tax rate no matter whether it was invested abroad or in the United States. However, a temporary rule, applicable to foreign shipping income earned from 1975 to 1986, continued to allow for deferral in cases where this income was reinvested in qualifying shipping activities. Section 955 of the Internal Revenue Code provided that this income would be included in gross income, i.e., taxed, immediately under Subpart F in the event of any net decrease in qualified shipping investments.
The American Jobs Creation Act of 2004 restored for shipping income the normal tax rule under which non-Subpart F income of foreign subsidiaries is not taxed by the United States until it is repatriated, generally as a dividend. In restoring the potential for deferral for certain shipping income, Congress in 2004 returned the treatment of shipping income to where it was prior to 1975.
Unfortunately, Congress did not address the rules under IRC Section 955 that apply to income earned between 1975 and 1986, thus creating a situation that this income is permanently stranded offshore. Our bill would repeal IRC Section 955 and will allow these stranded assets to be reinvested in the United States under the favorable tax terms that were in effect for other companies and industries in 2004. Specifically, the legislation provides a one-time opportunity for American-owned shipping companies to bring foreign source income back into the United States at a discounted tax rate for the purpose of expanding and growing our domestic maritime industry. Without the commonsense change in our legislation, these old, stranded assets will never return to the United States and never be subject to U.S. taxation.
The bill is guaranteed to create jobs for American workers with the funds being brought back into the U.S. economy--on the ships, in the shipyards building the ships, and in supporting businesses. The bill contains a provision that would recapture any tax benefits if a shipping company reduces its full-time U.S. employment levels.
This bill also would enhance U.S. national security interests by supporting shipyards that are vital to our defense industrial base, by enabling new U.S. flag tanker capacity to transport our Nation's energy products, and by providing DOD with critical assets--manpower and ships--necessary to help sustain military sealift.
The bill is strongly supported by maritime labor, shipyards, and ship owners and operators and can provide a boost to the U.S. maritime industry at a time when the U.S. is struggling to find its economic footing. The jobs created by this legislation are well-paying, long-term jobs in a crucial sector of our Nation's economy. I urge my colleagues to join me and my other original cosponsors in supporting this bill.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be printed in the RECORD
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By Ms. CANTWELL:
S. 1616. A bill to authorize assistance to small- and medium-sized businesses to promote exports to the People's Republic of China, and for other purposes; to the Committee on Banking, Housing, and Urban Affairs.
Ms. CANTWELL. Mr. President, I rise today to introduce the U.S.-China Market Engagement and Export Promotion Act of 2009. For many small- and medium-sized businesses across this country, some of which are in my home State of Washington, getting access to the Chinese market proves difficult at best. However, to establish a foothold in the ever expanding Chinese market can prove pivotal in achieving financial success. China is a tremendous market for U.S. goods and services. According to the U.S.-China Business Council, despite the global economic downturn, 85 percent of congressional districts increased their exports to China in 2008. In addition, exports to China in almost every congressional district grew more than exports to anywhere else from 2000 to 2008.
In 2008, U.S. total exports to China equaled $71.5 billion. During the same time, however, our imports from China equaled $337.8 billion. That means our trading balance with China in 2008 was a $266.3 billion deficit. This bill would help States establish export promotion offices in China and create a new China Market Advocate Program at U.S. Export Assistance Centers around the Nation. The bill also provides assistance to small businesses for China trade missions and authorizes grants for Chinese business education programs.
I support this bill because of the enormous role that small businesses play in our economy. Small- and medium-sized businesses are a great potential engine of growth. Between 2004 and 2005, small businesses created 78.9 percent of the Nation's net new jobs, and with expanded export opportunities that number will be able to increase in the near future. Considering the huge impact that small- and medium-sized businesses have on our economy, I urge all my colleagues to support this bill and give the business owners the assistance they need to succeed in the Chinese export market.
The U.S.-China Market Engagement and Promotion Act will build the infrastructure necessary to connect American small- and medium-sized businesses with export opportunities in China.
Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the text of the bill was ordered to be printed in the RECORD
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By Ms. CANTWELL:
S. 1633. A bill to require the Secretary of Homeland Security, in consultation with the Secretary of State, to establish a program to issue Asia-Pacific Economic Cooperation Business Travel Cards, and for other purposes; to the Committee on Foreign Relations.
Ms. CANTWELL. Mr. President, I rise today to introduce the Asia-Pacific Economic Cooperation, APEC, Business Travel Cards Act of 2009. This bill would authorize the Secretary of Homeland Security and State Department to issue APEC Business Travel Cards, ABTC's, to business leaders from APEC countries and senior government officials who are actively engaged in APEC business.
The ABTC program has 18 nations participating, including China, Japan and Australia, which are among the world's larger economies. The United States currently recognizes foreign issued ABTC travel cards. Cardholders from non-Visa Waiver Program countries need to present valid passports and those from other countries must still obtain U.S. visas as required by United States law. However, ABTC card holders are allowed to benefit from expedited visa interview scheduling at U.S. embassies and consulates, and expedited immigration processing through airline crew and diplomat immigration lanes upon arrival at U.S. international airports. However, under current law U.S. passport holders are not yet eligible to apply for the ABTC program and therefore do not enjoy these same benefits in Asia-Pacific countries. This bill would require the Secretary of Homeland Security to issue ABTCs to United States citizen business leaders and senior government officials actively engaged in APEC business no later than January 1, 2010.
I support the Asia-Pacific Economic Cooperation Business Travel Cards Act because I have long supported increased free trade with the Asia-Pacific region. International business travel is an essential part of selling goods and services around the world. The 21 member economies of APEC together account for around 53 percent of world GDP and approximately 48 percent of global trade. This bill would help facilitate international cooperation and trade by allowing business leaders within the participating countries to enter countries on an expedited basis for the length of the program, currently three years.
The success of the program has been shown by the amount of applications for travel cards since inception of the program in 1997. From 1997, applications received by participating countries have grown by more than 100 percent each year. By March of last year, there were more than 34,000 cards being used by APEC countries. The Asia-Pacific Economic Cooperation Business Travel Cards Act of 2009 will help facilitate global trade within the Asia-Pacific, and create expanded export opportunities for U.S. businesses. Working to grow U.S. exports will get our economy to grow again and create and maintain U.S. jobs.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be printed in the RECORD
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