[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.

                          ____________________