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OPTION health pla ns would not be allowed to impose any preexisting condition exclusions on new OPTION enrollees who have at least one year of health ins urance coverage immediately prior to enrollment in an OPTION plan. To prevent people from waiting
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People who lost their previous health cov erage and are not eligible for COBRA would be allowed to enroll in an OPTION plan at the start of the next month, just as newly hired federal employees can enroll in FEHBP.
The benefits provided by OPTION plans would be the same as the benefits in the corresponding FEHBP plans. (Current FEHBP benefits include inpatient/outpatient hospital care; physician services; surgical services; diagnostic tests; and emergency care; as well as child immunizations; certain cancer screening tests, including mammography; prescription drugs, including contraceptives; mental hea lth and substance abuse treatment benefits with parity for mental and physical health; or gan transplantation; and a 48-hour minimum inpatient stay for childbirth and mastectomies.)
The OPTION program would be administered by the Office of Personnel Management (OPM), which administers the FEHBP program, and would generally follow the rules for FEHBP. For example, OPM would conduct the same annual open season for enrollment and would negotiate premiums and benefits with OPTION health pla ns as it does with FEHBP plans. OPM has developed considerable expertise in negotiating and working with health pla ns and has shown that it can run a health pro gram well at a minimum of cost. Its expenses are currently limited to no more than one percent of the total premiums for the FEHBP program. Rather than reinventing the wheel, we can build on OPM's expertise to extend the same health ins urance options to all Americans.
Once it is up and running, the program would pay for itself. Administrative costs would be covered from a portion of the OPTION premiums.
By Mr. DURBIN:
S. 3285. A bill to amend the Internal Revenue Code of 1986 to exclude tobacco products from qualifying foreign trade property in the treatment of extraterritorial income; to the Committee on Finance.
STOP GIVING SPECIAL TAX BREAKS TO TOBACCO
Mr. DURBIN. Mr. President, today I am introducing legislation to exclude tobacco from the Extraterritorial Income Exclusion tax benefit, which has replaced the Foreign Sales Corporation tax benefit.
This tax provision provides tax benefits to a variety of companies, including many in Illinois, and I understand how important it is to them. But one product should be clearly, in law, excluded from this benefit, and it is the one product which kills its user when used according to the manufacturer's directions--tobacco.
The FSC replacement law already contains several exclusions from its benefits. Oil, gas, and other primary products are excluded to help ensure that natural resources in the United States are not depleted.
Unprocessed timber is excluded in order to ensure no displacement of U.S. jobs.
The law also excludes certain products in order to promote congruence with other federal government policies. For example, there are exclusions relating to items subject to the Export Administration Act, which prohibits or severely restricts export of certain civilian goods and technology that have military applications. Similarly, we should not be subsidizing tobacco products that are sold overseas while at the same time trying to cut smoking rates in the U.S. Our trade and health pri orities should be on the same page.
The biggest tobacco companies in America currently benefit handsomely from the Foreign Sales Corporation tax break and will benefit from the Extraterritorial Income Exclusion tax break. The latest available data from the Statistics of Income Division at the Internal Revenue Service show tobacco products sold through 10 Foreign Sales Corporations for domestic tobacco manufacturers accounted for about $100 million in lost tax revenue in 1996. There is no justification for compelling American taxpayers to support a $100 million tax subsidy annually for the benefit of U.S. tobacco companies.
Since 1990, while Philip Morris's sales have grown minimally in the U.S., they have grown by 80 percent abroad. Smoking currently causes more than 3.5 million deaths each year throughout the world. Within 20 years, that number is expected to rise to 10 million, with 70 percent of all deaths from smoking occurring in developing countries. Tobacco will soon be the leading cause of disease and premature death worldwide--surpassing communicable diseases such as AIDS, malaria, and tuberculosis.
American taxpayers should not be partners in this export of disease and death where the result is more children around the globe smoking and more people getting sick and dying.
While it is true that tobacco companies are not receiving any special treatment that other corporations don't get under the old FSC law or its recent replacement, we must remember that tobacco companies are not like any other company. Internal tobacco industry documents have established that, starting as early as the 1950s, cigarette companies intentionally withheld information about smoking, including scientific research about its risks; made false and misleading statements about the harm of tobacco products; attacked research findings despite knowing that the research was valid; failed to take steps to make their products safer; and marketed their products to children and youth.
As a matter of fact, Philip Morris recently posted a statement on its website agreeing that smoking is harmful to your health and that there is no such thing as a safe or safer cigarette. The statement says, ``We agree with the overwhelming medical and scientific consensus that cigarette smoking causes lung cancer, heart disease, emphysema and other serious diseases in smokers. Smokers are far more likely to develop serious diseases, like lung cancer, than non-smokers. There is no `safe' cigarette. These are and have been the messages of public health aut horities worldwide. Smokers and potential smokers should rely on these messages in making all smoking-related decisions.''
It is about time that the tobacco companies faced up to the fact that their products are harmful and highly addictive. In the U.S. alone, smoking causes more than 400,000 deaths and costs more than $72 billion in health car e costs every year.
We should not be subsidizing such an inherently dangerous product that is being promoted and marketed so irresponsibly here and around the world. With its devastating health eff ects, tobacco should not enjoy the same taxpayer-subsidized federal assistance as other products.
It's time to take another step toward bringing our nation's tax and trade priorities in line with our clear understanding of the health dan gers of tobacco. My legislation simply adds one additional category to the list of products excluded from the special tax treatment in the FSC Repeal and Extraterritorial Income Exclusion Act of 2000, which was recently signed into law by the President. It shifts tobacco from being promoted by this tax benefit to being excluded from this tax benefit.
In my legislation, tobacco is defined as it is defined in Section 5702(c) of the Internal Revenue Code, so it includes cigars, cigarettes, smokeless tobacco, and pipe tobacco. It does not apply to raw tobacco, so this legislation will not affect tobacco farmers' ability to sell their product abroad.
Is it fair to exclude a legal product from this tax benefit? Absolutely! Tobacco companies spend over $5 billion each year--that's nearly $14 million every day--in the U.S. alone to promote their products in order to replace the thousands of customers who either die or quit using tobacco products each day. In other countries, U.S. tobacco companies advertise their products near schools and in video-game arcades. They also use children in other countries to peddle their products. Street lights with the Camel logo have been installed in Bucharest, Romania. Toy cars with the Camel insignia are sold to children in Buenos Aires. Children's tatoos sporting the Salem logo are distributed in Hong Kong. Arcade games in the Philippines are plastered with the Marlboro label.
I urge my colleagues to send a message to U.S. tobacco companies as well as the next Administration to take the logical next step and make changes in the way tobacco products are sold and regulated to reflect the magnitude of the danger.
The tobacco prevention agenda has been stalled in this Congress for far too
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Mr. President, I urge my colleagues to join me in cosponsoring this important legislation, to end the contradiction of using the tax code to continue to enrich U.S. tobacco companies, which export products that addict children abroad to nicotine and push them down a path to disease and death.
I ask unanimous consent that a copy of the legislation be printed in the CONGRESSIONAL RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. EXCLUSION OF TOBACCO PRODUCTS FROM QUALIFYING FOREIGN TRADE PROPERTY.
(a) IN GENERAL.--Section 943(a)(3) of the Internal Revenue Code of 1986 (relating to excluded property) is amended by striking ``or'' at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting ``, and'', and by inserting after subparagraph (E) the following new subparagraph:
``(F) any tobacco products (as defined in section 5702(c)).''.
(b) EFFECTIVE DATE.--The amendments made by this section shall take effect as if included in the amendment made by section 3(b) of the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.
Mr. BINGAMAN (for himself, Mr. DASCHLE, and Mr. BAUCUS):
S. 3286. A bill to provide permanent funding for the Bureau of Land Management Payment in Lieu of Taxes program and for other purposes; to the Committee on Energy and Natural Resources.
PILT AND REFUGE REVENUE SHARING PERMANENT FUNDING ACT
Mr. BINGAMAN. Mr. President, the bill I am introducing today, the PILT and Refuge Revenue Sharing Permanent Funding Act, deals with an issue that I believe must be addressed in the next Congress. The bill is a measure to make permanent funding for two important programs managed by the Department of the Interior: the Payment in Lieu of Taxes Program (or PILT) in the Bureau of Land Management and the Refuge Revenue Sharing Program in the Fish and Wildlife Service. These programs provide support to local governments in areas in which these two agencies hold land. Under the authorizations for these programs, the funds are to be provided as an offset to the local property tax base lost by virtue of the Federal ownership of these lands.
Federal ownership of lands in the American West, in states like New Mexico, does not come without its share of burdens for local governments. If there is a fire or other emergency, they must help respond. If there is increased traffic to and from the site, they must maintain the public roads that provide the necessary access to the public. In enacting the original authorizing legislation, Congress decided that, as a matter of policy, it was appropriate for the Federal Government to bear a fair share in paying for these costs, in lieu of the taxes that would be levied on any private landowner in these localities.
But in setting up these programs, Congress decided to make them subject to annual appropriations, either partially (in the case of Refuge Revenue Sharing) or completely (in the case of PILT). In retrospect, this was a mistake. The annual appropriations process has never come even close to providing the funds agreed upon by the underlying authorizing law. Moreover, the amount made available has changed significantly from one year to the next, frustrating the ability of localities to plan effectively for the use of these funds. Many of the burdens they face as a result of Federal land ownership require expenditures and commitments that are long-term. If you want to have a reasonable system of country roads, you need to have a consistent multi-year plan. If you want adequate fire protection, you can't be hiring a dozen new firefighters in one year and firing them the next, as appropriation levels gyrate up and down.
The Federal Government needs to be a better neighbor and a more reliable partner to local governments in the rural West. Since the system of meeting our obligations to these localities through the annual appropriations process has not worked, I am proposing that we start treating our payments in lieu of taxes in the same way that we account for incoming tax revenues to the Federal Government--on the mandatory side of the Federal ledger. By making the funding for these crucial programs full and permanent, we will be keeping the commitments to rural communities throughout the West made in the original PILT and Refuge Revenue Sharing authorizing legislation. It's a matter of simple justice to rural communities. I hope that enacting legislation along the lines of what I am proposing today will receive high priority in the next Congress.
Mr. President, I ask unanimous consent that the text of this bill be printed in the RECORD following this statement.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``PILT and Refuge Revenue Sharing Permanent Funding Act''.
SEC. 2. PERMANENT FUNDING FOR PILT AND REFUGE REVENUE SHARING.
(a) PAYMENTS IN LIEU OF TAXES.--Section 6906 of title 31, United States Code, is amended to read as follows:
``There is authorized to be appropriated such sums as may be necessary to the Secretary of the Interior to carry out this chapter. Beginning in fiscal year 2002 and each year thereafter, amounts authorized under this chapter shall be made available to the Secretary of the Interior, out of any other funds in the Treasury not otherwise appropriated and without further appropriation, for obligation or expenditure in accordance with this chapter.''.
(b) REFUGE REVENUE SHARING.--Section 401(d) of the Act of June 15, 1935, as amended (16 U.S.C. 715s(d)) (relating to refuge revenue sharing), is amended by adding at the end thereof:
``Beginning in fiscal year 2002 and each year thereafter, such amount shall be made available to the Secretary, out of any other funds in the Treasury not otherwise appropriated and without further appropriation, for obligation or expenditure in accordance with this section.''.
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