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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - May 09, 2002)

(b) TREATMENT OF FRIVOLOUS REQUESTS FOR HEARINGS BEFORE LEVY.--

[Page: S4163]  GPO's PDF

(1) FRIVOLOUS REQUESTS DISREGARDED.--Section 6330 (relating to notice and opportunity for hearing before levy) is amended by adding at the end the following new subsection:

``(g) FRIVOLOUS REQUESTS FOR HEARING, ETC.--Notwithstanding any other provision of this section, if the Secretary determines that any portion of a request for a hearing under this section or section 6320 meets the requirement of clause (i) or (ii) of section 6702(b)(2)(A), then the Secretary may treat such portion as if it were never submitted and such portion shall not be subject to any further administrative or judicial review.''

(2) PRECLUSION FROM RAISING FRIVOLOUS ISSUES AT HEARING.--Section 6330(c)(4) is amended--

(A) by striking ``(A)'' and inserting ``(A)(i)'';

(B) by striking ``(B)'' and inserting ``(ii)'';

(D) by inserting after subparagraph (A)(ii) (as so redesignated) the following:

``(B) the issue meets the requirement of clause (i) or (ii) of section 6702(b)(2)(A).''

(3) STATEMENT OF GROUNDS.--Section 6330(b)(1) is amended by striking ``under subsection (a)(3)(B)'' and inserting ``in writing under subsection (a)(3)(B) and states the grounds for the requested hearing''.

(1) in subsection (b)(1), by striking ``under subsection (a)(3)(B)'' and inserting ``in writing under subsection (a)(3)(B) and states the grounds for the requested hearing'', and

(2) in subsection (c), by striking ``and (e)'' and inserting ``(e), and (g)''.

(d) TREATMENT OF FRIVOLOUS APPLICATIONS FOR OFFERS-IN-COMPROMISE AND INSTALLMENT AGREEMENTS.--Section 7122 is amended by adding at the end the following new subsection:

``(e) FRIVOLOUS SUBMISSIONS, ETC.--Notwithstanding any other provision of this section, if the Secretary determines that any portion of an application for an offer-in-compromise or installment agreement submitted under this section or section 6159 meets the requirement of clause (i) or (ii) of section 6702(b)(2)(A), then the Secretary may treat such portion as if it were never submitted and such portion shall not be subject to any further administrative or judicial review.''

(e) CLERICAL AMENDMENT.--The table of sections for part I of subchapter B of chapter 68 is amended by striking the item relating to section 6702 and inserting the following new item:

``Sec. 6702. Frivolous tax submissions.''

(f) EFFECTIVE DATE.--The amendments made by this section shall apply to submissions made and issues raised after the date on which the Secretary first prescribes a list under section 6702(c) of the Internal Revenue Code of 1986, as amended by subsection (a).

SEC. 214. REGULATION OF INDIVIDUALS PRACTICING BEFORE THE DEPARTMENT OF TREASURY.

(a) CENSURE; IMPOSITION OF PENALTY.--

(1) IN GENERAL.--Section 330(b) of title 31, United States Code, is amended--

(A) by inserting ``, or censure,'' after ``Department'', and

(B) by adding at the end the following new flush sentence:

``The Secretary may impose a monetary penalty on any representative described in the preceding sentence. If the representative was acting on behalf of an employer or any firm or other entity in connection with the conduct giving rise to such penalty, the Secretary may impose a monetary penalty on such employer, firm, or entity if it knew, or reasonably should have known, of such conduct. Such penalty shall not exceed the gross income derived (or to be derived) from the conduct giving rise to the penalty and may be in addition to, or in lieu of, any suspension, disbarment, or censure.''

(2) EFFECTIVE DATE.--The amendments made by this subsection shall apply to actions taken after the date of the enactment of this Act.

(b) TAX SHELTER OPINIONS, ETC.--Section 330 of such title 31 is amended by adding at the end the following new subsection:

``(d) Nothing in this section or in any other provision of law shall be construed to limit the authority of the Secretary of the Treasury to impose standards applicable to the rendering of written advice with respect to any entity, transaction plan or arrangement, or other plan or arrangement, which is of a type which the Secretary determines as having a potential for tax avoidance or evasion.''

SEC. 215. PENALTY ON PROMOTERS OF TAX SHELTERS.

(a) PENALTY ON PROMOTING ABUSIVE TAX SHELTERS.--Section 6700(a) is amended by adding at the end the following new sentence: ``Notwithstanding the first sentence, if an activity with respect to which a penalty imposed under this subsection involves a statement described in paragraph (2)(A), the amount of the penalty shall be equal to 50 percent of the gross income derived (or to be derived) from such activity by the person on which the penalty is imposed.''

(b) EFFECTIVE DATE.--The amendment made by this section shall apply to activities after the date of the enactment of this Act.

Mr. GRASSLEY. Mr. President, I rise today to co-sponsor legislation, the ``Tax Shelter Transparency Act'' which will arrest the proliferation of tax shelters.

We have known for many years that abusive tax shelters, which are structured to exploit unintended consequences of our complicated Federal income tax system, erode the Federal tax base and the public's confidence in the tax system. Such transactions are patently unfair to the vast majority of taxpayers who do their best to comply with the letter and spirit of the tax law. As a result, the Finance Committee has worked exceedingly hard over the past several years to develop three legislative discussion drafts for public review and comment. Thoughtful and well-considered comments on these drafts have been greatly appreciated by the staff and members of the Finance Committee. The collaborative efforts of those involved in the discussion drafts combined with the recent request for legislative assistance from the Treasury Department and IRS produced today's revised approach for dealing with abusive tax avoidance transactions.

Above all, the Tax Shelter Transparency Act encourages taxpayer disclosure of potentially abusive tax avoidance transactions. It is surprising and unfortunate that taxpayers, though required to disclose tax shelter transactions under present law, have refused to comply. The Treasury Department and IRS report that the 2001 tax filing season produced a mere 272 tax shelter return disclosures from only 99 corporate taxpayers, a fraction of transactions requiring such disclosure. The Tax Shelter Transparency Act will curb non-compliance by providing clearer and more objective rules for the reporting of potential tax shelters and by providing strong penalties for anyone who refuses to comply with the revised disclosure requirements.

The legislation has been carefully structured to reward those who are forthcoming with disclosure. I wholeheartedly agree with the remarks offered by the recent Treasury Assistant Secretary for Tax Policy, that ``if a taxpayer is comfortable entering into a transaction, a promoter is comfortable selling it, and an advisor is comfortable blessing it, they all should be comfortable disclosing it to the IRS.'' Transparency is essential to an evaluation by the IRS and ultimately by the Congress of the United States as to whether the tax benefits generated by complex business transactions are appropriate interpretations of existing tax law. To the extent such interpretations were unintended, the bill allows Congress to amend or clarify existing tax law. To the extent such interpretations are appropriate, all taxpayers, from the largest U.S. multinational conglomerate to the smallest local feedstore owner in Iowa, will benefit when transactions are publicly sanctioned in the form of an ``angel list'' of good transactions. This legislation accomplishes both of these objectives.

By Mr. KENNEDY (for himself and Mrs. CLINTON):

S. 2499. A bill to amend the Federal Food, Drug, and Cosmetic Act to establish labeling requirements regarding allergenic substances in food, and for other purposes; to the Committee on Health, Education, Labor, and Pensions.

Mr. KENNEDY. Mr. President, I am pleased today to join my colleagues Senator CLINTON and Congresswoman NITA LOWEY in introducing legislation to improve the labeling of allergens in food.

American families deserve to feel confident about the safety of the food on their tables. The Food Allergen Consumer Protection Act will allow the seven million Americans with food allergies to identify more easily a product's ingredients, avoid foods that may harm them, and stay healthy. We anticipate that this legislation will reduce the number, currently estimated to be 150 yearly, of Americans who die due to the ingestion of allergenic foods.

The Food Allergen Consumer Production Act will require that food ingredient statements on food packages identify in common language when an ingredient, including a flavoring, coloring, or other additive, is itself, or is derived from, one of the eight main food allergens, or from grains containing gluten. This legislation will also make the ingredient label on foods easier to read, and require it to include a working telephone number, including one for telecommunication devices for deaf persons.

[Page: S4164]  GPO's PDF

The Food Allergen Consumer Protection Act will require food manufacturers to minimize cross-contamination with food allergens between foods produced in the same facility or on the same production line. It will require the use of ``may contain'' or other advisory language in food labeling when steps to reduce such cross-contamination will not eliminate it. This legislation also preserves the Food and Drug Administration's current authority to regulate the safety of certain products that are bioengineered to contain proteins that cause allergic reactions.

The Food Allergen Consumer Protection Act will also require the Centers for Disease Control and Prevention to track deaths related to food allergies, and it will direct the National Institutes of Health to develop a plan for research activities concerning food allergies.

I urge my colleagues in the Senate to support this legislation that will do so much to improve the lives of those with food allergies. I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the bill was ordered to be printed in the RECORD, as follows:

S. 2499

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 ``Food Allergen Consumer Protection Act''.

SEC. 2. FINDINGS.

The Congress finds as follows:

(1) Approximately 7,000,000 Americans suffer from food allergies. Every year roughly 30,000 people receive emergency room treatment due to the ingestion of allergenic foods, and an estimated 150 Americans die from anaphylactic shock caused by a food allergy.

(2) Eight major foods--milk, egg, fish, Crustacea, tree nuts, wheat, peanuts, and soybeans--cause 90 percent of allergic reactions. At present, there is no cure for food allergies. A food allergic consumer depends on a product's label to obtain accurate and reliable ingredient information so as to avoid food allergens.

(3) Current Food and Drug Administration regulations exempt spices, flavorings, and certain colorings and additives from ingredient labeling requirements that would allow consumers to avoid those to which they are allergic. Such unlabeled food allergens may pose a serious health threat to those susceptible to food allergies.

(4) A recent Food and Drug Administration study found that 25 percent of bakery products, ice creams, and candies that were inspected failed to list peanuts and eggs, which can cause potentially fatal allergic reactions. The mislabeling of foods puts those with a food allergy at constant risk.

(5) In that study, the Food and Drug Administration found that only slightly more than half of inspected manufacturers checked their products to ensure that all ingredients were accurately reflected on the labels. Furthermore, the number of recalls because of unlabeled allergens rose to 121 in 2000 from about 35 a decade earlier. In part, mislabeling occurs because potentially fatal allergens are introduced into the manufacturing process when production lines and cooking utensils are shared or used to produce multiple products.

(6) Individuals who have food allergies may outgrow their allergy if they strictly avoid consuming the allergen . However, some scientists believe that because low levels of allergens are unintentionally present in foods, those with an allergy are unable to keep from being repeatedly exposed to the very foods they are allergic to. Good manufacturing practices can minimize the unintentional presence of food allergens. In addition, when good manufacturing practices cannot eliminate the potential for cross-contamination, an advisory label on the product can provide additional consumer protection.

(7) The Food and Drug Administration is the Nation's principal consumer protection agency, charged with protecting and promoting public health through premarket and postmarket regulation of food. The agency must have both the necessary authority to ensure that foods are properly labeled and produced using good manufacturing practices and the ability to penalize manufacturers who violate our food safety laws.

(8) Americans deserve to have confidence in the safety and labeling of the food on their tables.

SEC. 3. FOOD LABELING ; REQUIREMENT OF INFORMATION REGARDING ALLERGENIC SUBSTANCES.

(a) IN GENERAL.--Section 403 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 343) is amended by adding at the end the following:

``(t)(1) If it is not a raw agricultural commodity and it is, or it intentionally bears or contains, a known food allergen , unless its label bears, in bold face type, the common or usual name of the known food allergen and the common or usual name of the food source described in subparagraph (3)(A) from which the known food allergen is derived, except that the name of the food source is not required when the common or usual name of the known food allergen plainly identifies the food source.

``(2) The information required under this paragraph may appear in labeling other than the label only if the Secretary finds that such other labeling is sufficient to protect the public health. A finding by the Secretary under this subparagraph is effective upon publication in the Federal Register as a notice (including any change in an earlier finding under this subparagraph).

``(3) For purposes of this Act, the term `known food allergen' means any of the following:

``(A) Milk, egg, fish, Crustacea, tree nuts, wheat, peanuts, and soybeans.

``(B) A proteinaceous substance derived from a food specified in clause (A), unless the Secretary determines that the substance does not cause an allergic response that poses a risk to human health.

``(C) Other grains containing gluten (rye, barley, oats, and triticale).

``(D) In addition, any food that the Secretary by regulation determines causes an allergic or other adverse response that poses a risk to human health.

``(4) Notwithstanding paragraph (g), (i), or (k), or any other law, the labeling requirement under this paragraph applies to spices, flavorings, colorings, or incidental additives that are, or that bear or contain, a known food allergen .

``(u) If it is a raw agricultural commodity that is, or bears or contains, a known food allergen , unless it has a label or other labeling that bears in bold face type the common or usual name of the known food allergen and the Secretary has found that the label or other labeling is sufficient to protect the public health. A finding by the Secretary under this paragraph is effective upon publication in the Federal Register as a notice (including any change in an earlier finding under this paragraph).

``(w) If the labeling required under paragraphs (g), (i), (k), (t), (u), or (v)--

``(1) does not use a single, easy-to-read type style that is black on a white background, using upper and lower case letters and with no letters touching;

``(2) does not use at least 8 point type with at least one point leading (i.e., space between two lines of text), provided the total surface area of the food package available to bear labeling exceeds 12 square inches; or

``(3) does not comply with regulations issued by the Secretary to make it easy for consumers to read and use such labeling by requiring a format that is comparable to the format required for the disclosure of nutrition information in the food label under section 101.9(d)(1) of title 21, Code of Federal Regulations.''.

(b) CIVIL PENALTIES.--Section 303(g)(2) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 333(g)(2)) is amended--

(1) in subparagraph (A), by striking ``section 402(a)(2)(B) shall be subject'' and inserting the following: ``section 402(a)(2)(B) or regulations under this chapter to minimize the unintended presence of allergens in food, or that is misbranded within the meaning of section 403(t), 403(u), 403(v), or 403(w), shall be subject''; and

(2) in subparagraph (B), by inserting ``or misbranded'' after ``adulterated'' each place such term appears.

(c) CONFORMING AMENDMENT.--Section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) is amended by adding at the end the following:

``(ll) The term `known food allergen' has the meaning given such term in section 403(t)(3).''.

(d) EFFECTIVE DATE.--The amendments made by this section take effect upon the expiration of the 180-day period beginning on the date of the enactment of this Act.

SEC. 4. UNINTENTIONAL PRESENCE OF KNOWN FOOD ALLERGENS.

(a) FOOD LABELING OF SUCH FOOD ALLERGENS.--Section 403 of the Federal Food, Drug, and Cosmetic Act, as amended by section 3(a) of this Act, is amended by inserting after paragraph (u) the following:

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