[Congressional Record Volume 140, Number 17 (Thursday, February 24, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: February 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mrs. FEINSTEIN (for herself, Mrs. Murray, Mr. Kennedy, Mrs.
Boxer, Ms. Moseley-Braun, Mr. Simon, and Mr. Metzenbaum):
S. 1864. A bill to prohibit sexual harassment by employers with fewer
than 15 employees; to the Committee on Labor and Human Resources.
HARASSMENT-FREE WORKPLACE ACT
Mrs. FEINSTEIN. Mr. President, I am proud to introduce the
Harassment-Free Workplace Act of 1994, which is cosponsored by my
colleagues Senators Boxer, Murray, Moseley-Braun, Kennedy, Simon, and
Metzenbaum.
Mr. President, current Federal law contains one glaring loophole; and
that is, at present, title VII of the 1964 Civil Rights Act applies
only to businesses with 15 or more employees. However, an employee of a
company with fewer than 15 workers has no protection against sexual
harassment under current Federal law.
This loophole essentially omits some 18 million workers--which
comprise 20 percent of the American work force--from protection against
sexual harassment.
In order to eliminate that loophole, we are proposing legislation
which is modeled on legislation now in place in the State of California
which protects all workers from sexual harassment in the workplace.
This legislation would simply expand current Federal protection to
cover workers in businesses with fewer than 15 employees.
I think there is no question in anybody's mind that sexual harassment
is a serious and ongoing problem. Since the Anita Hill-Clarence Thomas
hearings of more than 2 years ago, the number of sexual harassment
claims processed by the Equal Employment Opportunity Commission,
believe it or not, has increased by more than 50 percent.
The 1990 Census Bureau found that roughly 18 million workers,
comprising 20 percent of the American work force, as I said, are not
protected by Federal law.
A survey of the National Association of Female Executives found that
53 percent of all women surveyed report being harassed at some time in
their working life.
Almost 90 percent of Fortune 500 companies report receiving
complaints.
So ignoring sexual harassment is not only bad policy, it is also bad
business.
A 1988 study of 160 Fortune 500 companies found that sexual
harassment costs the average company a total of $6.7 million a year due
to absenteeism, low productivity, and high turnover, because an
employee cannot continue to function at the same level when she is
subjected to sexual harassment.
Many States--including my own State of California--recognize this
problem.
Thirty-five States and the District of Columbia have adopted fair
employment laws that offer more protection against sexual harassment
for workers, according to the Congressional Research Service.
Yet, 15 States still offer no coverage beyond the Federal cutoff of
15 or more employees.
This legislation aims to level the playing field for all employees in
America and create some basic laws which extend to every employee. It
will mean that any employee, whether in corporate America or in small
business in America, will be protected by laws against sexual
harassment. It clearly defines what sexual harassment is, and it says
the employer has a responsibility if it is brought to his attention to
do something about it.
Much has been said about 1992 being the ``Year of the Woman,'' but I
am hopeful that 1994 will be the year for all women in the workplace to
once and for all put this issue behind us.
Mr. President, 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. 1864
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 ``Harassment-Free Workplace
Act''.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to provide Federal protection to small business
employees from sexual harassment in their workplaces;
(2) to extend the sexual harassment provisions of current
civil rights laws to private sector employers who are not
currently covered by Federal law relating to sexual
harassment; and
(3) to authorize the Equal Employment Opportunity
Commission to enforce sexual harassment laws with respect to
small businesses in the same manner as the Commission
currently enforces employment discrimination laws with
respect to other businesses.
SEC. 3. DEFINITIONS.
As used in this Act:
(1) Commerce.--The term ``commerce'' means trade, traffic,
commerce, transportation, transmission, or communication--
(A) among the several States;
(B) between a State and any place outside thereof;
(C) within the District of Columbia, or a possession of the
United States; or
(D) between points in the same State but through a point
outside thereof.
(2) Commission.--The term ``Commission'' means the Equal
Employment Opportunity Commission established under section
705 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-4).
(3) Complaining party.--The term ``complaining party''
means the Commission, the Attorney General, or a person who
may bring an action or proceeding under this Act.
(4) Employee.--The term ``employee'' means an individual
employed by an employer, except that the term ``employee''
shall not include any person elected to public office in any
State or political subdivision of any State by the qualified
voters thereof, or any person chosen by such officer to be on
such officer's personal staff, or an appointee on the policy
making level or an immediate adviser with respect to the
exercise of the constitutional or legal powers of the office.
The exemption set forth in the preceding sentence shall not
include employees subject to the civil service laws of a
State government, governmental agency, or political
subdivision. With respect to employment in a foreign country,
such term includes an individual who is a citizen of the
United States.
(5) Employer.--The term ``employer'' means a person engaged
in an industry affecting commerce who has fewer than fifteen
employees for each working day in each of 33 or more calendar
weeks in the current and in the preceding calendar year.
(6) Employment agency.--The term ``employment agency''
means any person regularly undertaking with or without
compensation to procure employees for an employer or to
procure for employees opportunities to work for an employer,
and includes an agent of such a person.
(7) Industry affecting commerce.--The term ``industry
affecting commerce'' means any activity, business, or
industry in commerce or in which a labor dispute would hinder
or obstruct commerce or the free flow of commerce and
includes any activity or industry ``affecting commerce''
within the meaning of the Labor-Management Reporting and
Disclosure Act of 1959, and further includes any governmental
industry, business, or activity.
(8) Labor organization.--The term ``labor organization''
means a labor organization engaged in an industry affecting
commerce, and any agent of such an organization, and includes
any organization of any kind, any agency, or employee
representation committee, group, association, or plan so
engaged in which employees participate and which exists for
the purpose, in whole or in part, of dealing with employers
concerning grievances, labor disputes, wages, rates of pay
hours, or other items or conditions of employment, and any
conference, general committee, joint or system board, or
joint council so engaged which is subordinate to a national
or international labor organization.
(9) Labor organization deemed to be engaged in
an industry affecting commerce.--A labor organization shall
be deemed to be engaged in an industry affecting commerce
if--
(A)(i) it maintains or operates a hiring hall or hiring
office which procures employees for an employer or procures
for employees opportunities to work for an employer; or
(ii) the number of its members (or, where it is a labor
organization composed of other labor organizations or their
representatives, if the aggregate number of the members of
such other labor organizations) is fewer than 15; and
(B) such labor organization--
(i) is the certified representative of employees under the
provisions of the National Labor Relations Act or the Railway
Labor Act;
(ii) although not certified, is a national or international
labor organization or a local labor organization recognized
or acting as the representative of employees of an employer
or employers engaged in an industry affecting commerce;
(iii) has chartered a local labor organization or
subsidiary body which is representing or actively seeking to
represent employees of employers within the meaning of clause
(i) or (ii);
(iv) has been chartered by a labor organization
representing or actively seeking to represent employees
within the meaning of clause (i) or (ii) as the local or
subordinate body through which such employees may enjoy
membership or become affiliated with such labor organization;
or
(v) is a conference, general committee, joint or system
board, or joint council subordinate to a national or
international labor organization, which includes a labor
organization engaged in an industry affecting commerce within
the meaning of any of clauses (i), (ii), (iii), or (iv).
(10) Person.--The term ``person'' includes one or more
individuals, governments, governmental agencies, political
subdivisions, labor unions, partnerships, associations,
corporations, legal representatives, mutual companies, joint-
stock companies, trusts, unincorporated organizations,
trustees, trustees in cases under title 11, United States
Code, or receivers.
(11) Respondent.--The term ``respondent'' means--
(A) an employer, employment agency, labor organization; or
(B) a joint labor-management committee controlling
apprenticeship or other training or retraining program,
including an on-the-job training program, that serves an
employer or an employee.
(12) State.--The term ``State'' includes a State of the
United States, the District of Columbia, Puerto Rico, the
Virgin Islands, American Samoa, Guam, Wake Island, the Canal
Zone, and Outer Continental Shelf lands defined in the Outer
Continental Shelf Lands Act.
SEC. 4. SEXUAL HARASSMENT.
(a) In General.--It shall be an unlawful employment
practice for a respondent to engage in a practice that
constitutes sexual harassment, within the meaning of title
VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.)
(including any regulation or administrative guideline issued
under such title, or any applicable case law issued by a
Federal court with respect to such title, regarding such
harassment) against an employee or an applicant for
employment with an employer.
(b) Anti-retaliation.--It shall be an unlawful employment
practice for a respondent to discriminate against any such
employee or applicant because the employee or applicant has
opposed any practice made an unlawful employment practice by
this Act, or because the employee or applicant has made a
charge, testified, assisted, or participated in any manner in
an investigation, proceeding, or hearing under this Act.
SEC. 5. ENFORCEMENT, REMEDIES, AND RELATED PROVISIONS.
(a) Enforcement and Remedies.--
(1) In general.--This Act provides the powers, remedies,
and procedures set forth in sections 705, 706, 707, 709, 710,
713, and 714 of the Civil Rights Act of 1964 (42 U.S.C.
2000e-4, 2000e-5, 2000e-6, 2000e-8, 2000e-9, 2000e-12, and
2000e-13) to the Commission, to the Attorney General, or to
any person alleging a violation of any provision of this Act,
as appropriate.
(2) Damages.--
(A) In general.--Except as provided in subparagraph (B), in
an action brought by a complaining party under paragraph (1)
in accordance with section 706 of the Civil Rights Act of
1964 (42 U.S.C. 2000e-5) against a respondent who engaged in
a practice that violates a provision of this Act, the
complaining party may be awarded compensatory and punitive
damages as allowed in section 1977A(b) of the Revised
Statutes (42 U.S.C. 1981a(b)), in addition to any relief
authorized by section 706(g) of the Civil Rights Act of 1964,
from the respondent.
(B) Limitations.--If--
(i) a complaining party is awarded, under this paragraph,
compensatory damages for future pecuniary losses, emotional
pain, suffering, inconvenience, mental anguish, loss of
enjoyment of life, or other nonpecuniary losses, or punitive
damages; and
(ii) on the day on which the complaining party is awarded
damages described in clause (i) there is in effect under
section 1977A of the Revised Statutes a limit on the sum of
the amount of such damages that may be awarded under such
section in an action in which the respondent has more than 14
and fewer than 101 employees in each of 20 or more calendar
weeks in the current or preceding calendar year,
the sum of the amount of such damages that the complaining
party may be awarded under this paragraph may not exceed the
sum described in clause (ii).
(C) Jury trial.--If a complaining party seeks compensatory
or punitive damages under this paragraph--
(i) any party may demand a trial by jury; and
(ii) the court shall not inform the jury of the limitations
described in subparagraph (B).
(b) Extraterritorial Application.--Section 702 of the Civil
Rights Act of 1964 (42 U.S.C. 2000e-1) shall apply with
respect to the application of this Act to an employer,
employing agency, labor organization, or committee, in the
same manner and to the same extent as such section applies
with respect to the application of title VII of such Act (42
U.S.C. 2000e et seq.) to an employer, employing agency, labor
organization, or committee, respectively, as such terms are
used in such Act.
(c) Effect on State Laws.--Section 708 of the Civil Rights
Act of 1964 (42 U.S.C. 2000e-7) shall apply with respect to
the construction of this Act in the same manner and to the
same extent as such section applies with respect to the
construction of title VII of such Act.
SEC. 6. POSTING NOTICES.
(a) Notice.--Every respondent shall post and keep posted,
in the manner prescribed by section 711 of the Civil Rights
Act of 1964 (42 U.S.C. 2000e-10), a notice describing the
applicable provisions of this Act, to be prepared or approved
by the Commission and to appear in an accessible format, for
employees and applicants for employment with employers.
(b) Penalty.--A willful violation of this section shall be
punishable by a fine of not more than $100 for each separate
offense.
SEC. 7. EFFECTIVE DATE.
This Act shall take effect 6 months after the date of
enactment of this Act.
Ms. MOSELEY-BRAUN. Mr. President, I am proud to be an original
cosponsor of the Harassment-Free Workplace Act. This legislation is
important because it will extend legal protections against sexual
harassment to every workplace in America. I believe it is critical to
expand civil right legislation to protect every American.
Under current law, the Civil Right Act of 1964 as amended, an
employee who has been the victim of sexual harassment in the workplace
has the right to sue an employer for back pay and emotional distress
only if she works for a company with greater than 15 employees. The law
comes into play not based on the degree of harassment, or the injury
caused, but as a function of the size of the company.
Mr. President, I believe this is the wrong standard. It is an
arbitrary standard. I believe that all women and men should have the
right to work in an environment free from harassment. Women who work in
small companies are entitled to the same civil rights protections as
women in large companies. That is what this bill does.
I would like to talk for a moment about the women that this bill will
protect. Many of these women are the main providers for their families.
They work hard and play by the rules and raise their children. They are
our mothers, our sisters, and our daughters. And they have every right
to equal protection under the law.
It is not enough to say that a woman working for a small company can
change jobs if she is being harassed. Oftentimes, changing jobs is not
a good option for a woman. For example, her employer may provide health
benefits. But without portability of health care benefits, a woman with
a preexisting condition might not be able to obtain affordable health
care coverage at a new job.
This bill is not going to funnel money to lawyers. It will not
produce unnecessary litigation. This bill will protect women who need
our help. These women look to the Congress and the legal system as
their last resort. Our laws must be responsive. Our country must
respect the work of women at all levels, in every business, in every
community.
Mr. President, small businesses are growing many times faster and
creating many more jobs than corporate America. As a member of the
Small Business Committee, I welcome the extension of Civil Right Act
protections to the most dynamic sector of our economy. More and more
women are working in small businesses, and they deserve the protections
the Congress has already awarded to women in big business.
I am proud that in my State of Illinois, the legislature reformed the
Illinois Human Rights Act in 1992 to protect from sexual harassment any
person who works in a company of more than one employee. In Illinois,
we recognize that every person has the right to work in a harassment-
free environment. But most States do not have legislation which
protects all employees. That is why this Federal legislation is so
important.
Mr. President, I was sent to the Senate by women and men across
Illinois who thought I could make a difference. This legislation, if
passed, will make an enormous difference in the lives of millions of
women in Illinois and across America. I want to commend my colleague
from California, Senator Feinstein, for her leadership on this
legislation. I intend to work closely with her to ensure passage of
this bill.
Mr. SIMON. Mr. President, as chair of the Subcommittee on Employment
and Productivity, which has oversight jurisdiction over the Equal
Employment Opportunity Commission, I am pleased to be an original
cosponsor of a measure that will provide recourse for the millions of
women and men employed in the small business sector who currently have
no protection under Federal sexual harassment law. While many States
such as my home State of Illinois have enacted legislation to extend
protection to small businesses, the increased incidence of sexual
harassment in the workplace demands congressional action. Mr.
President, my colleague, Senator Feinstein, is introducing legislation
to provide protection and recourse to those employed in businesses with
fewer than 15 employees.
For the past two decades, we have seen a remarkable evolution in
Federal sexual harassment law. In 1986, the Supreme Court in Meritor
Savings Bank versus Vinson ratified the consensus emerging among the
Federal circuits and the Equal Employment Opportunity Commission by
recognizing a title VII cause of action for sexual harassment, even
where the victim suffers no tangible or economic loss. Since the
enactment of the Civil Rights Act of 1991, sexual harassment plaintiffs
for the first time are entitled to compensatory and punitive damages,
and have the right to a jury trial. More recently, the Supreme Court
revisited sexual harassment issues in Harris versus Forklift Systems,
Inc. and held that workers need not show severe psychological injury to
prevail in sexual harassment cases.
Despite these recent developments and increased media attention to
the subject of sexual harassment, sexual harassment in the workplace
continues to be a pervasive problem. Some 70 percent of working women
have been the victims of sexual harassment, according to several recent
surveys. According to the National Institute of Business Management, 1
out of 2 women reports having been sexually harassed in the workplace
within the past 2 years. The Equal Employment Opportunity Commission
reports that sexual harassment complaints have increased 125 percent
nationwide since 1990.
While the reported increase is significant, it does not tell the
entire story. Sexual harassment is significantly underreported. In a
1992 Working Women survey, more than 60 percent of those surveyed
responded that they had been harassed; however, only 1 out of 4
reported the harassment to their employers. Many women do not feel that
they can safely report the problem, and many fear retaliation. Only 1
of 5 women surveyed by Working Women believes companies and the
government treat complaints of harassment justly. Over 90 percent think
that companies and government must do more to prevent and stop the
abuse. Harassment in any workplace, whether in the public or private
sector, must not be tolerated.
Sexual harassment is discrimination. Sexual harassment is about power
and fear. Harassment often stems from an outdated attitude about the
proper role of women, and is one way to keep women in their place.
harassment creates an onerous barrier that prevents women from reaching
their potential in the workplace. Those who are harassed experience
many serious ill effects such as being fired or forced to quit,
undermined self-esteem, impaired health, and long-term career damage.
Emotional turmoil effects work performance and forced career detours
all too often translate into decreased earning power.
Harassment hurts employers and our Nation also. An earlier Working
Women survey reported harassment costs a typical Fortune 500 company
$6.7 million dollars a year in absenteeism, turnover, and lost
productivity. In order to compete in a global economy, all barriers
that keep women and men from reaching their potential in the workplace
must be removed.
Currently, title VII covers only employers of 15 or more employees.
According to the Small Business Administration, approximately 89
percent of all employers operated businesses with less than 20
employees in 1990. These small businesses employed approximately 20
percent of the private workforce. These statistics mean that over 18
million women and men have no recourse under Federal sexual harassment
law. The proposed legislation will help ensure a nondiscriminatory
workplace for all.
I urge my colleagues to join me in support of the Harassment-Free
Workplace Act.
______
By Mr. McCAIN:
S. 1865. A bill to amend title XIX of the Social Security Act to
promote demonstrations by States of alternative methods of more
efficiently delivering health care services through community health
authorities.
The Community Health Improvement Act of 1994
Mr. McCAIN. Mr. President, I am pleased to introduce the
Community Health Improvement Act of 1994, which is being cosponsored by
Senators Hollings and Brown. The purpose of this legislation, which is
similar to H.R. 3573 sponsored by Representative Rowland and
cosponsored by Representative Bilirakis, is to enhance access to
quality care for underserved populations, such as residents of rural
areas and inner cities. It is strongly supported by the National
Association of Community Health Centers.
As we debate health care reform, it has become increasingly apparent
that millions of Americans have inadequate access to health care
services as a result of where they live. A report from the National
Association of Community Health Centers and George Washington
University found that there are 43 million Americans who are considered
medically underserved--people who can't get care when they need it.
These people live in all areas of the country, but they are
particularly located in rural communities and inner city neighborhoods
in which health care delivery systems are poorly developed. While some
are uninsured, many have coverage but are still not able to obtain the
efficient, integrated health care services they need.
The Community Health Improvement Act of 1994 will allow us to meet
the needs of our medically underserved populations by building our
national capacity of integrated service delivery systems. I want to
emphasize that this is not a health reform bill, in the sense that it
does not attempt to comprehensively address the way in which health
care services are financed and delivered in this country. Of the
various health reform bills that we are considering, some attempt to
improve the service delivery capacity in underserved areas and some do
not. Yet, all of these bills will entail some phase-in and none will
benefit underserved people immediately. This bill will allow us to
address their problems while we are waiting for reform to go into
effect. Moreover, it will not conflict with whichever health reform
proposal is ultimately enacted.
Specifically, the Community Health Improvement Act would promote
demonstrations by States of alternative methods of delivering health
care services to underserved populations under Medicaid. It would
authorize States to apply to the Secretary of DHHS to develop 5-year
renewable demonstration projects establishing Community Health
Authorities [CHA's]--vertically and horizontally integrated health
service networks consisting of Community Health Centers, rural health
clinics, public health agencies, hospitals, and other local providers.
The CHA's would enroll and care for underserved Medicaid recipients,
and to the extent financially feasible, would expand coverage to
uninsured and underinsured low-income individuals.
States would obtain Federal matching funds to support the planning,
development, and operation of the CHA's. The bill caps Federal payment
for services provided by CHA's to the previous year's costs plus CPI,
thereby funding them on a capitated basis. The CHA, not the Federal or
State government, would be at financial risk for costs incurred above
the capitation payment per enrollee. The National Association of
Community Health Centers has advised us that the administrative costs
of establishing the networks will be offset by program savings, and
that the bill is likely to be graded budget neutral by CBO. It projects
program savings of $2,150,000 annually for each State that has a
demonstration, after the first 2 years of $250,000 in startup costs.
The bill also amends the Public Health Service Act to authorize
grants to community health centers to support the planning and
development of integrated health service networks that serve medically
underserved areas and populations. This provision is independent of the
Medicaid provision in the bill, and would allow community health
centers to develop networks that are less comprehensive than the CHA's
if they choose. Unlike H.R. 3573, our Senate bill does not grant
malpractice protection under the Federal Tort Claims Act [FTCA] for CHA
providers. This provision in the House bill would create an open-ended
Federal liability for negligent actions of providers. Community Health
Centers will maintain their FTCA coverage under current law.
While we are debating different health care reform proposals, and
waiting for whatever reform plan that is ultimately enacted to go into
effect, we should do everything that we can to make health care
services more accessible and affordable for Americans, particularly
underserved populations. The Community Health Improvement Act of 1994
offers one important way in which we can do this now. It will enhance
our health care infrastructure where it is inadequate, enhance the
efficiency of services in underserved areas, and enhance the
affordability of care of uninsured and underinsured people.
Mr. President, I ask for unanimous consent that the text of our bill,
as well as a recent New York Times article entitled ``Finding, Not
Paying, Doctors is Top Rural Health Concern'' that indicates the need
for this legislation, be included in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1865
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 ``Community Health Improvement
Act of 1994''.
SEC. 2. COMMUNITY HEALTH AUTHORITIES DEMONSTRATION PROJECTS.
(a) In General.--Title XIX of the Social Security Act, as
amended by section 13631(b) of the Omnibus Budget
Reconciliation Act of 1993, is amended--
(1) by redesignating section 1931 as section 1932; and
(2) by inserting after section 1930 the following new
section:
``community health authorities demonstration projects
``Sec. 1931. (a) In General.--In order to test the
effectiveness of various innovative health care delivery
approaches through the operation of community health
authorities, the Secretary shall operate a program under
which States establish projects to demonstrate the
effectiveness of such approaches in providing access to cost-
effective preventive and primary care and related services
for various areas and populations, including low-income
residents of medically underserved areas or for medically
underserved populations. A State may operate more than 1 such
project.
``(b) Selection of State Projects.--
``(1) In general.--A State is eligible to participate in
the program, and establish a demonstration project, under
this section only if--
``(A) the State submits to the Secretary an application, at
such time and in such form as the Secretary may require, for
participation in the program; and
``(B) the Secretary finds that--
``(i) the application contains assurances that the State
will support the development of a community health authority
that meets the requirements of this section,
``(ii) the community health authority will meet the
requirements for such an authority under subsection (c),
``(iii) the State provides sufficient assurances that the
demonstration project of a community health authority meets
(or, when operational, will meet) the requirements of
subsection (d), and
``(iv) the State will comply with the requirements of
subsections (g) and (h).
``(2) Contents of application.--Each application submitted
under paragraph (1) for a demonstration project shall include
at least the following:
``(A) A description of the proposed community health
authority and of the area or population that the authority
will serve.
``(B) A demonstration that the CHA will serve at least 1
geographic area or population group that is designated as
medically underserved under section 330 of the Public Health
Service Act or as having a shortage of health professionals
under section 332 of such Act.
``(C) An assessment of the area's or population's need for
services and an assurance that the services of the CHA will
be responsive to those needs.
``(D) A list of the items and services to be furnished by
the CHA under the project, broken down by those items and
services that are treated as medical assistance under the
State plan under this title and other items and services that
will be provided by the CHA (either directly or through
coordination with other entities).
``(E) An assurance that the CHA has entered into (or plans
to enter into) written participation agreements with a
sufficient number of providers to enable the CHA to furnish
all of such items and services to enrolled individuals.
``(F) An assurance that the State plan under this title
will provide payment to the authority in accordance with
subsection (e).
``(G) Evidence of support and assistance from other State
agencies with responsibility for providing or supporting the
provision of preventive and primary care services to
underserved and at-risk populations.
``(H) A proposed budget for the CHA.
``(3) Priority.--The Secretary shall give priority to those
applications proposing to support a CHA that includes as
participating providers all Federally-qualified health
centers serving the area or population or (in areas for which
there are no Federally-qualified health centers) all entities
that would be Federally-qualified health centers but for the
failure to meet the requirement described in section
329(f)(2)(G)(i) of the Public Health Service Act or the
requirement described in section 330(e)(3)(G)(i) of such Act
(relating to the composition of the entity's governing
board).
``(4) Period of approval.--Each project approved under this
section shall be approved for a period of not less than 5
years, subject to renewal for subsequent periods unless such
approval is withdrawn for cause by the Secretary or at the
request of the State.
``(c) Community Health Authority (CHA) Defined.--In this
section, the terms `community health authority' and `CHA'
mean a nonprofit entity that meets the following
requirements:
``(1) The entity serves (or will serve at the time it
becomes operational under a project) a geographic area or
population group that includes those designated--
``(A) under section 330 of the Public Health Service Act as
medically underserved, or
``(B) under section 332 of such Act as a health professions
shortage area.
``(2) The entity enrolls--
``(A) individuals and families who are medicaid-eligible;
``(B) within the limits of its available resources and
capacity, other individuals who have incomes below 200
percent of the Federal official poverty level; and
``(C) within the limits of its available resources and
capacity, other individuals and families who are able to pay
the costs of enrollment.
``(3) Through its participating providers, the entity
provides or, through contracts, arranges for the provision of
(or, by the time it becomes operational, will so provide or
arrange for the provision of) at least preventive services,
primary care services, inpatient and outpatient hospital
services, and any other service provided by a participating
provider for which payment may be made under the State plan
under this title to enrolled individuals.
``(4) The entity must include (to the maximum extent
practicable) as participating providers any of the following
providers that furnish services provided by (or arranged by)
the entity that are located in or serve the area or
population to be covered:
``(A) Federally-qualified health centers.
``(B) Rural health clinics.
``(C) Local public health agencies that furnish such
services.
``(D) A hospital (or other provider of inpatient or
outpatient hospital services) which has a participation
agreement in effect with the State under its plan under this
title, which is located in or serving the area or population
to be served.
``(5) The entity may include as participating providers
other providers (which may include private physicians or
group practice offices, other community clinics, limited
service providers (such as prenatal clinics), and health
professionals teaching programs (such as area health
educational centers)) and take other appropriate steps, to
the extent needed to assure that the network is reasonable in
size and able to provide (or arrange for the provision of)
the services it proposes to furnish to its enrollees.
``(6) The entity must maintain written agreements with each
participating provider under which the provider agrees to
participate in the CHA and agrees to accept payment from the
CHA as payment in full for services furnished to individuals
enrolled with the CHA (subject to the requirements of
subsection (g)(4), in the case of services furnished by a
provider that are described in subparagraph (B) or (C) of
section 1905(a)(2)).
``(7) Under the written agreements described in paragraph
(6), if a majority of the board of directors of the entity
has determined that a participating provider is failing to
meet any of the requirements of the participation agreement,
the board may terminate the provider's participation
agreement in accordance with the following requirements:
``(A) Subject to subparagraph (B), prior to any termination
of a provider's participation agreement, the provider shall
be entitled to 30 days prior notice, a reasonable opportunity
to correct any deficiencies, and an opportunity for a full
and fair hearing conducted by the entity to dispute the
reasons for termination. The provider shall be entitled to
appeal the board of directors' decision directly to a
committee consisting of representatives of all of the
entity's participating providers.
``(B) If a majority of the board of directors of the entity
determines that the continued participation of a provider
presents an immediate threat to the health and safety of
patients or a substantial risk of improper diversion of
funds, the board may suspend the provider's participation
agreement (including the receipt of funds under the
agreement) for a period of up to 60 days. During this period,
the entity shall take steps to ensure that patients who were
assigned to or cared for by the suspended provider are
appropriately assigned or referred to alternative
participating providers. The suspended provider shall be
entitled to a hearing within the period of the suspension to
show cause why the suspension should be lifted and its
participation agreement restored. If dissatisfied with the
board's decision, the provider shall be entitled to appeal
the decision directly to a committee consisting of
representatives of all of the entity's participating
providers.
``(C) For all other disputes between the entity and its
participating providers (including disputes over the amounts
due or interim rates to be paid to a provider), the entity
shall provide an opportunity for a full and fair hearing.
``(8) The entity must be governed by a board of directors
that includes representatives of the participating providers
and, as appropriate, other health professionals, civic or
business leaders, elected officials, and residents of the
area or population served. Not less than 51 percent of such
board shall be composed of individuals who are enrolled in
the CHA and who are representatives of the community served.
``(d) Demonstration Project Requirements.--The requirements
of this subsection, with respect to a demonstration project
of a CHA under this section, are as follows:
``(1)(A) All services furnished by the CHA under the
project shall be available and accessible to all enrolled
individuals and, except as provided in subparagraph (B), must
be available without regard to an individual's ability to pay
for such services.
``(B) A CHA shall prepare a schedule of discounts to be
applied to the payment of premiums by individuals who are not
medicaid-eligible individuals which shall be adjusted on the
basis of the individual's ability to pay.
``(2) The CHA shall take appropriate steps to emphasize the
provision of preventive and primary care services, and shall
ensure that each enrolled individual is assigned to a primary
care physician (to the greatest extent appropriate and
feasible), except that the CHA shall establish a process
through which an enrolled individual may be assigned to
another primary care physician for good cause shown.
``(3) The CHA must make reasonable efforts to reduce the
unnecessary or inappropriate use of hospital or other high-
cost services through an emphasis on preventive and primary
care services, the implementation of utilization review or
other appropriate methods.
``(4) The State must regularly provide the CHA with
information on other medical, health, and related benefits
that may be available to individuals enrolled with the CHA
under programs other than the State plan under this title,
and the CHA must provide its enrolled individuals with
enrollment information and other assistance to assist such
individuals in obtaining such benefits.
``(5) The State and the CHA must meet such financial
standards and requirements and reporting requirements as the
Secretary specifies and must prepare and submit to the
Secretary an annual independent financial audit conducted in
accordance with requirements specified by the Secretary.
``(6) In collaboration with the State, the CHA must adopt
and use community-oriented, patient-responsive quality
assurance and control systems in accordance with requirements
specified by the Secretary. Such systems must include at
least an ongoing quality assurance program that measures
consumer satisfaction with the care provided under the
network, stresses improved health outcomes, and operates a
community health status improvement process that identifies
and investigates community health problems and implements
measures designed to remedy such problems.
``(e) Capitation Payments.--
``(1) In general.--Under a demonstration project under this
section, the State shall enter into an annual contract with
the CHA under which the State shall make monthly payments to
the CHA for covered services furnished through the CHA to
individuals entitled to medical assistance under this title
in the amount specified in paragraph (2). Payment shall be
made at the beginning of each month on the basis of estimates
of the amounts payable and amounts subsequently paid are
subject to adjustment to reflect the amounts by which
previous payments were greater or less than the amount of
payments that should have been made.
``(2) Amount of capitation payment.--The amount of a
monthly payment under paragraph (1) during a contract year,
shall be equal to \1/12\ of the product of--
``(A)(i) the average per capita amounts expended under this
title under the State plan for covered services to be
furnished under the demonstration project for similar
medicaid-eligible individuals for the most recent 12-month
period ending before the date of the enactment of this
section, increased by (ii) the percentage change in the
consumer price index for all urban consumers (all items; U.S.
city average) during the period that begins upon the
expiration of such 12-month period and ends upon the
expiration of the most recent 12-month period ending before
the first month of the contract year for which complete
financial data on such index is available, and
``(B) the number of medicaid-eligible individuals enrolled
under the project as of the 15th day of the month prior to
the first month of the contract year (or, in the case of the
first year for which a contract is in effect under this
subsection, the CHA's reasonable estimate of the number of
such individuals who will be enrolled in the project as of
the 15th day of such month).
``(f) Additional State Assistance for Planning,
Development, and Operations.--
``(1) In general.--Subject to paragraph (2), in addition to
the payments under subsection (e), demonstration projects
approved under this section are eligible to have approved
expenditures described in paragraph (3) treated, for purposes
of section 1903(a)(7), as expenditures found necessary by the
Secretary for the proper and efficient administration of the
State plan under this title.
``(2) Special rules.--
``(A) Limitation with respect to any community health
authority.--The total amount of expenditures with respect to
any CHA that may be treated as expenditures for
administration under paragraph (1) for any 12-month period
shall not exceed $250,000.
``(B) Limitation on number of years.--The number of 12-
month periods for which expenditures are treated as
expenditures for administration under paragraph (1) for a CHA
shall not exceed--
``(i) 2 for expenditures for planning and development
assistance, described in paragraph (3)(A), and
``(ii) 2 for expenditures for operational assistance,
described in paragraph (3)(B).
``(C) No resulting reduction in amounts provided under phsa
grants.--No grant to a CHA or 1 of its participating
providers under the Public Health Service Act or this Act may
be reduced on the ground that activities of the CHA that are
considered approved expenditures under paragraph (3) are
activities for which the CHA or the participating providers
received funds under such Act.
``(3) Approved expenditures.--The approved expenditures
described in this paragraph are as follows:
``(A) Planning and development.--Expenditures for planning
and development with respect to a CHA, including--
``(i) developing internal management, legal and financial
and clinical, information, and reporting systems for the CHA,
and carrying out other operating activities of the CHA;
``(ii) recruiting, training and compensating management
staff of the CHA and, as appropriate and necessary,
management and clinical staff of any participating provider;
``(iii) purchasing essential equipment and acquiring,
modernizing, expanding, or (if cost-effective) constructing
facilities for the CHA and for participating providers
(including amortization costs and payment of interest on
loans); and
``(iv) entering into arrangements to obtain or participate
in emerging medical technologies, including telemedicine.
``(B) Operations.--Expenditures in support of the
operations of a CHA, including--
``(i) the ongoing management of the CHA, including daily
program administration, recordkeeping and reporting,
assurance of proper financial management (including billings
and collections) and oversight of program quality;
``(ii) developing and operating systems to enroll eligible
individuals in the CHA;
``(iii) data collection, in collaboration with the State
medicaid agency and the State health department, designed to
measure changes in patient access to care, the quality of
care furnished, and patient health status, and health care
outcomes;
``(iv) ongoing community outreach and community education
to all residents of the area or population served, to promote
the enrollment of eligible individuals and the appropriate
utilization of health services by such individuals;
``(v) the establishment of necessary reserves or purchase
of stop-loss coverage; and
``(vi) activities relating to health professions training,
including residency training at participating provider sites.
``(g) Additional Requirements.--
``(1) Mandatory enrollment of medicaid-eligible
individuals.--Notwithstanding any provision of section
1903(m), a State participating in a demonstration project
under this section may require that each medicaid-eligible
resident in the service area of a CHA operating under the
project is not eligible to receive any medical assistance
under the State plan that may be obtained through enrollment
with the CHA unless the individual receives such assistance
through enrollment with the CHA.
``(2) Continued entitlement to additional benefits.--In the
case of a medicaid-eligible individual enrolled with a CHA
under a demonstration project under this section, the
individual shall remain entitled to medical assistance for
services which are not covered services under the project.
``(3) HMO-related requirements.--A CHA under this section
shall be deemed to meet the requirements of section 1903(m)
(subject to paragraph (1)) in the same manner as an entity
listed under section 1903(m)(2)(G).
``(4) Treatment of federally-qualified health centers and
rural health clinics.--Payments under a demonstration project
under this section to a Federally qualified health center or
rural health clinic which is a participating provider shall
be made consistent with section 1902(a)(13)(E) for all
services offered by the CHA which are provided by such a
center or clinic.
``(5) Outstationing eligibility workers.--Under the
project, the State may (in addition to meeting the
requirements of section 1902(a)(55)) provide for, or pay the
reasonable costs of, stationing eligibility workers at
appropriate service sites under the project, and may permit
medicaid-eligible individuals to be enrolled under the State
plan at such a CHA or at such a site.
``(6) Purchase of stop-loss coverage.--The State shall
ensure that the CHA has purchased stop-loss coverage to
protect against default on its obligations under the project.
If an entity otherwise qualified to serve as a CHA is
prohibited under State law from purchasing such coverage, the
State shall waive the application of such law to the extent
necessary to permit the entity to purchase such coverage.
``(h) Evaluation and Reporting.--
``(1) CHA.--Each CHA in a State with a demonstration
project approved under this section shall prepare and submit
to the State an annual report on its activities during the
previous year.
``(2) State.--Taking into account the reports submitted
pursuant to paragraph (1), each State with a demonstration
project approved under this section shall prepare and submit
to the Secretary an annual evaluation of its activities and
services under this section. Such evaluation shall include an
analysis of the effectiveness of the project in providing
cost-effective health care to enrolled individuals.
``(3) Report to congress.--Not later than 3 years after the
date of the enactment of this section, the Secretary shall
submit to Congress a report on the demonstration projects
conducted under this section. Such report shall include an
analysis of the effectiveness of such projects in providing
cost-effective health care for the areas or populations
served.
``(i) Collaboration in Administration.--In carrying out
this section, the Secretary shall assure the highest possible
level of collaboration between the Health Care Financing
Administration and the Public Health Service. Such
collaboration may include (if appropriate and feasible) any
of the following:
``(1) The provision by the Public Health Service of new or
increased grant support to eligible entities participating in
a CHA, in order to expand the availability of services
(particularly preventive and primary care services).
``(2) The placement of health professionals at eligible
locations and collaboration with Federally-assisted health
professions training programs located in or near the areas
served by community health authorities.
``(3) The provision of technical and other nonfinancial
assistance.
``(j) Definitions.--In this section:
``(1) Medicaid-eligible individual.--The term `medicaid-
eligible individual' means an individual described in section
1902(a)(10)(A) and entitled to medical assistance under the
State plan.
``(2) Participating provider.--The term `participating
provider' means, with respect to a CHA, a provider that has
entered into an agreement with the CHA for the provision of
covered services under a project under this section.
``(3) Preventive and primary care services.--`Preventive'
and `primary' services include those services described in
section 1905(l)(2)(A) and included as Federally-qualified
health center services.''.
(b) Continued Medicaid Eligibility for up to 1 Year.--
Section 1902(e)(2) of such Act (42 U.S.C. 1396a(e)(2)) is
amended--
(1) in subparagraph (A)--
(A) by inserting ``or with a community health authority
under a demonstration project under section 1931'' after
``section 1876'', and
(B) by striking ``such organization or entity'' and
inserting ``such organization, entity, or authority''; and
(2) in subparagraph (B), by striking ``effective.'' and
inserting the following: ``effective (or, in the case of an
individual enrolled with a community health authority under a
demonstration project under section 1931, of not more than 1
year beginning on the date the individual's enrollment with
the authority becomes effective).''.
(c) Exception to Anti-Kickback Law.--Section 1128B(b)(3) of
such Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
(1) by striking ``and'' at the end of subparagraph (D),
(2) by striking the period at the end of subparagraph (E)
and inserting ``; and'', and
(3) by adding at the end the following new subparagraph:
``(F) any remuneration paid, or received, by a Federally
qualified health center, rural health clinic, or other entity
which is a participating provider under a demonstration
project under section 1931 as part of an arrangement for the
procurement of goods or services or the referral of patients
or the lease or purchase of space or equipment.''.
(d) Effective Date.--The amendments made by this section
shall apply to calendar quarters beginning on or after
October 1, 1994.
SEC. 3. HEALTH CENTER PROGRAM AMENDMENTS.
(a) Authorization of Grants for Network Development.--
(1) Migrant health centers.--Section 329 of the Public
Health Service Act (42 U.S.C. 254b) is amended by adding at
the end the following:
``(j)(1) The Secretary may make a grant, to an entity
receiving a grant under this section or to a group of such
entities, to support the planning and development of health
service networks (as defined in paragraph (3)) which will
serve high impact areas, medically underserved areas, or
medically underserved populations within the area they serve
(or propose to serve).
``(2) A grant under this subsection for the planning and
development of a health service network may be used for the
following costs:
``(A) The costs of developing the network corporate entity,
including planning and needs assessment.
``(B) The costs of developing internal management for the
network, as well as costs of developing legal, financial,
clinical, information, billing, and reporting systems, and
other costs necessary to achieve operational status.
``(C) The costs of recruitment, training, and compensation
of management staff of the network and, as appropriate and
necessary, the management and clinical staff of any
participating provider.
``(D) The costs of developing additional primary health and
related service sites, including costs related to purchase of
essential equipment, acquisition, modernization, expansion,
or, if cost-effective, construction of facilities.
``(3) In this subsection, the term `health service network'
means a nonprofit private entity that--
``(A) through its participating providers (which may
provide services directly or through contract) assures the
provision of primary health and related services and, as
appropriate, supplemental health services to residents of the
high impact area or medically underserved area or members of
the medically underserved population covered by the network,
``(B) includes, as participating providers, at least all
recipients of grants under this section or section 330, 340,
or 340A that provide primary health and related services to
the residents of the area it serves (or proposes to serve),
and that may include, at the entity's option, any other
providers of primary health or supplemental health services
to residents of the high impact area or medically underserved
area or members of the medically underserved population
covered by the network, but only if such participating
providers agree to provide services without regard to an
individual's ability to pay, and
``(C) is governed by individuals a majority of whom are
patients, employees, or board members of its participating
providers that receive grants under this section or section
330, 340, or 340A.''.
(2) Community health centers.--Section 330 of such Act (42
U.S.C. 254c) is amended by adding at the end the following:
``(l)(1) The Secretary may make a grant, to an entity
receiving a grant under this section or to a group of such
entities, to support the planning and development of health
service networks (as defined in section 329(j)(3)) which will
serve high impact areas, medically underserved areas, or
medically underserved populations within the area they serve
(or propose to serve).
``(2) A grant under this subsection for the planning and
development of a health service network may be used for the
costs described in section 329(j)(2).''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
(b) Extension of Authorization of Appropriations.--
(1) Migrant health centers.--Section 329(h)(1)(A) of such
Act (42 U.S.C. 254b(h)(1)(A)) is amended--
(A) by inserting ``and subsection (j)'' after ``through
(e)'', and
(B) by striking ``1994'' and inserting ``1999''.
(2) Community health centers.--Section 330(g)(1)(A) of such
Act (42 U.S.C. 254c(g)(1)(A)) is amended by striking ``1994''
and inserting ``1999''.
____
[From the New York Times, Feb. 19, 1994]
Finding, Not Paying, Doctors Is Top Rural Health Concern
(By Adam Clymer)
Parkston, SD, Feb. 19.--The big problems of health care
sound very different in small farming towns than they do in
Washington. The issues that Congressional subcommittees will
begin voting on in a few days are remote, often irrelevant
and frequently unknown in the rural Midwest.
Several days of conversations here made it clear that the
big problem is less how to pay for health care than to make
sure that there is health care to pay for.
Few people concentrate on worries about bureaucracies and
health insurance purchasing alliances, though they have their
doubts. Instead they talk about recruiting doctors and using
other medical workers more efficiently.
Gale Walker, the administrator of the 30-bed St. Benedict's
Hospital in Parkston, 60 miles west of Sioux Falls, said:
``Here, it's not `Do I have a choice? it is, `What do I do to
find a doctor or a nurse practitioner?'''
Or, said Linda Guthmiller, the assistant administrator and
laboratory chief at the 25-bed Landman-Jungman Hospital in
Scotland, 24 miles to the southeast, ``Doctors have to start
dropping their egos, and they have to let the nurses and the
physicians' assistants do more.''
The health care issue has hit South Dakota with full force
with Hillary Rodham Clinton's visit to Lennox on Friday, a
pre-emptive Republican attack that morning in Sioux Falls by
Senator Phil Gramm of Texas, and a sudden surge in news
coverage of the subject.
It was clear from comments by people who heard Mrs.
Clinton, Conversations with people here and in Scotland, and
in a discussion with nine South Dakotans assembled on Friday
evening to talk about the subject, that there seems to be a
consensus on one crucial issue: the United States ought to
see to it that everyone has health insurance.
After the group discussion, Kate Heligas, executive
director of the South Dakota Nurses Association said, ``I
think until we have universal coverage, the rest of the
pieces will not fit.''
fearing `one size fits all'
Lots of people do have a vague idea of how President
Clinton's plan might affect them, at least in some meaningful
particular. Roy D. Nyberg, who runs the Ace Hardware Store in
Sioux Falls, thinks he could not afford to increase his
health insurance payments for workers to the level the plan
demands, although he thinks the nation needs universal
coverage. Cecelia Humphrey, an 85-year-old resident of a
Sioux Falls nursing home, told Mrs. Clinton: ``One think I'm
pleased about is we get to keep our doctor. I couldn't live
without mine.
But as to the alternative plans from Republicans and other
Democrats, hardly anyone knows what is in them. Dr. Phillip
Barker, a family practitioner at St. Benedict's, dismisses
them because ``most of them fail to provide universal
coverage,'' even though he thinks universal health insurance
could greatly increase the demand for medical care and lead
to more 90-hour weeks for isolated doctors like himself.
The one profound shared concern among South Dakotans is a
fear that Republicans like Senator Gramm have capitalized on:
that Washington uses a ``one size fits all'' approach, as Mr.
Gramm, the Clinton plan's severest critic, puts it.
That concern came through, perhaps more tentatively, around
the table in a motel meeting room on Friday where the nine
South Dakotans gathered. Evelyn Peterson, a retired nursing
educator who likes the Clinton plan's emphasis on preventive
care, still worries that ``every model that we've been given
for rural health care has been developed in an urban area, so
it doesn't fit.''
little competition to manage
Vince Crawford, the director of the Veterans Administration
Hospital in Sioux Falls, said, ``One size fits all is nuts.''
If there was one message he could send to Washington, Mr.
Crawford said, it would be ``there needs to be a great deal
of flexibility so that South Dakota and New York City can
each solve their own problems.''
One principle of the Clinton plan seems irrelevant here. A
basic hope of the Administration is that the philosophy
behind its proposals will lower costs. That philosophy, known
as managed competition, requires different groups of doctors
and hospitals to compete for patients' business. But South
Dakota has only three cities of more than 25,000 people and
only in Sioux Falls is there a big enough medical center for
competition to be imaginable.
Even without managed competition, the Clinton plan, if it
worked, would save money for South Dakotans. It would bring
them together in an alliance that would have enough
purchasing power to negotiate rates with insurance companies
that now, Mr. Nyberg said, simply announce how much higher
the rates will go each year.
That power of alliances has not got through here, though
Mrs. Clinton tried to stress it during her visit. Even a
basic supporter of her plan, Steven J. Simonin, the
administrator at Landman-Jungman, mutters caustically about
``this invisible alliance up in Sioux Falls or somewhere.''
To much of South Dakota, Sioux Falls with its population of
100,836 and two major hospitals, is the big city. In great
swaths of the state, medicine means small hospitals and the
clinics they run in outlying hamlets. It is hard to get
doctors. It is even hard to get physicians' assistants and
nurses.
Mr. Walker, the St. Benedict's administrator, calls that
his biggest problem. He spends 20 percent of his time on
recruitment and retention. Last month he sent out 50 letters
and got one postcard in return, asking for more information.
He uses recruiting agencies that he calls ``bounty hunters.''
He finds that small-town medicine may be attractive enough
but small-town living can be a drawback.
``We don't have the opera,'' Mr. Walker said. ``We don't
have professional sports. We don't have a shopping mall.'' He
looks for people interested in hunting, fishing and cross-
country skiing.
On Friday, Mrs. Clinton spoke of how the Administration
plan would stress financial incentives and tax credits to
lure medical workers to rural areas. The South Dakotans in
the discussion group thought that was a good idea.
`don't see a crisis here'
But Dr. Barker, whom Mr. Walker recruited, had his doubts
about whether money or anything else the Federal Government
might offer would bring more doctors to small towns.
Clearly there are South Dakotans who do not want the
Government doing more. Introducing Senator Gramm on Friday,
Dr. Walter Carlson, chairman of the professional activities
committee of McKennan Hospital, said: ``I guess we just don't
see a crisis here. I know of no physician or hospital that
has ever denied anybody health care.''
And supporters of the Clinton plan or some variant have
their doubts about whether the Federal Government can be
relied on, too. Mr. Walker fears that pressure to cut
Medicare reimbursement rates to pay for other programs will
hit his hospital hard, since it has few other patients to
shift costs to.
In the discussion group, several people wondered whether
the Government would provide all the money it promised,
recalling other programs that had been cut. And Mr. Crawford
feared ``too many checkers'' looking over shoulders, wasting
time and money. Mr. Nyberg asked, ``If this program starts,
where does it end?'' He recalled that in 1937 employers had
to pay a 1 percent Social Security tax but that now they pay
7.65 percent.
There was pessimism about the people, too. Karen Pettigrew,
a nurse-midwife from Rapid City, complained: ``People all
seem unwilling to change from the best of all possible ideal
plans, but they don't want to pay for it. Everyone wants the
Cadillac for them and their children.
But strongest of all were their doubts about Washington's
ability to deal with the issue. Morris Magnuson, a retired
school administrator, spoke for many when he said, ``It's
getting so fragmented with the doctors and the hospitals and
the Republicans and the Democrats.''
Mr. Nyberg added: ``There is a solution. It will not occur
if we have partisan politics as usual.''
And Ms. Pettigrew said she thought all that would result
would be ``a few Band-Aids, nothing that will really bother
people too much.''
______
By Mr. METZENBAUM (for himself, Mr. DeConcini Mr. Simon, and Mr.
Reid):
S. 1866. A bill to amend the National Security Act of 1947 to improve
personnel measures that enhance security for classified information,
and for other purposes; to the Select Committee on Intelligence.
personnel security act of 1994
Mr. METZENBAUM. Mr. President, we were all shocked on Wednesday to
learn that a senior CIA case officer had been arrested and charged with
being a spy for the Soviet Union and later for the Russian Federation.
It is almost beyond belief that he had allegedly been getting away with
it for nearly 9 years.
Some of my colleagues, including the Republican leader and some on my
side of the aisle as well, have suggested we should retaliate against
Russia for engaging in espionage against us by cutting off our economic
aid to them. I do not follow that logic. ``I don't get it.'' Are my
colleagues telling us that they are outraged, or surprised, or
disappointed, or dumbfounded to learn that the Soviet Union, and now
the Russians, have spies working for them? Is that news to them?
Are you telling me there is a Member of this body who is naive enough
to believe that Russia had gotten out of the espionage business? Of
course not. Did they think that the day the Soviet Union fell, we all
shook hands and called home our spies?
Of course not. Whom are we kidding. We all know that was not the
fact. It was not the Russians who betrayed us. It was an American CIA
officer who betrayed his country for cash, and exposed our spies in
Russia. The Russians are doing what we have been doing for decades in
the spying business.
What riles me is the fact that they seem to be doing a better job of
it than we are. The protesting Republican leader and his allies from my
party could use a little reality check. Retaliation against Russia
would be self-defeating.
I am frank to say that on the whole aid-to-Russia package, this
Senator was not a player. I was not involved in promoting it or
speaking for it or advocating it. I voted for it; I did not vote
against it. But it was not something I considered a particular issue of
my concern. To hear now, however, that we ought to be denying the
Russians that aid because of the betrayal committed by one of our
intelligence officers, to me that is absolutely absurd.
Our aid to Russia is intended to enhance our own national security.
Whether Russia spies on us or not, it remains in our national security
interests for them to dismantle the greater part of their missiles and
nuclear warheads. Likewise, whether Russia spies on us or not, it
remains in our national security interests for Russia to persevere in
its economic and political reforms. Our aid is designed to assist in
those areas, and it remains in our own national interest to provide it.
We have a right to be upset by the Aldrich Ames case. Every American
has a right to be distressed, disturbed, and also questioning--asking,
``How could this happen? How could this happen, in the Central
Intelligence Agency on which we spend billions upon billions of dollars
a year?'' We cannot state the exact amount, because this is prohibited
by law--because the administration and the Director of the Central
Intelligence Agency are unwilling to make the fact known--but everybody
knows it is billions upon billions of dollars. We have a right to say,
``Are we getting our money's worth?'' What are we getting for it if, in
this particular case, something was going on for 8 or 9 years and the
CIA did not know about it?
We should not be surprised, however, by the fact that the Soviets and
the Russians after them used the information which Ames made available
to them. We may not like spying, but that is certainly one of the so-
called games that nations play. We play with game, our allies play that
game and, naturally, our adversaries do so as well.
The first lesson that spies learn, moreover, is that you have to know
what the other guy is doing to you. That is precisely what the Soviets
and Russians were doing when they reportedly paid Mr. Ames $1.5 million
to tell them about United States espionage operations and the identity
of our secret sources in that country. The real concern that we should
have in the CIA's failure to know what Mr. Ames had apparently been
doing for all these years. For an agency on which we spend billions of
dollars a year to spy on other countries not to know what is going on
in their own shop is embarrassing, it is humiliating, and it is
absolutely unacceptable.
A $70,000-a-year Government worker buys a half million dollar house
with cash, drives a Jaguar to work, uses his charge cards as if he were
the Sultan of Brunei, and nobody figures it out? How can this be? It is
incredible.
Some Members of this body, instead of putting the blame where it
belongs--on our own intelligence agency--want to blame Russia for
having spied on us; therefore, they argue, we ought to not let them
have any more aid. I do not understand that line of reasoning. There is
an argument as to whether we should make aid available to Russia, but
this case has nothing to do with it. While I support the aid package, I
understand an argument against it. But there is no logic in cutting off
our aid because the Soviet Union did a better job of breaking through
our spy network than we did in breaking through theirs.
Our spies in the U.S.S.R. were getting arrested and executed for
treason because of Mr. Ames's actions, and our intelligence body did
not know what was going on. It is shameful; it is embarrassing; it is
humiliating. But it is a reality.
What can we do about it? There is one thing we can do immediately, if
we want. It would not help on the Ames case--that is behind us--but it
might help on tomorrow's case or next year's case. It would help our
intelligence agencies and other agencies that handle top-secret
information. We can pass legislation that was proposed by the
leadership of the Intelligence Committee 3 years ago giving agencies
access to the financial and travel records of their employees who get
top-secret access.
It is a sobering fact, Mr. President, that the modern American spy
rarely betrays our country for ideological reasons and even more rarely
because of blackmail. The major goals of American spies in recent years
have been money--money and excitement.
In the really damaging long-term espionage cases, there were often
large amounts of money changing hands, and it would be a great benefit
to our counterintelligence security units if they could routinely
monitor the financial status of employees and recent employees who have
access to top-secret information. This would be a new intrusion upon
those employees, but I think it would be a reasonable one. I would
normally be protective of the privacy of all employees; but in this
limited area alone, I think there is reason to make certain exceptions.
Thanks to the good work of U.S. security services and especially of
the FBI, foreign intelligence services rarely have face-to-face
meetings with American spies in the United States. Rather,
communications in the United States is generally through the use of
``dead drops'' or coded radio broadcasts or through prearranged signals
in classified ads.
But foreign intelligence services do have American spies travel to
foreign meeting places like Mexico City, Vienna, Geneva, Berlin,
Bogota, or Bangkok to meet their foreign handlers face to face. If an
employee's agency would routinely check the records of airlines and
other travel companies to see where its employees were traveling, that
would make it much more difficult for a spy to run around the world for
5 or 10 years without the agency catching us.
Today I am introducing a bill, the Personnel Security Act of 1994, to
provide U.S. agencies with access to financial and travel records that
they need to do a better job of protecting themselves against foreign
espionage. I invite my colleagues, especially those on the Senate
Intelligence Committee, to work with me to make a sensible contribution
to combating espionage, rather than pretending that we have either the
right or the ability to stop other countries from engaging in espionage
efforts that we and every other state view as a normal national
security protection.
Let us stop the breast beating and the Russia bashing and admit that
if we want to combat foreign espionage, we have to improve personnel
security at home. Let us get on with that job.
Mr. President, I send a copy of the legislation to the desk and I ask
unanimous consent that a copy be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1866
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 ``Personnel Security Act of
1994''.
SEC. 2. AMENDMENT TO THE NATIONAL SECURITY ACT OF 1947.
The National Security Act of 1947 (50 U.S.C. 401 et seq.)
is amended by inserting at the end thereof the following new
title:
``TITLE VIII--ACCESS TO TOP SECRET INFORMATION
``eligibility for access to top secret information
``Sec. 801. (a) The President and Vice President, Members
of the Congress, Justices of the Supreme Court and judges of
other courts of the United States established pursuant to
Article III of the Constitution, shall, by virtue of their
elected or appointed positions, be entitled to access to Top
Secret information needed for the performance of their
governmental functions without regard to the other provisions
of this title.
``(b) Among employees of the United States Government,
access to Top Secret information shall be limited to
employees who--
(1) have been granted access to such information pursuant
to this title;
(2) are citizens of the United States who require access to
such information for the performance of official governmental
functions; and
(3) have been determined to be trustworthy based upon a
background investigation and appropriate reinvestigations and
have otherwise satisfied the requirements of section 802,
below.
``(c) Access to Top Secret information by persons other
than those identified in subsections (a) and (b) shall be
permitted only in accordance with the regulations issued by
the President pursuant to section 802 below.
``implementing regulations
``Sec. 802. The President shall, within 180 days of
enactment of this title, issue regulations to implement this
title which shall be binding upon all departments, agencies,
and offices of the Executive branch. These regulations shall,
at a minimum provide that--
``(A) no employee of the United States Government shall be
given access to Top Secret information owned, originated or
possessed by United States, after the effective date of this
title, by any department, agency, or entity of the United
States Government unless such person has been subject to an
appropriate background investigation and has--
``(1) provided consent to the investigative agency
responsible for conducting the security investigation of such
person, during the initial background investigation and for
such times as access to such information is maintained, and
for 5 years thereafter, permitting access to--
``(a) financial records concerning the subject pursuant to
section 1104 of the Right to Financial Privacy Act of 1978;
``(b) consumer reports concerning the subject pursuant to
section 1681b of the Consumer Credit Protection Act; and
``(c) records maintained by the commercial entities within
the United States pertaining to any travel by the subject
outside the United States: Provided, that--
``(i) no information may be requested by an authorized
investigation agency pursuant to this section for any purpose
other than making a security determination, unless such
agency has reasonable grounds to believe, based upon specific
and articulable facts available to it, that such person may
pose a threat to the continued security of the information to
which he or she had previously had access; and
``(ii) any information obtained by an authorized
investigative agency pursuant to this section shall not be
disseminated to any other department, agency, or entity for
any purpose other than: (A) for making a security
determination; or (B) for foreign counterintelligence or law
enforcement purposes;
``(2) agreed, during the period of his or her access, to
report to the department, agency, or entity granting such
access in accordance with applicable regulations, any travel
to foreign countries which has not been authorized as part of
the subject's official duties; and
``(3) agreed to the Federal Bureau of Investigation, or to
appropriate investigative authorities of the department,
agency, or entity concerned, any unauthorized contracts with
persons known to be foreign nationals or persons representing
foreign nationals, where an effort to acquire classified
information is made by the foreign national, or where such
contacts appear intended for this purpose. For purposes of
this subsection, the term ''unauthorized contacts'' does
not include contacts made within the context of an
authorized diplomatic relationship. Failure by the
employee to comply with any of the requirements of this
subsection shall constitute grounds for denial or
termination of access to the Top Secret information
concerned.
``(B) all employees granted access to Top Secret
information pursuant to this subsection shall also be subject
to--
``(1) additional background investigations by appropriate
governmental authorities during the period of access at no
less frequent interval than every 5 years, except that any
failure to satisfy this requirement that is not solely
attributable to the subject of the investigation shall not
result in a loss or denial of access; and
``(2) investigation by appropriate governmental authority
at any time during the period of access to ascertain whether
such persons continue to meet the requirements for access;
``(C) access to Top Secret information by categories of
persons who do not meet the requirements of subsections (A)
and (B) of this section may be permitted only where the
President, or officials designated by the President for this
purpose, determine that such access is essential to protect
or further the national security interests of the United
States; and
``(D) a single office within the Executive branch shall be
designated to monitor the implementation and operation of
this title within the Executive branch. This office shall
submit an annual report to the President and appropriate
committees of the Congress, describing the operation of this
title and recommending needed improvements. A copy of the
regulations implementing this title shall be provided to the
Select Committee on Intelligence of the Senate and the
Permanent Select Committee on Intelligence of the House of
Representatives thirty days prior to their effective date.
``WAIVERS FOR INDIVIDUAL CASES
``Sec. 803. In extraordinary circumstances, when essential
to protect or further the national security interests of the
United States, the President (or officials designated by the
President for this purpose) may waive the provisions of this
title, or the provisions of the regulations issued pursuant
to section 802, above, in individual cases involving persons
who are citizens of the United States or are persons admitted
into the United States for permanent residence: Provided,
that all such waivers shall be made a matter of record and
reported to the office designated pursuant to subsection
802(D), above, and shall be available for review by the
Select Committee on Intelligence of the Senate and the
Permanent Select Committee on Intelligence of the House of
Representatives.
``Definitions
``Sec. 804. For purposes of this title--
``(a) the term ``national security'' refers to the national
defense and foreign relations of the United States;
``(b) the phrases ``information classified in the interest
of national security'' or ``classified information'' means
any information originated by or on behalf of the United
States Government, the unauthorized disclosure of which would
cause damage to the national security, which has been marked
and is controlled pursuant to the Executive Order 12356 of
April 2, 1982, or successor orders, or the Atomic Energy Act
of 1954;
``(c) the term ``Top Secret information'' means information
classified in the interests of national security, the
unauthorized disclosure of which would cause exceptionally
grave damage to the national security;
``(d) the term ``employee'' includes any person who
receives a salary or compensation of any kind from the United
States Government, is a contractor of the United States
Government, is an unpaid consultant of the United States
Government, or otherwise acts for or on behalf of the United
States Government, but does not include the President or Vice
President of the United States, Members of the Congress of
the United States, Justices of the Supreme Court or judges of
other federal courts established pursuant to Article III of
the Constitution; and
``(e) the term ``authorized investigative agency'' means an
agency authorized by law or regulation to conduct
investigations of persons who are proposed for access to Top
Secret information to ascertain whether such persons satisfy
the criteria for obtaining and retaining access to such
information.
``Effective Date
``Sec. 805. This title shall take effect 180 days after the
date of its enactment.''
Mr. SIMON. Mr. President, Senator Metzenbaum has just illustrated why
it is going to be a great loss not to have him in the U.S. Senate. I
happened, back many years ago, to have served in military intelligence
when I was in the Army. I think the bill he offers makes a great deal
of sense. I have never been on the Intelligence Committee. I will be
pleased to cosponsor it.
But I rise primarily because there is a kind of an unreality to some
of the conversations about what is going on with spies. Let us face it,
Russia spies, we spy--we should. It tomorrow we hear a rumor that Great
Britain, our good friend, is developing some special kind of weapon, we
are not going to sit back and wait until we read it in the London
Times. We are going to have espionage operations. That applies to our
friends; it applies to our potential foes. That is the way the
intelligence community operates.
For us not to look at the big picture and not to do what we can to
see that Russia has a viable democracy and a stable situation, and to
get all wrought up over this one instance of their spying is not in our
national interest. What we have to do on the floor of this body is to
serve the national interest, not the national passion. We are
responding to the national passion.
Is this a tragedy? Yes. Is this going to be repeated in the future? I
hate to say it, but even with the Metzenbaum legislation, it is going
to happen again in the future. We are going to have double spies; other
countries are going to have double spies. That is part of life today.
I am pleased to join as a cosponsor of the legislation, and I am
pleased that someone brought some reality to this whole business. I
have heard some of the speeches of our colleagues condemning Russia for
spying. That is part of life in the world today, and we should
recognize that.
______
By Mr. DURENBERGER (for himself, Mr. Murkowski, and Mr.
Jeffords):
S. 1867. A bill to expedite the naturalization of aliens who served
with special guerrilla units in Laos; to the Committee on the
Judiciary.
hmong veterans' naturalization act of 1994
Mr. DURENBERGER. Mr. President, today I am introducing
legislation that will relax certain immigration and naturalization
requirements for Hmong veterans who served with United States forces
during the Vietnam war. The bill will also relax requirements for
spouses or widows of Hmong veterans.
This act recognizes the extremely important contributions and
sacrifices made by thousands of Hmong and other Laotian highland groups
who served in CIA-directed special guerrilla units in the Vietnam war
from 1961 to 1978.
The Hmong and other highland peoples served bravely and sacrificed
dearly during the war. Between 10,000 and 20,000 Hmong were killed in
combat and over 10,000 had to flee their homeland in order to survive.
Although the Hmong served admirably in support of United States
efforts in the Vietnam war, many of those who did survive and made it
to the United States are separated from other family members and are
having a difficult time adjusting to life here. Family reunification
remains a vexing problem for the Hmong, one that concerns this Senator
greatly.
The Hmong Veterans' Naturalization Act of 1994 will make an important
contribution to efforts at reuniting families. The act will make it
easier for those who served in the special guerrilla units to attain
U.S. citizenship by waiving the English language and residency tests.
The single greatest obstacle for the Hmong in becoming U.S. citizens
is passing the English test. Why is this so? Principally because the
Hmong language is verbal, not written. Additionally, formal education
is rare in the highland region of Laos where the Hmong come from.
Written characters for Hmong have only recently been introduced, and
whatever chances most Hmong may have had for learning the written
language were disrupted by the war.
In addition to the language requirements, this bill would also waive
the residency requirement for those who served, to speed up the process
of family reunification. Current law permits aliens or noncitizen
nationals who served honorably during World War I, World War II, the
Korean war, and the Vietnam war to be naturalized, regardless of age,
period of residence, or physical presence in the United States. There
is a well-established precedent of relaxing naturalization requirements
for military service.
The Hmong served the United States for 17 years. They suffered and
sacrificed a great deal in that service. This bill recognizes the brave
contribution of the Hmong people and the extreme difficulty that the
Hmong have in learning English.
It is the hope of this Senator that my colleagues will join me in
supporting this legislation. It gives appropriate recognition and
assistance to a group in our society that has earned it in serving U.S.
interests when it mattered for us.
______
By Mrs. BOXER:
S. 1868. A bill to amend the Internal Revenue Code of 1986 to allow
the casualty loss deduction for disaster losses without regard to the
10-percent adjusted gross income floor; to the Committee on Finance.
disaster losses deduction act of 1994
Mrs. BOXER. Mr. President, today I am introducing legislation
that will provide relief for thousands of Californians who suffered
serious damage in the January earthquake. My bill will help citizens
who otherwise are out of luck under current law by removing the 10-
percent adjusted gross income threshold for casualty loss deductions.
This legislation will apply to losses attributable to disasters
occurring on or after January 17, 1994--the day of the devastating
Northridge quake.
Under current law, taxpayers may deduct casualty losses only when
they exceed 10 percent of adjusted gross income. Because of this
threshold, many who suffer damage find themselves without recourse. In
California, for example, most people do not have earthquake insurance.
And those who do often have deductibles as high as $5,000 to $10,000.
We have all seen the devastating images of collapsed structures on
television. But it is important to remember that most Californians
affected by the earthquake suffered serious, but moderate, damage.
Their windows shattered and their televisions smashed on the ground.
They may have cracks in their walls or fireplace damage, but their
homes still stand. These people have $5,000 in damage, or maybe
$10,000. These are the taxpayers who may not get the relief they need.
Consider a simple hypothetical example. Suppose a middle-class family
with adjusted gross income of $50,000 sustains $4,000 in earthquake
damage. Under current law, the family has nowhere to turn because only
losses in excess of $5,000 can be deducted. But under my bill, that
family could deduct all losses. And where would that tax refund go? It
would go back into the economy as a direct stimulus. It would create
jobs for contractors and those who produce the raw materials they use.
The economic benefits would ripple throughout the community.
I hope my colleagues realize that California is still lingering in
the midst of a very serious recession. It seems that in the past year
we've seen it all--fire, flood, earthquake, and most recently,
mudslides. I believe that our Nation cannot sustain a full economic
recovery without strong support from our largest State--California.
Mr. President, this legislation will ease the suffering of victims of
natural disasters, and at the same time, will provide a much needed
infusion of capital into damaged local economies. I hope my colleagues
will join me in supporting this legislation.
I ask unanimous consent that the full 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. 1868
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ELIMINATION OF 10-PERCENT FLOOR FOR DISASTER
LOSSES.
(a) General Rule.--Subparagraph (A) of section 165(h)(2) of
the Internal Revenue Code of 1986 (relating to net casualty
loss allowed only to the extent it exceeds 10 percent of
adjusted gross income) is amended by striking clauses (i) and
(ii) and inserting the following:
``(i) the amount of the personal casualty gains for the
taxable year,
``(ii) the amount of the federally declared disaster losses
for the taxable year (or, if lesser, the net casualty loss),
plus
``(iii) the portion of the net casualty loss which is not
deductible under clause (ii) but only to the extent such
portion exceeds 10 percent of the adjusted gross income of
the individual.''
``For purposes of the preceding sentence the term `net
casualty loss' means the excess of personal casualty losses
for the taxable year over personal casualty gains.''
(b) Federally Declared Disaster Loss Defined.--Paragraph
(3) of section 165(h) of such Code is amended by adding at
the end the following new subparagraph:
``(C) Federally declared disaster loss.--The term
`federally declared disaster loss' means any personal
casualty loss attributable to a disaster occurring in an area
subsequently determined by the President of the United States
to warrant assistance by the Federal Government under the
Disaster Relief and Emergency Assistance Act.''
(c) Clerical Amendment.--The heading for paragraph (2) of
section 165(h) of such Code is amended by striking ``Net
casualty loss'' and inserting ``Net nondisaster casualty
loss''.
(d) Effective Date.--The amendments made by this section
shall apply to losses attributable to disasters occurring on
or after January 17, 1994, including for purposes of
determining the portion of such losses allowable in taxable
years ending before such date pursuant to an election under
section 165(i) of the Internal Revenue Code of 1986.
______
By Mr. COHEN (for himself and Mr. Boren):
S. 1869. A bill to amend the National Security Act of 1947 to improve
counterintelligence measures through enhanced security for classified
information, and for other purposes; to the Select Committee on
Intelligence.
counterintelligence improvements act 1994
Mr. COHEN. Mr. President, I ask unanimous consent that a
summary of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Summary of Provisions
Section 1. Gives the bill the short title of the
Counterintelligence Improvements Act of 1994.
Section 2. Adds a new title to the National Security Act of
1947 to govern access to particularly sensitive classified
information. To be granted access to such information, a
person would be required, among other things, to permit
access by U.S. Government investigative agencies to financial
records, consumer credit reports, and records maintained by
commercial entities within the U.S. pertaining to travel by
the person outside the U.S.
Section 3. Adds a new title to the National Security Act of
1947 to provide special requirements for the protection of
cryptographic information.
Section 4. Amends the Right to Financial Privacy Act of
1978 by adding a new subsection to permit a person being
considered for access to particularly sensitive classified
information to provide his or her consent to U.S. Government
investigative agencies to obtain access to his or her
financial records. This would apply for the period of the
person's access to such information and for five years
thereafter.
Section 5. Provides for a new criminal offense for the
possession of espionage devices where the intent to use such
devices to violate the espionage statutes can be shown.
Section 6. Proides for a new criminal offense for any
person who knowingly sells or transfers for any valuable
consideration to a person whom he knows or has reason to
believe to be an agent or representative of a foreign
government any document or material classified Top Secret.
Section 7. Provides that any officer or employee of the US
who knowingly removes documents or materials classified Top
Secret without authority and retains them at an unauthorized
location shall be fined not more than $1000 or imprisoned not
more than one year, or both.
Section 8. Establishes jurisdiction in certain U.S. federal
courts to try cases involving violations of the espionage
laws where the alleged misconduct takes place outside the
U.S.
Section 9. Amends title 18 of the U.S. Code to provide for
expansion of the forfeiture provision to certain espionage
offenses that are not enumerated in the existing law.
Section 10. Provides that a person may be denied annuity or
retired pay by the U.S. if convicted in a foreign country of
offenses for which such annuity or retired pay could have
been denied had such offense occurred within the U.S.
Section 11. Amends the Consumer Credit Protection Act to
provide the FBI access to records sought in connection with
an authorized foreign counterintelligence investigation when
there are specific and articulable facts giving reason to
believe the person to whom the records relate is an agent of
a foreign power.
Section 12. Authorizes the FBI to obtain subscriber
information from telephone companies on persons with an
unlisted number who are called by foreign powers or their
agents.
Section 13. Provides the Attorney General with
discretionary authority to pay rewards, up to $1 million, for
information leading to the arrest or conviction of espionage
against the U.S. or the prevention of such acts.
Section 14. Subjects physical searches in the U.S. to the
same court order procedure that is required for electronic
surveillance.
______
By Mr. KENNEDY (for himself and Mr. Kerry):
S. 1871. A bill to establish a Whaling National Historical Park in
New Bedford, MA, and for other purposes; to the Committee on Energy and
Natural Resources.
New Bedford Whaling National Historical Act of 1994
Mr. KENNEDY. Mr. President, today Senator Kerry and I are introducing
a bill to establish a Whaling National Historical Park in New Bedford,
MA. Congressman Barney Frank is introducing an identical bill in the
House.
The legislation follows the recommendations of a National Park
Service special resource study begun in 1990, which evaluated the
historic resources of New Bedford for possible inclusion in the
National Park System. That study, completed in November 1993, noted the
important role of whaling in 19th century American history. It found
that this theme is not currently presented in the National Park System,
and that New Bedford would be the ideal site for a park commemorating
that history. As the former whaling capital of the world, New Bedford
provided the oil that fueled the Nation's lamps and kept the wheels of
the Industrial Revolution turning. So prosperous was the whaling
industry that, by mid-19th century, it had made New Bedford the
wealthiest city, per capita, in the world.
New Bedford's whaling history raises many social and economic theme
that are essential to a full understanding of our American heritage.
Among these are the spirit of technological progress, the
entrepreneurial drive that motivated daring men and women to risk their
lives and fortunes on the seas, and the many cultures that took root
here, brought by immigrants drawn from every corner of the globe. It
was this diversity which contributed to New Bedford's position as a
center of the Abolitionist Movement and made it a key stop for fugitive
sales on the underground railroad. Frederick Douglass spent his first 3
years of freedom in New Bedford, working as a calker on the hulls of
whaleboats.
New Bedford is also the port from which Herman Melville set sail
aboard the whaler Acushnet in 1841, the voyage which inspired ``Moby
Dick,'' one of the greatest of all American novels. The streets that
Melville and Ishmael wandered can still be visited in New Bedford
today, as can the famous Seamen's Bethel, where the whalers attended
religious services before setting off on their voyages.
Much of New Bedford's whaling waterfront still exists in the city's
National Historic Landmark District, and the 20-acre site has become a
model for historic preservation. Businesses, residents and tourists
move comfortably in an environment of restored buildings, cobblestone
streets, and brick sidewalks from the whaling era.
New Bedford also is the site of the Rotch-Jones-Duff House and Garden
Museum, one of the finest examples of Greek Revival residential
architecture in the country and the only surviving whaling-era mansion
open to the public complete with its original gardens and grounds.
New Bedford's historical and cultural assets are not limited to its
streets and buildings. They also include outstanding collections of
artworks and archives associated with the whaling era located at the
city's public library and at its renowned whaling museum. The museum
houses a half-size model of the whaling bark Lagoda that can be boarded
by visitors.
The city is also home port to the restored, 100-year-old National
Historic Landmark vessel Ernestina, which is the oldest Grand Banks
schooner in existence and which has had a distinguished maritime career
as a fishing vessel, as an Arctic explorer under Capt. Bob Bartlett,
and as a packet plying the route between the Cape Verde Islands and the
United States. In her packet role, she was the last sailing vessel to
bring immigrants to our shores.
National park designation will be a valuable economic stimulus for
tourism and associated development for the city. A report prepared to
evaluate the economic impact of the proposed national park indicates it
will lead to the creation of hundreds of jobs in the coming years and
add millions of dollars annually to the local economy.
The Whaling Park in New Bedford will protect a nationally significant
historic treasure and stimulate the economy of a city in need. It is an
investment in America's past and in a city's future, and I urge my
colleagues to support this legislation.
Mr. KERRY. Mr. President, I am pleased to join my good friend and
colleague Senator Kennedy in introducing legislation to establish a
Whaling National Historical Park in New Bedford, MA. Our initiative is
based upon a special resource study completed by the National Park
Service last fall which found that the New Bedford area meets the
criteria for inclusion in the National Park System.
The city of New Bedford, tucked by the sea in the southeast corner of
Massachusetts has a rich and diverse history. For decades it was the
center of our Nation's whaling industry. Although the whaling industry
collapsed by the turn of the last century, New Bedford is to this day
remembered for its seafaring heritage.
As a national park, the New Bedford National Historic Landmark
District and surrounding area would enhance the National Park System by
expanding its maritime history theme to include a focus on our Nation's
whaling past. Particularly noteworthy are the historic town center, the
waterfront with the national historic landmark schooner Ernestina and
an array of over three dozen historically rehabilitated buildings which
combine to provide a cultural resource that reflects the era of
whaling.
Since 1962, a public/private partnership--initiated by the Waterfront
Historic Area League of New Bedford in cooperation with the Bedford
Landing Taxpayers Association, the Old Dartmouth Historical Society,
private property owners, and the city of New Bedford--has raised $3.7
million in public funding and $2.7 million in private investment,
rehabilitated 36 buildings, and created over 40 new businesses and 200
new jobs. Creating a New Bedford Whaling Park will preserve an
important piece of seafarer heritage while simultaneously permitting
the public/private partnership to expand and grow.
I am hopeful that the Senate will look favorably upon this initiative
and I encourage my colleagues to support this important addition to our
National Park System.
______
By Mr. ROCKEFELLER:
S. 1872. A bill to expand U.S. exports of goods and services by
requiring the development of objective criteria to achieve market
access in Japan, and for other purposes; to the Committee on Finance.
fair market access act of 1994
Mr. ROCKEFELLER. Mr. President, today, I am joining House
Majority Leader Richard Gephardt in introducing legislation designed to
create a more constructive, mutually beneficial relationship between
the United States and Japan. The Fair Market Access Act of 1994
proposes a way to open up Japan's economy to United States products and
services. It lays out the steps to ensure that Japan fulfills promises
that it has already made and responds to a rational, reasonable
expectation that their markets should be accessible just like they have
access to ours. This bill responds to a clear need for the extra work
that it will take to break down barriers in Japan that unfairly hurt
industry and workers here in America and throughout the world.
The last 8 months have been difficult ones for the United States-
Japan bilateral relationship. Our failure to reach an agreement on
February 11 further implementing the Framework Agreement of July 1993,
has led to considerable speculation on the future of the relationship
and on what each party should do to restore it to an even keel.
In contrast to much of that analysis, Mr. President, I am among those
who believe that what has happened is good, that it will lead to a more
mature relationship, and that the President, in contrast to his
predecessors, has handled a very difficult problem properly. We have
clearly gone beyond the ``senior-junior partner'' relationship that
existed throughout so much of the post-war period and moved into a more
mature relationship of equals whose interests sometimes diverge but
often converge. That does not mean there are not difficult challenges
ahead or that there will not be many opportunities to make mistakes.
The United States-Japan relationship is full of those, and there is no
particular reason to believe the future will be any different. However,
I believe there have been some significant structural changes in both
our countries that provide some basis for optimism--provided we are
able to understand those changes and handle them skillfully. Explaining
that first demands some comments on precisely what those changes are.
In Japan, I believe it is accurate to say that both political and
economic fundamentals are moving in the direction we have both
advocated and predicted for some time. Last summer's election in Japan,
which produced a government without the Liberal Democratic Party for
the first time in some 40 years, made clear the shift in political
power in the country that has meant the effective break up of the LDP,
as numerous members moved to other parties or started new ones, some of
which are participating in the current coalition government.
The LDP's problems are a graphic illustration of the gradual erosion
of the coalition of farmers, small shopkeepers, and professionals that
has been its backbone since the early 1950's. Demography--the aging of
Japan's population and these sectors in particular--and economics--
first the industrialization and now the ``technological
transformation'' of the country--have a lot to do with it.
Obviously, the numerous financial scandals that embroiled LDP members
as well as the previous government's inability to pull the economy out
of its recession were decisive factors in the election, but it is the
long-term erosion of the LDP's base that is most noteworthy.
This erosion was not ignored in Japan. Both new Prime Minister
Hosokawa and his ex-LDP partners, Tsutomu Hata and Ichiro Ozawa, are
all careful students of Japanese politics. They recognized this trend
and are building a new coalition that better reflects current
demographic realities and economic priorities. That coalition will
depend on urban and suburban office workers--``salarymen''--and their
families as its backbone. This will have major implications for the
United States, as this part of the population is more consumer-oriented
and more outward-looking. It will have less of a stake in Japan's over-
complex distribution system or in the protection of agriculture or
manufacturing, and eventually, the politicians will follow suit.
After the election, the conventional wisdom was that the new
coalition government would not last long. It was expected to pass long
overdue political reform legislation and then disintegrate over
fundamental policy disagreements in other areas.
In fact, the conventional wisdom is proving to be wrong. We should
not underestimate the desire of people who have been out of power for
40 years to stay in now that they have finally risen to the top. Though
there are serious differences between the Socialists, the former LDP
parties, and Hosokawa's Japan New Party--most recently reflected in the
tax cut debacle--we should not rule out their ability to subordinate
those differences to their common interest in maintaining themselves in
power.
The long-term survival of a Hosokawa government will, I believe, have
major implications for United States-Japan relations. We are all well
aware of the long list of bilateral trade frustrations. From beef and
citrus to baseball bats, lawyers, semiconductors, and supercomputers,
the litany of trade disputes seems endless. Some, like construction,
have ultimately become national scandals in Japan before action was
taken--and the jury is still out on the effectiveness of that action.
The new government and the changed political environmental, however,
is likely to lead over the long term to change that will benefit us.
First, there appears to be some interest on the part of ministers to
actually govern and make decisions. That may seem an odd statement in
the wake of the collapse of the framework talks that many observers
blamed on the Government's surrender to the bureaucrats. That blame was
correctly placed, in my judgment, but it may in retrospect turn out to
be the bureaucracy's last stand. During my visit to Japan in January, I
had numerous meetings with politicians, bureaucrats, and ex-
bureaucrats. I sensed a realization that major structural change was
taking place in Japan and that the old methods, which had been
remarkably successful in the past, could not deal with it. Beyond
strong support for far-reaching political reform, there was no clear
consensus on what should be done; but without question, as the
recession deepened, a growing desire to do something different emerged.
Second, in the face of that recession, I believe that the Hosokawa
government has begun to recognize the truth of what the Clinton
administration has been telling it--that change in the Japanese economy
is inevitable, that historic growth rates cannot be regained using
traditional methods, and that the solution is the liberalization and
decontrol of the economy we have been advocating.
It is interesting to observe the Japanese response to the recent
appreciation of the yen. When this event, known there as endaka,
occurred in 1985-87, Japan's manufacturers responded by tightening
their belts, improving their productivity, keeping prices low, and
capturing even more market share with their export-led growth strategy.
This time, with the yen rising to 105, the response is different--a
growing pattern of outsourcing manufacturing production to the United
States and to low-wage countries in Asia. Instead of export-led growth,
we are seeing the export of jobs. If it continues, this will mean an
unemployment problem in Japan more serious than anything they have
experienced in years. Already, their official unemployment rate is the
highest in over 6 years--only 2.9 percent, but a serious problem in
Japanese terms.
Prime Minister Hosokawa understands that the key to avoiding that
disaster, with all its political implications, is to promote more
domestic growth, which can only be obtained by major structural changes
in the Japanese economy. Further reductions in interest rates, for
example, when the real rate is close to 1 percent, or public works
stimulus packages that are invariably too little too late, will not do
the job. The Japanese economy simply has to begin operating on a real
market basis. The cozy credit relationships or keiretsu-based
procurement practices of the past will not restore growth.
The recent controversy over a major tax cut demonstrates that not all
parts of the Japanese political system have learned this lesson yet. It
also proves that a tax increase--which would have followed the cut--is
not popular anywhere in the world--not a surprising conclusion.
Ultimately, the Japanese Government will have no choice but to do
what we have been urging. It is the only thing that makes any sense.
The real questions for the bilateral relationship are:
First, whether they do it in the context of the ongoing framework
negotiations in recognition of what we have been saying, or whether
they do it with a gloss of anti-American rhetoric to serve domestic
political purposes; and
Second, how long it will take them to act.
With respect to the first question, it appears that the Prime
Minister is finding it politically expedient to be perceived as
standing up to the Americans at the same time he is telling his
countrymen they need to import more and open up their economy. He may
not be politically strong enough to do anything else. While the United
States no doubt would prefer to claim victory in the framework
negotiations, quite frankly, a results-oriented administration, as this
one is, should take it either way because, after all, the issue for the
United States is market access and the jobs that go with it.
That means the important question is the second one--how long these
changes will take. This is a particularly awkward question because of
the disjuncture in timing at which the two countries find themselves.
The United States has had a large and growing trade deficit with Japan
for years, and we have, at least since the Nixon administration, been
pressing them to open their economy. While the deficit is related to
macroeconomic factors as well, it is apparent from the economic history
of the past decade that the Japanese economy does not respond to
macroeconomic changes like exchange rate shifts in the ways our
economists and their textbooks predict.
Indeed, if we have learned anything in the past 15 years it is that
this economy is unique. There is no other developed economy in the
world so relentlessly geared to export-led growth and the limitation of
imports. It is precisely that uniqueness as well as the exhaustion of
our patience after so many years of trying so many different approaches
that has brought us to the present point.
Our patience is exhausted not only because of the duration and
difficulty of the battle, but because its price has been paid by the
American worker. There are hundreds of thousands, if not millions, of
Americans who lost their jobs in the past 15 years because of Japanese
imports and our inability to access their market. Automobiles, steel,
machine tools, computers, semiconductors, televisions--the list seems
endless. Many of those Americans have found other jobs but rarely
better ones. The Clinton administration has embarked on a program to
restore our competitiveness, particularly in critical technology areas,
that has helped to restore national confidence and reduce unemployment,
but so much damage has been done that it will be years before we fully
recover.
The Japanese Government, in turn, is only beginning to recognize the
magnitude of the problem and the extent to which it is now hurting
their people just as it has hurt ours for so long. Their response is
predictable--essentially a plea for more time and the chance to deal
with things their way. In the abstract, that is not an unreasonable
plea, but it comes at an unreasonable time--when America has no more
patience left to give.
This dilemma is nowhere better illustrated than in the recent battle
over United States access to the Japanese construction market. The
Japanese construction industry has been notorious for its corruption
and closed doors for years. American efforts to penetrate the dango
system have gone on for years with virtually no success. Finally, after
the system became a domestic political scandal in Japan, the Government
began to move under the threat of American sanctions. It did so with a
plea for more time--a reasonable request from Japan's perspective
because they were just beginning to deal with the problem, but an
outrageous one from our perspective because they should have been
dealing with it for the last 10 years.
The Framework negotiations have featured the same disjuncture. Prime
Minister Hosokawa argues that Japan should, in effect, have time to do
it their way. We argue it is too late for further delay, and, in any
event, the record of successful implementation of his predecessors'
promises is bleak.
In the long run, this will work itself out. But also in the long run,
as Keynes said, we are all dead. President Clinton's obligation is to
meet our needs, and to insist on the restoration of some equity in the
trading relationship. Doing so, of course, will help Japan as well, as
I have noted.
The question the Congress faces right now is how best to assist the
President in his effort to put meat on the bones of the Framework
Agreement, because it is clear that in the short run, Japan is
unwilling or unable to honor the commitments it made last July. A
useful approach, in my judgment, is embodied in the legislation that
Congressman Gephardt and I are introducing today. Essentially it is an
effort to reinforce the President's efforts by creating a mechanism for
the development of the objective criteria the Framework Agreement calls
for, a process for negotiating to achieve those goals, and a process
for taking action in the event the goals are not reached, either by
failure to reach agreement or failure to comply with obligations that
have been undertaken.
In brief, the bill would require the Commerce Department to prepare
annual competitive assessments of selected sectors--initially those
identified in the Framework Agreement and subsequently those that
involve critical technologies, are important elements of our economy or
the bilateral trade deficit or which are requested by the U.S. Trade
Representative. These assessments would estimate how well we would be
doing in the Japanese market in that sector if that market were truly
open.
Those assessments, in turn, would become negotiating objectives for
the U.S. Trade Representative, who would decide, at 6 month intervals,
which of the various sectoral objectives he wanted to pursue in
bilateral negotiations. The goal of the negotiations would be to reach
agreements that are designed to achieve the objectives.
In turn, there would be two circumstances under which subsequent
action might be taken. An agreement could be reached but its provisions
not adequately implemented, and the bill sets up a monitoring process
to help make that judgment. Second, the parties could fail to reach
agreement. In either case, the result becomes a cause of action under
section 301 of the Trade Act of 1974.
This is a carefully developed, nuanced approach designed to further
the President's goals. Its beauty is its cumulative nature. The
Commerce Department will be regularly reviewing sectors and analyzing
their competitiveness in Japan. USTR will be just as regularly
undertaking the negotiations envisioned in the Framework Agreement with
respect to those sectors. The Department's studies will serve as the
foundation and goal for those negotiations. The use of section 301 is
warranted in the event of failure. Indeed, use of section 301 in the
case of agreements that have not been complied with is similar to the
approach taken by the proposed Trade Agreements Compliance Act, which
the Senate passed in 1992 and which many Senators have cosponsored
again in this Congress.
The result of this mechanism will be an ongoing effort to open the
Japanese market through negotiations that use an established analytical
method to set goals. Negotiating priorities are left to the U.S. Trade
Representative, as is the decision on final action, as in current law.
This bill creates a barometer of sorts to measure trade successes
between Japan and the United States, translating the vague language of
trade frameworks into the specific language of balance sheets and
growth. If standards are set and reached, then clearly both nations are
living up to their commitments and policies are working. If not, then
agreements need to be revisited and problems worked out.
It's time for Japan to tear down its economic walls, to end
protectionism, open its markets, and accept the responsibilities that
come with being a world economic power. This bill is a significant step
toward that end.
Will this kind of an approach solve all our problems? History would
suggest that is too much to expect. At the same time, it is critical
that we move forward with some action. To those who say this is managed
trade, I would say that it is not intended that way. It is intended as
a market-opening strategy. At the same time, however, I would reiterate
the point I made earlier--the Japanese economy is unique. Every tactic
we have pursued for more than 15 years has failed, notwithstanding the
validity of our complaints, which most economists now agree with. Under
the circumstances, it is not only appropriate but the only responsible
course of action to try something new before more time passes and more
jobs are lost. Such an approach is neither required nor recommended
with respect to other parts of the world where we do compete--win or
lose--on a market basis.
Having said that, Mr. President, I continue to be optimistic that
this story will ultimately have a happy ending. In the first place, we
have an administration here that understands it and is pressing the
Japanese on the right issues in the right way. In the second place, we
may now have a Japanese Government which, at least privately,
understands that what we have been asking is good for them as well as
for us; indeed, it is good for the trading system. Getting from there
to real results promises to be difficult, as nearly any change in Japan
is, but there is less reason for gloom now than there has been in some
time.
I also want to take this chance to commend President Clinton and his
team on these issues for providing leadership and direction at this
critical juncture. In his refusal to reject inaction on the Framework
Agreement, he also made his commitment to strengthening this country's
short-term and long-term relationship with Japan abundantly clear. We
share that goal very deeply.
I also applaud Congressman Gephardt for his continued thoughtful
leadership in trade policy and the partnership we have forged to help
pave the next road in the United States-Japan relationship. We share a
sense of obligation to America's families and industries, and the
belief that this legislation can benefit them and the people Japan .
Mr. President, I ask unanimous consent that the test of the bill and
additional material be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1872
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 ``Fair Market Access Act of
1994''.
SEC. 2. REPORTS ON ACCESS TO JAPANESE MARKETS.
(a) Initial Report.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Secretary shall submit to the
Congress a report assessing the access to the Japanese market
of goods and services produced or originating in the United
States in each sector specifically identified in the
Framework Agreement.
(2) Contents of Report.--The Secretary shall include in the
report under paragraph (1) the following:
(A) An assessment of the market access opportunities that
would be available in the Japanese market for goods and
services in each sector referred to in paragraph (1) in the
absence of barriers to achieving access to such market in
both the public and private sectors in Japan. In making such
assessment, the Secretary shall consider the competitive
position of such goods and services in similarly developed
markets in other countries. Such assessment shall specify the
time periods within which such market access opportunities
should reasonably be expected to be obtained.
(B) Objective criteria for measuring the extent to which
those market access opportunities described in subparagraph
(A) have been obtained. The development of such objective
criteria may include the use of interim objective criteria to
measure results on a periodic basis, as appropriate.
(b) Subsequent Annual Reports.--
(1) In general.--Not later than the date which is 1 year
after the last day of the 90-day period referred to in
subsection (a)(1), and annually thereafter, the Secretary
shall submit to the Congress a report containing the
following:
(A) An assessment of the market access opportunities that
would be available in the Japanese market, for goods and
services produced or originating in the United States in
those sectors selected by the Secretary, in the absence of
the barriers to achieving access to such market in both the
public and private sectors in Japan. In making such
assessment, the Secretary shall consider the competitive
position of such goods and services in similarly developed
markets in other countries. Such assessment shall specify the
time periods within which such market access opportunities
should reasonably be expected to be obtained.
(B) Objective criteria for measuring the extent to which
those market access opportunities described in subparagraph
(A) have been obtained. The development of such objective
criteria may include the use of interim criteria described in
subsection (a)(2)(B).
(C) An assessment of whether, and to what extent, Japan has
materially complied with--
(i) agreements and understandings reached between the
United States and Japan pursuant to section 3, and
(ii) existing trade agreements between the United States
and Japan.
Such assessment shall include specific information on the
extent to which United States suppliers have achieved
additional access to the Japanese market and the extent to
which Japan has complied with other commitments under such
agreements and understandings.
(D) An assessment of the effect of the agreements and
understandings described in subparagraph (C) on the access to
the Japanese markets of goods and services produced or
originating in the United States.
(2) Selection of sectors.--In selecting sectors that are to
be the subject of a report under paragraph (1), the Secretary
shall give priority to those sectors--
(A) in which access to the Japanese market is likely to
have significant potential to increase exports of United
States goods and services;
(B) in which access to the Japanese market will result in
significant employment benefits for producers of United
States goods and services; or
(C) which represent critical technologies, including those
identified by the National Critical Technologies Panel under
section 603 of the National Science and Technology Policy,
Organization, and Priorities Act of 1976 (42 U.S.C. 6683).
The Secretary shall include an assessment under paragraph (1)
of any sector for which the Trade Representative requests
such assessment be made. In preparing any such request, the
Trade Representative shall give priority to those barriers
identified in the reports required by section 181(b) of the
Trade Act of 1974.
(3) Information on access by foreign suppliers.--The
Secretary shall consult with the governments of foreign
countries concerning access to the Japanese market of goods
and services produced or originating in those countries. At
the request of the government of any such country, the
Secretary may include in the reports required by paragraph
(1) information, with respect to that country, on such
access.
SEC. 3. NEGOTIATIONS TO ACHIEVE MARKET ACCESS.
(a) Negotiating Authority.--The President is authorized to
enter into agreements or other understandings with the
Government of Japan for the purpose of obtaining the market
access opportunities described in the reports of the
Secretary under section 2.
(b) Determination of Priority of Negotiations.--Upon the
submission by the Secretary of each report under section 2,
the Trade Representative shall determine--
(1) for which sectors identified in the report the Trade
Representative will pursue negotiations, during the 6-month
period following submission of the report, for the purpose of
concluding agreements or other understandings described in
subsection (a), and the time frame for pursuing negotiations
on any other sector identified in the report; and
(2) for which sectors identified in any previous report of
the Secretary under section 2 the Trade Representative will
pursue negotiations, during the 6-month period described in
paragraph (1), in cases in which--
(A) negotiations were not previously pursued by the Trade
Representative, or
(B) negotiations that were pursued by the Trade
Representative did not result in the conclusion of an
agreement or understanding described in subsection (a) during
the preceding 6-month period, but are expected to result in
such an agreement or understanding during the 6-month period
described in paragraph (1).
For purposes of this Act, negotiations by the Trade
Representative with respect to a particular sector shall be
for a period of not more than 12 months.
(c) Semiannual Reports.--At the end of the 6-month period
beginning on the date on which the Secretary's first report
is submitted under subsection (a)(1), and every 6 months
thereafter, the Trade Representative shall submit to the
Congress a report containing the following:
(1) With respect to each sector on which negotiations
described in subsection (b) were pursued during that 6-month
period--
(A) a determination of whether such negotiations have
resulted in the conclusion of an agreement or understanding
intended to obtain the market access opporunities described
in the most recent applicable report of the Secretary, and if
not--
(i) whether such negotiations are continuing because they
are expected to result in such an agreement or understanding
during the succeeding 6-month period; or
(ii) whether such negotiations have terminated;
(B) in the case of a positive determination made under
subparagraph (A)(i) in the preceding report submitted under
this subsection, a determination of whether the continuing
negotiations have resulted in the conclusion of an agreement
or understanding described in subparagraph (A) during that 6-
month period.
(2) With respect to each sector on which negotiations
described in subsection (b) were not pursued during that 6-
month period, a determination of when such negotiations will
be pursued.
SEC. 4. MONITORING OF AGREEMENTS AND UNDERSTANDINGS.
(a) In General.--For the purpose of making the assessments
required by section 2(b)(1)(C), the Secretary shall monitor
the compliance with each agreement or understanding reached
between the United States and Japan pursuant to section 3,
and with each existing trade agreement between the United
States and Japan. In making each such assessment, the
Secretary shall describe--
(1) the extent to which market access for the sector
covered by the agreement or understanding has been achieved;
and
(2) the bilateral trade relationship with Japan in that
sector.
In the case of agreements or understandings reached pursuant
to section 3, the description under paragraph (1) shall be
done on the basis of the objective criteria set forth in the
applicable report under section 2(a)(2)(B) or 2(b)(1)(B).
(b) Treatment of Agreements and Understandings.--Any
agreement or understanding reached pursuant to negotiations
conducted under this Act, and each existing trade agreement
between the United States and Japan, shall be considered to
be a trade agreement for purposes of section 301 of the Trade
Act of 1974.
SEC. 5. TRIGGERING OF SECTION 301 ACTIONS.
(a) Determinations by Trade Representative.--
(1) Failure to conclude agreements.--In any case in which
the Trade Representative determines under section
3(c)(1)(A)(ii) or (B) that negotiations have not resulted in
the conclusion of an agreement or understanding described in
section 3(a), each barrier to access to the Japanese market
that was the subject of such negotiations shall, for purposes
of title III of the Trade Act of 1974, be considered to be an
act, policy, or practice determined under section 304 of that
Act to be an act, policy or practice that is unreasonable and
discriminatory and burdens or restricts United States
commerce. The Trade Representative shall determine what
action to take under section 301(b) of that Act in response
to such act, policy, or practice.
(2) Noncompliance with agreements or understandings.--In
any case in which the Secretary determines, in a report
submitted under section 2(b)(1), that Japan is not in
material compliance with--
(A) any agreement or understanding concluded pursuant to
negotiations conducted under section 3, or
(B) any existing trade agreement between the United States
and Japan,
the Trade Representative shall determine what action to take
under section 301(a) of the Trade Act of 1974. For purposes
of section 301 of that Act, a determination of noncompliance
described in the preceding sentence shall be treated as a
determination made under section 304 of that Act.
SEC. 6. DEFINITIONS.
As used in this Act--
(1) Existing trade agreement between the united states and
japan.--The term ``existing trade agreement between the
United States and Japan'' means any trade agreement that was
entered into between the United States and Japan before the
date of the enactment of this Act and is in effect on such
date. Such term includes--
(A) the Arrangement Between the Government of Japan and the
Government of the United States of America Concerning Trade
in Semiconductor Products, signed in 1986;
(B) the Arrangement Between the Government of Japan and the
Government of the United States of America Concerning Trade
in Semiconductor Products, signed in 1991;
(C) the United States-Japan Wood Products Agreement, signed
on June 5, 1990;
(D) Measures Related to Japanese Public Sector Procurements
of Computer Products and Services, signed on January 10,
1992;
(E) the Tokyo Declaration on the U.S.-Japan Global
Partnership, signed on January 9, 1992; and
(F) the Cellular Telephone and Third-Party Radio Agreement,
signed in 1989.
(2) Framework agreement.--The term ``Framework Agreement''
means the Japan-United States Framework for a New Economic
Partnership, signed on July 10, 1993.
(3) Secretary.--The term ``Secretary'' means the Secretary
of Commerce.
(4) Trade representative.--The term ``Trade
Representative'' means the United States Trade
Representative.
____
Fair Market Access Act of 1994
goal
To expand United States exports of goods and services by
requiring the development of objective criteria to achieve
market access in Japan.
background
Starting in the early 1980's, the United States has seen
its trade deficit with Japan increase dramatically, to a
level of approximately $60 billion in 1993. Despite repeated
negotiations to achieve access to the Japanese market during
this period, access for many U.S. products--particularly high
value-added products--has been severely limited.
In April of 1993, President Clinton and Japan's Prime
Minister met and directed their Administrations to begin
discussions with the goal of resolving a number of
longstanding trade disputes. Many of these disputes had been
subject to negotiated agreements in the past; however,
specific results in terms of market access were minimal at
best.
At the Tokyo Economic Summit in July, President Clinton and
then-Prime Minister Miyazawa signed the Joint Statement on
the United States-Japan Framework For A New Economic
Partnership, which created a process as well as a specific
framework for negotiations between our two countries. While
negotiations are continuing, there is some skepticism as to
whether concrete milestones for success will be contained in
any agreements. These milestones are necessary if we are to
be able finally to achieve real access to the Japanese
market. Indeed, prior to the Economic Summit Prime Minister
Miyazawa indicated that outside pressure is necessary if
Japan is to change.
The Japanese Government's willingness to negotiate under
the framework is an acknowledgement of the problems U.S.
companies face. Further investigation of barriers to our
exports isn't necessary--we've examined this problem long
enough. Accordingly, the legislation will short-circuit the
investigation phase and go immediately to consultations. If
an agreement can't be reached, action could occur.
specifics
First, the legislation will require a report by the
Department of Commerce and the USTR on the trade agreements
currently in force between the United States and Japan, and
the operations of those agreements. The report will include
specific information on the extent to which U.S. and world
suppliers have been able to achieve additional access to the
Japanese markets pursuant to those agreements.
Second, the legislation will require that the Department of
Commerce compile an annual report on market access
opportunities for U.S. firms in the Japanese market. In
compiling this report, the Department of Commerce shall
examine the competitive position of U.S. firms in similarly
developed third country markets. The report will define
objective criteria for each industry necessary to gain the
access to the Japanese market that U.S. firms would have but
for the existence of market access impediments.
The first report under the legislation is required 90 days
after enactment. In this first report, the Department of
Commerce is to give priority to developing objective criteria
to those industries which are contained in the ``Framework
For A New Economic Partnership'' agreed to by the Governments
of Japan and the United States in 1993.
In defining which industries shall be included in each
report, the Department of Commerce shall give priority to:
(1) Those industries where the United States can maximize
the economic gain for its farmers, workers and businesses by
expanding exports;
(2) Those industries which will result in the greatest
employment benefits for the United States, or;
(3) Those industries which represent critical technologies.
In compiling these reports, the Department of Commerce
shall include any industry which the USTR requests be
included in the report. Additionally, the Department of
Commerce shall consult with foreign governments, at their
request, and include information on market access
opportunities for world suppliers in the Japanese market.
During this period, the Administration is expected to
continue its efforts to negotiate agreements in each of these
areas. The goal, of course, is to achieve agreements that
will result in definable market access for U.S. companies.
However, if agreements aren't reached, then the targets set
by the Department of Commerce could provide the basis for
action under Section 301 of the trade law.
Each report is to contain information on the operations of
agreements and understandings entered into before as well as
after the date of enactment.
Finally, the legislation will extend the President's trade
negotiating authority specifically for Japan. This is to make
it clear that the unique nature of the Japanese market
requires a different approach than has been used in the past
in trade negotiations.
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