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(E) streamlined procedures for States and localities to interact with and obtain assistance from Federal agencies that perform water resource functions; and
[Page: S907] GPO's PDF
(F) other materials, as determined by the Secretary.
SEC. 404. REPORT TO CONGRESS.
Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter through fiscal year 2007, the Secretary shall submit to Congress a report on the implementation of this title.
SEC. 405. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Secretary to carry out this title $3,000,000 for each of fiscal years 2003 through 2007, to remain available until expended.
Mr. JEFFORDS. Mr. President, I rise today to join my colleagues Senator GRAHAM, Senator CRAPO, and Senator SMITH of New Hampshire in introducing the Water Investment Act of 2002. This legislation seeks to provide additional resources to States, Tribes, and localities to meet water infrastructure needs. Simultaneously, it seeks to move the state of the art in water program management forward by increasing the flexibility offered to States in administering their water programs, ensuring that ``next generation'' of water quality issues receive the appropriate focus, and institutionalizing financial management capacity into our Nation's water systems.
Mr. President, this legislation is critical to our Nation's future. We tend to take clean water in our faucets and well-functioning, hidden sewage treatment systems for granted in this country. However, without vigilance, these luxuries can quickly disappear. The Water Investment Act of 2002 will help our communities be vigilant.
This legislation authorizes funding of over $20 billion over 5 years nationwide for clean water and $15 billion over 5 years nationwide for safe drinking water projects.
There is significant new flexibility attached to these funds .
Many of the provisions already authorized in the Safe Drinking Water Act which allow an extension of loan terms and more favorable loan terms (including principal forgiveness) for disadvantaged communities. In States such as my home State of Vermont, these types of provisions are critical as small communities struggle to meet water quality needs.
Recognizing the needs of larger communities with diverse income groups within their borders, this bill includes a new opportunity for States to provide more favorable loan terms to communities that may not be disadvantaged as a whole, but may have pockets of disadvantaged individuals as long as the community can demonstrate that the financial benefit they received will be directed through the rate structure toward disadvantaged individuals (based on income) in their service area.
The bill makes the authority to transfer funds between the Safe Drinking Water Act and Clean Water Act State revolving funds permanent.
There is financial accountability built into the Water Investment Act of 2002. We have included provisions for both the Clean Water Act and the Safe Drinking Water Act that are designed to help water utilities better manage their capital investments using asset management plans, rate structures that account for capital replacement costs, and other financial management techniques. We encourage utilities to seek innovative solutions by asking them to review options for consolidation, public-private partnerships, and low-impact technologies before proceeding with a project.
Whenever one mentions ``consolidation'', concerns are often raised about inadvertently providing incentives for excessive or uncontrolled growth. This legislation recognizes that concern and includes a provision that specifically requires States to ensure that water projects are coordinated with local land use plans, regional transportation improvement and long-range transportation plans, and state , regional and municipal watershed plans. As a package, this legislation will help ensure that utilities seek the most efficient organizational structure to meet their water quality needs.
I am also very pleased that the bill includes provisions ensuring that ``next generation'' of water quality issues receives the appropriate focus. As I worked on this legislation, I became aware that there are opportunities to use low-impact technologies to solve water quality issues that may or may not be considered by states and localities as they seek to solve water quality issues. In response, our bill includes several incentives for use of non-structural technologies. We specifically state in the statute that these approaches are eligible to receive funding under the Clean Water Act State Revolving Fund and require that recipients of funds consider the use of low-impact technologies. In addition, we authorize a demonstration program at $20 million per year over 5 years to promote innovations in technology and alternative approaches to water quality management and water supply. This program requires that a portion of the projects use low-impact development technologies.
The use of nontraditional technologies is the focus in the Water Investment Act to ensure that nonpoint source pollution receives appropriate emphasis under the Clean Water Act. The modifications this bill makes to the priority listing requirements in the Clean Water Act ensure that nonpoint source projects will be a part of the equation when funding decisions are made at the State level.
The bill also addresses eligibility issues. It clarifies that planning, design, and associated preconstruction costs are eligible for funds under the Clean Water Act and Safe Drinking Water Act State Revolving Funds as stand-alone items. This ensures that small communities who may not have the resources available to get a project ready to go on their own can receive assistance.
Small communities will also benefit from a provision in the bill that allows privately-owned wastewater facilities to access the Clean Water Act State Revolving Fund Already permitted under the Safe Drinking Water Act, this will allow small, privately-owned wastewater systems such as those located in trailer parks, to obtain much-needed financial assistance.
To ensure that both public and private small systems can actually develop the projects to solve problems, our legislation provides three main types of technical assistance for small communities. It authorizes $7 million per year over 5 years for technical assistance to small systems serving less than 3300 people located in a rural area. It reauthorizes the Small Public Water Systems Technology Assistance Centers for an additional $5 million per year over 5 years. Finally, it reauthorizes the Environmental Finance Centers for $1.5 million per year over 5 years.
We have heard from many organizations that public participation in the execution of the state revolving loan funds needs to be increased. I hope that every individual interested in how water quality projects are selected and prioritized in their States takes full advantage of existing opportunties for public participation. Our legislation takes action to ensure that there is ample opportunity for public comment when developing project priority lists and intended use plans.
There are a multitude of additional provisions in this legislation that I will leave to my colleagues to discuss. I want to thank Senator GRAHAM for his leadership on this legislation and Senators CRAPO and SMITH for their dedication to introducing a bi-partisan package today and their willingness to find a compromise when we needed one.
Water infrastructure is a major priority for the Environment and Public Works Committee during this Congress. We plan to begin an aggressive schedule to move this legislation through the Senate on February 26 with our first committee hearing, followed by our second hearing on February 28 and a markup in early March. I recognize that this issue is of great importance to every Senator, and I look forward to working with each of you to pass this important legislation that is so important to our Nation's water quality and drinking water safety.
By Mr. WYDEN (for himself, Mrs. MURRAY, and Mr. SMITH of Oregon):
S. 1962. A bill to provide for qualified withdrawals from the Capital Construction Fund for fishermen leaving the industry for the rollover of Capital Construction Funds to individual retirement plans; to the Committee on Finance.
Mr. WYDEN. Mr. President, today I am pleased to introduce, for myself, Mrs. MURRAY, and Mr. SMITH of Oregon, the Capital Construction Fund Qualified Withdrawal Act of 2002.
[Page: S908] GPO's PDF
The groundfish fishery in Oregon and adjoining States in the Pacific Northwest continues to face daunting challenges as a result of the groundfish fishery disaster, resulting in a more than 40-percent drop in the income of Oregon fishers since 1995. To assist in rebuilding healthy groundfish stocks, my goal remains to reduce overcapitalization in the groundfish fishery. We want to get the right number of fishers out there, at the right time, catching the right number of fish. This legislation supports this effort by reforming the Capital Construction Fund in a way that will ease the transition for groundfish fishers away from fishing.
The Capital Construction Fund, CCF, was created by the Merchant Marine Act of 1936, as amended in 1969, 46 U.S.C. 1177. CCF has been a way for fishers to accumulate funds , free from taxes, for the purpose of buying or refitting fishing vessels. The program has been a success; however, the CCF's usefulness has not kept up with the times, and today the CCF is exacerbating the problems facing U.S. fisheries, including the West Coast groundfish fishery.
CCF works like an Individual Retirement Account, IRA, in that deposits to the fund earn interest and are deducted from the fishermen's taxable income. But unlike IRAs, there is no limit on contributions to the CCF; so fishers are able to accumulate funds quickly. In Oregon, the amounts in the accounts range from $10,000 to over $200,000.
The problem my legislation will address is that fishers lose up to 70 percent of their funds in taxes and penalties if they withdraw funds from the CCF for purposes other than buying new vessels or upgrading current vessels. Because of the environmental problems plaguing commercial fishing, as well as the overcapitalization of the fishing fleet, fishermen who want to opt out of fishing are penalized for doing so.
This bill takes a significant step towards helping fishermen and making the West Coast groundfish fishery and the commercial fishing industry sustainable by amending the CCF to allow non-fishing uses of investments. This bill amends the Merchant Marine Act of 1936 and the Internal Revenue Code to allow funds currently in the CCF to be rolled over into an IRA or other types of retirement accounts, or to be used for the payment of an industry fee authorized by the fishery capacity reduction program, without adverse tax consequences to the account holders.
I look forward to working with my colleagues to pass this legislation, and I ask that the text of the bill be printed in the RECORD.
The bill 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 Capital Construction Fund Qualified Withdrawal Act of 2002''.
SEC. 2. AMENDMENT OF THE MERCHANT MARINE ACT OF 1936 TO ENCOURAGE RETIREMENT OF CERTAIN FISHING VESSELS AND PERMITS.
(a) IN GENERAL.--Section 607(a) of the Merchant Marine Act, 1936 (46 U.S.C. App. 1177(a)) is amended by adding at the end the following: ``Any agreement entered into under this section may be modified for the purpose of encouraging the sustainability of the fisheries of the United States by making the termination and withdrawal of a capital construction fund a qualified withdrawal if done in exchange for the retirement of the related commercial fishing vessels and related commercial fishing permits.''.
(b) NEW QUALIFIED WITHDRAWALS.--
(1) Amendments to merchant marine act, 1936.--Section 607(f)(1) of the Merchant Marine Act, 1936 (46 U.S.C. App. 1177(f)(1)) is amended--
(A) by striking ``for:'' and insertingÐ ``for--'';
(B) by striking ``vessel'' in subparagraph (A) and inserting ``vessel;'';
(C) by striking ``vessel, or'' in subparagraph (B) and inserting ``vessel;'';
(D) by striking ``vessel.'' in subparagraph (C) and inserting ``vessel;''; and
(E) by inserting after subparagraph (C) the following:
``(D) the payment of an industry fee authorized by the fishing capacity reduction program under section 312(b) of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1861a(b));
``(E) in the case of any such person or shareholder for whose benefit such fund was established or any shareholder of such person, a rollover contribution (within the meaning of section 408(d)(3) of the Internal Revenue Code of 1986) to such person's or shareholder's individual retirement plan (as defined in section 7701(a)(37) of such Code); or
``(F) the payment to a person or corporation terminating a capital construction fund for whose benefit the fund was established and retiring related commercial fishing vessels and permits.''.
(2) SECRETARY TO ENSURE RETIREMENT OF VESSELS AND PERMITS.--The Secretary of Commerce by regulation shall establish procedures to ensure that any person making a qualified withdrawal authorized by section 607(f)(1)(F) of the Merchant Marine Act, 1936 (46 U.S.C. App. 1177(f)(1)(F)) retires the related commercial use of fishing vessels and commercial fishery permits.
(c) CONFORMING AMENDMENTS.--
(1) IN GENERAL.--Section 7518(e)(1) of the Internal Revenue Code of 1986 (relating to purposes of qualified withdrawals) is amended--
(A) by striking ``for:'' and insertingÐ ``for--'';
(B) by striking ``vessel, or'' in subparagraph (B) and inserting ``vessel;'';
(C) by striking ``vessel.'' in subparagraph (C) and inserting ``vessel;'';
(D) by inserting after subparagraph (C) the following:
``(D) the payment of an industry fee authorized by the fishing capacity reduction program under section 312 of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1861a);
``(E) in the case of any person or shareholder for whose benefit such fund was established or any shareholder of such person, a rollover contribution (within the meaning of section 408(d)(3)) to such person's or shareholder's individual retirement plan (as defined in section 7701(a)(37)); or
``(F) the payment to a person terminating a capital construction fund for whose benefit the fund was established and retiring related commercial fishing vessels and permits.''.
(2) SECRETARY TO ENSURE RETIREMENT OF VESSELS AND PERMITS.--The Secretary of the Treasury by regulation shall establish procedures to ensure that any person making a qualified withdrawal authorized by section 7518(e)(1)(F) of the Internal Revenue Code of 1986 retires the related commercial use of fishing vessels and commercial fishery permits referred to therein.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall apply to withdrawals made after the date of enactment of this Act.
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