[Congressional Record Volume 140, Number 26 (Thursday, March 10, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: March 10, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. FEINGOLD:
S. 1917. A bill to provide for public access to information regarding
the availability of insurance, and for other purposes; to the Committee
on Banking, Housing, and Urban Affairs.
anti-redlining in insurance disclosure act of 1994
Mr. FEINGOLD. Mr. President, I rise today to introduce the Anti-
Redlining in Insurance Disclosure Act of 1994, a bill designed to
address the longstanding problem involving discrimination in the
insurance industry which effectively denies millions of Americans
access to affordable or adequate insurance for their homes and
businesses--a practice better known as insurance redlining.
Historically, the term has been associated with certain
discriminatory practices carried out by lending institutions which drew
lines on maps in red ink around communities that they did not want to
provide their respective financial services to--typically home or small
business loans. These redlined areas were generally comprised of
neighborhoods in which large or growing numbers of minority residents
lived. For years similar practices were carried out by some members of
the insurance industry and more recently similar results have been
achieved by more subtle industry practices which leave many residents
of poor or minority communities without access to adequate or
affordable property insurance.
Sadly enough, the decision on who gets insurance and what type of
coverage they will receive based solely on the color of an applicant's
skin or the neighborhood in which that person lives has taken place for
some time now. It is a problem which has been discussed and examined by
public officials as far back as 25 years ago.
The problem of insurance redlining is pervasive and strikes at the
core of the ability of many Americans to participate fully in our
society by being able to enjoy that which has come to be known as the
American dream--home ownership.
The consequences associated with the inability of individuals and
entire neighborhoods to obtain property insurance was probably best
described by the National Advisory Panel on Insurance in riot affected
areas in 1968 when it observed that:
Insurance is essential to revitalize our cities. It is a
cornerstone of credit. Without insurance banks and other
financial institutions will not and cannot make loans. New
housing cannot be constructed and existing housing cannot be
repaired.
New businesses cannot be opened and existing businesses
cannot expand, or even survive. Without insurance buildings
are left to deteriorate; services, goods and jobs diminish;
efforts to rebuild our Nation's inner cities cannot move
forward. Communities without insurance are communities
without hope.
This statement was made over 25 years ago and unfortunately, still
accurately reflects the situation in many of our Nation's inner-city
neighborhoods.
Study after study since then including the 1979 report of the
Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin advisory
committees to the U.S. Commission on Civil Rights, ``Insurance
Redlining, Fact Not Fiction'' and the recent study on home insurance in
14 U.S. cities released by the community advocacy group ACORN, have
reaffirmed the extent of this problem and the inadequacy of State and
Federal responses to address it.
These studies and recent reports have also indicated that entire
neighborhoods are continuing to be denied or provided inferior
insurance coverage and that insurance redlining practices are currently
widespread throughout the United States. It is not only disturbing that
discrimination continues to exist today, but it troubles me even more
so that the fine city of Milwaukee, WI, has received national attention
regarding this problem. In fact, a CNN television report even stated
that Milwaukee is becoming famous not only for beer, but for insurance
discrimination.
And if you think that the lack of adequate insurance that is
available in many of these neighborhoods is driven solely on sound
principles of economics and statistically based risk assessments--and
not on principles of prejudice--you may be as surprised and outraged as
I was when I first learned of the actions of one district sales manager
of a large insurance company which serves the Milwaukee area community
that were reported in the media and presented in testimony before the
House Subcommittee on Consumer Credit and Insurance. The impact that
prejudice can sometimes have on the decisionmaking process on who
should and who should not be written homeowner policies was evidenced
by the tape recorded advice given to several insurance agents by their
sales manager. This sales manager was recorded saying:
Very honestly, I think you write too many blacks.* * * You
gotta sell good, solid, premium paying white people * * *.
They own their homes, the white works * * *. Very honestly,
black people will buy anything that looks good right now * *
* but when it comes to pay for it next time * * * you're not
going to get your money out of them * * *. The only way
you're going to correct your persistency is get away from
blacks.
This ``quit writing all those blacks'' prejudicial policy was not
only communicated to agents verbally, but was placed in writing as well
and it has been reported that the manager even showed one agent how to
accomplish this goal by stating that ``if a black wants insurance, you
don't have to say, just tell them, because based on this kind of
policy, the company will only allow me to accept an annual premium. Do
it that way.''
Activity of this type that has prompted such allegations of
discrimination in the insurance industry cannot and must not be
tolerated anywhere in our society. We must now take steps to remedy the
situation so that the actions of a few do not discredit the rest of the
citizens of Milwaukee, our Nation, or the majority of the insurance
industry.
It is an insult to the millions of Americans of color who take pride
in home ownership and make their payments each month for certain
decisionmakers to simply write them off by assuming that minorities are
a greater risk or too risky to insure. Not only does this type of
thinking prevent many hardworking individuals of all means the chance
to own a home or start up a business, but if flies in the face of the
evidence and adds to urban decay as well. In fact, data comparing low-
income minority areas with low-income white areas collected from
insurers in St. Louis and Kansas City by the Missouri insurance
department showed that low-income minorities on average paid higher
premiums for homeowners insurance than white homeowners of similar
means for comparable coverage, even though losses were lower in the
minority areas. What are the chances for a section of a city to ever
rebound or be revitalized if individuals who are committed to turning
things around are not given a chance and allowed to become insured and
thus enabled to purchase a home or create jobs by opening a small
business?
It is important that we place people of all races and ethnic
backgrounds on a level playing field when it comes to the opportunity
to purchase insurance. It is difficult enough these days for anyone to
be able to afford to buy a home, and is even more difficult, if not
impossible, to purchase one without homeowner insurance. Expanding home
ownership is critical to any effort our Nation undertakes to turn
around our cities. We must remove all barriers such as this type of
discrimination in order to fulfill any urban revitalization goals.
The Anti-Redlining In Insurance Disclosure Act of 1994 would, among
other things, give Federal agencies and affected individuals the
ability to detect and address effectively the problem of insurance
redlining and enforce the anti-discrimination provisions of the Fair
Housing Act. It would accomplish this by requiring the Secretary of
Housing and Urban Development to establish requirements for insurers to
compile and submit information to the Secretary annually. The
information that would be required to be disclosed along census tract
lines includes data pertaining to the number and types of policies
made, the race of the applicants, whether the applicants were accepted
or rejected, the loss data for the specified area and other useful
information in the 50 largest metropolitan statistical areas [MSA's]
and an additional 100 MSA's based on geographic diversity and size of
MSA populations. The bill would require the reporting of rural
insurance information by ZIP Code rather than census tract in 50 rural
areas as well.
This information would allow for the analysis and comparison of the
availability, affordability, and quality or type of insurance coverage
for property and casualty homeowners insurance. Such information would
also be invaluable to Federal prosecutors and individuals seeking
redress from discriminatory redlining practices.
The disclosure requirements found in this bill are patterned after
those found in the Home Mortgage Disclosure Act [HMDA] which require
financial institutions to report their lending activities along census
tract lines. The only burden faced by insurance companies that are in
compliance with the Fair Housing Act law that will be imposed by these
requirements will be the costs associated with the collection and
reporting of the data. Banks, savings associations, and credit unions
have been able to meet the similar requirements under HMDA by using in-
house software programs and outside services to convert address
information to census tract form. The bill takes these costs concerns
into account by requiring the Secretary of HUD to make software to make
such conversions available to insurers at cost.
The Anti-Redlining In Insurance Disclosure Act of 1994 would also
provide for a study concerning insurance availability, affordability,
and adequacy for small businesses and residential property in the
largest 25 MSA's. Data would be collected over a 5-year period, and the
Secretary of HUD would be required to report the data each year. The
number of insurers required to report the data would be limited in each
of the 25 MSA's as determined by the Secretary.
After three decades of research, it is time that our Nation take
concrete steps to end discrimination in the insurance industry. The
Nation was first made aware of insurance redlining practices after
studies following the riots of the 1960's and the problem has reemerged
as a national concern primarily because of the aftermath of the 1991
Los Angeles riots. It is unfortunate that such tragedies must occur in
order for the Nation to take notice of the problem and look for
solutions. And it is a shame that three decades of research showing
that there is an insurance crisis in many of our Nation's communities
has gone unheeded.
Especially in light of the fact that in this same period of time we
have required banks, and other lending institutions to provide housing-
related credit in a nondiscriminatory fashion by enacting the Fair
Housing Act of 1968, the Equal Credit Opportunity Act of 1975, and the
disclosure requirements found in the Home Mortgage Disclosure Act, and
even require that lenders have an affirmative obligation to lend in all
the communities they are chartered to serve, including low- and
moderate-income neighborhoods through the Community Reinvestment Act of
1977.
Our experience with the Home Mortgage Disclosure Act has shown that
the public disclosure of this type of information can serve multiple
purposes in combating insurance discrimination by allowing for an
accurate assessment of the extent and nature of the problem, and by
assisting affected individuals and State and Federal regulators in the
enforcement of antidiscrimination laws. Such disclosure can also
stimulate self corrective policies by the industry itself by bringing
to light the disparate impact of certain industry policies.
Unfortunately, we can pass all of the laws that we want in order to
make discriminatory activities illegal, but none will ensure that such
practices will go away. Unequal treatment of individuals solely on the
basis of the color of their skin will not disappear because a law is
enacted making it illegal. But the law does enable people whose rights
are violated to seek redress and punish those who violate these rights
through the legal system. And the law also symbolizes our consensus to
condemn and eliminate this invidious discrimination. The Anti-Redlining
in Insurance Disclosure Act of 1994 will help achieve both of these
purposes.
I am also interested in exploring suggestions that have been made
that the insurance industry ought to be subjected to the same
requirements that are imposed upon the banking industry under the
Community Reinvestment Act. Just as the banking community is required
to address the credit needs of all communities, we should consider
whether the insurance industry ought to be asked to make a similar
effort to make affordable insurance accessible to the residents of
those communities as well.
Finally, I would also like to thank key members of the other body,
Representatives Joseph Kennedy and Cardiss Collins, for bring the issue
of insurance redlining to the attention of Congress. Through their
respective subcommittees information has been gathered that documents
the problems of insurance redlining and its consequences for millions
of Americans, who are denied insurance or forced to pay higher premiums
for lower coverage. My colleague from Wisconsin, Representative Tom
Barrett, has also been deeply involved in this issue and chaired a
hearing in Milwaukee on January 4 which focused on these problems.
Representative Barrett was actively involved in efforts to combat
discrimination when we both served in the Wisconsin legislature and I
am pleased to have the opportunity to work with him again on these
important issues.
The bill I have introduced today is modeled after H.R. 1257, as it
was reported out of the House Banking Committee, since it requires the
disclosure of data along more well defined census tract lines rather
than by ZIP Code. This method follows the requirements made by the Home
Mortgage Disclosure Act and provides for the reporting of data that is
more useful for disclosing patterns of discrimination, since many urban
ZIP Codes contain neighborhoods that have a diverse range of economic,
racial, and housing stock characteristics.
I would like to conclude my remarks by noting that the administration
has signaled its support for legislation which would address the
problem of insurance redlining and I have attached a letter from a
number of community organizations supporting this bill as well
including:
The Alliance to End Childhood Lead Poisoning,
The American Planning Association,
The Association of Community Organizations for Reform Now
[ACORN],
The Center for Community Change,
The Consumer Federation of America,
Consumers Union,
The National Council of La Raza,
The National Fair Housing Alliance,
The National Insurance Consumer Organization,
The National League of Cities,
The National Low-Income Housing Coalition,
The National Neighborhood Coalition,
Network: A National Catholic Social Justice Lobby,
Public Citizen's Congress Watch,
And the United Methodist Church, General Board of Church
and Society
I look forward to working with all of my colleagues and the
administration in making sure that we do all that we can to end the
practice of insurance discrimination.
I ask unanimous consent that the text of the bill, and the list of
organizations endorsing this measure be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1917
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Anti-
Redlining in Insurance Disclosure Act of 1994''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Establishment of general requirements to submit information.
Sec. 4. Reporting of noncommercial insurance information.
Sec. 5. Study of commercial insurance for residential properties and
small businesses.
Sec. 6. Reporting of rural insurance information.
Sec. 7. Waiver of reporting requirements.
Sec. 8. Reporting by private mortgage insurers.
Sec. 9. Use of data contractor and statistical agents.
Sec. 10. Submission of information to secretary and maintenance of
information.
Sec. 11. Compilation of aggregate information.
Sec. 12. Availability and access system.
Sec. 13. Designations.
Sec. 14. Improved methods and reporting on basis of other areas.
Sec. 15. Annual reporting period.
Sec. 16. Disclosures by insurers to applicants and policyholders.
Sec. 17. Enforcement.
Sec. 18. Reports.
Sec. 19. Task force on agency appointments.
Sec. 20. Studies.
Sec. 21. Exemption and relation to State laws.
Sec. 22. Regulations.
Sec. 23. Definitions.
Sec. 24. Effective date.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) there are disparities in insurance coverage provided by
some insurers between areas of different incomes and racial
composition;
(2) such disparities in affordability and availability of
insurance severely limit the ability of qualified consumers
to obtain credit for home and business purchases; and
(3) the lack of affordable and adequate commercial
insurance for small businesses severely curtails the
establishment and growth of such businesses.
(b) Purposes.--The purposes of this Act are--
(1) to establish a nationwide database for determining the
availability, affordability, and adequacy of insurance
coverage for consumers and small businesses;
(2) to facilitate the enforcement of Federal and State laws
that prohibit illegally discriminatory insurance practices;
and
(3) to determine whether the extent and characteristics of
insurance availability, affordability, and coverage require
public officials to take any actions--
(A) to remedy redlining or other illegally or unfairly
discriminatory insurance practices; or
(B) regarding areas underserved by insurers.
(c) Construction.--Nothing in this Act is intended to, nor
shall it be construed to, encourage unsound underwriting
practices.
SEC. 3. ESTABLISHMENT OF GENERAL REQUIREMENTS TO SUBMIT
INFORMATION.
(a) In General.--The Secretary shall, by regulation,
establish requirements for insurers to compile and submit
information to the Secretary for each annual reporting
period, in accordance with this Act.
(b) Consultation.--In establishing the requirements for the
submission of information under this Act, the Secretary shall
consult with Federal agencies having appropriate expertise,
the National Association of Insurance Commissioners, State
insurance regulators, statistical agents, representatives of
small businesses, representatives of insurance agents
(including minority insurance agents), representatives of
property and casualty insurers, and community, consumer, and
civil rights organizations, as appropriate.
SEC. 4. REPORTING OF NONCOMMERCIAL INSURANCE INFORMATION.
(a) In General.--The requirements established pursuant to
section 3 to carry out this section shall--
(1) be designed to ensure that information is submitted and
compiled under this section as may be necessary to permit
analysis and comparison of--
(A) the availability and affordability of insurance
coverage and the quality or type of insurance coverage, by
MSA and the applicable region, race, and gender of
policyholders; and
(B) the location of the principal place of business of
insurance agents and the race of such agents, and the
location of the principal place of business of insurance
agents terminated and the race of such agents, by MSA and
applicable region; and
(2) specify the data elements required to be reported under
this section and require uniformity in the definitions of the
data elements.
(b) Designated Insurers.--
(1) Aggregate information.--The regulations issued under
section 3 shall require that each designated insurer for a
designated line of insurance under section 13(c)(1) compile
and submit to the Secretary, for each annual reporting
period--
(A) the total number of policies issued in such line, total
exposures covered by such policies, and total amount of
premiums for such policies, by designated line and by
designated MSA and applicable region in which the insured
risk is located;
(B) the total number of cancellations and nonrenewals
(expressed in terms of policies or exposures, as determined
by the Secretary), by designated line and by designated MSA
and applicable region in which the insured risk is located;
(C) the total number and racial characteristics of--
(i) licensed agents of such insurer selling insurance in
the designated line, by designated MSA and applicable region
in which the agent's principal place of business is located;
and
(ii) such agents who were terminated by the insurer, by
designated MSA and applicable region in which the agent's
principal place of business was located; and
(D) for such designated line of insurance, information that
will enable the Secretary to assess the aggregate loss
experience for the insurer, by designated MSA and applicable
region in which the insured risk is located.
(2) Specification of information for itemized disclosure.--
(A) In general.--The regulations issued under section 3
regarding annual reporting requirements for designated
insurers for a designated line of insurance under section
13(c)(1) shall, with respect to policies issued under the
designated line or exposure units covered by such policies,
as determined by the Secretary--
(i) specify the data elements that shall be submitted;
(ii) provide for the submission of information on an
individual insurer basis;
(iii) provide for the submission of the information with
the least burden on insurers, particularly small insurers,
and insurance agents;
(iv) take into account existing statistical reporting
systems in the insurance industry;
(v) require reporting by MSA and applicable region in which
the insured risk is located;
(vi) provide for the submission of information that
identifies the designated line and subline or coverage type;
(vii) provide for the submission of information that
distinguishes policies written in a residual market from
policies written in the voluntary market;
(viii) specify--
(I) whether information shall be submitted on the basis of
policy or exposure unit; and
(II) whether information, when submitted, shall be
aggregated by like policyholders with like policies, except
that the Secretary shall not permit such aggregation if it
will adversely affect the accuracy of the information
reported;
(ix) provide for the submission of information regarding
the number of cancellations and nonrenewals of policies under
the designated line by MSA and applicable region in which the
insured risk is located, by race and gender of the
policyholder (if known to the insurer), and by whether the
policy was issued in a voluntary or residual market; and
(x) provide for the submission of information on the racial
characteristics and gender of policyholders at the level of
detail comparable to that required by the Home Mortgage
Disclosure Act of 1975 (and the regulations issued
thereunder).
(B) Rules regarding obtaining racial information.--With
respect to the information specified in subparagraph (A)(x),
applicants for, and policyholders of, insurance may be asked
their racial characteristics only in writing. Any such
written question shall clearly indicate that a response to
the question is voluntary on the part of the applicant or
policyholder, but encouraged, and that the information is
being requested by the Federal Government to monitor the
availability and affordability of insurance. If an applicant
for, or policyholder of, insurance declines to provide such
information, the agent or insurer for such insurance may
provide such information.
(3) Rule for reporting by designated insurers.--A
designated insurer for a designated line shall submit--
(A) information required under subparagraphs (A), (B), and
(D) of paragraph (1) and information required pursuant to
paragraph (2), for risks insured under such line that are
located within each designated MSA, any part of which is
located in a State for which the insurer is designated; and
(B) information required under paragraph (1)(C) for agents
within such designated MSA's.
(c) Nondesignated Insurers.--The regulations issued under
section 3 shall require each insurer that issues an insurance
policy in a designated line of insurance under section
13(c)(1) that covers an insured risk located in a designated
MSA and which is not a designated insurer for the line in any
State in which any part of such MSA is located, to compile
and submit to the Secretary, for each annual reporting
period--
(1) the total number of policies issued in such line;
(2) the total exposures covered by such policies; and
(3) the total amount of premiums for such policies;
by designated MSA and applicable region in which the insured
risk is located.
SEC. 5. STUDY OF COMMERCIAL INSURANCE FOR RESIDENTIAL
PROPERTIES AND SMALL BUSINESSES.
(a) In General.--The Secretary shall conduct a study to
determine the availability, affordability, and quality or
types of commercial insurance coverage for residential
properties and small businesses, in urban areas.
(b) Submission of Information.--To acquire information for
the study under this section, the Secretary shall, by
regulation, establish requirements for insurers providing
commercial insurance for residential properties and small
businesses to compile and submit to the Secretary on an
annual basis information regarding such insurance, as
follows:
(1) MSA's.--The Secretary shall carry out the study only
with respect to the 25 MSA's having the largest populations,
as determined by the Secretary and specified in the
regulations under this section.
(2) Insurers.--For each of the MSA's specified pursuant to
paragraph (1), the Secretary shall designate the insurers
required to submit the information. The Secretary shall
designate a sufficient number of insurers to provide a
representative sample of the insurers providing such
insurance in each such MSA.
(3) Lines of insurance.--The Secretary shall require the
submission of information regarding such lines, sublines, or
coverage types of commercial insurance as the Secretary
determines are necessary or important with respect to
establishing, operating, or maintaining residential
properties and each type of small business selected under
paragraph (4), and shall require submission of such
information by such lines, sublines, or coverage types.
(4) Small businesses.--For purposes of paragraph (3), the
Secretary shall determine the types of businesses that are
typical of small businesses and shall select a representative
sample of such types.
(5) Data elements.--The Secretary shall identify the data
elements required to be submitted.
(6) Submission by location.--The Secretary shall require
the information to be submitted by designated MSA and
applicable region in which the insured risk is located.
(7) Submission by insurer.--The Secretary shall require the
submission of information on an individual insurer basis and
shall specify whether information, when submitted, shall be
aggregated by like policies, except that the Secretary shall
not permit such aggregation if it will adversely affect the
accuracy of the information reported.
(8) Sunset.--The Secretary shall require the submission of
information under this section only for each of the first 5
annual reporting periods beginning more than 3 years after
the date of enactment of this Act.
(c) Considerations.--In establishing the requirements for
submission of information under this section, the Secretary
shall--
(1) take into consideration the administrative, paperwork,
and other burdens on insurers and insurance agents involved
in complying with the requirements of this section;
(2) minimize the burdens imposed by such requirements with
respect to such insurers and agents; and
(3) take into consideration existing statistical reporting
systems in the insurance industry.
(d) Report.--Not later than 6 months after the expiration
of the fifth of the 5 annual reporting periods referred to in
subsection (b)(8), the Secretary shall submit a report to the
Congress describing the information submitted under the study
conducted under this section and any findings of the
Secretary from the study regarding disparities in the
availability, affordability, and quality or types of
commercial insurance coverage for residential properties and
small businesses, in urban areas.
SEC. 6. REPORTING OF RURAL INSURANCE INFORMATION.
(a) In General.--The Secretary shall, by regulation,
establish requirements for insurers to annually compile and
submit to the Secretary information concerning the
availability, affordability, and quality or type of insurance
in designated rural areas in the lines designated under
section 13(c)(1).
(b) Content.--The regulations under this section shall
provide that--
(1) the information to be compiled and submitted under this
section by designated insurers and insurers that are not
designated insurers shall be of such types, data elements,
and specificity that is as identical as possible to the
types, data elements, and specificity of information required
under this Act of designated and nondesignated insurers,
respectively, for designated MSA's and shall be subject to
the provisions of section 4(b)(2)(B); and
(2) the information compiled and submitted under this
section shall be compiled and submitted on the basis of each
5-digit zip code in which the insured risks are located,
rather than on the basis of designated MSA and applicable
region (as otherwise required in this Act).
(c) Designation of Rural Areas.--For purposes of this
section, the term ``designated rural area'' means the
following:
(1) First 5 years.--With respect to the first 5 annual
reporting periods to which the reporting requirements under
this section apply, any of the 50 rural areas designated by
the Secretary and specified in regulations issued pursuant to
section 22, which shall not be amended or revised after
issuance. The Secretary shall (to the extent possible)
designate one rural area under this paragraph in each State
of the United States.
(2) After first 5 years.--With respect to annual reporting
periods thereafter, a rural area for which a designation made
by the Secretary under this paragraph is in effect, pursuant
to the following requirements:
(A) The designations shall be made for each of the
successive 5-year periods at the time provided in
subparagraph (C), and the first such period shall be the 5-
year period beginning upon the commencement of the sixth
annual reporting period to which the reporting requirements
under this Act apply.
(B) The Secretary shall designate 50 rural areas as
designated rural areas for each such 5-year period and shall
designate such rural areas based upon the information and
recommendations made in the report under section 18(b)
relating to the period.
(C) The Secretary shall make the designation of rural areas
for an ensuing 5-year period by regulations issued--
(i) not later than 12 months before the commencement of the
5-year period; and
(ii) not later than 6 months after the submission to the
Secretary of the report under section 18(b) relating to such
period.
(D) The designations of rural areas for a 5-year period
shall take effect upon the commencement of the first annual
reporting period of the 5-year period beginning not less than
12 months after the issuance of the regulations making such
designations, and shall remain in effect until the expiration
of the 5-year period.
Notwithstanding any other provision of this section, the
designation of a rural area shall remain in effect until a
succeeding designation of rural areas under paragraph (2)
takes effect.
SEC. 7. WAIVER OF REPORTING REQUIREMENTS.
(a) Waiver for States Collecting Equivalent Information.--
(1) Authority.--Subject to the requirements under this
section, the Secretary shall provide, by regulation, for the
waiver of the applicability of the provisions of sections 4,
5, and 6 for each insurer transacting business within a State
referred to in paragraph (2), but only with respect to
information required to be submitted under such sections that
relates to agents or insured risks located in the State.
(2) Requirements.--The Secretary may make a waiver pursuant
to paragraph (1) only with respect to a State that the
Secretary determines has in effect a law or other requirement
that--
(A) requires insurers to submit to the State information
that is the same as or equivalent to the information that is
required to be submitted to the Secretary pursuant to
sections 4, 5, and 6;
(B) provides for adequate enforcement of such law or other
requirements;
(C) provides for the same annual reporting period used by
the Secretary under this Act and for submission of the
information to the Secretary in a timely fashion, as
determined by the Secretary; and
(D) provides that, to the extent statistical agents are
permitted to submit information to the State on behalf of
insurers, such agents are subject to the same or equivalent
requirements as provided under section 9(b).
(3) Duration.--A waiver pursuant to paragraph (1) may
remain in effect only during the period for which the State
law or other requirement under paragraph (2) remains in
effect.
(b) Multiple-State MSA's.--In the case of any designated
MSA that contains area within--
(1) any State for which a waiver has been made pursuant to
subsection (a); and
(2) any State for which such a waiver has not been made;
the provisions of this Act requiring submission of
information to the Secretary regarding such MSA shall be
considered to apply only to the portion of such MSA that is
located within the State for which such a waiver has not been
made.
(c) Authority for Secretary To Obtain Information Directly
From Insurers.--If the State for which a waiver has been made
pursuant to subsection (a) does not submit to the Secretary
the information required under subsection (a)(2)(A) or
submits information that is not complete, the Secretary shall
require the insurers transacting business within the State to
submit such information directly to the Secretary.
SEC. 8. REPORTING BY PRIVATE MORTGAGE INSURERS.
(a) HMDA Reporting.--On an annual basis, the Federal
Financial Institutions Examination Council (hereafter in this
section referred to as the ``Council'') shall determine the
extent to which each insurer providing private mortgage
insurance is making available to the public and submitting to
the appropriate agency information regarding such insurance
that is equivalent to the information regarding mortgages
required to be reported under the Home Mortgage Disclosure
Act of 1975.
(b) Reporting Under This Act.--
(1) Certification of noncompliance.--If, for any annual
period referred to in subsection (a), the Council determines
that any insurer providing private mortgage insurance is not
making available to the public or submitting the information
referred to in subsection (a) or that the information made
available or submitted is not equivalent information as
described in subsection (a), then the Council shall notify
the insurer of such noncompliance. If, after the expiration
of a reasonable period of time, the insurer has not remedied
such noncompliance to the satisfaction of the Council, then
the Council shall immediately certify such noncompliance to
the Secretary.
(2) Requirement.--Upon the receipt of a certification under
paragraph (1), the Secretary shall, by regulation, require
such insurer to submit to the Secretary information regarding
such insurance that complies with the provisions of section 4
that are applicable to such insurance. Such regulations shall
be issued not later than 6 months after receipt of such
certification and shall apply to the first succeeding annual
reporting period beginning not less than 6 months after
issuance of such regulations and to each annual reporting
period thereafter.
SEC. 9. USE OF DATA CONTRACTOR AND STATISTICAL AGENTS.
(a) Data Collection Contractor.--The Secretary may contract
with a data collection contractor to collect the information
required to be maintained and submitted under sections 4, 5,
6, 7, and 8(b), if the contractor agrees to collect the
information pursuant to the terms and conditions of such
sections and this Act and the regulations issued thereunder.
Information submitted to such contractor shall be available
to the public to the same extent as if the information were
submitted directly to the Secretary.
(b) Use of Statistical Agents.--
(1) In general.--The Secretary shall provide, by
regulation, that insurers may submit any information required
under sections 4, 5, 6, and 8(b) through statistical agents
acting on behalf of more than one insurer.
(2) Protections.--The regulations issued under this
subsection shall permit submission of information through a
statistical agent only if the Secretary determines that--
(A) the statistical agent has adequate procedures to
protect the integrity of the information submitted;
(B) the statistical agent has a statistical plan and format
for submitting the information that meets the requirements of
this Act;
(C) the statistical agent has procedures in place that
ensure that information reported under the statistical plan
in connection with reporting under this Act and submitted to
the Secretary is not subject to any adjustment by the
statistical agent or an insurer for reasons other than
technical accuracy and conformance to the statistical plan;
(D) the information of an insurer is not subject to review
by any other insurer before being made available to the
public; and
(E) acceptance of the information through the statistical
agent will not adversely affect the accuracy of the
information reported.
(3) Discontinuance of acceptance of information.--The
Secretary may discontinue accepting information reported
through a statistical agent pursuant to this subsection if
the Secretary determines that the requirements for such
reporting are no longer met or that continued acceptance of
such information is contrary to the goal of ensuring the
accuracy of the information reported.
(4) GAO audits.--The Comptroller General of the United
States shall, at the request of the Secretary, audit
information collection and submission performed under this
subsection by data collection contractors or statistical
agents to ensure that the integrity of the information
collected and submitted is protected. In determining whether
to request an audit of a statistical agent, the Secretary
shall consider the sufficiency (for purposes of this Act) of
audits of the statistical agent conducted in connection with
State insurance regulation.
(5) Liability.--Notwithstanding any use of a statistical
agent as authorized under this subsection, an insurer using
such an agent shall be responsible for compliance with the
requirements under this Act.
SEC. 10. SUBMISSION OF INFORMATION TO SECRETARY AND
MAINTENANCE OF INFORMATION.
(a) Period of Maintenance.--Each insurer required by this
Act to compile and submit information to the Secretary shall
maintain such information for the 3-year period beginning
upon the conclusion of the annual reporting period to which
such information relates. The Secretary shall maintain any
information submitted to the Secretary for such period as the
Secretary considers appropriate and feasible to carry out the
purposes of this Act and to allow for historical analysis and
comparison of the information.
(b) Submission.--The Secretary shall issue regulations
prescribing a standard schedule (taking into consideration
the provisions of section 12(a)), format, and method for
submitting information under this Act to the Secretary. The
format and method of submitting the information shall
facilitate and encourage the submission in a form readable by
a computer. Any insurer submitting information to the
Secretary may submit in writing to the Secretary any
additional information or explanations that the insurer
considers relevant to the decision by the insurer to sell
insurance.
SEC. 11. COMPILATION OF AGGREGATE INFORMATION.
(a) Insurance Information.--For each annual reporting
period, the Secretary shall--
(1) compile, for each designated MSA, by designated line
(and if such information is submitted, by subline or coverage
type)--
(A) information submitted under sections 4, 5, 7, and 8(b)
and loss ratios (if the submission of loss information is
required), aggregated by applicable region for all insurers
submitting such information; and
(B) such information and loss ratios (if the submission of
loss information is required), aggregated by applicable
region for each such insurer; and
(2) produce tables based on information submitted under
sections 4, 5, 7, and 8(b) for each designated MSA, by
insurer and for all insurers, by designated line (and if such
information is submitted, by subline or coverage type),
indicating--
(A) insurance underwriting patterns aggregated for the
applicable regions within the MSA, grouped according to
location, age of property, income level, and racial
characteristics of neighborhoods; and
(B) loss ratios based on the information obtained pursuant
to sections 4, 5, 7, and 8(b) (if the submission of loss
information is required), aggregated for the applicable
regions within the MSA, grouped according to location, age of
property, income level, and racial characteristics of
neighborhoods.
(b) Agent Information.--For each annual reporting period
and for each designated MSA, the Secretary shall compile, by
designated line, the information submitted under section
4(b)(1)(C)--
(1) by designated insurer by applicable region;
(2) by designated insurer aggregated for the applicable
regions within the designated MSA, grouped according to
location, age of property, income level, and racial
characteristics; and
(3) for all designated insurers that have submitted such
information for the designated MSA, aggregated for the
applicable regions within the designated MSA, grouped
according to location, age of property, income level, and
racial characteristics.
(c) Rural Insurance Information.--For each annual reporting
period, the Secretary shall--
(1) compile for each applicable 5-digit zip code, by
designated line (and if such information is submitted, by
subline or coverage type)--
(A) information regarding insurance in rural areas
submitted under sections 6 and 7 and loss ratios, for all
insurers for which such information is submitted; and
(B) such information and loss ratios, for each such
insurer; and
(2) produce tables for each 5-digit zip code based on
information regarding insurance in rural areas submitted
under sections 6 and 7, by insurer and for all such insurers
for which information is submitted under such sections, by
designated line (and if such information is submitted, by
subline or coverage type), indicating--
(A) insurance underwriting patterns, aggregated by zip
codes, grouped according to location, age of property, income
level, and racial characteristics of neighborhoods (where
such demographic information is available); and
(B) loss ratios, based on the information obtained pursuant
to sections 6 and 7, aggregated by zip codes, grouped
according to location, age of property, income level, and
racial characteristics of neighborhoods (where such
demographic information is available).
SEC. 12. AVAILABILITY AND ACCESS SYSTEM.
(a) Availability to Public.--
(1) In general.--The Secretary shall maintain and make
available to the public, in accordance with the requirements
of this section, any information submitted to the Secretary
under this Act and any information compiled by the Secretary
under this Act.
(2) Timing.--The Secretary shall make such information
publicly available on a timetable determined by the
Secretary, but not later than 9 months after the conclusion
of the annual reporting period to which the information
relates, except that such information shall not be made
available to the public until it is available in its entirety
unless not all the information required to be reported is
available by such date.
(b) Public Access System.--
(1) Implementation.--The Secretary shall implement a system
to facilitate access to any information required to be made
available to the public under this Act.
(2) Bases of availability.--The system shall provide access
in the following manners:
(A) Access to itemized information.--To information
submitted under sections 4, 5, 6, 7, and 8(b) on the basis of
the insurer submitting the information, on the basis of
designated MSA and applicable region (or in the case of rural
information submitted under section 6 or 7, on the basis of
5-digit zip code), and on any other basis the Secretary
considers feasible and appropriate.
(B) Access to aggregate information.--To aggregate
information compiled under section 11, on the basis of--
(i) the insurer submitting the information;
(ii) designated MSA and applicable region (or in the case
of rural information submitted under section 6 or 7, on the
basis of 5-digit zip code); and
(iii) any other basis the Secretary considers feasible and
appropriate.
(3) Method.--The access system shall include a toll-free
telephone number that can be used by the public to request
such information and the address at which a written request
for such information may be submitted.
(4) Form.--The Secretary shall, by regulation, establish
the forms in which such information may be furnished by the
Secretary. Such forms shall include written statements, forms
readable by widely used personal computers, and, if feasible,
on-line access for personal computers. The Secretary shall
provide the information available under this section in any
such form requested by the person requesting the information,
except that the Secretary may charge a fee for providing such
information, which may not exceed the amount, determined by
the Secretary, that is equal to the cost of reproducing the
information.
(5) Analysis software.--The Secretary shall make available
to the public software that can be used on a personal
computer to analyze the information provided under this
section. The software shall be capable of analyzing the
information by insurer, designated line, race, gender, MSA,
and applicable region. It shall also contain data compiled by
the Secretary for each MSA and applicable region on income
levels, age of property, and racial characteristics that can
be used to evaluate the information provided under this Act
by insurers. The software and any accompanying data shall be
made available to the public without charge, except for an
amount, determined by the Secretary, which shall not exceed
the actual cost of reproducing the software and the
accompanying data.
(c) Protections Regarding Loss Information.--
(1) Prohibition of disclosure of loss information.--
Notwithstanding any other provision of this Act, the
Secretary may not make available to the public or otherwise
disclose any information submitted under this Act regarding
the amount or number of claims paid by any insurer, the
amount of losses of any insurer, or the loss experience for
any insurer, except--
(A) in the form of a loss ratio (expressing the
relationship of claims paid to premiums) made available or
disclosed in compliance with the provisions of paragraph (2);
or
(B) as provided in paragraph (3).
(2) Protection of identity of insurer.--In making available
to the public or otherwise disclosing a loss ratio for an
insurer--
(A) the Secretary may not identify the insurer to which the
loss ratio relates; and
(B) the Secretary may disclose the loss ratio only in a
manner that does not allow any party to determine the
identity of the specific insurer to which the loss ratio
relates, except parties having access to information under
paragraph (3).
(3) Confidentiality of information disclosed to
governmental agencies.--The Secretary may make information
referred to in paragraph (1) and the identity of the specific
insurer to which such information relates available to any
Federal entity and any State agency responsible for
regulating insurance in a State and may otherwise disclose
such information to any such entity or agency, but only to
the extent such entity or agency agrees not to make any such
information available or disclose such information to any
other person.
SEC. 13. DESIGNATIONS.
(a) Designation of MSA's.--For purposes of this Act, the
term ``designated MSA'' means the following MSA's:
(1) First 5 years.--With respect to the first 5 annual
reporting periods to which the reporting requirements under
this Act apply (pursuant to section 24), any of the 150 MSA's
selected as follows:
(A) The Secretary shall select the 50 MSA's having the
largest populations, as determined by the Secretary and
specified in regulations issued pursuant to section 22, which
shall not be amended or revised after issuance.
(B) The Secretary shall select 100 additional MSA's, on a
basis that provides for--
(i) geographic diversity among the designated MSA's under
this paragraph; and
(ii) diversity in size of the populations among such MSA's.
(2) After first 5 years.--With respect to annual reporting
periods thereafter, an MSA for which a designation under this
paragraph is in effect, pursuant to the following
requirements:
(A) The designations shall be made for each of the
successive 5-year periods at the time provided in
subparagraph (C), and the first such period shall be the 5-
year period beginning upon the commencement of the sixth
annual reporting period to which the reporting requirements
under this Act apply.
(B) The Secretary shall designate not less than 150 MSA's
as designated MSA's for each such 5-year period and shall
designate such MSA's based upon the information and
recommendations made in the report under section 18(b)
relating to the period.
(C) The Secretary shall make the designation of MSA's for
an ensuing 5-year period by regulations issued--
(i) not later than 12 months before the commencement of the
5-year period; and
(ii) not later than 6 months after the submission to the
Secretary of the report under section 20(b) relating to such
period.
(D) The designations of MSA's for a 5-year period shall
take effect upon the commencement of the first annual
reporting period of the 5-year period beginning not less than
12 months after the issuance of the regulations making such
designations, and shall remain in effect until the expiration
of the 5-year period.
Notwithstanding any other provision of this section, the
designation of an MSA shall remain in effect until a
succeeding designation of MSA's under paragraph (2) takes
effect.
(b) Designation of Insurers.--The Secretary shall
designate, for each designated line and each State, insurers
doing business in the lines as designated insurers in the
State for purposes of this Act, subject to the following
requirements:
(1) Highest aggregate premium volume.--
(A) General rule.--For each State, the Secretary shall
designate, for each designated line, each of the insurers and
insurer groups included in the class established under this
paragraph for the State.
(B) Determination.--In each State, the Secretary shall rank
the insurers and insurer groups in each designated line from
the insurer or group having the largest aggregate premium
volume in the State for such line to the insurer or group
having the smallest such aggregate premium volume and shall
include in the class for the State only--
(i) the insurer or group of the highest rank;
(ii) each insurer or group of successively lower rank if
the inclusion of such insurer or group in the class does not
result in the sum of such aggregate premium volumes for
insurers and groups in the class exceeding 80 percent of the
total aggregate premium volume in the State for the line; and
(iii) the first such successively lower ranked insurer or
insurer group whose inclusion in the class results in such
sum exceeding 80 percent of the total aggregate premium
volume in the State for the line.
(2) Minimum aggregate premium volume.--For each State, the
Secretary shall designate, for each designated line, each
insurer and insurer group not designated pursuant to
paragraph (1) whose premium volume in the State for the
designated line exceeds 1 percent of the total aggregate
premium volume in the State for the line.
(3) FAIR plans and joint underwriting associations.--For
each State, the Secretary shall designate, for each
designated line--
(A) each statewide plan under part A of title XII of the
National Housing Act to assure fair access to insurance
requirements; and
(B) each joint underwriting association;
that provides insurance under such line.
(4) Duration.--The Secretary shall designate insurers under
this subsection once every 5 years. Each insurer designated
shall be a designated insurer for each of the first 5
successive annual reporting periods commencing after such
designation.
(c) Designation of Lines of Insurance.--
(1) In general.--The Secretary shall, by regulation,
designate homeowners, dwelling fire, and allied lines of
insurance as designated lines for purposes of this Act, and
shall distinguish the coverage types in such lines by the
perils covered and by market or replacement value. For
purposes of this Act, homeowners insurance shall not include
any renters coverage or coverage for the personal property of
a condominium owner.
(2) Report.--At any time the Secretary determines that any
line of insurance not described in paragraph (1) should be a
designated line because disparities in coverage provided
under such line exist among geographic areas having different
income levels or racial composition, the Secretary shall
submit a report recommending designating such line of
insurance as a designated line for purposes of this Act to
the Committee on Banking, Finance and Urban Affairs of the
House of Representatives and the appropriate committees of
the Senate.
(3) Duration.--
(A) In general.--Except as provided in subparagraph (B),
the Secretary shall make the designations under this
subsection once every 5 years, by regulation, and each line
and subline or coverage type designated under such
regulations shall be designated for each of the first 5
successive annual reporting periods occurring after issuance
of the regulations.
(B) Alteration.--During any 5-year period referred to in
subparagraph (A) in which designations are in effect, the
Secretary may amend or revise the designated lines, sublines,
and coverage types only by regulation and only in accordance
with the requirements of this subsection. Such regulations
amending or revising designations shall apply only to annual
reporting periods beginning after the expiration of the 6-
month period beginning on the date of issuance of the
regulations.
(d) Timing of Designations.--The Secretary shall make the
designations required by subsections (b)(4) and (c)(3)(A) and
notify interested parties during the 6-month period ending 6
months before the commencement of the first annual reporting
period to which such designations apply.
(e) Obtaining Information.--The Secretary may require
insurers to submit to the Secretary such information as the
Secretary considers necessary to make designations
specifically required under this Act. The Secretary may not
require insurers to submit any information under this
subsection that relates to any line of insurance not
specifically authorized to be designated pursuant to this Act
or that is to be used solely for the purpose of a report
under subsection (c)(2).
SEC. 14. IMPROVED METHODS AND REPORTING ON BASIS OF OTHER
AREAS.
(a) Development of Improved Methods.--The Secretary shall
develop, or assist in the improvement of, methods of matching
addresses and applicable regions to facilitate compliance by
insurers, in as economical a manner as possible, with the
requirements of this Act. The Secretary shall allow insurers,
or statistical agents acting on behalf of insurers, to match
addresses and applicable regions through the use of 9-digit
zip codes if the Secretary determines that such use will
substantially reduce the cost and burden to insurers of such
matching without significant adverse impact on the
reliability of the matching.
(b) Address Conversion Software.--The Secretary shall make
available, to any insurer required to provide information to
the Secretary under this Act, computer software that can be
used to convert addresses to applicable regions within
designated MSA's. The software shall be made available in
forms that provide such conversion for designated MSA's on a
nationwide basis and on a State-by-State basis. The software
shall be made available not later than 6 months before the
first annual reporting period to which the reporting
requirements under this Act apply (pursuant to section 26)
and shall be updated annually. The software shall be made
available without charge, except for an amount, determined by
the Secretary, which shall not exceed the actual cost of
reproducing the software.
(c) Convertibility.--
(1) Authority.--The Secretary may, by regulation, provide
for insurers to comply with the requirements under sections
4, 5, and 8(b) by reporting the information required under
such sections on the basis of geographical location other
than MSA and applicable region, but only if the Secretary
determines that information reported on such other basis is
convertible to the basis of MSA and applicable region and
such conversion does not affect the accuracy of the
information.
(2) Limitation.--With respect to any information submitted
on the basis of geographical location other than designated
MSA and applicable region pursuant to paragraph (1), the
Secretary may disclose the information only on the basis of
designated MSA and applicable region.
SEC. 15. ANNUAL REPORTING PERIOD.
(a) In General.--For purposes of this Act, the annual
reporting periods shall be the 12-month periods commencing in
each calendar year on the same day, which shall be selected
under subsection (b) by the Secretary.
(b) Selection.--Not later than the expiration of the 6-
month period beginning on the date of enactment of this Act,
the Secretary shall, by regulation, select a day of the year
upon which all annual reporting periods shall commence. In
determining such day, the Secretary shall consider the
reporting periods used for purposes of State and other
insurance statistical reporting systems, in order to minimize
the burdens on insurers.
SEC. 16. DISCLOSURES BY INSURERS TO APPLICANTS AND
POLICYHOLDERS.
(a) In General.--The Secretary shall, by regulation,
require the following disclosures:
(1) Applicants.--Each insurer that, through the insurer, or
an agent or broker, declines a written application or written
request to issue an insurance policy under a designated line
shall provide to the applicant at the time of such
declination, through such insurer, agent, or broker, one of
the following:
(A) A written explanation of the specific reasons for the
declination.
(B) Written notice that--
(i) the applicant may submit to the insurer, agent, or
broker, within 90 days of such notice, a written request for
a written explanation of the reasons for the declination; and
(ii) pursuant to such a request, an explanation shall be
provided to the applicant within 21 days after receipt of
such request.
(2) Provision of explanation.--If an insurer, agent, or
broker making a declination receives a written request
referred to in paragraph (1)(B) within such 90-day period,
the insurer, agent, or broker shall provide a written
explanation referred to in such subparagraph within such 21-
day period.
(3) Policyholders.--Each insurer that cancels or refuses to
renew an insurance policy under a designated line shall
provide to the policyholder, in writing and within an
appropriate period of time as determined by the Secretary,
the reasons for canceling or refusing to renew the policy.
(b) Model Acts.--In issuing regulations under subsection
(a), the Secretary shall consider relevant portions of model
acts developed by the National Association of Insurance
Commissioners.
(c) Preemption.--Subsection (a) shall not be construed to
annul, alter, or effect, or exempt any insurer, agent, or
broker subject to the provisions of subsection (a) from
complying with any laws or requirements of any State with
respect to notifying insurance applicants or policyholders of
the reasons for declination or cancellation of, or refusal to
renew insurance, except to the extent that such laws or
requirements are inconsistent with subsection (a) (or the
regulations issued thereunder) and then only to the extent of
such inconsistency. The Secretary is authorized to determine
whether such inconsistencies exist and to resolve issues
regarding such inconsistencies. The Secretary may not provide
that any State law or requirement is inconsistent with
subsection (a) if it imposes requirements equivalent to the
requirements under such subsection or requirements that are
more stringent or comprehensive, in the determination of the
Secretary.
(d) Immunity.--In issuing regulations under subsection (a),
the Secretary shall specifically consider the necessity of
providing insurers, agents, and brokers with immunity solely
for the act of conveying or communicating the reasons for a
declination or cancellation of, or refusal to renew insurance
on behalf of a principal making such decision. The Secretary
may provide for immunity under the regulations issued under
subsection (a) if the Secretary determines that such a
provision is necessary and in the public interest, except
that the Secretary may not provide immunity for any conduct
that is negligent, reckless, or willful.
(e) Enforcement.--The Secretary may authorize the States to
enforce the requirements under regulations issued under
subsection (a).
SEC. 17. ENFORCEMENT.
(a) Civil Penalties.--Any insurer who is determined by the
Secretary, after providing opportunity for a hearing on the
record, to have violated any requirement pursuant to this Act
shall be subject to a civil penalty of not to exceed $5,000
for each day during which such violation continues.
(b) Injunction.--The Secretary may bring an action in an
appropriate United States district court for appropriate
declaratory and injunctive relief against any insurer who
violates the requirements referred to in subsection (a).
(c) Insurer Liability.--An insurer shall be responsible
under subsections (a) and (b) for any violation of a
statistical agent acting on behalf of the insurer.
SEC. 18. REPORTS.
(a) Annual Report.--The Secretary shall annually report to
the Committee on Banking, Finance and Urban Affairs of the
House of Representatives and the appropriate committees of
the Senate on the implementation of this Act and shall make
recommendations to such committees on such additional
legislation as the Secretary deems appropriate to carry out
this Act. The Secretary shall include in each annual report a
description of any complaints or problems resulting from the
implementation of this Act, of which the Secretary has
knowledge, made by (or on behalf of) insurance policyholders
that concern the disclosure of information regarding
policyholders and any recommendations for addressing such
problems. Each report shall specifically address whether
granting property and casualty insurance powers to other
financial intermediaries would significantly reduce redlining
and other discriminatory insurance practices and the
Secretary shall consult with the appropriate financial
institution regulators regarding such issues in preparing the
report.
(b) GAO Reports.--
(1) In general.--The Comptroller General of the United
States shall submit a report under this subsection to the
Secretary and the Congress for each 5-year period referred to
in sections 6(c)(2) and 13(a)(2), which contains information
to be used by the Secretary in implementing this Act during
such period.
(2) Timing.--The report under this subsection for each such
5-year period shall be submitted not later than 18 months
before the commencement of the period to which the report
relates.
(3) Contents.--A report under this subsection shall include
the following information:
(A) An analysis of the adequacy of the implementation of
this Act and any recommendations of the Comptroller General
for improving the implementation.
(B) The costs to the Federal Government, insurers, and
consumers of implementing and complying with this Act.
(C) Any beneficial or harmful effects resulting from the
requirements of this Act.
(D) An analysis of whether, considering the purposes of
this Act, insurers are required by this Act (or by
implementing regulations) to submit appropriate information.
(E) An analysis of whether sufficient evidence exists of
patterns of disparities in the availability, affordability,
and quality or type of insurance coverage to warrant
continued applicability of the requirements of this Act.
(F) An analysis of whether the group of designated MSA's in
effect at the time of the report are appropriate for purposes
of this Act.
(G) Specific recommendations, for use by the Secretary in
designating MSA's for the 5-year period for which the report
is made, with regard to--
(i) the characteristics of MSA's that should be included in
the group of designated MSA's;
(ii) the number of MSA's that should be included in the
group;
(iii) the number of MSA's having each particular
characteristic that should be included in the group; and
(iv) the characteristics of MSA's, and number of MSA's
having each such characteristic, that should be removed from
the group of designated MSA's in effect at the time of the
report.
(H) With respect only to the first report required under
this subsection, recommendations of whether the study
conducted under section 5 should be continued beyond the date
in section 5(b)(8) and, if so, whether the requirements
regarding the submission of information under the study
should be expanded or changed with respect to insurers,
MSA's, lines, sublines or coverage types of insurance, and
types of small businesses, or whether the study should be
allowed to terminate under law.
(I) An analysis of whether the group of designated rural
areas in effect at the time of the report are appropriate for
purposes of this Act.
(J) Specific recommendations, for use by the Secretary in
designating rural areas for purposes of section 6 for the 5-
year period for which the report is made, with regard to--
(i) the characteristics of rural areas that should be
included in the group of designated rural areas under such
section;
(ii) the number of rural areas having each particular
characteristic that should be included in the group; and
(iii) the characteristics of rural areas, and number of
rural areas having each such characteristic, that should be
removed from the group of designated rural areas in effect at
the time of the report.
(K) Any other information or recommendations relating to
the requirements or implementation of this Act that the
Comptroller General considers appropriate.
(4) Consultation.--In preparing each report under this
subsection, the Comptroller General shall consult with
Federal agencies having appropriate expertise, the National
Association of Insurance Commissioners, State insurance
regulators, statistical agents, representatives of small
businesses, representatives of insurance agents (including
minority insurance agents) and property and casualty
insurers, and community, consumer, and civil rights
organizations.
SEC. 19. TASK FORCE ON AGENCY APPOINTMENTS.
(a) Establishment.--Not later than 90 days after the date
of enactment of this Act, the Secretary shall establish a
task force on insurance agency appointments (hereafter in
this section referred to as the ``Task Force''). The Task
Force shall--
(1) consist of representatives of appropriate Federal
agencies, property and casualty insurance agents, including
specifically minority insurance agents, property and casualty
insurers, State insurance regulators, and community,
consumer, and civil rights organizations;
(2) have a significant representation from minority
insurance agents; and
(3) be chaired by the Secretary or the Secretary's
designee.
(b) Function.-- The Task Force shall--
(1) review the problems inner-city and minority agents may
have in receiving appointments to represent property and
casualty insurers and consider the effects such problems have
on the availability, affordability, and quality or type of
insurance, especially in underserved areas;
(2) review the practices of insurers in terminating agents
and consider the effects such practices have on the
availability, affordability, and quality or type of
insurance, especially in underserved areas; and
(3) recommend solutions to improve the ability of inner-
city and minority insurance agents to market property and
casualty insurance products, including steps property and
casualty insurers should take to increase their appointments
of such agents.
(c) Report and Termination.--The Task Force shall report to
the Committee on Banking, Finance and Urban Affairs of the
House of Representatives and the appropriate committees of
the Senate its findings under paragraphs (1) and (2) of
subsection (b) and its recommendations under paragraph (3) of
subsection (b) not later than 2 years after the date of
enactment of this Act. The Task Force shall terminate on the
date on which the report is submitted to the committees.
SEC. 20. STUDIES.
(a) Study of Insurance Prescreening.--
(1) In general.--The Secretary shall conduct a study to
determine the feasibility and utility of requiring insurers
to report information with respect to the characteristics of
applicants for insurance and reasons for rejection of
applicants. The study shall examine the extent to which--
(A) oral applications or representations are used by
insurers and agents in making determinations regarding
whether or not to insure a prospective insured;
(B) written applications are used by insurers and agents in
making determinations regarding whether or not to insure a
prospective insured;
(C) written applications are submitted after the insurer or
agent has already made a determination to provide insurance
to a prospective insured or has determined that the
prospective insured is eligible for insurance; and
(D) prospective insured persons are discouraged from
submitting applications for insurance based, in whole or in
part, on--
(i) the location of the risk to be insured;
(ii) the racial characteristics of the prospective insured;
(iii) the racial composition of the neighborhood in which
the risk to be insured is located; and
(iv) in the case of residential property insurance, the age
and value of the risk to be insured.
(2) Report.--The Secretary shall report the results of the
study under paragraph (1) to the Committee on Banking,
Finance and Urban Affairs of the House of Representatives and
the appropriate committees of the Senate, not later than 2
years after the date of enactment of this Act. The report
shall include recommendations of the Secretary--
(A) with respect to requiring insurers to report on the
disposition of oral and written applications for insurance;
and
(B) for any legislation that the Secretary considers
appropriate regarding the issues described in the report.
(b) Study of Insurer Actions To Meet Insurance Needs of
Certain Neighborhoods.--The Secretary shall conduct a study
of various practices, actions, and methods undertaken by
insurers to meet the property and casualty insurance needs of
residents of low- and moderate-income neighborhoods, minority
neighborhoods, and small businesses located in such
neighborhoods. The Secretary shall report the results of the
study, including any recommendations, to the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate committees of the Senate,
not later than 2 years after the date of enactment of this
Act.
(c) Study of Disparate Claims Treatment.--
(1) In general.--The Secretary shall conduct a study to
determine whether, and the extent to which, insurers engage
in disparate treatment in handling claims of policyholders
under designated lines of insurance based on the race,
gender, and income level of the policyholder, and on the
racial characteristics and income levels of the area in which
the insured risk is located. In conducting the study, the
Secretary shall specifically consider whether residents of
low-income neighborhoods or areas and minority neighborhoods
or areas are more likely than residents of other areas to
have their claims contested or their insurance coverage
canceled.
(2) Report.--The Secretary shall submit a report on the
results of the study to the Committee on Banking, Finance and
Urban Affairs of the House of Representatives and the
appropriate committees of the Senate, not later than 2 years
after the date of enactment of this Act.
(d) Study of Rating Territories.--The Secretary shall
conduct a study to determine whether the practice in the
insurance industry of basing insurance premium amounts on the
territory in which the insured risk is located has a
disparate impact on the availability, affordability, or
quality of insurance by race, gender, or type of
neighborhood. The Secretary shall submit a report on the
results of the study to the Committee on Banking, Finance and
Urban Affairs of the House of Representatives and the
appropriate committees of the Senate, not later than 12
months after the date of enactment of this Act.
(e) Study of Insurer Reinvestment Requirements.--
(1) In general.--The Secretary shall conduct a study to
determine the feasibility of requiring insurers to reinvest
in communities and neighborhoods from which they collect
premiums for insurance and whether, and the extent to which,
community reinvestment requirements for insurers should be
established that are comparable to the community reinvestment
requirements applicable to depository institutions. The
Secretary shall consult with representatives of insurers and
consumer, community, and civil rights organizations regarding
the results of the study and any recommendations to be made
based on the results of the study.
(2) Report.--The Secretary shall report the results of the
study, including any such recommendations, to the Committee
on Banking, Finance and Urban Affairs of the House of
Representatives and the appropriate committees of the Senate,
not later than 6 months after the conclusion of the first
annual reporting period to which the reporting requirements
under this Act apply (pursuant to section 26).
SEC. 21. EXEMPTION AND RELATION TO STATE LAWS.
(a) Exemption for United States Programs.--Reporting shall
not be required under this Act with respect to insurance
provided by any program underwritten or administered by the
United States.
(b) Relation to State Laws.--This Act does not annul,
alter, or affect, or exempt the obligation of any insurer
subject to this Act to comply with the laws of any State or
subdivision thereof with respect to public disclosure,
submission of information, and recordkeeping.
SEC. 22. REGULATIONS.
(a) In General.--The Secretary shall issue any regulations
required under this Act and any other regulations that may be
necessary to carry out this Act. The regulations shall be
issued through rulemaking in accordance with the procedures
under section 553 of title 5, United States Code, for
substantive rules. Except as otherwise provided in this Act,
such final regulations shall be issued not later than the
expiration of the 18-month period beginning on the date of
enactment of this Act.
(b) Burdens.--In prescribing such regulations, the
Secretary shall take into consideration the administrative,
paperwork, and other burdens on insurance agents, including
independent insurance agents, involved in complying with the
requirements of this Act and shall minimize the burdens
imposed by such requirements with respect to such agents.
SEC. 23. DEFINITIONS.
For purposes of this Act, the following definitions shall
apply:
(1) Agent.--The term ``agent'' means, with respect to an
insurer, an agent licensed by a State who sells property and
casualty insurance. The term includes agents who are
employees of the insurer, agents who are independent
contractors working exclusively for the insurer, and agents
who are independent contractors appointed to represent the
insurer on a nonexclusive basis.
(2) Applicable region.--The term ``applicable region''
means, with respect to a designated MSA--
(A) for any county located within the MSA that has a
population of more than 30,000, the applicable census tract
within the county; or
(B) for any county located within the MSA that has a
population of 30,000 or less, the applicable county.
(3) Commercial insurance.--The term ``commercial
insurance'' means any line of property and casualty
insurance, except homeowner's, dwelling fire, allied lines,
and other personal lines of insurance.
(4) Designated insurer.--The term ``designated insurer''
means, with respect to a designated line, an insurer
designated for a State by the Secretary under section 13(b)
as a designated insurer for such line or any insurer that is
part of an insurer group selected under such section.
(5) Designated investment.--The term ``designated
investment'' means making or purchasing a loan for the
purchase of commercial real estate, making or purchasing a
mortgage loan for the purchase of a 1- to 4-family dwelling,
making or purchasing a commercial or industrial loan.
(6) Designated line.--The term ``designated line'' means a
line of insurance or bid, performance, and payment bonds
designated by the Secretary under section 13(c).
(7) Exposures.--The term ``exposures'' means, with respect
to an insurance policy, an expression of an exposure unit
covered under the policy compared to the duration of the
policy (pursuant to standards established by the Secretary
for uniform reporting of exposures).
(8) Exposure units.--The term ``exposure units'' means a
dwelling covered under an insurance policy for homeowners,
dwelling fire, or allied lines coverage.
(9) Insurance.--The term ``insurance'' means property and
casualty insurance. Such term includes primary insurance,
surplus lines insurance, and any other arrangement for the
shifting and distributing of risks that is determined to be
insurance under the law of any State in which the insurer or
insurer group engages in an insurance business.
(10) Insurer.--Except with respect to section 8, the term
``insurer'' means any corporation, association, society,
order, firm, company, mutual, partnership, individual,
aggregation of individuals, or any other legal entity that is
authorized to transact the business of property or casualty
insurance in any State or that is engaged in a property or
casualty insurance business. The term includes any certified
foreign direct insurer, but does not include an individual or
entity which represents an insurer as agent solely for the
purpose of selling or which represents a consumer as a broker
solely for the purpose of buying insurance.
(11) Issued.--The term ``issued'' means, with respect to an
insurance policy, newly issued or renewed.
(12) Joint underwriting association.--The term ``joint
underwriting association'' means an unincorporated
association of insurers established to provide a particular
form of insurance to the public.
(13) Mortgage insurance.--The term ``mortgage insurance''
means insurance against the nonpayment of, or default on, a
mortgage or loan for residential or commercial property.
(14) MSA.--The term ``MSA'' means a Metropolitan
Statistical Area or a Primary Metropolitan Statistical Area.
(15) Private mortgage insurance.--The term ``private
mortgage insurance'' means mortgage insurance other than
mortgage insurance made available under the National Housing
Act, title 38 of the United States Code, or title V of the
Housing Act of 1949.
(16) Property and casualty insurance.--The term ``property
and casualty insurance'' means insurance against loss of or
damage to property, insurance against loss of income or extra
expense incurred because of loss of, or damage to, property,
and insurance against third party liability claims caused by
negligence or imposed by statute or contract. Such term does
not include workers' compensation, professional liability, or
title insurance.
(17) Residual market.--The term ``residual market'' means
an assigned risk plan, joint underwriting association, or any
similar mechanism designed to make insurance available to
those unable to obtain it in the voluntary market. The term
includes each statewide plan under part A of title XII of the
National Housing Act to assure fair access to insurance
requirements.
(18) Rural area.--The term ``rural area'' means any area
that--
(A) has a population of 10,000 or more;
(B) has a continuous boundary; and
(C) contains only areas that are rural areas, as such term
is defined in section 520 of the Housing Act of 1949 (except
that clause (3)(B) of such section 520 shall not apply for
purposes of this Act).
(19) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(20) State.--The term ``State'' means any State, the
District of Columbia, the Commonwealth of Puerto Rico, the
Northern Mariana Islands, the Virgin Islands, American Samoa,
and the Trust Territory of the Pacific Islands.
SEC. 24. EFFECTIVE DATE.
The requirements of this Act relating to reporting of
information by insurers shall take effect with respect to the
first annual reporting period that begins not less than 3
years after the date of enactment of this Act.
____
March 8, 1994.
Senator Russ Feingold,
Dirksen Senate Office Building, Washington, DC.
Dear Senator Feingold: We write to offer our endorsement of
S. XXX. This legislation addresses the serious problem of
discrimination and redlining in the provision of homeowners
insurance industry in a simple yet effective way--through the
power of sunshine.
Numerous studies and hearings before the House of
Representatives have shown that residents of low-income,
predominantly minority areas have a harder time obtaining
insurance coverage for their homes. When they can get
coverage, it is often substantially more expensive, or of
substandard quality. While insurers claim these results are
due to an objective evaluation of risk, studies analyzing
actual losses in low income and minority areas indicate this
is not true.
Insurance redlining contributes to and furthers urban decay
and disinvestment. The lack of affordable insurance is a
material deterrent to homeownership and economic development
in low income and minority communities. Without insurance,
people simply cannot buy homes.
S. XXX simply requires insurers to begin to make public
information as to where and at what price they write
insurance. It also would collect data on insurer losses. The
data collected by this legislation will go a long way to
resolve the debate over insurance redlining and will be a
valuable tool for enforcement of civil rights laws at the
state and federal level.
Your legislation incorporates 3 key elements that are
essential to advancing fair and equal access to insurance:
First, S. 1917 collects data on the cost and type of
insurance policies written by the census tract (or zip+4's)
where the policy is issued. Only census tracts are accurate
enough to gauge the disparate impact insurance redlining has
on minority and low-income neighborhoods. The Home Mortgage
Disclosure Act requires banks to report loan information on a
census tract basis, and this standard should apply to the
insurance industry as well.
Second, S. 1917 collects data on insurance losses and
claims. While insurers claim disparities in prices between
different neighborhoods are solely based on loss experience,
a recent study by the Missouri Department of Insurance
suggests the opposite. Data analyzed by the department
indicated that residents of minority neighborhoods pay more
in premiums, but incur fewer losses, than residents of
comparable white neighborhoods. Only through the collection
of loss data can we conclusively resolve the debate about
whether these disparities are due to risk or prejudice.
Third, S. 1917 would collect this data in 150 Metropolitan
Statistical Areas (MSA's). The data collected by this
legislation will be invaluable as a civil rights enforcement
tool, and that tool should be available to the greatest
number of communities and citizens.
We are eager to work with you to obtain passage of S. XXX,
and commend you for your leadership on the issue.
Sincerely,
Alliance to End Childhood Lead Poisoning, American Planning
Association, Association of Community Organizations for
Reform Now (ACORN), Center for Community Change, Consumer
Federation of America, Consumers Union, National Council of
La Raza, National Fair Housing Alliance, National Insurance
Consumer Organization, National League of Cities, National
Low Income Housing Coalition, National Neighborhood
Coalition, NETWORK: A National Catholic Social Justice Lobby,
Public Citizen's Congress Watch, United Methodist Church,
General Board of Church and Society.
______
By Mr. BINGAMAN:
S. 1919. A bill to improve water quality within the Rio Puerco
watershed and to help restore the ecological health of the Rio Grande
through the cooperative identification and implementation of best
management practices which are consistent with the ecological,
geological, cultural, sociological, and economic conditions in the
region; to the Committee on Energy and Natural Resources.
rio puerco watershed act of 1994
Mr. BINGAMAN. Mr. President, I introduce legislation that will
authorize a coordinated approach for restoration of the Rio Puerco
watershed, which at 7,000 square miles is the largest tributary to the
Rio Grande in terms of area and sediment. The Rio Puerco was once known
as New Mexico's bread basket, with water supply and soil tilth to
support that reputation.
Over time, extensive ecological changes have occurred in the Rio
Puerco watershed, some of which have resulted in damage to the
watershed that has seriously affected the economic and cultural well-
being of its inhabitants. This has resulted in the loss of existing
communities that were based on the land and were self-sustaining. Mr.
President, a healthy and sustainable ecosystem is essential to the
long-term economic and cultural viability of the region.
According to the Bureau of Land Management, the Rio Puerco
contributes only 6 percent of the total water but over 50 percent of
the sediments which enter the Rio Grande. Accelerated, progressive soil
erosion within the basin threatens not only the sustained productivity
of the rangeland watershed, but also the middle Rio Grande aquatic
system, irrigators dependent on those water, and the economic
foundation of the Mesilla Valley dependent on Elephant Butte Reservoir.
A substantial proportion of the rural population is concerned about
its ability to maintain a traditional lifestyle with an economy which
is natural resource based and dependent upon the productivity of land
with multiple ownership. The vast Rio Puerco drainage system is a
mosaic of land ownership and agency management. No single agency has
watershed wide expertise and management responsibility. It is
imperative that the numerous agencies and individuals with resource
management responsibility--Indian Pueblos, Federal and State agencies,
and private citizens-- work together to develop a plan for and
implement an effective Rio Puerco watershed management program.
This legislation directs the Secretary of the Interior to lead and
coordinate a management program in the Rio Puerco watershed with the
advice and input of a Rio Puerco management committee composed of the
various landowners, affected Indian Pueblos, local, regional, State,
and Federal governments, and other interested citizens.
The committee will prepare a management plan to identify reasonable
and appropriate goals and objectives for land owners and managers in
the Rio Puerco watershed; to describe potential alternative actions to
meet the goals and objectives; to recommend voluntary implementation of
appropriate best management practices on both public and private lands;
to provide for cooperative development of management guidelines for
maintaining and improving the ecological, cultural, and economic
conditions on both public and private lands; and other activities that
will promote cooperation and information sharing among those that own
and manage land in the Rio Puerco watershed.
Mr. President, it is our hope that this legislation will advance the
restoration of and maintenance of a healthy Rio Puerco watershed that
will serve New Mexico and its citizens in the future as well as it has
served us in the past. We have a lot of work ahead of us. A clear path
must be outlined and a base of authorization, from which this program
can be funded, established. Most importantly, this legislation
authorizes an approach that brings all of the stakeholders together.
The Federal Government cannot, and should not, undertake this effort
alone. The support and contributions of local citizens, tribes,
governmental entities, and others is crucial. I urge my colleagues to
support this legislation.
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. 1919
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 ``Rio Puerco Watershed Act of
1994''.
SEC. 2. FINDINGS.
The Congress finds that--
(1) over time, extensive ecological changes have occurred
in the Rio Puerco watershed, including--
(A) erosion of agricultural and range lands;
(B) impairment of waters due to heavy sedimentation;
(C) reduced productivity of renewable resources;
(D) loss of biological diversity;
(E) loss of functioning riparian areas; and
(F) loss of available surface water;
(2) damage to the watershed has seriously affected the
economic and cultural well-being of its inhabitants,
including--
(A) loss of existing communities that were based on the
land and were self-sustaining; and
(B) adverse effects on the traditions, customs, and
cultures of the affected communities;
(3) a healthy and sustainable ecosystem is essential to the
long-term economic and cultural viability of the region;
(4) the impairment of the Rio Puerco watershed has damaged
the ecological and economic well-being of the area below the
junction of the Rio Puerco with the Rio Grande including--
(A) disruption of ecological processes;
(B) water quality impairment;
(C) significant reduction in the water storage capacity and
life expectancy of the Elephant Butte Dam and Reservoir
system due to sedimentation;
(D) chronic problems of irrigation system channel
maintenance; and
(E) increased risk of flooding caused by sediment
accumulation;
(5) the Rio Puerco is a major tributary of the Rio Grande
and the coordinated implementation of ecosystem-based best
management practices for the Rio Puerco system could benefit
the larger Rio Grande system;
(6) the Rio Puerco watershed has been stressed from the
loss of native vegetation, introduction of exotic species,
and alteration of riparian habitat which have disrupted the
original dynamics of the river and disrupted natural
ecological processes;
(7) the Rio Puerco watershed is a mosaic of private,
Federal, tribal trust, and State land ownership with diverse,
sometimes differing management objectives;
(8) development, implementation, and monitoring of an
effective watershed management program for the Rio Puerco
watershed requires cooperation among--
(A) the Bureau of Land Management;
(B) the Rio Puerco Watershed Committee;
(C) the National Forest Service;
(D) the Pueblos of Acoma, Isleta, Jemez, and Laguna;
(E) the Eastern and Canoncito Bands of the Navajo nation;
(F) the Jicarilla Apache Tribe;
(G) the Bureau of Reclamation;
(H) the Geological Survey;
(I) the Bureau of Indian Affairs;
(J) the Fish and Wildlife Service;
(K) the Soil and Conservation Service;
(L) the Army Corps of Engineers;
(M) the National Park Service;
(N) the State of New Mexico;
(O) private landowners;
(P) local and regional governmental entities;
(Q) other interested citizens; and
(R) affected local soil and water conservation districts;
(9) the Secretary of the Interior, acting through the
Director of the Bureau of Land Management, in consultation
with the entities listed in paragraph (7), and in cooperation
with the Rio Puerco Watershed Committee, is best suited to
coordinate management efforts in the Rio Puerco watershed;
and
(10) accelerating the pace of improvement in Rio Puerco
watershed on a coordinated, cooperative basis will benefit
persons living in the watershed as well as downstream users
on the Rio Grande.
SEC. 3. MANAGEMENT PROGRAM.
(a) In General.--The Secretary of the Interior, acting
through the Bureau of Land Management and in consultation
with the Rio Puerco Management Committee established pursuant
to section 4, shall--
(1) establish a clearinghouse for research and information
on management within the Rio Puerco watershed, as described
in the attached map, including--
(A) current and historical natural resource conditions;
(B) data concerning the extent and causes of watershed
impairment; and
(C) implementation, monitoring, and evaluation of best
management practices initiated within the watershed; and
(2) provide support to the Rio Puerco Management Committee
to identify objectives, coordinate implementation of best
management practices, and monitor results.
(b) Rio Puerco Management Plan.--Not later than 2 years
after the date of enactment of this Act, the Secretary, in
consultation with the Rio Puerco Management Committee, shall
prepare a plan for the restoration of the Rio Puerco
watershed. The plan shall--
(1) identify reasonable and appropriate goals and
objectives for landowners and managers in the Rio Puerco
watershed;
(2) describe potential alternative actions to meet the
goals and objectives, including proven best management
practices and costs associated with implementing the actions;
(3) recommend voluntary implementation of appropriate best
management practices on both public and private lands;
(4) provide for cooperative development of management
guidelines for maintaining and improving the ecological,
cultural, and economic conditions on both public and private
lands;
(5) provide for the development of public participation and
community outreach programs that would include proposals
for--
(A) cooperative efforts with private landowners to
encourage implementation of best management practices within
the watershed; and
(B) involving private citizens in restoring the watershed.
(6) provide for the development of proposals for voluntary
cooperative programs among the Rio Puerco Management
Committee membership to implement best management practices
in a coordinated, consistent, and cost-effective manner;
(7) provide for the encouragement and support
implementation of best management practices on private lands;
and
(8) provide for the development of proposals for a
monitoring system that--
(A) builds upon existing data available from private,
Federal, and State sources;
(B) provides for the coordinated collection, evaluation,
and interpretation of additional data as needed or collected;
and
(C) will provide information to--
(i) assess existing resource and socioeconomic conditions;
(ii) identify priority implementation actions; and
(iii) assess the effectiveness of actions taken.
(c) Additional Assistance.--If the Secretary of the
Interior determines that employment of additional personnel
is necessary to carry out this Act, the Secretary shall,
where feasible, employ individuals who reside in the vicinity
of the Rio Puerco watershed restoration area.
SEC. 4. RIO PUERCO MANAGEMENT COMMITTEE.
(a) Establishment.--There is established the Rio Puerco
Management Committee (referred to in this section as the
``Committee'').
(b) Membership.--The Committee shall be convened by a
representative of the Bureau of Land Management, and shall
include representatives from--
(1) the Rio Puerco Watershed Committee;
(2) affected tribes and pueblos;
(3) the National Forest Service of the Department of
Agriculture;
(4) the Bureau of Reclamation;
(5) the Geological Survey;
(6) the Bureau of Indian Affairs;
(7) the Fish and Wildlife Service;
(8) the Army Corps of Engineers;
(9) the Soil and Conservation Service of the Department of
Agriculture;
(10) the State of New Mexico, including the New Mexico
Environment Department and the State Engineer;
(11) affected local Soil and Water Conservation Districts;
(12) the Elephant Butte Irrigation District;
(13) private landowners; and
(14) other interested citizens.
(c) Duties.--The Rio Puerco Management Committee shall--
(1) advise the Secretary of the Interior, acting through
the Director of the Bureau of Land Management, on the
development and implementation of the Rio Puerco Management
Program described in section 3; and
(2) serve as a forum for information about activities that
may affect or further the development and implementation of
the best management practices described in section 3.
SEC. 5. REPORT.
Two years after the date of enactment of this Act, and
biennially thereafter, the Secretary of the Interior, in
consultation with the Rio Puerco Management Committee, shall
transmit to the Committee on Energy and Natural Resources of
the Senate and to the Committee on Natural Resources of the
House of Representatives a report containing--
(1) a summary of accomplishments as outlined in section 3;
and
(2) proposals for joint implementation efforts, including
funding recommendations.
SEC. 6. LOWER RIO GRANDE HABITAT STUDY.
(a) In General.--The Secretary of the Interior, acting
through the Director of the Fish and Wildlife Service shall,
in cooperation with the States of New Mexico and Texas,
conduct a study of the Rio Grande from Caballo Lake to the
Gulf of Mexico. The study shall include--
(1) a survey of the current habitat conditions of the river
and its riparian environment;
(2) identification of the changes in vegetation and habitat
over the past 400 years and the affect of the changes on the
river and riparian area; and
(3) an assessment of the feasibility, benefits, and
problems associated with activities to prevent further
habitat loss and restoration of habitat through
reintroduction or establishment of appropriate native plant
species.
(b) Transmittal.--Not later than 1 year after the date on
which funds are made available to carry out this Act, the
Secretary shall transmit the study authorized by this section
to the Committee on Energy and Natural Resources of the
Senate and to the Committee on Natural Resources of the House
of Representatives.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are
necessary to carry out this Act, and to implement the plan
prepared pursuant to section 3(b).
______
By Mr. DOMENICI (for himself, Mr. Boren, Mr. Hatfield, and Mr.
Nickles):
S. 1920. A bill to amend title XIV of the Public Health Service Act
(commonly known as the ``Safe Drinking Water Act'') to ensure the
safety of public water systems, and for other purposes; to the
Committee on Environment and Public Works.
safe drinking water amendments of 1994
Mr. DOMENICI. Mr. President, I introduce the Safe Drinking Water
Amendments of 1994. This Senator is clearly on the record in support of
protecting safe drinking water as one of the keys to a high quality of
life in a developed nation like the United States. However, as I have
stated in the past, the current regulatory scheme amounts to overkill,
and places unsustainable financial drains on public water systems and
the communities they serve.
As many Senators will recall, I have previously come to this floor to
seek simple and clear modifications to the existing Safe Drinking Water
Act that will harm no one and relieve many of the economic burdens I
mentioned. I return today to introduce legislation that will accomplish
this goal by making two significant changes to the implementation of
the existing law.
First, this bill will write into the law the flexibility EPA and the
States need when protecting drinking water. In exercising their
respective authorities, EPA will be able to set standards for
contaminants considering both public health benefits and cost while
States can establish monitoring requirements based on occurrence data.
This means that regulatory requirements will be triggered by the actual
presence of a contaminant in a particular drinking water system. By
eliminating the need to monitor for contaminants that, in fact, do not
occur in a particular drinking water system, enormous costs can be
avoided.
By authorizing EPA to consider risk reduction benefits and cost when
setting the maximum level at which a contaminant may be present in
drinking water, the bill will ensure that recognizable benefits to the
public health will actually be achieved by the huge rate increases that
consumers will bear.
Second, the bill eliminates the requirement that EPA automatically
and mechanically add 25 new contaminants to the list of regulated
substances every 3 years, regardless of whether such substances
actually occur in drinking water. By this provision, we can begin to
get off the treadmill of regulating for the sake of regulations, and
redirect our environmental protection resources to substances that may
actually harm us.
I would like to take a few moments to address some of the concerns
that have been raised about this bill. Some have said that this
legislation would gut the existing Safe Drinking Water Act and its
protections, or that it would eliminate key safeguards in the law. Mr.
President, I could not stand before you today if I believed this
legislation did anything of the kind. We can no longer ignore
environmental regulatory reality. The money that the American taxpayer
provides for environmental protection must be spent wisely, and in a
manner designed to elicit the greatest level of health protection and
risk reduction.
The broad coalition of support behind this legislation is a further
indication of how pressing the problem of unrealistic regulation is.
The National Governors' Association, the Conference of Mayors, the
League of Cities, water agencies, and organizations representing both
municipal and rural water consumers, and many others are squarely
behind this improved approach to regulating.
I urge my colleagues to cosponsor this legislation and I ask
unanimous consent that the text of this bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1920
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the ``Safe
Drinking Water Act Amendments of 1994''.
(b) References to Title XIV of the Public Health Service
Act.--Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of title XIV of the Public Health Service Act
(commonly known as the ``Safe Drinking Water Act'') (42
U.S.C. 300f et seq.).
SEC. 2. GOALS.
Part A (42 U.S.C. 300f et seq.) is amended by inserting
before section 1401 the following new section:
``SEC. 1400. GOALS.
``The goals of this Act are--
``(1) to ensure the quality and safety of drinking water
provided to the public by public water systems; and
``(2) to protect the public health from the threat of
disease caused by water-borne contaminants.''.
SEC. 3. DEFINITIONS.
Section 1401 (42 U.S.C. 300f) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) The term `primary drinking water regulation' means a
regulation that--
``(A) applies to public water systems;
``(B) specifies 1 or more contaminants subject to
regulation under section 1412;
``(C) specifies for each contaminant referred to in
subparagraph (B)--
``(i) a maximum contaminant level; or
``(ii) a treatment technique; and
``(D) contains criteria and procedures to ensure a supply
of drinking water that dependably complies with each maximum
contaminant level or treatment technique referred to in
subparagraph (C), including--
``(i) quality control and testing procedures to ensure--
``(I) compliance with the level or treatment technique; and
``(II) proper operation and maintenance of the public water
system; and
``(ii) requirements as to--
``(I) the minimum quality of water that may be taken into
the public water system; and
``(II) siting for new facilities for public water
systems.'';
(2) in paragraph (4), by striking the second sentence and
inserting the following new sentence: ``The term includes--
``(A) a collection, treatment, storage, or distribution
facility that is under the ownership of the system and is
used primarily in connection with the system; and
``(B) a collection or pretreatment storage facility that is
not under the ownership of the system and that is used
primarily in connection with the system.'';
(3) in paragraph (6), by inserting before the period at the
end the following: ``that is of public health or welfare
concern'';
(4) in paragraph (14), by adding at the end the following
new sentence: ``The term includes any Native village, as
defined in section 3(c) of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602(c)).''; and
(5) by adding at the end the following new paragraphs:
``(15) The term `risk reduction benefits and costs' means
the public health benefits achieved by changing the regulated
level of a contaminant from 1 level to another level, taking
costs into consideration.
``(16) The term `community water system' means a public
water system that--
``(A) serves at least 15 service connections used by year-
round residents of the area served by the system; or
``(B) regularly serves at least 25 year-round residents.
``(17) The term `noncommunity water system' means a public
water system that is not a community water system.''.
SEC. 4. NATIONAL DRINKING WATER REGULATIONS.
Section 1412 (42 U.S.C. 300g-1) is amended--
(1) in subsection (a)(1), by striking the second sentence
and inserting the following new sentence: ``No regulation
referred to in the preceding sentence shall be required to
comply with the standards established under subsection (b)(3)
unless the regulation is revised to establish a different
maximum contaminant level (or treatment technique) after the
date of enactment of the Safe Drinking Water Act Amendments
of 1994.'';
(2) in paragraph (3), by striking ``, (2), or (3)'' each
place it appears and inserting ``or (2)'';
(3) by striking subsection (b) and inserting the following
new subsection:
``(b)(1) In the case of a contaminant listed in the advance
notice of proposed rulemaking published at 47 Fed. Reg. 9352,
and at 48 Fed. Reg. 45502, for which a national primary
drinking water regulation has not been issued as of the date
of enactment of the Safe Drinking Water Act Amendments of
1994, the Administrator shall--
``(A) publish maximum contaminant level goals and issue a
national primary drinking water regulation in accordance with
paragraph (3) for the contaminant if the Administrator finds,
based on data available under section 1445, that the
contaminant occurs in drinking water at a level of public
health concern; and
``(B) not later than 18 months after the date of enactment
of the Safe Drinking Water Act Amendments of 1994, eliminate
monitoring, compliance, and enforcement requirements for the
contaminant if the Administrator finds, based on the data
referred to in subparagraph (A), that the contaminant does
not occur in drinking water at a level of public health
concern.
``(2)(A) Not later than 3 years after the date of enactment
of the Safe Drinking Water Act Amendments of 1994, and every
5 years thereafter, the Administrator shall issue maximum
contaminant level goals and national primary drinking water
regulations for new contaminants selected in accordance with
this paragraph.
``(B) The Administrator shall review the national drinking
water occurrence data base maintained under section 1445(b).
After notice and an opportunity for public comment, the
Administrator shall assess all occurrence and public health
information available with respect to each contaminant in the
data base.
``(C) Based on the assessment under subparagraph (B), the
Administrator shall determine, with respect to each
contaminant listed under section 1445, based on occurrence
and public health concern, whether--
``(i) the issuance of a national primary drinking water
regulation is or is not appropriate; or
``(ii) additional health effects or occurrence information
is necessary before a determination under clause (i) can be
made.
``(D) For each contaminant with respect to which the
Administrator makes a determination under subparagraph (C)(i)
that the issuance of a national primary drinking water
regulation is not appropriate, the Administrator shall make a
determination on the continuation of monitoring under section
1445(a).
``(3)(A) Each maximum contaminant level goal established
under this subsection shall be set at a level--
``(i) at which no known or anticipated adverse effects on
human health occur; and
``(ii) that allows an adequate margin of safety.
``(B) Each national primary drinking water regulation for a
contaminant for which a maximum contaminant level goal is
established under this subsection shall specify a maximum
level for the contaminant that is achievable by public water
systems with the use of the best technology, treatment
techniques, and other means, taking public health risk
reduction benefits and cost into consideration, that the
Administrator finds are available, after examination for
efficacy under field conditions (and not solely under
laboratory conditions).
``(C) In each national primary drinking water regulation,
the Administrator shall identify appropriate best technology
treatment techniques (including watershed protection and
pollution prevention) that may be used to meet applicable
maximum contaminant levels under this subsection for public
water systems that serve--
``(i) fewer than 1,000 people;
``(ii) between 1,000 and 10,000 people; and
``(iii) more than 10,000 people.
``(4) Notwithstanding paragraph (3), the Administrator
shall issue national primary drinking water regulations for
radionuclides, disinfection byproducts, sulfate, and
corrosion byproducts that will be protective of public health
and take into account--
``(A) the health benefits to be achieved by reducing the
level of the contaminants in drinking water relative to
reducing the level of the contaminants in other media;
``(B) the availability of technology--
``(i) that is effective in removing or otherwise treating
the contaminants under field conditions reflecting a
representative range of water qualities (and not solely under
laboratory conditions); and
``(ii) that does not cause significant adverse impacts on--
``(I) other elements of drinking water quality;
``(II) other environmental media, including impacts related
to disposal of treatment residuals; or
``(III) the efficacy of other drinking water treatment or
processes; and
``(C) the costs to consumers of the regulation.
``(5)(A) Subject to subparagraph (B), each national primary
drinking water regulation that establishes a maximum
contaminant level shall list the technology, treatment
techniques, compliance timeframes, and other means that the
Administrator finds are available for the purpose of meeting
the maximum contaminant level.
``(B) A regulation issued under this subsection shall not
require that any specified technology, treatment technique,
compliance timeframe, or other means be used for the purpose
of meeting the maximum contaminant level.
``(6)(A)(i) The Administrator may issue a national primary
drinking water regulation that requires the use of a
treatment technique in lieu of establishing a maximum
contaminant level, if the Administrator makes a finding that
it is not economically or technologically feasible to
ascertain the level of the contaminant.
``(ii) If the Administrator issues a regulation under
clause (i), the Administrator shall--
``(I) identify such treatment techniques as will be
protective of public health; and
``(II) take into account the factors specified in
paragraphs (3) and (4), as appropriate.
``(iii)(I) Subject to subclause (II), a regulation issued
under clause (i) shall specify each treatment technique known
to the Administrator that meets the requirements of this
paragraph.
``(II) The Administrator may grant a variance from any
specified treatment technique in accordance with section
1415(3).
``(B)(i) Not later than 18 months after June 19, 1986, the
Administrator shall propose and issue national primary
drinking water regulations specifying criteria under which
filtration (including coagulation and sedimentation, as
appropriate) is required as a treatment technique for public
water systems supplied by surface water sources. In issuing
the regulations, the Administrator shall consider the quality
of source waters, protection afforded by watershed
management, treatment practices (such as disinfection and
length of water storage), and other factors relevant to the
protection of health.
``(ii)(I) In lieu of variances under section 1415, the
Administrator shall specify procedures by which a State shall
determine which public water systems within the jurisdiction
of the State shall adopt filtration under the criteria of
clause (i).
``(II) A State may require a public water system to provide
studies or other information to assist in the determination
described in subclause (I).
``(III) The procedures referred to in subclause (I) shall
provide notice and an opportunity for a public hearing on the
determination described in such subclause.
``(IV) If a State determines under this clause that
filtration is required, the State shall prescribe a schedule
for compliance by the public water system with the filtration
requirement. The schedule shall take into account the time
that is reasonably necessary for the public water system to
plan, design, finance, and construct filtration facilities
and make such adjustments to operating practices as are
necessary to achieve compliance with the filtration
requirement.
``(iii) Not later than 2 years after the Administrator
establishes the criteria and procedures under this
subparagraph, a State with primary enforcement responsibility
for public water systems under section 1413 shall adopt such
regulations as are necessary to carry out this subparagraph.
Not later than 1 year after the date of adoption of the
regulations, the State shall make determinations regarding
filtration for all the public water systems within the
jurisdiction of the State supplied by surface waters.
``(iv) If a State does not have primary enforcement
responsibility for public water systems, the Administrator
shall have the same authority to make the determination
described in clause (ii) in the State as the State would have
under such clause. A filtration requirement or schedule under
this subparagraph shall be treated as if the requirement or
schedule were a requirement of a national primary drinking
water regulation.
``(7)(A) Not later than 4 years after the date of enactment
of the Safe Drinking Water Act Amendments of 1994, the
Administrator shall propose and issue--
``(i) national primary drinking water regulations requiring
disinfection as a treatment technique for all public water
systems; and
``(ii) a rule specifying criteria that will be used by the
Administrator (or delegated State authorities) to grant
variances from the requirement described in clause (i) in
accordance with paragraphs (1)(B) and (3) of section 1415.
``(B) In carrying out section 1442(g), the Administrator
(or the delegated State authority) shall, if appropriate,
give special consideration to providing technical assistance
to small public water systems in complying with the
regulations issued under this paragraph.
``(8)(A)(i) The Administrator shall review each national
primary drinking water regulation issued prior to the date of
enactment of this clause not later than 30 months after the
date of enactment.
``(ii) If the Administrator determines, based on data
available under section 1445, that a contaminant subject to
regulation does not occur in public water systems at a level
of public health concern, the Administrator shall eliminate
monitoring, compliance, and enforcement requirements from the
contaminant regulation.
``(iii) In addition to the review under clause (i), the
Administrator shall review each regulation referred to in
clause (i) not later than 5 years after the date of enactment
of this clause. If the Administrator determines that a
regulation is not consistent with the factors specified in
paragraph (3) or (4), as appropriate, the Administrator shall
issue a revised regulation in accordance with the factors.
``(B)(i) Each national primary drinking water regulation
issued after the date of enactment of this clause shall
include a schedule for periodic review of the regulation.
``(ii) Each review referred to in clause (i) shall include
an analysis of new health effects and occurrence data, and
innovations or changes in technology, treatment techniques,
or other activities, that have become available since the
date of issuance of the regulation.
``(iii) If the Administrator determines that the
contaminant subject to regulation no longer occurs in
drinking water at a level of public health concern, the
Administrator shall eliminate monitoring, compliance, and
enforcement requirements from the contaminant regulation.
``(iv) If the Administrator determines that the regulation
is not consistent with the factors specified in paragraph (3)
or (4), as appropriate, the Administrator shall issue a
revised regulation in accordance with the factors.
``(9)(A) Subject to subparagraph (B), a national primary
drinking water regulation issued under this subsection (or a
revision of the regulation) shall take effect in accordance
with a schedule issued by the Administrator in the
regulation.
``(B) Each schedule, including monitoring requirements,
shall--
``(i) be for not less than 2 years; and
``(ii) take into account the time that is reasonably
necessary for public water systems to plan, design, finance,
and construct treatment facilities and make such adjustments
to operating practices as are necessary to achieve compliance
with the regulation.
``(C) A regulation issued under subsection (a) shall be
superseded by a regulation issued under this subsection to
the extent provided by the regulation issued under this
subsection.
``(10) No national primary drinking water regulation may
require the addition of any substance for preventive health
care purposes unrelated to the contamination of drinking
water.'';
(4) in subsection (e), by striking the second sentence and
inserting the following new sentence: ``The Board shall
respond, as the Board considers appropriate, and the
Administrator shall publish the findings and recommendations
of the Board, if any, as part of the notice of proposed
rulemaking of the regulation.''; and
(5) by adding at the end the following new subsection:
``(f) The Administrator may utilize negotiated rulemaking
procedures provided for under subchapter III of chapter 5 of
title 5, United States Code (commonly known as the
`Negotiated Rulemaking Act of 1990'), if the Administrator
determines that the procedures will facilitate the issuance
of regulations required by this section.''.
SEC. 5. STATE PRIMARY ENFORCEMENT RESPONSIBILITY.
Section 1413(a) (42 U.S.C. 300g-2(a)) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) has adopted drinking water regulations that are no
less stringent than the national primary drinking water
regulations issued by the Administrator under subsections (a)
and (b) of section 1412, by not later than 2 years after the
date of issuance by the Administrator;''; and
(2) by striking paragraph (4) and inserting the following
new paragraph:
``(4) if the State permits variances from the requirements
of the drinking water regulations of the State that meet the
requirements of paragraph (1), permits the variances under
conditions and in a matter that is not less stringent than
the conditions under, and the manner in which, variances may
be granted under section 1415; and''.
SEC. 6. ENFORCEMENT OF DRINKING WATER REGULATIONS.
Section 1414 (42 U.S.C. 300g-3) is amended--
(1) in subsection (a)--
(A) in paragraph (1)(A), by striking ``or an exemption
under section 1416'' each place it appears; and
(B) in paragraph (2), by striking ``or an exemption under
section 1416(f)'' each place it appears;
(2) in subsection (b)--
(A) by striking ``or exemption''; and
(B) by striking ``or 1416'';
(3) by striking subsection (c) and inserting the following
new subsection:
``(c)(1) Each owner or operator of a public water system
shall give notice to the persons served by the system--
``(A) of any failure on the part of the public water system
to--
``(i) comply with an applicable maximum contaminant level
or treatment technique requirement of, or a testing procedure
prescribed by, a national primary drinking water regulation;
or
``(ii) perform monitoring required under section 1445(a);
and
``(B) if the public water system is subject to a variance
granted under section 1415(1) because of an inability to meet
a maximum contaminant level requirement, of--
``(i) the existence of the variance; and
``(ii) any failure to comply with the requirements of a
schedule prescribed pursuant to the variance.
``(2)(A) The Administrator shall by regulation prescribe
the frequency for giving notice under this subsection.
``(B) Subject to subparagraphs (C) and (D), not later than
15 months after the date of enactment of the Safe Drinking
Water Act Amendments of 1994, the Administrator shall revise
the regulations required under subparagraph (A) to provide
for different types and frequencies of notice based on the
seriousness of any potential adverse health effects that may
be involved.
``(C) Notice of a violation designated by the Administrator
as posing a serious potential adverse health effect shall be
given as soon as practicable, but in no case later than 14
days after the violation.
``(D) Notice of a violation judged to be less serious than
violations described in subparagraph (C) shall be given not
less frequently than annually.
``(3) The Administrator shall provide guidance as to the
form, manner, and content of the notices to be used to
provide information as promptly and effectively as
practicable, taking into account both the seriousness of any
potential adverse health effects and the likelihood of
reaching all affected persons. Each State, in consultation
with public water systems in the State, shall determine the
actual form, manner, and content of the notices.
``(4) The Administrator may require the owner or operator
of a public water system to give notice to the persons served
by the system of the contaminant level of any unregulated
contaminant required to be monitored under section 1445(a).
``(5) A person who violates this subsection or regulations
issued under this subsection shall be subject to a civil
penalty in an amount not to exceed $25,000.''; and
(4) in subsection (f)(2), by striking ``or exemption''.
SEC. 7. VARIANCES.
Section 1415 (42 U.S.C. 300g-4) is amended to read as
follows:
``SEC. 1415. VARIANCES.
``Notwithstanding any other provision of this part, a
variance from a national primary drinking water regulation
may be granted as follows:
``(1) A State that has primary enforcement responsibility
for public water systems under section 1413 may grant 1 or
more variances from an applicable national primary drinking
water regulation to 1 or more public water systems within the
jurisdiction of the State.
``(2)(A) A variance may be issued only if--
``(i) the State has determined that the water system cannot
afford to install the best available technology or other
technology that has been identified by the Administrator as
appropriate for the system size category to meet the maximum
contaminant level; and
``(ii) it is not feasible for the water system to connect
with another source of water that will meet the standards.
``(B) If the State determines that a water system is unable
to comply with a designated best available technology, the
system shall comply with a best available affordable
technology as designated by the Administrator. The measures
comprising the best available affordable technology may
include requirements for public education and notification,
and use of alternative technologies that, while the
technologies cannot bring the contaminant level below the
maximum contaminant level, will not result in an unreasonable
risk to health.
``(3) After a variance is issued, the variance shall be
reviewed by the State not less than every 3 years to
determine if the conditions for granting the variance
continue to exist. It shall be the responsibility of the
water system to provide documentation to the State indicating
that then current best available technology for the system
size continues to be unaffordable and that the system
continues to be unable to connect with another source of
water that meets the standards.
``(4) Before a determination to grant a variance is made by
the State, the State shall provide notice and an opportunity
for a public hearing on the determination. Each State that
grants a variance shall promptly notify the Administrator of
the granting of the variance. The notification shall include
the reasons for the variance and the documentation used to
grant the variance.
``(5) Not later than 18 months after the date of enactment
of the Safe Drinking Water Act Amendments of 1994, the
Administrator, in consultation with the States, shall develop
affordability guidance. The affordability guidance shall be
reviewed by the Administrator and the States not less than
every 5 years to determine if changes are needed to the
guidance.''.
SEC. 8. EXEMPTIONS.
Section 1416 (42 U.S.C. 300g-5) is repealed.
SEC. 9. RETURN OF WATER.
Part B (42 U.S.C. 300g et seq.) is amended by inserting
after section 1415 the following new section:
``SEC. 1416. PROHIBITION ON THE RETURN OF WATER TO PUBLIC
WATER SYSTEMS.
``(a) In General.--
``(1) Prohibition.--Except as provided in paragraph (2),
notwithstanding any other provision of law, no treated
drinking water may be removed from a public water system used
for any purpose or routed through a device or pipe outside
the public water system, and returned to the public water
system.
``(2) Exceptions.--The prohibition in paragraph (1) shall
not apply to a device or pipe totally within the control of 1
or more public water systems or to connections between water
mains.
``(b) State Enforcement.--Subsection (a) shall be enforced
in all States beginning on the date that is 2 years after the
date of enactment of the Safe Drinking Water Act Amendments
of 1994. Each State shall enforce the subsection through
State or local plumbing codes, or such other means of
enforcement as the State determines is appropriate.''.
SEC. 10. TAMPERING.
Subsection (d) of section 1432 (42 U.S.C. 300i-1(d)) is
amended to read as follows:
``(d) Definition of Tamper.--As used in this section, the
term `tamper' means, with respect to a public water system--
``(1) to introduce a contaminant into the public water
system with the intention of harming persons;
``(2) to otherwise interfere with the operation of the
public water system with the intention of harming persons; or
``(3) to inject water that has gone out of the public water
system, back into the system in violation of section 1416.''.
SEC. 11. RESEARCH, TECHNICAL ASSISTANCE, INFORMATION, AND
TRAINING OF PERSONNEL.
Section 1442 (42 U.S.C. 300j-1) is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``may'' and by inserting
``shall''; and
(B) in paragraph (2)(A), by inserting before the period at
the end the following: ``and for other purposes, including--
``(i) the development and dissemination of advisory
measures to protect against contaminants that have not been
found to occur in drinking water at levels of public health
concern;
``(ii) assistance in achieving compliance with the public
notification requirements of section 1414(c); and
``(iii) the development and dissemination of minimum
guidance for the certification of laboratories that perform
drinking water analyses, and for the certification of
individuals who operate public water systems, for use by the
States in ensuring--
``(I) the validity of monitoring reports by regulations
issued under section 1445; and
``(II) the competence of system operators.''; and
(2) by striking subsection (f) and inserting the following
new subsection:
``(f)(1) There are authorized to be appropriated to carry
out this section, other than paragraphs (1) and (2)(B) of
subsection (a) and provisions relating to research--
``(A) $15,000,000 for fiscal year 1975;
``(B) $25,000,000 for fiscal year 1976;
``(C) $35,000,000 for fiscal year 1977;
``(D) $17,000,000 for each of fiscal years 1978 and 1979;
``(E) $21,405,000 for fiscal year 1980;
``(F) $30,000,000 for fiscal year 1981; and
``(G) $35,000,000 for fiscal year 1982.
``(2) There are authorized to be appropriated to carry out
subsection (a)(1) for each of fiscal years 1995 through 1999
not more than the following amounts:
``Fiscal Year Amount
1994......................................................$20,000,000
1995.......................................................20,000,000
1996.......................................................20,000,000
1997.......................................................20,000,000
1998......................................................20,000,000.
``(3) There are authorized to be appropriated to carry out
subsection (a)(2)(B) $8,000,000 for each of fiscal years 1978
through 1982. There are authorized to be appropriated to
carry out subsection (a)(2)(B) for each of fiscal years 1987
through 1991 not more than the following amounts:
``Fiscal Year Amount
1987.......................................................$7,650,000
1988........................................................7,650,000
1989........................................................8,050,000
1990........................................................8,050,000
1991.......................................................8,050,000.
``(4) There are authorized to be appropriated to carry out
this section (other than subsection (g), paragraphs (1) and
(2)(B) of subsection (a), and provisions relating to
research) for each of fiscal years 1987 through 1991 not more
than the following amounts:
``Fiscal Year Amount
1987......................................................$35,600,000
1988.......................................................35,600,000
1989.......................................................38,020,000
1990.......................................................38,020,000
1991...................................................38,020,000.''.
SEC. 12. GRANTS FOR STATE PROGRAMS.
Section 1443 (42 U.S.C. 300j-2) is amended--
(1) in subsection (a)(7), by striking the table and
inserting the following new table:
``Fiscal Year Amount
1987......................................................$37,200,000
1988.......................................................37,200,000
1989.......................................................40,150,000
1990.......................................................40,150,000
1991.......................................................40,150,000
1995......................................................100,000,000
1996......................................................125,000,000
1997......................................................150,000,000
1998......................................................150,000,000
1999..................................................150,000,000.'';
and
(2) in subsection (c)(1)--
(A) by striking ``and exemptions'' both places it appears;
and
(B) by striking ``sections 1415 and 1416'' and inserting
``section 1415''.
SEC. 13. RECORDS, OCCURRENCE DATA, AND INSPECTIONS.
Section 1445 (42 U.S.C. 300j-4) is amended to read as
follows:
``SEC. 1445. RECORDS, OCCURRENCE DATA, AND INSPECTIONS.
``(a) Records and Monitoring.--
``(1) In general.--
``(A) In general.--Each person who is a supplier of water,
who is or may be otherwise subject to a primary drinking
water regulation prescribed under section 1412 or to an
applicable underground injection control program (as defined
in section 1422(c)), who is or may be subject to the permit
requirement of section 1424 or to an order issued under
section 1441, or who is a grantee, shall establish and
maintain such records, make such reports, conduct such
monitoring, and provide such information as the Administrator
may reasonably require by regulation to assist the
Administrator in--
``(i) establishing regulations under this title;
``(ii) determining whether the person has acted or is
acting in compliance with this title;
``(iii) administering a program of financial assistance
under this title;
``(iv) evaluating the health risks of an unregulated
contaminant; or
``(v) advising the public of the risks.
``(B) Considerations by the administrator.--In requiring a
public water system to conduct monitoring under this
subsection, the Administrator may take into consideration the
system size and the contaminants likely to be found in the
drinking water of the system.
``(C) Considerations by states.--Notwithstanding
subparagraph (A), a State with primary enforcement
responsibility under section 1413 may otherwise establish,
modify, or eliminate monitoring requirements for a system or
class of systems based on occurrence data and other
information concerning the system or class of systems that is
available to the State.
``(2) General monitoring program for unregulated
contaminants.--
``(A) Establishment.--Not later than 18 months after the
date of enactment of this subparagraph, the Administrator
shall issue regulations establishing a monitoring program for
unregulated contaminants.
``(B) Frequency of monitoring.--The regulations shall
require monitoring of drinking water supplied by the public
water system and shall vary the frequency and schedule of
monitoring requirements for systems based on the number of
persons served by the system, the source of supply, and the
contaminants likely to be found. Each system required to
conduct monitoring shall conduct the monitoring at least once
every 5 years after the effective date of the regulations of
the Administrator, unless the Administrator requires more
frequent monitoring.
``(3) Monitoring program for certain unregulated
contaminants.--
``(A) In general.--Not later than 18 months after the date
of enactment of this subparagraph and every 5 years
thereafter, the Administrator shall issue revised regulations
under paragraph (2) listing not more than 30 unregulated
contaminants to be monitored by public water systems and
included in the national drinking water occurrence data base
maintained pursuant to subsection (b).
``(B) Monitoring by large systems.--A public water system
that serves 10,000 or more people shall conduct monitoring
for all contaminants listed under subparagraph (A).
``(C) Monitoring plan for small systems.--Each State shall
develop a representative monitoring plan to assess the
occurrence of unregulated contaminants in public water
systems that serve fewer than 10,000 people. The plan shall
require monitoring by systems representative of different
sizes, types, and geographic locations within the State. The
Administrator shall make available to the States, on request,
laboratory capacity to analyze samples taken pursuant to the
plan.
``(4) Use of monitoring results.--Each public water system
that conducts monitoring of unregulated contaminants pursuant
to this subsection shall provide the results of the
monitoring to the primary enforcement authority.
``(5) Public notification.--Notification of the
availability of the results of the monitoring programs
required under paragraph (2), and notification of the
availability of the results of the monitoring program
referred to in paragraph (6), shall be given to the persons
served by the system and the Administrator.
``(6) Waiver of monitoring requirement.--The Administrator
may waive the monitoring requirement under paragraph (2) for
a system that has conducted a monitoring program after
January 1, 1983, if the Administrator determines the program
to have been consistent with the regulations issued under
this section.
``(7) Monitoring by very small systems.--A system that
supplies fewer than 150 service connections shall be treated
as complying with this subsection if the system provides
water samples or the opportunity for sampling according to
rules established by the Administrator.
``(8) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$30,000,000 for fiscal year 1987, to remain available until
expended.
``(b) Occurrence Data Base.--
``(1) In general.--Not later than 2 years after the date of
enactment of the Safe Drinking Water Act Amendments of 1994,
the Administrator shall assemble and maintain a national
drinking water occurrence data base, using information on the
occurrence of both regulated and unregulated contaminants in
public water systems obtained under subsection (a), and
information from other public and private sources.
``(2) Use of data.--The data in the data base referred to
in paragraph (1) shall be used by the Administrator in making
any determination under section 1412 with respect to the
occurrence of a contaminant in drinking water at a level of
public health concern.
``(3) Public recommendations.--The Administrator shall
periodically solicit recommendations from the appropriate
officials of the National Academy of Sciences, and any person
may submit recommendations to the Administrator, with respect
to contaminants that should be included in the national
drinking water occurrence data base, including
recommendations with respect to additional unregulated
contaminants that should be listed in regulations issued
under subsection (a)(3).
``(c) Entry and Inspection.--
``(1) In general.--
``(A) Authority of the administrator.--
``(i) In general.--Except as provided in paragraph (2), the
Administrator, or a representative of the Administrator duly
designated by the Administrator, upon presenting appropriate
credentials and a written notice to a supplier of water or
any other person subject to--
``(I) a national primary drinking water regulation
prescribed under section 1412;
``(II) an applicable underground injection control program;
or
``(III) a requirement to conduct monitoring with respect to
an unregulated contaminant pursuant to subsection (a),
or a person in charge of any of the property of the supplier
or other person referred to in subclause (I), (II), or (III),
may enter any establishment, facility, or other property of
the supplier or other person in order to determine whether
the supplier or other person has acted or is acting in
compliance with this title.
``(ii) Purposes of entry.--An entry under clause (i) may
include--
``(I) inspection, at reasonable times, of records, files,
papers, processes, controls, and facilities; or
``(II) the testing of any feature of a public water system,
including the raw water source of the system.
``(B) Access to records.--The Administrator or the
Comptroller General of the United States (or a representative
designated by the Administrator or the Comptroller General)
shall have access for the purpose of audit and examination to
any record, report, or information of a grantee that is
required to be maintained under subsection (a) or that is
pertinent to any financial assistance under this title.
``(2) Entry if state has primary enforcement
responsibility.--
``(A) Requirement of notice.--No entry may be made under
paragraph (1)(A)(i) to an establishment, facility, or other
property of a supplier of water or other person subject to a
national primary drinking water regulation if the
establishment, facility, or other property is located in a
State that has primary enforcement responsibility for public
water systems under section 1413, unless, before written
notice of the entry is made, the Administrator (or a designee
of the Administrator) notifies the State agency charged with
responsibility for safe drinking water of the reasons for the
entry.
``(B) Showing by a state.--Upon a showing by the State
agency that an entry described in subparagraph (A) will be
detrimental to the administration of the program of the State
of primary enforcement responsibility, the Administrator
shall take the showing into consideration in determining
whether to make the entry.
``(C) Use of notice information.--No State agency that
receives notice under this paragraph of an entry proposed to
be made under paragraph (1) may use the information contained
in the notice to inform the person whose property is proposed
to be entered of the proposed entry. If a State agency so
uses the information, notice to the agency under this
paragraph shall not be required until such time as the
Administrator determines that the agency has provided the
Administrator with satisfactory assurances that the agency
will no longer so use information contained in a notice under
this paragraph.
``(d) Penalty.--A person who fails or refuses to comply
with a requirement of subsection (a) or to allow the
Administrator or the Comptroller General of the United States
(or a representative of the Administrator or the Comptroller
General) to enter and conduct an audit or inspection
authorized by subsection (b) shall be subject to a civil
penalty in an amount not to exceed $25,000.
``(e) Trade Secrets.--
``(1) In general.--Subject to paragraph (2), upon a showing
satisfactory to the Administrator by a person that any
information required under this section from the person, if
made public, would divulge a trade secret or secret process
of the person, the Administrator shall consider the
information confidential in accordance with section 1905 of
title 18, United States Code. If the applicant fails to make
a showing satisfactory to the Administrator, the
Administrator shall notify the applicant not later than 30
days before releasing the information to which the
application relates (unless the public health or safety
requires an earlier release of the information).
``(2) Disclosure.--Any information required under this
section--
``(A) may be disclosed to any officer, employee, or
authorized representative of the United States concerned with
carrying out this title, to a committee of Congress, or when
relevant in a proceeding under this title; and
``(B) shall be disclosed as described in subparagraph (A)
to the extent that the information deals with the level of
contaminants in drinking water.
``(3) Definition.--As used in this subsection, the term
`information required under this section' means any paper,
book, document, or information, or any particular part
thereof, reported to or otherwise obtained by the
Administrator under this section.
``(f) Definitions.--As used in this section:
``(1) Grantee.--The term `grantee' means a person who
applies for or receives financial assistance, by grant,
contract, or loan guarantee, under this title.
``(2) Person.--The term `person' includes a Federal
agency.''.
SEC. 14. JUDICIAL REVIEW.
Section 1448(b) (42 U.S.C. 300j-7(b)) is amended--
(1) by striking ``or exemption'' each place it appears; and
(2) in paragraph (1), by striking ``or 1416''.
SEC. 15. CITIZEN'S CIVIL ACTION.
Section 1449(b) (42 U.S.C. 300j-8(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by striking ``, or'' and inserting
a semicolon; and
(B) by adding at the end the following new subparagraph:
``(C) against a public water system that is operating under
the terms of--
``(i) an administrative compliance order;
``(ii) an administrative consent agreement; or
``(iii) a judicial consent decree, and
is in compliance with the terms of the order, agreement, or
decree; or''; and
(2) in the third sentence--
(A) by striking ``or 1416''; and
(B) by striking ``or exemption''.
SEC. 16. STATE REVOLVING LOAN FUNDS.
Title XIV of the Public Health Service Act (42 U.S.C. 300f
et seq.) is amended by adding at the end the following new
part:
``PART G--STATE REVOLVING LOAN FUNDS
``SEC. 1471. GENERAL AUTHORITY.
``(a) Capitalization Grant Agreements.--The Administrator
shall offer to enter into an agreement with each State having
primacy to make capitalization grants to the State pursuant
to section 1472 (referred to in this part as `capitalization
grants') to establish a drinking water treatment State
revolving loan fund (referred to in this part as a `State
loan fund').
``(b) Requirements of Agreements.--An agreement entered
into pursuant to this section shall establish, to the
satisfaction of the Administrator, that--
``(1) the State has established a State loan fund that
complies with the requirements of this part;
``(2) the State loan fund will be administered by an
instrumentality of the State that has the powers and
authorities that are required to operate the State loan fund
in accordance with this part;
``(3) the State will deposit the capitalization grants into
the State loan fund;
``(4) the State will deposit all loan repayments received,
and interest earned on the amounts deposited into the State
loan fund under this part, into the State loan fund;
``(5) the State, beginning in fiscal year 1996, will
deposit into the State loan fund an amount equal to at least
20 percent of the total amount of each capitalization grant
to be made to the State on or before the date on which the
grant is made to the State;
``(6) the State will use funds in the State loan fund in
accordance with an intended use plan prepared pursuant to
section 1474(b); and
``(7) the State and loan recipients that receive funds that
the State makes available from the State loan fund will use
accounting, audit, and fiscal procedures that conform to
generally accepted accounting standards, as determined by the
Administrator.
``(c) Administration of State Loan Funds.--
``(1) In general.--The authority to establish assistance
priorities and carry out oversight and related activities
(other than financial administration) with respect to
financial assistance provided with amounts deposited into the
State loan fund shall remain with the State agency that has
primary responsibility for the administration of the State
program pursuant to section 1413(a).
``(2) Financial administration.--A State may combine the
financial administration of the State loan fund pursuant to
this part with the financial administration of any other
revolving loan fund established by the State if the
Administrator determines that--
``(A) the grants to be provided to the State under this
part, together with loan repayments and interest deposited
into the State loan fund pursuant to this part, will be
segregated and used solely for the purposes specified in this
part; and
``(B) the authority to establish assistance priorities and
carry out oversight and related activities (other than
financial administration) with respect to such assistance
remains with the State agency having primary responsibility
for administration of the State program under section
1413(a).
``SEC. 1472. CAPITALIZATION GRANTS.
``(a) General Authority.--The Administrator may make grants
to capitalize State loan funds to a State that has entered
into an agreement pursuant to section 1471(a).
``(b) Formula for Allotment of Funds.--
``(1) In general.--Subject to subsection (c), funds made
available to carry out this part shall be allotted to States
that have entered into an agreement pursuant to section
1471(a) in accordance with a formula that is the same as the
formula used to distribute public water system supervision
grant funds under section 1443 for fiscal year 1994.
``(2) Other jurisdictions.--Each formula established
pursuant to paragraph (1) shall reserve 0.5 percent of the
amounts made available to carry out this part for a fiscal
year for providing capitalization grants to jurisdictions
referred to in subsection (e), other than Indian tribes.
``(c) Reservation of Funds.--
``(1) Indian tribes.--
``(A) In general.--For each fiscal year, prior to the
allotment of funds made available to carry out this part, the
Administrator shall reserve 1 percent of the funds for
providing financial assistance to Indian tribes pursuant to
subsection (e).
``(B) Use of funds.--Funds reserved pursuant to
subparagraph (A) shall be used to address the most
significant threats to public health associated with public
water systems that serve Indian tribes, as determined by the
Administrator in consultation with the Commissioner of Indian
Affairs.
``(C) Needs assessment.--The Administrator, in consultation
with the Commissioner of Indian Affairs, shall, in accordance
with a schedule that is consistent with the needs survey for
assessments conducted pursuant to section 1475(c), prepare a
biennial survey and assess the needs of drinking water
treatment facilities to serve Indian tribes, including an
evaluation of the public water systems that pose the most
significant threats to public health.
``(2) Public health emergencies.--
``(A) In general.--For each fiscal year, prior to the
allotment of funds made available to carry out this part
pursuant to subsection (b), the Administrator shall reserve
0.5 percent of the funds to provide financial assistance to
respond to public health emergencies under section
1442(a)(2)(B).
``(B) Allotment of unused funds.--On the last day of each
fiscal year, the Administrator shall allot any funds that
were reserved pursuant to subparagraph (A) but were not
expended in the fiscal year to the States on the basis of the
same ratio as is applicable to sums allotted under subsection
(b).
``(3) Rural system technical assistance program, and
drinking water health effects research.--For each fiscal
year, prior to allotment of funds made available to carry out
this part pursuant to subsection (b), the Administrator shall
reserve--
``(A) $15,000,000 to carry out the rural small drinking
water systems technical assistance programs of the
Environmental Protection Agency pursuant to section 1442(g);
and
``(B) $10,000,000 for drinking water health effects
research carried out under section 1442(a).
``(d) Allotment Period.--
``(1) Period of availability for financial assistance.--
``(A) In general.--Except as provided in subparagraph (B),
the sums allotted to a State pursuant to subsection (b) for a
fiscal year shall be available to the State for obligation
during the fiscal year for which the sums are authorized and
during the following fiscal year.
``(B) Funds made available for fiscal year 1994.--The sums
allotted to a State pursuant to subsection (b) from funds
that are made available by appropriations for fiscal year
1994 shall be available to the State for obligation during
each of fiscal years 1994 through 1996.
``(2) Reallotment of unobligated funds.--The amount of any
allotment that is not obligated by a State by the last day of
the period of availability established by paragraph (1) shall
be immediately reallotted by the Administrator on the basis
of the same ratio as is applicable to sums allotted under
subsection (b). None of the funds reallotted by the
Administrator shall be reallotted to any State that has not
obligated all sums allotted to the State pursuant to this
section during the period that the sums were available for
obligation.
``(e) Direct Grants.--The Administrator is authorized to
make grants for compliance with this title to Indian tribes,
the District of Columbia, the United States Virgin Islands,
the Commonwealth of the Northern Mariana Islands, American
Samoa, Guam, and the Republic of Palau.
``SEC. 1473. ELIGIBLE ASSISTANCE.
``(a) In General.--The amounts deposited into a State loan
fund, including any amounts equal to the amounts of loan
repayments and interest earned on the amounts deposited, may
be used by the State to carry out projects that are
consistent with this section.
``(b) Use of Funds.--
``(1) In general.--The amounts referred to in subsection
(a) shall be used for providing loans or other financial
assistance of any kind that the State considers appropriate
for public water systems. The financial assistance may be
used by a public water system only for expenditures (not
including compliance monitoring, operation, and maintenance
expenditures) of a type or category that the Administrator
determines, through guidance, will--
``(A) facilitate compliance with national primary drinking
water regulations applicable to the system under section
1412; or
``(B) otherwise significantly further the health protection
objectives of this title.
``(2) Systems that serve fewer than 10,000 individuals.--15
percent of the amounts credited to any State loan fund
established under this part for a fiscal year shall be
available solely for providing assistance to public water
systems that regularly serve less than 10,000 individuals.
``(c) Specific Requirements.--
``(1) In general.--The Administrator shall offer to enter
into an agreement with a State under this subsection only if
the State has established, to the satisfaction of the
Administrator, that--
``(A) the State will deposit all grants received from the
Administrator under this subsection, together with all
repayments and interest on the grants, in a drinking water
treatment revolving fund established by the State in
accordance with this subsection; and
``(B) the appropriate official of the State agency with
primacy shall have authority to make determinations for
criteria and eligibility for funding provided to a public
water system from the revolving fund.
``(2) Prohibition.--
``(A) In general.--Except as provided in subparagraph (B),
no loan or other financial assistance may be used by any
public water system in significant noncompliance of a
requirement of this title, for any expenditure that could be
avoided or significantly reduced by appropriate
consolidation, restructuring, or obtaining a new water
source.
``(B) Exception.--The assistance referred to in
subparagraph (A) may be provided for a consolidation,
restructuring, or new water source referred to in such
subparagraph.
``(d) Eligible Public Water Systems.--
``(1) In general.--Except as provided in paragraph (2), a
State loan fund may provide financial assistance only to
community water systems and public and nonprofit noncommunity
water systems.
``(2) Privately owned noncommunity systems.--Before
providing financial assistance to a privately owned
noncommunity system pursuant to this paragraph, the State
shall ensure that the assistance is secured with an
appropriate amount of, and type of, financial collateral.
``(e) Types of Assistance.--Except as otherwise limited by
State law, the amounts deposited into a State loan fund under
this section may be used only--
``(1) to make loans, on the condition that--
``(A) the interest rate for each loan is less than or equal
to the market interest rate, including an interest free loan;
``(B)(i) the annual principal and interest payments on each
loan will commence not later than 1 year after the completion
of the project for which the loan was made; and
``(ii) each loan will be fully amortized not later than 30
years after the completion of the project;
``(C) the recipient of each loan will establish a dedicated
source of revenue for the repayment of the loan; and
``(D) the State loan fund will be credited with all
payments of principal and interest on each loan;
``(2) to buy or refinance the debt obligation of a
municipality, or other public body created by or pursuant to
State law, or interstate agency within the State, at an
interest rate that is less than or equal to the market
interest rate;
``(3) to guarantee, or purchase insurance for, a local
obligation if the guarantee or purchase would improve credit
market access or reduce the interest rate applicable to the
obligation;
``(4) as a source of revenue or security for the payment of
principal and interest on revenue or general obligation bonds
issued by the State if the proceeds of the sale of the bonds
will be deposited into the State loan fund;
``(5) as a source of revenue or security for the payment of
interest on a local obligation, if the payment from the State
loan fund does not reduce the effective interest rate of the
obligation by more than 2.5 percentage points; and
``(6) to earn interest on the amounts deposited into the
State loan fund.
``(f) Assistance for Disadvantaged Communities.--
Notwithstanding subsection (d), each State may forgive
repayment of some or all of the principal amount of a loan or
other financial assistance made available from the State loan
fund to any community that the State determines, using
criteria developed by the State, is (or will become) a
disadvantaged community. The total amount of repayments of
principal forgiven pursuant to this subsection shall be an
amount not less than 10 percent and not more than 20 percent
of the capitalization grant allotted to the State pursuant to
section 1472.
``SEC. 1474. STATE LOAN FUND ADMINISTRATION.
``(a) Administration, Planning, and Technical Assistance.--
Each State that has a State loan fund is authorized to expend
from the State loan fund a reasonable amount--
``(1) not to exceed 5 percent of the capitalization grant
made to the State, for the costs of the administration of the
State loan fund; and
``(2) not to exceed the greater of--
``(A) $3,000,000; or
``(B) 10 percent of the capitalization grant made to the
State,
for State primacy, technical and financial management
assistance to public water systems including requirements for
the preparation of ground water and wellhead protection
plans, the implementation of underground injection control
programs, and the operation of small systems monitoring
programs and operator certification programs. The amount
(whether principal or interest of the fund) shall not be
subject to repayment to the fund.
``(b) Intended Use Plans.--
``(1) In general.--Not later than 1 year after receiving an
initial capitalization grant under section 1472, and before
receiving any subsequent grant, each State that enters into a
capitalization agreement under this part shall, after
providing an opportunity for public review and comment,
prepare a plan that identifies the intended uses of the
amounts deposited into the State loan fund of the State.
``(2) Contents.--An intended use plan shall include--
``(A) a list of the projects to be assisted in the first
fiscal year that begins after the date of the plan, including
a description of the project, the terms of financial
assistance, and the size of the community served;
``(B) a description of all projects for which a public
water system sought financial assistance for the fiscal year
and the annual user charges of the system;
``(C) the criteria and methods established for the
distribution of funds;
``(D) a description of projects expected to be assisted in
the 2 fiscal years following the fiscal year for which a list
was prepared under subparagraph (A); and
``(E) a description of the financial status of the State
loan fund and the short-term and long-term goals of the State
loan fund.
``(3) Priority for project funding.--An intended use plan
shall provide, to the extent practicable, that priority for
the use of funds be given to public water systems that are in
violation of a national primary drinking water regulation.
``SEC. 1475. STATE LOAN FUND MANAGEMENT.
``(a) In General.--Not later than 1 year after the date of
enactment of this part, and annually thereafter, the
Administrator shall conduct such reviews and audits as the
Administrator considers appropriate, or require each State to
have the reviews and audits independently conducted, in
accordance with the single audit requirements of chapter 75
of title 31, United States Code.
``(b) State Reports.--Not later than 1 year after the date
of enactment of this part, and annually thereafter, each
State that administers a State loan fund shall publish and
submit to the Administrator a report on the activities of the
State under this part, including the findings of the most
recent audit of the State loan fund.
``(c) Drinking Water Needs Survey and Assessment.--Not
later than 2 years after the date of enactment of this part,
and every 4 years thereafter, the Administrator shall submit
to Congress a survey and assessment of the needs for
facilities in each State eligible for assistance under this
part. The survey and assessment conducted pursuant to this
subsection shall--
``(1) identify the needs for projects or facilities
eligible for assistance under this part on the date of the
assessment (other than refinancing for a project pursuant to
section 1473(d)(2));
``(2) identify the needs for eligible facilities over the
20-year period following the date of the assessment;
``(3) identify the population served by each public water
system that has a project eligible for assistance; and
``(4) include such other information as the Administrator
determines to be appropriate.
``(d) Evaluation.--The Administrator shall conduct an
evaluation of the effectiveness of the State loan funds
through fiscal year 1996. The evaluation shall be submitted
to Congress at the same time as the President submits to
Congress, pursuant to section 1108 of title 31, United States
Code, an appropriations request for fiscal year 1998 relating
to the budget of the Environmental Protection Agency.
``SEC. 1476. ENFORCEMENT.
``The failure or inability of any public water system to
receive funds under this part or any other loan or grant
program, or any delay in obtaining the funds, shall not alter
the obligation of the system to comply in a timely manner
with all applicable drinking water standards and requirements
of this Act.
``SEC. 1477. REGULATIONS AND GUIDANCE.
``The Administrator shall publish such guidance and issue
such regulations as are necessary to carry out this part,
including guidance and regulations to ensure that--
``(1) each State commits and expends funds from State loan
funds in accordance with the requirements of this part and
applicable Federal and State laws; and
``(2) the States and eligible public water systems that
receive funds under this part use accounting, auditing, and
fiscal procedures that conform to generally accepted
accounting standards.
``SEC. 1478. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to the
Environmental Protection Agency to carry out this part
$600,000,000 for fiscal year 1994 and $1,000,000,000 for each
of fiscal years 1995 through 2000.''.
SEC. 17. MINORITY COMMUNITY GRANTS FOR COMMUNITIES WITH
ECONOMIC HARDSHIP.
(a) Definitions.--As used in this section:
(1) Minority.--The term ``minority'' means an African-
American, Hispanic American, Asian American, or Native
American.
(2) Minority community with economic hardship.--The term
``minority community with economic hardship'' means an
unincorporated community--
(A) that, based on the latest census data, has a minority
population in excess of 50 percent of the total population;
(B) that is unable to be recognized as an appropriate
political subdivision of the State that could more
effectively access funding for water and wastewater projects;
and
(C) for which the State legislature has made funds
available by appropriations to assist in the payment of an
eligible wastewater project (as described in subsection (c)).
(b) In General.--The Administrator may make a grant or
provide other financial assistance to 1 or more minority
communities with economic hardship for eligible wastewater
treatment projects, including providing assistance for the
construction of facilities and related expenses to minority
communities with economic hardship to--
(1) improve the housing stock infrastructure in the
communities; and
(2) abate health hazards caused by ground water
contamination from septage in arid areas with high ground
water levels.
(c) Eligible Wastewater Treatment Projects.--The eligible
wastewater treatment projects that may receive assistance
under this section shall include innovative technologies,
including vacuum systems and constructed wetlands.
(d) Funding.--In carrying out this section, the
Administrator shall use an amount equal to $20,000,000 of the
funds made available to the Environmental Protection Agency
for use beginning on May 31, 1994, under the matter under the
heading ``water infrastructure/state revolving funds'' under
the heading ``Environmental Protection Agency'' in title III
of the Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act,
1994 (Public Law 103-124; 107 Stat. 1294).
SEC. 18. ASSISTANCE TO COLONIAS.
(a) Definitions.--As used in this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Border state.--The term ``border State'' means each of
the following States:
(A) Arizona.
(B) California.
(C) New Mexico.
(D) Texas.
(3) Construction.--The term ``construction'' has the
meaning provided the term under section 212(1) of the Federal
Water Pollution Control Act (33 U.S.C. 1292(1)).
(4) Eligible community.--The term ``eligible community''
means a low-income community with economic hardship that--
(A) is commonly referred to as a colonia;
(B) is located along the United States-Mexico border
(generally in an unincorporated area); and
(C) lacks basic sanitation facilities such as safe drinking
water, household plumbing, and a proper sewage disposal
system.
(5) Treatment works.--The term ``treatment works'' has the
meaning provided the term under section 212(2) of the Federal
Water Pollution Control Act (33 U.S.C. 1292(2)).
(b) Purposes.--The purposes of this section are to protect
the economy, public health, environment, and water quality of
the United States-Mexico border area that is endangered and
is being polluted by raw or partially treated sewage,
effluent, and other pollutants.
(c) Transfers and Grants To Alleviate Health Risk.--
(1) In general.--
(A) Assistance.--The Administrator is authorized to
transfer funds to another Federal agency or award grants to
any other appropriate entity or border State, designated by
the President, to provide assistance to eligible communities
for--
(i) the conservation, development, use, and control of
water (including the extension or improvement of a water
supply system); and
(ii) the construction or improvement of sewers, treatment
works for wastewater treatment, and essential community
facilities (including necessary related equipment).
(B) Use of funds.--Each transfer of funds, and each grant
awarded, pursuant to subparagraph (A) shall be used to
provide assistance to 1 (or more) eligible community with
respect to which the residents are subject to a significant
health risk (as determined by the Administrator) attributable
to the lack of access to, or service by, an adequate and
affordable--
(i) water supply system; or
(ii) treatment works for wastewater treatment.
(2) Operation and maintenance.--To carry out the purposes
referred to in subsection (b), the Administrator and the head
of each other Federal agency, entity, or border State,
designated by the President pursuant to paragraph (1)(A) are
each authorized to operate and maintain a treatment works or
other project that is constructed with funds made available
pursuant to paragraph (1).
(3) Approval of plans.--
(A) Plans and specifications.--Each treatment works or
other project that is funded by a transfer or a grant made
pursuant to paragraph (1)(A) shall be constructed in
accordance with plans and specifications developed by the
Administrator or the head of another Federal agency or the
appropriate official of an entity or border State designated
by the President under subparagraph (A), in consultation with
the appropriate official of the affected border State.
(B) Approval by the administrator.--As a condition of
carrying out the construction of a treatment works or other
project referred to in subparagraph (A), the head of the
Federal agency or appropriate official of an entity or border
State shall submit the plans and specifications referred to
in paragraph (1) to the Administrator for approval.
(C) Standards for construction.--The standards for
construction applicable to a treatment works or other project
under title II of the Federal Water Pollution Control Act (33
U.S.C. 1281 et seq.) shall apply to the construction of a
treatment works or other project under this section in the
same manner as the standards apply under such title.
(d) Funding.--
(1) Available funds.--The Administrator shall use such
amount of the funds made available to the Environmental
Protection Agency for use beginning on May 31, 1994, under
the matter under the heading ``water infrastructure/state
revolving funds'' under the heading ``Environmental
Protection Agency'' in title III of the Departments of
Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1994 (Public Law
103-124; 107 Stat. 1294) as is necessary to carry out this
section.
(2) Authorization of appropriations.--There are authorized
to be appropriated to the Environmental Protection Agency to
carry out this section such sums as may be necessary for
fiscal year 1995, and for each fiscal year thereafter.
Mr. BOREN. Mr. President, I am pleased to join my distinguished
colleague, the senior Senator from New Mexico, as a sponsor of the Safe
Drinking Water Act Amendments of 1993. This important legislation
contains badly needed improvements to the Safe Drinking Water Act that
will increase compliance with its provisions, particularly among small
systems; reduce the administrative burdens that the act imposes on
States; provide financial assistance to States and water systems; and,
most importantly, strengthen protection of public health.
Everyone agrees that the current safe drinking water laws are broken.
One need look no further than to my own State of Oklahoma for evidence
of this. Oklahoma has 2,453 public water systems. Only 42 of these
water systems serve over 10,000 persons, and only 114 systems serve
more than 3,300 persons. Therefore, the other 95 percent of Oklahoma's
public water systems serve under 3,300 persons. And the vast majority
of these serve fewer than 500 persons.
These small and very small systems are run by conscientious people
trying their hardest to provide safe drinking water to their customers.
The managers of these water systems have no other interest than to
provide the safest water possible; after all, in addition to their
customers--who are friends and neighbors--they and their families drink
it everyday. Ironically, despite its title, the Safe Drinking Water Act
as it is currently written often makes the provision of safe drinking
water more difficult.
Just one example will demonstrate this point. The Safe Drinking Water
Act currently regulates 83 contaminants. All 83 of these contaminants
must be monitored quarterly, whether or not they are found in the
source water. Water systems must monitor for many contaminants
regardless of whether the contaminants have even been found in a water
supply anywhere in the country. This monitoring is very expensive,
costing even the smallest system as much as $40,000 a year. The
economics are obvious. Before too long, monitoring will fall by the
wayside, and suddenly we will see hundreds of small systems in Oklahoma
and thousands nationwide forced to consider breaking the law, despite
the fact the water is completely safe.
Our bill contains a number of provisions that will ease the barriers
facing these small systems. These provisions will relieve systems of
all sizes from requirements that force water system customers to spend
money for no clear health benefits.
First and foremost, our bill strengthens the Safe Drinking Water Act
by focusing resources on those contaminants that actually occur at
levels of public health concern. It regulates only those contaminants,
determined through nationwide monitoring, that actually are found in
drinking water supplies. It then permits the Administrator to regulate
contaminants based on their public health effects, occurrence, and the
cost of technology. This is in contrast to the current act which allows
the EPA Administrator to look only at the cost of technology when
setting standards.
Second, when determining affordable technology, our bill lets the
Administrator examine what is affordable for three system sizes: those
serving less than 1,000 customers; between 1,001 and 10,000; and
greater than 10,000. Current regulations require technology to be
affordable to systems serving 1 million or more. A threshold like that
is difficult for even the biggest water system in Oklahoma to cross,
let alone the small ones.
Third, recognizing that not all systems could comply immediately with
the standards established under the current act, our Safe Drinking
Water Act extends some timeframes for systems under certain conditions.
Unfortunately, the current variance provisions are so difficult to
understand and meet that State agencies don't often grant variances,
and systems don't bother applying. Our bill would make the variance
provisions workable, while at the same time ensuring that systems are
attempting to come into full compliance with all standards.
Fourth, the authority to determine monitoring priorities is given to
the States. These requirements would be based on the occurrence of
contaminants and system characteristics, such as size. This sensible
and logical provision will give those who know the most about the
occurrence of contaminants the authority to establish monitoring
requirements. Current EPA procedures for waving monitoring requirements
are so complex and expensive that they are seldom utilized by States or
water systems.
Fifth, finally our bill provides additional resources exactly where
they are needed. It increases the authorization of State primacy grants
to $150 million by fiscal year 1996. It also authorizes a State
Revolving Fund for which $599 million has already been appropriated in
fiscal year 1994. However, our State Revolving Loan Fund provides much
more flexibility than other proposals. It allows the greater of $3
million or 10 percent of each capitalization grant to fund State
administration of the Safe Drinking Water Act. Under this provision,
between 10 and 20 percent of each capitalization grant can be used for
loan forgiveness in disadvantaged communities. Also under this
provision $15 million is set aside to fund the EPA rural small system
technical assistance programs, and $10 million is set aside for
research on the health effects of drinking water.
I urge my colleagues to take a close look at this legislation. After
they do, I think they will conclude, as I have, that it provides modest
but needed improvements to the Safe Drinking Water Act. Our legislation
has been endorsed by the following groups: the National Governors
Association, Conference of Mayors, National League of Cities, National
Conference of State Legislators, National Association of Counties,
Association of State Drinking Water Agencies, National Association of
Water Companies, Association of Metropolitan Water Agencies, American
Water Works Association, National Rural Water Association, National
Water Resources Association, National Association of Regulatory Utility
Commissioners, the National Association of Towns and Townships, the
National Environmental Health Association, the National Association of
County Health Officials, the Florida Department of Environmental
Protection, the Public Utilities Commission of Ohio, and the
Congressional Rural Caucus. These associations and groups are all
comprised of officials whose job it is to serve and protect the public.
Mr. President, I conclude my remarks today by applauding the work my
colleague from New Mexico has devoted to preparing this bill. I look
forward to working with him as it makes its way through Congress and to
working with the committee to craft sensible and effective legislation.
I urge my colleagues to cosponsor the Safe Drinking Water Act
Amendments of 1993.
Mr. HATFIELD. Mr. President, today Senator Domenici, Senator Boren,
and Senator Nickles, and I are introducing amendments to the Safe
Drinking Water Act that will guarantee a high level of health
protection at a cost the water-rate payers of our country can afford.
I have always supported the Safe Drinking Water Act. I voted for the
original legislation in 1974 and for the 1986 amendments.
Last July, I convened over 150 representatives of water systems in
Oregon to discuss drinking water and the Safe Drinking Water Act. All
of the water operators of Oregon believe strongly in a safe, clean, and
affordable supply of drinking water. However, I believe each of them
would tell you that the Safe Drinking Water Act is not working as
Congress originally intended.
My Senate colleagues have heard the same concerns. States and local
systems struggle with unrealistically high standards, too many
regulations, unclear priorities, limited information about the risk to
human health, and inadequate resources. Many systems spend resources on
contaminants they have never had while the worst problems go ignored.
For the people on the front lines of drinking water provisions, I
learned that many of the requirements in the Safe Drinking Water Act
have put an incredible burden on the local areas of my State,
especially the rural areas. That burden is so great that--instead of
guaranteeing safe water--the Safe Drinking Water Act may increase the
risk Oregonians face when they turn on the tap.
I want to make sure that the resources of States and water systems go
to those problems that place us all in jeopardy each time we use a
drinking fountain or take a shower.
The Domenici-Boren-Hatfield-Nickles proposal will ensure that all
people have safe water at a reasonable cost. Our bill is founded on
three key principles: flexibility, protection of human health, and
adequate resources.
The first principle is flexibility. The Safe Drinking Water Act is
applied uniformly to every contaminant, every State, and every
community in our Nation. While this may be egalitarian, it means that a
lot of our regulations are not effective. Each water contaminant is
different, and each water system has different needs, but current
regulations ignore important differences.
To address the need for flexibility, the Domenici-Boren-Hatfield-
Nickles bill removes many rigid statutory provisions and creates
additional discretion for EPA and States. By no means does this
flexibility mean less stringent regulation; rather the bill merely
permits States and local systems to operate more effective programs.
The second principle is that drinking water regulations must relate
to greater protection of human health. Mr. President, the Safe Drinking
Water Act is special in the realm of environmental legislation; the
only beneficiaries of safe drinking water programs are human beings,
and our focus at looking at revisions should be guaranteeing that
drinking water regulations reduce the threats to human health.
I learned form operators in Oregon that many regulations are costly,
but do not necessarily lessen the risk of disease. Many systems believe
they spend millions of dollars removing contaminants that pose little
risk to people. The costs of these programs are passed on to the rate
payers, but increased rates may not buy water consumers anything.
To better ensure money spent on drinking water result in real
improvements in health, the Domenici-Boren-Hatfield-Nickles bill
requires EPA to consider the risk reduction costs and benefits of each
regulation. This is a technical way of stating that new drinking water
regulations need to produce real and measurable benefits to human
health to justify the costs created by a regulation.
We cannot ask people to pay for a program that does not help them.
Citizens have a right to understand exactly what they are buying with
their water rates, and the Safe Drinking Water Act needs to actually
result in fewer risks from water.
The last key element is adequate resources. We have all heard from
local governments in our States about unfunded Federal mandates, and
the Safe Drinking Water Act is certainly one of the things cities,
counties, and States are worried about. But the issue isn't only money.
Local systems need better training and assistance in implementing the
act.
The Domenici-Boren-Hatfield-Nickles bill addresses the resource
shortfall by increasing the authorization for grants to States, by
establishing a State revolving loan fund, and by setting up a program
to certify drinking water technicians and labs. Our bill also shifts
the role of EPA from enforcement to implementation, creating a stronger
partnership between EPA and local agencies.
I do not believe you would find a single water system official
opposed to regulating water. They all believe that our Nation's women,
men, children, and babies must be protected. Mr. President, the water
system operators of Oregon are committed to delivering clean, healthy
water. They view it not as a legal responsibility, but as a moral one.
As Robert MacRostie of the Deschutes Valley wrote me:
If a health hazard existed in the water, the District would
be ethically, morally, as well as legally required to remove
the hazard. This statement is unqualified and without
exception.
The Safe Drinking Water Act hinders people like Mr. MacRostie instead
of helping them. The experience of the people on the front lines of
implementing the regulations tell me that the Safe Drinking Water Act
is not working for them. They tell me that they need more flexibility
to attack the problems that pose the biggest threat to people, that
they do not want to spend precious, limited resources on something that
does not have a noticeable benefit for people, and that they need new
resources to make their program work.
______
By Mr. REID (for himself and Mr. Shelby):
S. 1923. A bill to amend the Immigration and Nationality Act to curb
criminal activity by aliens, to defend against acts of international
terrorism, to protect American workers from unfair labor competition,
and to relieve pressure on public services by strengthening border
security and stabilizing immigration into the United States; to the
Committee on the Judiciary.
immigration stabilization act of 1994
Mr. REID. Mr. President, during his recent State of the Union speech,
President Clinton reminded us that our Nation is facing a health care
crisis and a crime crisis, both of which are threatening the present--
and more importantly--future well-being of our people, and both of
which Congress must promptly address. Today, I want to spotlight
another serious national crisis that adversely affects our health care
and crime difficulties and on virtually every other major domestic
issue. This is the matter of immigration.
As many of my colleagues will recall, my grave concerns over this
issue led me to become quite involved with immigration reform last
year. However, in the waning days of the session, in my eagerness to
address what all parties agree is a pressing, yet complex and sensitive
issue. I introduced S. 1351, the Immigration Stabilization Act of 1993.
While no bill will please everyone, this bill was clearly
unsatisfactory. Frankly, I should not have introduced the bill in the
form that it was in. My intentions were good but the remedy proposed
required significant fine tuning. As everyone who serves in this body
knows, the legislative process is an evolving process. Enacting
meaningful and beneficial legislation requires the thoughtful input of
all parties affected by that legislation.
Since the introduction of S. 1351 I have heard from many, many groups
affected by our immigration laws. The insights and experiences shared
with me by immigration experts, minority communities, the INS, and
other legal experts interested in reforming our immigration laws for
the better were instrumental in my decision to reintroduce a new
comprehensive immigration stabilization bill.
Today, I am introducing an immigration bill that I believe
thoughtfully addresses the concerns of all those involved in this
debate. This bill recognizes the significant contributions that
immigrants have historically made--and will continue to make--to our
society. It is axiomatic that we are a nation of immigrants and that
continued immigration, at reasonable levels, will lead to a more
diverse, and consequently better, society in America.
However, this bill also addresses the existing--and patently
evident--problems with our current immigration policy. The heavy costs
imposed on the States and the Federal Government are exorbitant and the
spiraling increase in migration--because of the current law--only
exacerbates the problem. The facts and the numbers make the argument
for change compelling. Tuesday's New York Times reported that in 1992,
legal and illegal immigration cost the State of Texas more than $4
billion for education, health care and other services.
The bill I am introducing today is a realistic recognition that
something must be done to reduce these escalating costs to ensure that
our children and grandchildren do not inherit a country in which no one
would want to live. For if we do not take reasonable steps now, history
may well judge us as the first generation of Americans that passed down
to the next generation, a country with fewer opportunities and greater
debts.
There are legitimate issues in the immigration debate that must be
addressed. Ultimately, however, our legislative actions must avoid
embracing those extremists who would rather engage in demagoguery and
the politics of fear. Yes, we must reduce the flow of immigration to
the levels recommended by President John Kennedy but we must do so
consistent with the admonition of then Senator John Kennedy: ``We are a
nation of immigrants.'' My bill accomplishes this. In so doing, it
balances the interests of those promoting continued immigration with
the realistic recognition that if we fail to take proper steps now, the
real losers will be those who play by the rules as well as the future
generations of Americans.
We just finished debating the balanced budget amendment. The vehicle
that drove this legislation was the concern for providing for a
fiscally secure future for our nation and the desire to motivate
Congress to act in a responsible manner. Unfortunately, my version of
this amendment, which would have balanced the budget while also
protecting the future of the Social Security system, did not pass.
However, the public support was overwhelming and the message we
received in Washington was unambiguous. Fortunately, that clear
unequivocal message--that we take action so that our children and
grandchildren will not be burdened by the mistakes of our past--
continues to resonate from coast to coast. I believe the immigration
bill I am introducing today is consistent with this public outcry:
Unreasonable levels of continuous immigration--like uncontrolled
deficit spending--will only result in our mortgaging away both the
future of our children and the sanctity of our environment. Mr.
President, this is morally intolerable.
We are unquestionably the greatest nation on the face of the earth.
But even our great country is financially and resourcefully incapable
of absorbing upwards of a million new immigrants every year. Yet under
the current law, that is exactly what we are doing and will continue to
do. And remember, this calculation does not include the enormous
numbers of individuals who make their way into our country illegally or
otherwise abuse our generous immigration laws which are almost
exclusively premised on the notion that laws on the books--regardless
of their enforcement--will be a sufficient deterrent to fraud and
abuse. I am by no means suggesting that all immigrants abuse the
system. Of course, they do not. What I am suggesting, however, is that
the system and the laws perpetrating its existence, invite fraud and
abuse. Let's face it Mr. President, our current system is like a busy
intersection without a traffic cop: Sure there are laws on the books,
but absent enforcement, there are too many accidents.
My bill will allow us to avoid the many shortfalls and inequities
caused by the current immigration system. It reconciles both our
historic role as a nation of immigrants and our unbreachable duty to
provide future generations with a better world in which to live.
Some may question the necessity of comprehensive immigration reform.
Critics may scoff that this bill is unnecessary in light of the recent
amendments passed in 1990. I would ask critics to examine some charts
that I am going to show and see what our population will be if we
maintain the status quo.
By the year 2050, we will have a population of almost 400 million
people. Arguably, this staggering increase not only makes the argument
for reform compelling, it also shifts the burden to those who would
defend the current system to make the case for its continued existence.
This chart, Mr. President, tracks population growth since 1970. You
can see where it goes. This is where it would wind up by the year 2050.
The red area is, as I have indicated, based on U.S. Census data and
represents the increase in the admission of immigrants.
The green area down here represents population growth if we were to
admit 160,000 immigrants each year. My legislation, you will see, would
admit more than twice that number. Yet the increase represented by the
green line is still material. What is evidenced by this chart, Mr.
President, is the fact that any legislation is quite generous.
If we keep the present system, if we fail to take reform, this is
where we will be by 2050, 392 million people. For the record, it should
be noted that the source for this number is the U.S. Census Bureau. Not
exactly a partisan interest group.
We must ask ourselves this. When 2050 rolls around, how will we need
EPA standards for air and water. How will we ensure that our
grandchildren's children will grow up in a healthy environment. Without
change, we cannot ensure any of this.
I want to also, Mr. President, refer to another chart which is
certainly obvious in its intent. It shows simply how immigration has
increased--1930's, 1940's, 1950's, 1960's, 1970's, and 1980's. And here
is where we are in the nineties. Just continually you see these
building blocks going up, up, and up until we are here, and we will
only continue to go up more.
Mr. President, the threshold question of any domestic or foreign
policy initiative is, does it serve the national interest--I think that
is a fair question--now as well as for the future. A secondary
consideration, at least with respect to foreign policy, is will the
legislation have a deleterious impact on other nations. I submit that
our current immigration policy fails to satisfy either objective. We
are selling out the well-being of future generations of Americans and
sending the wrong signals to those countries working to improve or
start up their own democracies. Again, my bill recognizes that the
United States will always welcome those who are genuinely fleeing
persecution, but it forces other industrialized nations to share in the
effort.
We must ask ourselves what have we done to address this problem.
Apart from a modest increase in funding for the Border Patrol and
certain provisions in the crime bill, the Senate passed no significant
immigration reform provisions last year, and the House did even less.
In particular, despite overwhelming evidence that immediate statutory
reforms were needed--and are needed--to address the serious abuses in
the political asylum process, and despite bipartisan reform proposals,
neither body passed legislation to stop these abuses. Hopefully, more
substantial legislative actions will be taken in 1994.
Mr. President, I would like now to focus on some key facts that
support my contention that the current policy is flawed.
Let us look at the alarming immigration numbers.
Many people mistakenly believe what the advocates of an open door
immigration policy would have us think--that America has always
admitted massive numbers of immigrants and that today's levels are
generally in accord with our historic levels.
Looking at this chart, we simply know that is a false premise and a
false argument.
Mr. President, anyone having this misperception should awaken to the
facts, and the facts are these:
We have the highest immigration levels in U.S. history. The annual
number of immigrants entering the United States, counting both legal
and illegal, is at the highest level in the history of our country, and
has been running alarmingly high for nearly three decades.
There are more than 1 million new immigrants each year. By contrast,
we now have at least 300,000 new illegal immigrants settling here, and
we have around 1 million new legal immigrants annually. In 1992, for
example, the United States had over 1.2 million new immigrants.
Mr. President, legal immigration is massive. While most of the
spotlight has been on illegal immigration, the fact is legal
immigration makes up two-thirds of the flood of immigrants. For
example, 957,000 new legal immigrants were admitted to the United
States in 1992.
Congressional mistakes have dramatically increased immigration
through a series of what I believe were ill-advised actions going back
to 1965, when the basic notions of our immigration laws were revised.
In 1990, Congress opened the floodgates by passing a 35-percent
increase in legal immigration.
Mr. President, untold numbers of individuals are unlawfully coming to
the United States every year. In 1986, Congress gave amnesty and legal
status to 3.1 million individuals not lawfully residing here, and in
1990, it granted ``temporary protected status''--which tends to be de
facto permanent legal residence--to hundreds of thousands of others who
did not play by the rules. Even after Congress has passed massive
legalization programs, millions of individuals do not lawfully reside
in the United States today, and many more continue to cheat the rules
and continue to enter unlawfully. In 1992, for example, the Border
Patrol apprehended approximately 1 million persons seeking to enter the
United States illegally. And, at least 2 to 3 people escape--
apprehension for every 1 that is captured.
Immigration is driving rapid population growth in the United States.
The United States now has the fastest growing population of any nation
in the industrialized world. Over half of our Nation's population
growth is attributable to legal and illegal immigration. Largely
because of our present immigration policies, the U.S. Census Bureau now
estimates that our Nation's population will increase from its current
size of approximately 250 to 392 million by the year 2050.
There is unprecedented worldwide pressures to immigrate to the United
States. There are millions of people around the globe who are not
refugees fleeing persecution, but who want to move to our country for
economic or other reasons. In addition, the world's refugee population
has exploded. Over 20 million persons now are deemed by the United
Nations to be refugees outside their home countries, and another 20 to
25 million are displaced from their homes in their own countries.
Millions of these suffering people naturally would like to move to the
United States. The tragic reality is that our own resources are
limited, and we can admit but a tiny fraction of even the true
refugees.
Mr. President, there is growing worldwide population pressures to
immigrate. The world's population of 5.4 billion is expected to
increase to over 8 billion by the year 2025, and almost all of this
increase is projected as coming in the poorest nations. In contrast to
the United States, other industrialized nations have much more
restrictive immigration policies, and most have been moving to further
limit immigration to their countries. The worldwide population
explosion and other developed nations' immigration limits will cause
the demand to immigrate to the United States to grow astronomically.
In summary, Mr. President, the immigration numbers are alarming and
the pressures to immigrate to the United States are growing. Given the
host of problems our Nation is facing and our serious budget
shortfalls, there is no way that we can continue to tolerate the levels
of legal or illegal immigration we have been experiencing for a number
of years.
Many citizens and legal residents--including many recent immigrants--
are asking what we in Congress must ask: Why are we letting so many
people come in? Quite frankly, I believe that when Congress does face
this threshold question--and let me say that I will press very hard to
have us do so this year--Senate and House Members will conclude
overwhelmingly that the current high levels simply cannot be justified.
Like every other major Federal public policy, immigration should serve
the national interest. Clearly, our present immigration policy is no
longer doing so. Therefore, Congress must apply the brakes and rethink
the direction of U.S. immigration policy.
Labor force needs and economic conditions are disregarded in our
policies. Many aspects of our current policies and procedures are
patently wrong. For example, legal immigration has almost no link to
U.S. employment needs or economic conditions. Only a handful, about 6
percent, of the total legal admissions, are allowed because they have a
skill or vocation that is needed here. The vast majority of immigrants
are admitted based on special preferences written into the immigration
law that favor relatives of other recent immigrants. Sixty percent of
our immigrants are admitted merely because they have relatives here.
Many of these people are not immediate relatives, but are part of
extended families. The nepotistic U.S. policy lets in relatives, then
lets in the relatives' relatives, and so on, creating an endless and
ever-growing chain of new immigrants.
U.S. immigration procedures are often flawed and invite abuse. We
have a backlog of more than 3.4 million people who have formally filed
petitions for admission. Given the complex system of preferences and
quotas, almost everyone has to wait for years for a visa, and in many
cases, this waiting period extends for decades--I say that in the
plural. Not surprisingly, millions of people seek admission short-cuts
by slipping across our borders illegally without immigration
inspection, or by filing false claims for admission. Asylum claims
jumped from 5,000 per year in 1981 to over 100,000 in 1992. Most of
them are invalid and fraudulent. Others recognize that our political
asylum process has broken down and tens of thousands have moved to take
advantage of the system's defects. Fraudulent claimants know that by
merely filing a claim almost anyone is given work authorization
documents and is released pending a decision on their claim, which
often takes well over a year. Not surprisingly, most claimants never
show up for their hearing and merely continue working and living in the
United States unlawfully. Penalties for violation of our immigration
laws also generally are quite weak and provide little deterrent effect.
So-called alien smugglers and those entering illegally know that
Congress has not given the Border Patrol and INS adequate staff and
other resources to provide tough enforcement and that these dedicated
public servants are being overwhelmed by the massive numbers of
violators. Under our immigration laws, cheaters tend to prosper.
I have focused on the excessively high levels of immigration that the
United States has been experiencing and on some of the major flaws in
our existing laws and procedures. I now want to shift to highlight a
few of the problems that are resulting from this massive wave of
immigration.
Job Losses
Unemployment rates are still too high, international competition is
getting tougher and, as President Clinton has pointed out, Americans
are working harder and longer for less and less. In 1992, the Federal
Government actually issued more work authorizations to immigrants and
temporary foreign workers than the net number of new jobs created by
our economy. Something is fundamentally wrong when we have millions of
American citizens and legal residents begging for jobs, and yet we are
admitting thousands and thousands of immigrants a year with virtually
no consideration to our employment needs or their employment skills.
Crime
The issue of crime and public safety is the No. 1 concern of most
Americans. Immigration clearly is related to our crime problem. A
quarter of all felons in Federal prisons are not even citizens of our
country. Unfortunately this shocking number suggests that a
disproportionate number of crimes are being committed by immigrants,
many of whom are here illegally.
adverse environmental impacts and resource depletion
Our natural resources are being used up, and our environment is being
significantly harmed by the rapidly growing population in the United
States which now has the most rapid population growth in the
industrialized world. Fully half of this population growth is a result
of immigration, and the trends show that this situation will be getting
even worse. The environmental impacts are of particular concern to me.
In my State, we have tremendous water problems. A once beautiful body
of water, Walker Lake, is dying in part because of over population.
Mr. President, we in Congress must act to address these problems by
overhauling our immigration laws. There is no other way to do it. As we
redesign our country's immigration policy, we must ensure that our
national interests are being served instead of the special interests of
those who want more immigration. to craft our new immigration policy,
Congress must be able to answer three fundamental questions:
How many immigrants can we successfully absorb? We have an overriding
and primary obligation to ensure the public welfare of our citizens and
legal residents. Many would contend that we are unable to do this
adequately now with our available resources. However, when we increase
our population through immigration, we also take on new obligations to
help the immigrants. Immigrants are human beings and have all the same
human needs and aspirations as everyone else. When we admit immigrants
our society is making a commitment to educate children, provide health
care for the sick, create jobs for workers, construct housing for
families, add and improve infrastructure, and many, many other things.
Given the limits of our resources, we must set lower numbers because,
clearly, we are exceeding our capacity to successfully absorb the
recent levels of legal and illegal immigration.
The second question is, how should immigrants be selected? The
overwhelming majority of legal immigrants are now admitted merely
because they are related to other recent immigrants to the United
States. While this seems like a well-meaning policy, it creates a
constant pressure for increasing immigration levels each time a new
immigrant is admitted. It is an automatic entitlement for relatives to
join the immigration queue. By all means, we must have an immigration
policy that encourages keeping the nuclear family intact, but beyond
husbands, wives and minor children, we cannot effectively manage a
policy that promises extended families that they, too, will be allowed
to immigrate.
Third, how do we enforce the rules? One of the most perplexing
problems we face is how to control the flood of illegal immigration. In
addition to the nearly 1 million legal immigrants admitted annually
many many more enter the United States illegally each year, and settle
permanently. We can and we must institute effective and humane measures
to control this unreasonable flow of illegal immigration. A recent
Border Patrol crackdown in the El Paso, TX area has shown that our
borders can be secured if adequate manpower and other resources are
devoted to this effort. This will also require implementing a secure
work verification system, based on the model that credit card companies
use to verify the validity of credit cards, to ensure that only those
who are legally here can work and receive benefits in the United
States.
We must talk about comprehensive reform legislation. Today, I am
introducing a comprehensive reform bill, the ``Immigration
Stabilization Act of 1994,'' and I will push hard for its enactment.
This bill is a refined version of the comprehensive reform bill, S.
1351, the ``Immigration Stabilization Act,'' which I introduced last
year, and which has been cosponsored by Senators Shelby, Exon, and
Faircloth.
The provisions in my new bill would do the following:
It would limit annual admissions of immigrants, refugees, and asylees
to 325,000.
This still allows for unlimited immigration for spouses and minor
children of U.S. citizens. Based on previous years we expect this
number to be about 170,000: 50,000 divided between parents of U.S.
citizens and spouses and minor children of permanent resident aliens.
50,000 for refugees, 50,000 to be divided between the top two
employment preferences; 50,000 to go to those on the existing waiting
lists at the date the bill becomes effective.
It would also depoliticize and discipline the refugee admissions
program.
It would also reform the asylum program by streamlining the
application and decisional process.
It would exclude those individuals arriving in our country without
documentation unless they indicated a fear of persecution or claimed
asylum. Those who are not excluded would be immediately called to
appear before a specially trained asylum officer to determine if they
have a credible fear of persecution.
Those filing frivolous applications or failing to appear for asylum
hearings would be ineligible for any benefits under immigration law.
The asylum status would terminate during an asylee's first 3 years
here if conditions in their home country no longer justified asylum or
another safe country is willing to accept them, or if the alien
voluntarily returns to his or her own country.
This new legislation penalizes criminal aliens. It expands the list
of serious crimes requiring deportation.
It speeds deportation proceedings.
It limits collateral attacks against final deportation orders.
It authorizes Federal incarceration of aliens convicted under State
law.
It increases the maximum penalty for visa fraud from 5 to 10 years.
It requires State and local law enforcement agencies to provide the
INS with certain information whenever they arrest an individual not
lawfully within the country.
It prohibits violators of immigration laws from filing for immigrant
status.
And it eliminates administrative discretion to waive grounds for
excluding criminal aliens.
It imposes real financial responsibility.
It extends to sponsors of family-oriented immigrants financial
accountability to ensure the immigrant will not become a public charge.
It limits federally funded benefits.
It also preserves jobs for citizens and legal residents. What it does
is simply strengthen the current law's employer sanctions prohibitions
on knowingly hiring illegal aliens.
It controls document fraud and removes sanctions compliance burdens
by requiring issuance of counterfeit-resident Social Security-type
cards and improved, machine-readable alien identification cards and
establishment of a telephone verification system for work
authorization.
It provides for a uniform national network of State vital statistic
records to ensure a person's identity can be confirmed.
It greatly increases border security by increasing the Border Patrol
at the rate of 1,000 new officers each year up to a level of 9,900
full-time positions.
It imposes a modest border crossing fee on persons or vehicles
crossing the land or sea U.S. border.
It provides the fees will fund measures for preventing illegal entry
of persons and contraband, for expediting lawful traffic, and for
financial assistance to local law enforcement authorities.
It also increases fines against international carriers that
consistently transport human cargo to the United States.
It curtails alien smuggling by organized crime by adding alien
smuggling to a list of crimes subject to RICO sanctions.
It increases penalties for smuggling under the Federal Sentencing
Guidelines.
It expands property that is forfeited when used in smuggling or
harboring illegal aliens.
And it authorizes Federal wiretap authority for alien smuggling
investigations.
Mr. President, the public is demanding that we take steps. In the
coming weeks, we will be debating many of the issues involving
immigration.
My grandmother was born in England, my father-in-law, my wife's
father, was born in Russia. My wife's mother is of Lithuanian
extraction. I believe in immigration. I think this country needs it for
diversity and strength, and I am a great supporter of immigration. I
just think we need to ratchet down our laws so that they are
meaningful.
If we fail to take action now if we fail to carefully look at the
facts, how will future generations of Americans judge us? I ask
everyone involved in this debate to avoid the politics of name-calling
and the politics of hate.
Mr. President, I stated earlier that our failure to act now would be
intolerable. To illustrate this point I suggest we view America as we
do our family dinner table. Even if the table is full and there is not
that much food to go around, we would still invite a hungry stranger in
and feed him or her for the night. That is part of the spirit and
greatness of our country. However, if the table is full and there is no
food to go around, we don't open the doors and continue to invite all
others to join us. That is not ethical. That is not responsible. That
is not humane. Everybody has a right to live in dignity and we in
Congress are charged with the obligation of doing our most to ensure
that this right is maintained.
In summary Mr. President, time has come for the Congress to deal with
our immigration crisis.
I believe that the most realistic way to address this complex issue
is the bill that I am introducing today.
Mr. President, I ask unanimous consent that the text of the bill be
printed into the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1923
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 ``Immigration Stabilization
Act of 1994''.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--ADMISSION OF IMMIGRANTS
Sec. 101. Reduction in annual immigration ceilings.
Sec. 102. Redefinition of immediate relatives.
Sec. 103. Revision of preference allocations for family-sponsored
immigrants.
Sec. 104. Revision of preference allocations for employment-based
immigrants.
Sec. 105. Conforming amendments.
Sec. 106. Transition.
Sec. 107. Repeals.
TITLE II--ADMISSION OF REFUGEES
Sec. 201. Numerical limitation on the admission of refugees.
Sec. 202. Congressional review.
Sec. 203. Repeal of Cuban Adjustment Act.
TITLE III--ASYLUM REFORM
Sec. 301. Inspection and exclusion by immigration officers.
Sec. 302. Asylum.
Sec. 303. Failure to appear for asylum hearing.
Sec. 304. Judicial review.
Sec. 305. Conforming amendments.
Sec. 306. Effective dates.
TITLE IV--CRIMINAL ALIENS
Sec. 401. Expansion in definition of ``aggravated felony''.
Sec. 402. Deportation procedures.
Sec. 403. Judicial deportation.
Sec. 404. Defenses to deportation.
Sec. 405. Enhanced penalties for reentry or failure to depart.
Sec. 406. Deportation of imprisoned aliens.
Sec. 407. Judicial order of deportation.
Sec. 408. Federal incarceration.
Sec. 409. Increased penalty for visa fraud.
Sec. 410. Notification of alien arrest.
Sec. 411. Excludability of unlawful entrants.
Sec. 412. Exclusion of immigration law violators.
Sec. 413. Miscellaneous and technical changes.
TITLE V--FINANCIAL RESPONSIBILITY
Sec. 501. Public charge defined.
Sec. 502. Guarantee of financial responsibility.
Sec. 503. Limited benefits for illegal aliens.
TITLE VI--EMPLOYER SANCTIONS
Sec. 601. Implementation of GAO recommendations.
Sec. 602. Verification by telephone.
Sec. 603. Uniform vital statistics.
TITLE VII--BORDER SECURITY
Sec. 701. Border Patrol personnel.
Sec. 702. Border crossing fee.
Sec. 703. Border Control Trust Fund.
Sec. 704. Responsibility of international carriers.
TITLE VIII--ALIEN SMUGGLING
Sec. 801. Cooperative arrangements.
Sec. 802. Coast Guard instructions.
Sec. 803. Application of RICO.
Sec. 804. Increased penalties for alien smuggling.
Sec. 805. Expanded forfeiture for smuggling or harboring.
Sec. 806. Wiretap authority for alien smuggling investigations.
TITLE IX--EFFECTIVE DATE
Sec. 901. Effective date.
TITLE I--ADMISSION OF IMMIGRANTS
SEC. 101. REDUCTION IN ANNUAL IMMIGRATION CEILINGS.
(a) Family-Sponsored Immigration.--Section 201(c)(1) of the
Immigration and Nationality Act (8 U.S.C. 1151(c)(1)(A)(i))
is amended to read as follows:
``(c) Worldwide Level of Family-Sponsored Immigrants.--(1)
The worldwide level of family-sponsored immigrants under this
subsection for a fiscal year is equal to--
``(A) 325,000, minus
``(B) the number computed under paragraph (2), plus
``(C) the number computed under paragraph (3).''.
(b) Employment-Based Immigration.--Section 201(d)(1)(A) of
the Immigration and Nationality Act (8 U.S.C. 1151(d)(1)(A))
is amended by striking ``140,000'' and inserting ``50,000''.
(c) Diversity Immigration.--(1) Section 201(a) of the
Immigration and Nationality Act (8 U.S.C. 1151(a)) is
amended--
(A) by inserting ``and'' at the end of paragraph (1);
(B) by striking ``; and'' at the end of paragraph (2) and
inserting a period; and
(C) by striking paragraph (3).
(2) Sections 201(e) (8 U.S.C. 1151(e)) and 203(c) (8 U.S.C.
1153(c)) of the Immigration and Nationality Act are hereby
repealed.
SEC. 102. REDEFINITION OF IMMEDIATE RELATIVES.
Section 201(b)(2)(A)(i) of the Immigration and Nationality
Act (8 U.S.C. 1151(b)(2)(A)(i)) is amended by striking
``children, spouses, and parents of a citizen of the United
States, except that, in the case of parents, such citizens
shall be at least 21 years of age'' and inserting ``children
and spouses''.
SEC. 103. REVISION OF PREFERENCE ALLOCATIONS FOR FAMILY-
SPONSORED IMMIGRANTS.
Paragraphs (1) through (4) of section 203(a) of the
Immigration and Nationality Act are amended to read as
follows:
``(1) Spouses and children of permanent resident aliens.--
Qualified immigrants who are the spouses or children of an
alien lawfully admitted for permanent residence shall be
allocated visas in a number equal to 40 percent of the
difference between such worldwide level and the number of
immediate relative visas required, plus any visas not
required for the class specified in paragraph (1).
``(2) Parents of adult united states citizens.--Qualified
immigrants who are the parents of citizens of the United
States who are at least 21 years of age shall be allocated
visas in a number equal to 60 percent of the difference
between such worldwide level and the number of immediate
relative visas required, plus any visas not required for the
class specified in paragraph (1).
``(3) Sons and daughters of united states citizens.--
Qualified immigrants holding priority dates as of the
effective date of this Act who are the sons and daughters of
citizens of the United States shall be allocated visas in a
number equal to 75 percent of the maximum number of visas
available but not issued under paragraphs (1) and (2).
``(4) Sons and daughters of permanent resident aliens.--
Qualified immigrants holding priority dates as of the
effective date of this Act who are the sons and daughters of
permanent resident aliens shall be allocated visas in a
number equal to 25 percent of the maximum number of visas
available but not issued under paragraphs (1) and (2).
``(5) Brothers and sisters of citizens.--Qualified
immigrants holding priority dates as of the effective date of
this Act who are the brothers or sisters of citizens of the
United States, if such citizens are at least 21 years of age,
shall be allocated visas in a number equal to the number of
visas not required for the classes specified in paragraphs
(3) and (4).''.
SEC. 104. REVISION OF PREFERENCE ALLOCATIONS FOR EMPLOYMENT-
BASED IMMIGRANTS.
(a) Adjustment in Allocations as Percentage of Worldwide
Level.--(1) Section 203(b)(1) of such Act is amended by
striking ``28.6 percent'' and inserting ``50 percent''.
(2) Section 203(b)(2)(A) of such Act is amended by striking
``28.6 percent'' and inserting ``50 percent''.
(3) Section 203(b)(1) of such Act is amended by striking
``, plus any visas not required for the classes specified in
paragraphs (4) and (5),''.
(b) Allocations for Backlogged Previous Preferences.--(1)
Section 203(b)(3)(A) of such Act (8 U.S.C. 1153(b)(3)(A)), in
the text above clause (i), is amended to read as follows:
``(A) In general.--Visas shall be made available in a
number equal to the number of visas not required for the
classes specified in paragraphs (1) and (2) to the following
classes of aliens not described in paragraph (2) who are
qualified immigrants holding priority dates as of the
effective date of this Act:''.
(2) Section 203(b)(4) of such Act (8 U.S.C. 1153(b)(4)) is
amended by striking ``in a number not to exceed 7.1 percent
of such worldwide level, to qualified special immigrants''
and inserting ``in a number equal to the number of visas not
required for the classes specified in paragraphs (1) through
(3), to qualified special immigrants holding priority dates
as of the effective date of this Act who are''.
(3) Section 203(b)(5)(A) of such Act (8 U.S.C.
1153(b)(5)(A)), in the text above clause (i), is amended to
read as follows:
``(A) In general.--Visas shall be made available in a
number equal to the number of visas not required for
paragraphs (1) through (4) to qualified immigrants holding
priority dates as of the effective date of this Act who are
seeking to enter the United States for the purpose of
engaging in a new commercial enterprise--''.
(4) Section 203(b)(6) of such Act (8 U.S.C. 1153(b)(6)) is
repealed.
SEC. 105. CONFORMING AMENDMENTS.
Section 204 of the Immigration and Nationality Act (8
U.S.C. 1154) is amended--
(1) in subsection (a)(1)--
(A) in subparagraph (A), by striking ``paragraph (1), (3),
or (4)'' and inserting ``paragraph (1) or (3)'';
(B) in subparagraph (D), by striking ``203(b)(2), or
203(b)(3)'' and inserting ``or 203(b)(2)'';
(C) by redesignating subparagraph (E)(ii) as subparagraph
(E);
(D) by striking subparagraph (E)(i);
(E) by striking subparagraph (F); and
(F) by redesignating subparagraph (G) as subparagraph (F);
and
(2) in subsection (b), by striking ``or 203(b)(3)''.
SEC. 106. TRANSITION.
(a) Parents of Citizens; Unmarried Sons and Daughters of
Citizens.--Any petition filed under section 204(a) of the
Immigration and Nationality Act before the effective date of
this Act for--
(1) immediate relative status as a parent of a United
States citizen who is at least 21 years of age,
(2) preference status under section 203(a)(1) of such Act
(as in effect before such date),
(3) preference status under section 203(a)(2) by virtue of
being the spouse or child of a permanent resident alien, or
(4) preference status under section 203(a)(2) by virtue of
being the son or daughter of a permanent resident alien,
shall be deemed, as of such date, to be a petition filed
under such section for preference status under section
203(a)(2), section 203(a)(3), 203(a)(1), or 203(a)(4),
respectively, of such Act (as amended by this Act).
(b) Eliminated Preference Classifications.--Beginning on
the effective date of this Act--
(1) the Attorney General may not accept any petition filed
under section 204(a) for classification under section
203(a)(4), 203(b)(3), 203(b)(4), or 203(b)(5), as in effect
before the effective date of this Act; and
(2) each priority date established before the effective
date of this Act shall be maintained with respect to any
petition filed under section 204(a) of the Immigration and
Nationality Act before such date for preference status under
paragraph (1), (2), (3), or (4) of section 203(a) (as in
effect before such date) or paragraph (3), (4), or (5) of
section 203(b) of such Act (as in effect before such date).
SEC. 107. REPEALS.
The following provisions of law are repealed:
(1) Section 584 of the Foreign Operations, Export
Financing, and Related Programs Appropriations Act, 1988 (as
contained in section 101(e) of Public Law 100-202; 101 Stat.
1329-183) (relating to the admission of Amerasians).
(2) Section 132 of the Immigration Act of 1990 (Public Law
101-649) (relating to the admission of aliens from adversely
affected foreign countries).
(3) Section 301 of the Immigration Act of 1990 (Public Law
101-649) (relating to admission of dependents of legalized
aliens).
TITLE II--ADMISSION OF REFUGEES
SEC. 201. NUMERICAL LIMITATION ON THE ADMISSION OF REFUGEES.
Section 207(a) of the Immigration and Nationality Act (8
U.S.C. 1157(a)) is amended--
(1) by amending paragraph (1) to read as follows: ``(1)
Except as provided in subsection (b), the number of refugees
who may be admitted under this section in any fiscal year may
not exceed 50,000.'';
(2) by striking paragraph (2); and
(3) by redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively.
SEC. 202. CONGRESSIONAL REVIEW.
Section 207(b) of the Immigration and Nationality Act (8
U.S.C. 1157(b)) is amended--
(1) by redesignating paragraphs (1), (2), and (3) as
clauses (A), (B), and (C), respectively;
(2) by striking ``(b) If'' and inserting ``(b)(1) Subject
to paragraph (2), if'';
(3) by striking ``may fix a number'' and inserting ``may
recommend to the Congress a number''; and
(4) by adding at the end the following:
``(2)(A) The number of refugee admissions proposed under
paragraph (1) shall be effective only if the Congress, within
30 days of receipt of such recommendation, enacts a joint
resolution approving the number of refugees to be admitted.
``(B) The President may waive the application of
subparagraph (A) if he certifies to the Congress that it is
important to the national interest to do so.
``(3) A joint resolution described in paragraph (2) shall
be considered in accordance with paragraphs (3) through (7)
of section 8066(c) of the Department of Defense Appropriation
Act, 1985 (as contained in Public Law 98-473), except that
references in such paragraphs to the Committee on
Appropriations shall be deemed to be references to the
Committee on the Judiciary.''.
SEC. 203. REPEAL OF CUBAN ADJUSTMENT ACT.
Public Law 89-732, as amended by Public Law 94-571, is
repealed.
TITLE III--ASYLUM REFORM
SEC. 301. INSPECTION AND EXCLUSION BY IMMIGRATION OFFICERS.
(a) Inspection of Aliens.--Section 235(b) of the
Immigration and Nationality Act (8 U.S.C. 1225(b)) is amended
to read as follows:
``(b) Inspection and Exclusion by Immigration Officers.--
(1) An immigration officer shall inspect each alien who is
seeking entry to the United States.
``(2)(A) If the examining immigration officer determines
that an alien seeking entry--
``(i) does not present the documentation required (if any)
to obtain legal entry to the United States; and
``(ii) does not indicate either an intention to apply for
asylum (under section 208) or a fear of persecution, the
officer shall order the alien excluded from the United States
without further hearing or review.
``(B) The examining immigration officer shall refer for
immediate inspection at a port of entry by an asylum officer
under subparagraph (C) any alien who has indicated an
intention to apply for asylum or a fear of persecution.
``(C)(i) If an asylum officer determines that an alien has
a credible fear of persecution, the alien shall be entitled
to apply for asylum under section 208.
``(ii) If an asylum officer determines that an alien does
not have a credible fear of persecution the officer shall
order the alien excluded from the United States without
further hearing or review.
``(3)(A) Except as provided in subparagraph (B), if the
examining immigration officer determines that an alien
seeking entry is not clearly and beyond a doubt entitled to
enter, the alien shall be detained for a hearing before a
special inquiry officer.
``(B) The provisions of subparagraph (A) shall not apply--
``(i) to an alien crewman,
``(ii) to an alien described in paragraph (2)(A) or
(2)(C)(ii), or
``(iii) if the conditions described in section 273(d)
exist.
``(4) The decision of the examining immigration officer, if
favorable to the admission of any alien, shall be subject to
challenge by any other immigration officer and such challenge
shall operate to take the alien, whose privilege to enter is
so challenged, before a special inquiry officer for a hearing
on exclusion of the alien.
``(5)(A) Subject to subparagraph (B), an alien has not
entered the United States for purposes of this Act unless and
until such alien has been inspected and admitted by an
immigration officer pursuant to this subsection.
``(B) An alien who (i) is physically present in the United
States, (ii) has been physically present in the United States
for a continuous period of 1 year, and (iii) has not been
inspected and admitted by an immigration officer shall be
deemed to have entered the United States without
inspection.''.
(b) Grounds for Exclusion.--Section 212(a)(6) of the
Immigration and Nationality Act (8 U.S.C. 1182(a)(6)) is
amended by adding at the end the following new subparagraphs:
``(G)(i) Any alien who, in seeking entry to the United
States or boarding a common carrier for the purpose of coming
to the United States, presents any document which is forged,
counterfeit, altered, falsely made, stolen, or inapplicable
to the alien presenting the document, or otherwise contains a
misrepresentation of a material fact, is excludable.
``(ii) Clause (i) shall not apply to an alien if, in the
determination of the asylum officer, the document or
documents to which that clause refers were presented by the
alien solely to enable the alien to depart directly from--
``(I) a country in which the alien had a credible fear of
persecution; or
``(II) a country in which there was a significant danger
that the alien would be returned to a country in which the
alien would have a credible fear of persecution.
``(iii) For the purposes of this subparagraph, the term
`credible fear of persecution' means (I) that it is more
probable than not that the statements made by the alien in
support of his or her claim are true, and (II) that there is
a significant possibility, in light of such statements and of
such other facts as are known to the officer that the alien
could establish eligibility for asylum under section 208.
``(H) Any alien who, in boarding a common carrier for the
purpose of coming to the United States, presents a document
that relates or purports to relate to the alien's eligibility
to enter the United States, and fails to present such
document to an immigration officer upon arrival at a port of
entry into the United States, is excludable.''.
(c) Conforming Amendments.--Section 237(a) (8 U.S.C.
1227(a)) is amended--
(1) in the second sentence of paragraph (1) by striking
``Deportation'' and inserting ``Subject to section 235(b)(2),
deportation''; and
(2) in the first sentence of paragraph (2) by striking
``If'' and inserting ``Subject to section 235(b)(2), if''.
SEC. 302. ASYLUM.
Section 208 (8 U.S.C. 1158) is amended to read as follows:
``Sec. 208. (a) Asylum.--
``(1) Right to apply.--An alien physically present in the
United States or at a land border or port of entry may apply
for asylum in accordance with this section.
``(2) Conditions for granting.--
``(A) Grants by attorney general.--The Attorney General may
grant asylum to an alien if the alien applies for asylum in
accordance with the requirements of this section and
establishes that it is more probable than not that in the
alien's country of nationality (or, in the case of a person
having no nationality, the country in which such alien last
habitually resided) such alien would be arrested and
incarcerated or such alien's life would be threatened on
account of race, religion, nationality, membership in a
particular social group, or political opinion.
``(B) Exception.--Subparagraph (A) shall not apply to an
alien if the Attorney General determines that--
``(i) the alien ordered, incited, assisted, or otherwise
participated in the persecution of any person on account of
race, religion, nationality, membership in a particular
social group, or political opinion;
``(ii) the alien, having been convicted by a final judgment
of a particularly serious crime, constitutes a danger to the
community of the United States;
``(iii) there are serious reasons for believing that the
alien has committed a serious nonpolitical crime outside the
United States prior to the arrival of the alien in the United
States;
``(iv) there are reasonable grounds for regarding the alien
as a danger to the security of the United States; or
``(v) a country willing to accept the alien has been
identified (other than the country described in subparagraph
(A)) to which the alien can be deported or returned and the
alien does not establish that it is more likely than not that
the alien would be incarcerated or the alien's life would be
threatened in such country on account of race, religion,
nationality, membership of a particular social group, or
political opinion.
For purposes of clause (ii), an alien who has been convicted
of an aggravated felony shall be considered to have committed
a particularly serious crime. The Attorney General shall
promulgate regulations that specify additional crimes that
will be considered to be a crime described in clause (ii) or
clause (iii).
``(3) Asylum status.--In the case of any alien granted
asylum under paragraph (2), the Attorney General, in
accordance with this section--
``(A) shall not deport or return the alien to the country
described under paragraph (2)(A);
``(B) shall authorize the alien to engage in employment in
the United States and provide the alien with an `employment
authorized' endorsement or other appropriate work permit; and
``(C) may allow the alien to travel abroad with the prior
consent of the Attorney General, except that such travel may
not be authorized to the country from which the alien claimed
to be fleeing persecution.
``(4) Termination.--Asylum granted under paragraph (2)
shall be terminated if the Attorney General, pursuant to such
regulations as the Attorney General may prescribe, determines
that--
``(A) the alien no longer meets the conditions described in
paragraph (2) owing to a change in circumstances in the
alien's country of nationality or, in the case of an alien
having no nationality, in the country in which the alien last
habitually resided;
``(B) the alien meets a condition described in paragraph
(2)(B);
``(C) a country willing to accept the alien has been
identified (other than the country described in paragraph
(2)) to which the alien can be deported or returned and the
alien cannot establish that it is more likely than not that
the alien would be arrested or incarcerated in such country
on account of race, religion, nationality, membership in a
particular social group, or political opinion; or
``(D) the alien returns to the country from which the alien
claimed to be fleeing persecution or makes application with
the Attorney General to return to the country from which the
alien claimed to fleeing persecution.
``(5) Acceptance by another country.--In the case of an
alien described in paragraph (2)(B)(v) or paragraph (4)(C),
the alien's deportation or return shall be directed by the
Attorney General in the sole discretion of the Attorney
General, to any country which is willing to accept the alien
into its territory (other than the country described in
paragraph (2)).
``(b) Asylum Procedure.--
``(1) Applications.--
``(A) In general.--
``(i) Deadline.--Subject to clause (ii), an alien's
application for asylum shall not be considered under this
section unless--
``(I) the alien has filed, not later than 30 days after
entering or coming to the United States, notice of intention
to file such an application, and
``(II) such application is actually filed not later than 45
days after entering or coming to the United States.
``(ii) Exception.--An application for asylum may be
considered, notwithstanding that the requirements of clause
(i) have not been met, only if the alien demonstrates by
clear and convincing evidence changed circumstances in the
alien's country of nationality (or in the case of an alien
with no nationality, in the country where the alien last
habitually resided) affecting eligibility for asylum.
``(B) Requirements.--An application for asylum shall not be
considered unless the alien submits to the taking of
fingerprints and a photograph in a manner determined by the
Attorney General.
``(C) Fees.--The Attorney General may provide for a
reasonable fee for the consideration of an application for
asylum or for any employment authorization under subsection
(a)(3)(B).
``(D) Notice of privilege of counsel and consequences of
frivolous application.--At the time of filing a notice of
intention to apply for asylum, the alien shall be advised of
the privilege of being represented (at no expense to the
government) by such counsel, authorized to practice in such
proceedings, as the alien shall choose and of the
consequences, under subsection (d), of filing a frivolous
application for asylum.
``(2) Consideration of applications; hearings.--
``(A) Asylum officers.--Applications for asylum shall be
considered by officers of the Service (referred to in this
Act as `asylum officers') who are specially designated by the
Service as having special training and knowledge of
international conditions and human rights records of foreign
countries. Pending the designation of such officers,
individuals who as of the date of the enactment of the
Immigration Stabilization Act of 1994 are authorized to
perform duties as asylum officers shall be deemed to be
qualified to be asylum officers for purposes of this Act.
``(B) Scheduling of hearings.--
``(i) In general.--Upon the filing of an application for
asylum, an asylum officer, at the earliest practicable time
and after consultation with the attorney for the Government
and the attorney (if any) for the applicant, shall set the
application for hearing on a day certain or list it on a
weekly or other short-term calendar, so as to assure a speedy
hearing.
``(ii) Deadline.--Unless the applicant (or an attorney for
the applicant) consents in writing to the contrary, the
hearing on the temporary asylum application shall commence
not later than 45 days after the date the application was
filed.
``(C) Public hearings.--A hearing on a asylum application
shall be open to the public unless the applicant requests
that it be closed to the public.
``(D) Rights in hearings.--The officer shall, to the extent
practicable, conduct the hearing in a nonadversarial manner.
During such hearing, the applicant shall have the privilege
of the assistance and participation of counsel (as provided
under paragraph (1)(D)) and both the government and the
applicant shall be entitled to present evidence and
witnesses, to examine and object to evidence, and to cross-
examine all witnesses.
``(E) Country conditions.--An officer may request opinions
regarding country conditions from the Secretary of State, but
shall not request or consider recommendations from the
Secretary of State as to whether a particular named
individual should or should not be granted asylum.
``(F) Transcript of hearings.--A complete record of the
proceedings and of all testimony and evidence produced at the
hearing shall be kept. The hearing shall be recorded
verbatim. The Attorney General and the Service shall provide
that a transcript of a hearing held under this section is
made available not later than 10 days after the date of
completion of the hearing.
``(G) Deadline for determinations on applications.--The
officer shall render a determination on the application not
later than 30 days after the date of completion of the
hearing. The determination of the officer shall be based only
on the officer's knowledge of international conditions and
human rights records of foreign countries, and evidence
produced at the hearing.
``(H) Resource allocation.--The Attorney General shall
allocate sufficient resources so as to assure that
applications for asylum are heard and determined on a timely
basis. However, nothing in this paragraph relating to
scheduling or deadlines shall be construed as creating any
right or benefit, substantive or procedural, which is legally
enforceable by any party against the United States, its
agencies, its officers, or any other person.
``(I) Sanctions for failure to appear.--
``(i) Subject to clause (ii), the application for asylum of
an alien who does not appear for a hearing on such
application shall be summarily dismissed unless the alien can
show exceptional circumstances (as defined in section
242B(f)(2)) as determined by the asylum officer.
``(ii) Clause (i) shall not apply if written and oral
notice were not provided as required by section
242B(e)(4)(B).
``(iii) Except in exceptional circumstances (as defined in
section 242B(f)(2)), an application summarily dismissed in
accordance with clause (i) shall not be reopened or
reconsidered nor shall a new application for asylum be
entertained by the Attorney General at any time.
``(J) Finality of determinations.--
``(i) In general.--The decision of the asylum officer shall
be the final administrative determination of a claim for
asylum.
``(ii) Treatment of cases in exclusion or deportation.--If
proceedings are instituted against an alien under section 235
or 242 of this Act and the alien files an application for
asylum based on circumstances described in subsection
(b)(1)(A)(ii), the asylum officer shall render, on an
expedited basis, a decision on the application.
``(c) Asylum Status Adjustments.--
``(1) Adjustment of status.--Under such regulations as the
Attorney General may prescribe, the Attorney General shall
adjust to the status of an alien granted asylum the status of
any alien granted asylum under subsection (a)(2)(A) who--
``(A) applies for such adjustment;
``(B) has been physically present in the United States for
at least 3 years after being granted asylum;
``(C) continues to be eligible for asylum under this
section; and
``(D) is admissible under this Act at the time of
examination for adjustment of status under this subsection.
``(2) Treatment of spouse and children.--A spouse or child
(as defined in section 101(b)(A), (B), (C), (D), or (E)) of
an alien whose status is adjusted to that of an alien granted
asylum under subsection (a)(2) may be granted the same status
as the alien if accompanying, or following to join, such
alien.
``(3) Application fees.--The Attorney General may impose a
reasonable fee for the filing of an application for
adjustment to the status of an alien granted asylum under
this subsection.
``(d) Denial of Immigration Benefits for Frivolous
Applications.--
``(1) In general.--If the asylum officer determines that an
alien has made a frivolous application for asylum under this
section and the alien has received the notice under
subsection (b)(1)(D)(i), the alien shall be permanently
ineligible for any benefits under this Act, effective as of
the date of a final determination on such application.
``(2) Treatment of fraudulent or material
misrepresentations.--For purposes of this subsection, an
application considered to be `frivolous' includes, but is not
limited to, an application which is fraudulent or otherwise
contains a willful misrepresentation or concealment of a
material fact.''.
SEC. 303. FAILURE TO APPEAR FOR ASYLUM HEARING.
Section 242B(e)(4) (8 U.S.C. 1252b(e)(4)) is amended in
subparagraph (A)--
(1) by inserting ``and'' at the end of clause (i); and
(2) by striking all after clause (iii) and inserting
``shall not be eligible for any benefits under this Act.''.
SEC. 304. JUDICIAL REVIEW.
Section 235 of the Immigration and Nationality Act (8
U.S.C. 1225) is amended by adding at the end thereof:
``(d) Notwithstanding any other provision of law, no court
shall have jurisdiction to review, except by petition for
habeas corpus, any determination made with respect to an
alien found excludable pursuant to titles I or II of this
Act. In any such case, review by habeas corpus shall be
limited to examination of whether the petitioner (1) is an
alien, and (2) was ordered excluded from the United States
pursuant to the provisions of this Act. Notwithstanding the
nature of the suit or claim, no court shall have jurisdiction
except as provided in this subsection to consider the
validity of any adjudication or determination of exclusion,
to certify a class in an action challenging the exclusion
provisions of this Act or any portion or implementation
thereof, or to provide declaratory or injunctive relief with
respect to the exclusion of any alien.
``(e) In any action brought for the assessment of penalties
for improper entry or reentry of an alien under section 275,
276, 277, or 278 of this Act, no court shall have
jurisdiction to hear claims collaterally attacking the
validity of orders of exclusion, or deportation entered under
section 235, 236, or 242 of this Act.''.
SEC. 305. CONFORMING AMENDMENTS.
Section 209(b) of the Immigration and Nationality Act (8
U.S.C. 1159(b)) is amended--
(1) in paragraph (2), by striking ``one year'' and
inserting ``5 years''; and
(2) by amending paragraph (3) to read as follows:
``(3) continues to be eligible for asylum under section
208,''.
SEC. 306. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided, the
amendments made by this title shall take effect on the date
of the enactment of this Act.
(b) Exceptions.--(1) The amendments made by this title
shall not apply to applications for asylum or withholding of
deportation made before the first day of the first month that
begins more than 180 days after the date of the enactment of
this Act and no application for asylum under section 208 of
the Immigration and Nationality Act (as amended by section
201 of this Act) shall be considered before such first day.
(2) In applying section 208(b)(1)(A) of the Immigration and
Nationality Act (as amended by this title) in the case of an
alien who has entered or came to the United States before the
first day described in paragraph (1), notwithstanding the
deadlines specified in such section--
(A) the deadline for the filing of a notice of intention to
file an application for asylum is 30 days after such first
day, and
(B) the deadline for the filing of the application for
asylum is 45 days after the date of filing such notice.
(3) The amendments made by section 305(b) (relating to
adjustment of status) shall not apply to aliens granted
asylum under section 208 of the Immigration and Nationality
Act, as in effect before the date of the enactment of this
Act.
TITLE IV--CRIMINAL ALIENS
SEC. 401. EXPANSION IN DEFINITION OF ``AGGRAVATED FELONY''.
(a) Expansion in Definition.--Section 101(a)(43) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)(43)) is
amended to read as follows:
``(43) The term `aggravated felony' means--
``(A) murder;
``(B) any illicit trafficking in any controlled substance
(as defined in section 102 of the Controlled Substances Act),
including any drug trafficking crime as defined in section
924(c) of title 18, United States Code;
``(C) any illicit trafficking in any firearms or
destructive devices as defined in section 921 of title 18,
United States Code, or in explosive materials as defined in
section 841(c) of title 18, United States Code;
``(D) any offense described in (i) section 1956 of title
18, United States Code (relating to laundering of monetary
instruments) or (ii) section 1957 of such title (relating to
engaging in monetary transactions in property derived from
specific unlawful activity) if the value of the funds
exceeded $100,000;
``(E) any offense described in--
``(i) subsection (h) or (i) of section 842, title 18,
United States Code, or subsection (d), (e), (f), (g), (h), or
(i) of section 844 of title 18, United States Code (relating
to explosive materials offenses),
``(ii) paragraph (1), (2), (3), (4), or (5) of section
922(g), or section 922(j), section 922(n), section 922(o),
section 922(p), section 922(r), section 924(b), or section
924(h) of title 18, United States Code (relating to firearms
offenses), or
``(iii) section 5861 of title 26, United States Code
(relating to firearms offenses);
``(F) any crime of violence (as defined in section 16 of
title 18, United States Code, not including a purely
political offense) for which a sentence of 5 years
imprisonment or more may be imposed;
``(G) any theft offense (including receipt of stolen
property) or any burglary offense, where a sentence of 5
years imprisonment or more may be imposed;
``(H) any offense described in section 875, section 876,
section 877, or section 1202 of title 18, United States Code
(relating to the demand for or receipt of ransom);
``(I) any offense described in section 2251, section 2251A
or section 2252 of title 18, United States Code (relating to
child pornography);
``(J) any offense described in--
``(i) section 1962 of title 18, United States Code
(relating to racketeer influenced corrupt organizations), or
``(ii) section 1084 (if it is a second or subsequent
offense) or section 1955 of such title (relating to gambling
offenses), where a sentence of 5 years imprisonment or more
may be imposed;
``(K) any offense relating to the bribery or attempted
bribery of an official or agent of the Government of the
United States or of an official or agent of any political
subdivision of the United States;
``(L) any offense relating to commercial bribery,
counterfeiting, forgery or trafficking in vehicles whose
identification numbers have been altered, where a sentence of
5 years imprisonment or more may be imposed;
``(M) any offense--
``(i) described in section 2421, section 2422, or section
2423 of title 18, United States Code (relating to
transportation for the purpose of prostitution), or
``(ii) described in section 1581 through 1585, or section
1588, of title 18, United States Code (relating to peonage,
slavery, and involuntary servitude);
``(N) any offense relating to perjury or subornation of
perjury where a sentence of 5 years imprisonment or more may
be imposed;
``(O) any offense described in--
``(i) section 793 (relating to gathering or transmitting
national defense information), section 798 (relating to
disclosure of classified information), section 2153 (relating
to sabotage) or section 2381 or section 2382 (relating to
treason) of title 18, United States Code, or
``(ii) section 421 of title 50, United States Code
(relating to protecting the identity of undercover
intelligence agents);
``(P) any offense--
``(i) involving fraud or deceit where the loss to the
victim or victims exceeded $200,000; or
``(ii) described in section 7201 of title 26, United States
Code (relating to tax evasion), where the tax loss to the
Government exceeds $200,000;
``(Q) any offense described in section 1324(a)(1) of title
8, United States Code (relating to alien smuggling) for the
purpose of commercial advantage;
``(R) any violation of section 1546(a) of title 18, United
States Code (relating to document fraud), for the purpose of
commercial advantage;
``(S) any offense relating to failing to appear before a
court pursuant to a court order to answer to or dispose of a
charge of a felony, where a sentence of 2 years or more may
be imposed; or any attempt or conspiracy to commit any such
act; or
``(T) any felony committed by an alien on or after the date
that alien had received a waiver of deportation under section
212 or 241 of this Act (8 U.S.C. 1182 or 1251) after
commission of a prior felony.''.
Such term applies to offenses described in this paragraph
whether in violation of Federal or State law and applies to
such offenses in violation of the laws of a foreign country
for which the term of imprisonment was completed within the
previous 15 years.
(b) Effective Date.--The amendments made by this section
shall apply to all convictions entered before, on, or after
the date of enactment of this Act.
SEC. 402. DEPORTATION PROCEDURES.
(a) Elimination of Administrative Hearing for Certain
Criminal Aliens.--Section 242A of the Immigration and
Nationality Act (8 U.S.C. 1252a) is amended--
(1) in subsection (a)--
(A) by inserting ``Deportation of Permanent Resident
Aliens.--(1)'' after ``(a)''; and
(B) by inserting in the first sentence ``permanent
resident'' after ``correctional facilities for'';
(2) in subsection (b)--
(A) by striking ``(b) Implementation.--'' and inserting
``(2) Implementation.--''; and
(B) by striking ``respect to an'' and inserting ``respect
to a permanent resident''; and
(3) by adding the following after subsection (a), as
amended herein:
``(b) Deportation of Aliens Who Are Not Permanent
Residents.--(1) Notwithstanding section 242, and subject to
paragraph (5), the Attorney General may issue a final order
of deportation against any alien described in paragraph (2)
whom the Attorney General determines to be deportable under
section 241(a)(2)(A)(iii) (relating to conviction of an
aggravated felony).
``(2) An alien is described in this paragraph if the
alien--
``(A) was not lawfully admitted for permanent residence at
the time that proceedings under this section commenced, or
``(B) had permanent resident status on a conditional basis
(as described in section 216) at the time that proceedings
under this section commenced.
``(3) The Attorney General may delegate the authority in
this section to the Commissioner or to any District Director
of the Service.
``(4) No alien described in this section shall be eligible
for any relief from deportation that the Attorney General may
grant in his discretion.
``(5) The Attorney General may not execute any order
described in paragraph (1) until 14 calendar days have passed
from the date that such order was issued, in order that the
alien has an opportunity to apply for judicial review under
section 106.''.
(b) Limited Judicial Review.--Section 106 of the
Immigration and Nationality Act (8 U.S.C. 1105a) is amended--
(1) in the first sentence of subsection (a), by inserting
``or pursuant to section 242A'' after ``under section
242(b)'';
(2) in subsection (a)(1) and subsection (a)(3), by
inserting ``(including an alien described in section 242(A)''
after ``aggravated felony''; and
(3) by adding at the end the following new subsection;
``(d) Notwithstanding subsection (c), a petition for review
or for habeas corpus on behalf of an alien described in
section 242A(b) may only challenge whether the alien is in
fact an alien described in such section, and no court shall
have jurisdiction to review any other issue.''.
(c) Effective Date.--The amendments made by this section
shall apply to all aliens against whom deportation
proceedings are initiated after the date of enactment of this
Act.
SEC. 403. JUDICIAL DEPORTATION.
(a) Judicial Deportation.--Section 242A of the Immigration
and Nationality Act (8 U.S.C. 1252a), as amended by section
402, is further amended by inserting at the end the following
new subsection:
``(c) Judicial Deportation.--
``(1) Authority.--In any criminal case subject to the
jurisdiction of any court of the United States or of any
State, such court may enter a judicial order of deportation
at the time of sentencing against an alien whose criminal
conviction causes such alien to be deportable under section
241(a)(2)(A)(iii) (relating to conviction of an aggravated
felony).
``(2) Denial of judicial order.--Denial of a request for a
judicial order of deportation shall not preclude the Attorney
General from initiating deportation proceedings pursuant to
section 242 upon the same ground of deportability or upon any
other ground of deportability provided under section
241(a).''.
(b) Technical and Conforming Changes.--The ninth sentence
of section 242(b) of the Immigration and Nationality Act (8
U.S.C. 1252(b)) is amended by striking out ``The'' and
inserting in lieu thereof, ``Except as provided in section
242A(c), the''.
(c) Effective Date.--The amendments made by this section
shall apply to all aliens whose adjudication of guilt or
guilty plea is entered in the record after the date of
enactment of this Act.
SEC. 404. DEFENSES TO DEPORTATION.
(a) Defenses Bases on Seven Years of Permanent Residence.--
The last sentence of section 212(c) of the Immigration and
Nationality Act (8 U.S.C. 1182(c)) is amended by striking out
``has served for such felony or felonies'' and all that
follows through the period and inserting in lieu thereof
``has been sentenced for such felony or felonies to a term of
imprisonment of at least 5 years if the time for appealing
such conviction or sentence has expired and the sentence has
become final.''.
(b) Defenses Based on Withholding of Deportation.--Section
243(h)(2) of the Immigration and Nationality Act (8 U.S.C.
1253(h)(2)) is amended--
(1) in the first sentence--
(A) by striking ``or'' at the end of subparagraph (C);
(B) by striking the period at the end of subparagraph (D)
and inserting ``; or''; and
(C) by adding at the end the following new subparagraph:
``(E) the alien has been convicted of a felony.''; and
(2) by striking the last sentence.
SEC. 405. ENHANCED PENALTIES FOR REENTRY OR FAILURE TO
DEPART.
(a) Failure To Depart.--Section 242(e) of the Immigration
and Nationality Act (8 U.S.C. 1252(e)) is amended--
(1) by striking out ``paragraph (2), (3), or 4 of'' the
first time it appears; and
(2) by striking out ``shall be imprisoned not more than ten
years'' and inserting in lieu thereof, ``shall be imprisoned
not more than two years, or shall be imprisoned not more than
ten years if the alien is a member of any of the classes
described in paragraph (2), (3), or (4) of section 241(a)''.
(b) Reentry.--Section 276(b) of the Immigration and
Nationality Act (8 U.S.C. 1326(b)) is amended--
(1) in paragraph (1)--
(A) by inserting after ``commission of'' the following:
``two or more misdemeanors or''; and
(B) by striking out ``5'' and inserting in lieu thereof
``10'';
(2) in paragraph (2), by striking out ``15'' and inserting
in lieu thereof ``20''; and
(3) by adding at the end the following sentence: ``For the
purposes of this subsection, the term `deportation' includes
any agreement where an alien stipulates to deportation during
a criminal trial under either Federal or State law.''.
(c) Collateral Attacks on Underlying Deportation Order.--
Section 276 of the Immigration and Nationality Act (8 U.S.C.
1326) is amended by inserting after subsection (b) the
following new subsection:
``(c) In any criminal proceeding under this section, no
alien may challenge the validity of the deportation order
described in subsection (a)(1) or subsection (b).''.
SEC. 406. DEPORTATION OF IMPRISONED ALIENS.
Section 242(h) of the Immigration and Nationality Act (8
U.S.C. 1252(h)) is amended to read as follows:
``(h)(1) Except as provided in paragraph (2), an alien
sentenced to imprisonment may not be deported until such
imprisonment has been terminated by the release of the alien
from confinement. Parole, supervised release, probation, or
possibility of rearrest or further confinement in respect of
the same offense shall not be a ground for deferral of
deportation.
``(2) The Attorney General may deport an alien prior to the
completion of a sentence of imprisonment--
``(A) in the case of an alien in the custody of the
Attorney General, if the Attorney General determines that the
alien has been adequately punished and that such deportation
of the alien is appropriate; or
``(B) in the case of an alien in the custody of a State, if
the chief State official exercising authority with respect to
the incarceration of the alien determines (i) that the alien
has been adequately punished and that such deportation is
appropriate, and (ii) submits a written request to the
Attorney General that such alien be so deported.''.
SEC. 407. JUDICIAL ORDER OF DEPORTATION.
(a) In General.--Subchapter A of chapter 227 of title 18,
United States Code, is amended by adding at the end the
following:
``Sec. 3560. Order of deportation for certain aliens
``The court, upon sentencing an individual who is an alien
for an aggravated felony (as defined in section 101(a)(43) of
the Immigration and Nationality Act, shall include in a
sentencing order a declaration that the individual is
deportable. Any presentence report required under the Rules
of Criminal Procedure with respect to the sentencing of any
individual for such a felony shall include whether or not
such individual is an alien.''.
(b) Clerical Amendment.--The table of sections at the
beginning of subchapter A of chapter 227 of title 18, United
States Code, is amended by adding at the end the following
new item:
``3560. Order of deportation for certain aliens.''.
(c) Deportation Procedures.--Section 242A of the
Immigration and Nationality Act (18 U.S.C. 1252a) is amended
by adding at the end the following:
``(f) Deportation Pursuant to a Judicial Order.--An alien
subject to a judicial order of deportation under section 3560
of title 18, United States Code, shall be deported consistent
with section 242(h).''.
SEC. 408. FEDERAL INCARCERATION.
Section 242 of the Immigration and Nationality Act (8
U.S.C. 1252) is amended by adding at the end the following:
``(j)(1) The Attorney General shall take into the custody
of the Federal Government, and shall incarcerate for a
determinate sentence of imprisonment, a criminal alien
described in paragraph (3) if--
``(A) the chief State official exercising authority with
respect to the incarceration of the undocumented criminal
alien submits a written request to the Attorney General;
``(B) the undocumented criminal is sentenced to a
determinate term of imprisonment;
``(C) the State in which the official described in
subparagraph (A) exercises authority cooperates, and requires
local governments or agencies in such State to cooperate,
with Federal immigration authorities with respect to the
identification, location, arrest, prosecution, detention, and
deportation of aliens who are not lawfully present in the
United States; and
``(D) adequate Federal facilities are available for the
incarceration of the criminal alien.
``(2) Criminal aliens taken into the custody of the
Attorney General under paragraph (1) may be deported under
subsection (h)(2)(A).
``(3) An alien is described in this paragraph if the
alien--
``(A) has been convicted of a felony and sentenced to a
term of imprisonment, and
``(B)(i) had entered the United States without inspection
or at any time or place other than as designated by the
Attorney General, or
``(ii) was the subject of exclusion or deportation
proceedings at the time he or she was taken into custody by
the State.''.
SEC. 409. INCREASED PENALTY FOR VISA FRAUD.
(a) False Statement.--Section 1542 of title 18, United
States Code, is amended by striking ``fined not more than
$2,000 or imprisoned not more than five years, or both'' and
inserting ``fined under this title or imprisoned not more
than 10 years, or both''.
(b) Forgery.--Section 1543 of title 18, United States Code,
is amended by striking ``fined not more than $2,000 or
imprisoned not more than five years, or both'' and inserting
``fined under this title or imprisoned not more than 10
years, or both''.
(c) Misuse of Passport.--Section 1544 of title 18, United
States Code, is amended by striking ``fined not more than
$2,000 or imprisoned not more than five years, or both'' and
inserting ``fined under this title or imprisoned not more
than 10 years, or both''.
(d) Safe Conduct Violation.--Section 1545 of title 18,
United States Code, is amended by striking ``fined not more
than $2,000 or imprisoned not more than three years, or
both'' and inserting ``fined under this title or imprisoned
not more than 10 years, or both''.
(e) Fraud and Misuse of Visas.--Section 1546(a) of title
18, United States Code, is amended by striking ``fined not
more than $2,000 or imprisoned not more than five years, or
both'' and inserting ``fined under this title or imprisoned
not more than 10 years, or both''.
SEC. 410. NOTIFICATION OF ALIEN ARREST.
Whenever a State or local law enforcement agency arrests an
alien for the commission of a felony, that State or local law
enforcement agency shall provide the District Director of the
Immigration and Naturalization Service for the district in
which the State or local law enforcement agency has
jurisdiction the following information within 72 hours of the
arrest: the name of the alien; the alien's place of birth;
the alien's date of birth; the alien's alien registration
number, if any; the nature of the offense for which the alien
was arrested; and any available information on bond, future
hearings and proceedings.
SEC. 411. EXCLUDABILITY OF UNLAWFUL ENTRANTS.
Section 204(c) of the Immigration and Nationality Act is
amended--
(1) by striking ``laws or'' and inserting ``laws,''; and
(2) by inserting the following before the period: ``, or
(3) the petition was submitted by or on behalf of any alien
who entered or attempted to enter the United States
unlawfully, who entered or attempted to enter with
fraudulent, forged or stolen documents, who failed to present
the immigration officer any document produced when the alien
boarded a common carrier for travel to the United States, or
who entered the United States lawfully as a nonimmigrant but
violated the terms of his or her nonimmigrant visa''.
SEC. 412. EXCLUSION OF IMMIGRATION LAW VIOLATORS.
(a) Exclusion of Criminal Alien.--Section 212(a)(2)(A)(i)
of the Immigration and Nationality Act (8 U.S.C.
1182(a)(2)(A)(i)) is amended--
(1) by striking ``or'' at the end of subclause (I);
(2) by inserting ``or'' at the end of subclause (II); and
(3) by inserting after subclause (II) the following:
``(III) any violation of any immigration law or any
violation of any federal or State statute prohibiting fraud,
including any statutes prohibiting income tax evasion,''.
(b) Exclusion Reform.--Section 212 of the Immigration and
Nationality Act (8 U.S.C. 1182) is amended by amending
subsection (c) to read as follows:
``(c) Aliens lawfully admitted for permanent residence who
temporarily proceeded abroad voluntarily and not under an
order of deportation shall not be admitted if that alien is
excludable under subsection (a), without regard to the
purpose or duration of the alien's presence outside the
United States.''.
SEC. 413. MISCELLANEOUS AND TECHNICAL CHANGES.
(a) Form of Deportation Hearings.--The second sentence of
section 242(b) of the Immigration and Nationality Act (8
U.S.C. 1252(b)) is amended--
(1) by redesignating paragraphs (1), (2), (3), and (4) as
subparagraphs (A), (B), (C), and (D);
(2) by striking ``(b) A special'' and inserting ``(b)(1)
Except as provided in paragraph (2), a special''; and
(3) by adding at the end the following:
``(2) Nothing in this subsection shall preclude the
Attorney General from authorizing proceedings by electronic
or telephonic media (with or without the consent of the
alien) or, where waived or agreed to by the parties, in the
absence of the alien.''.
(b) Construction of Expedited Deportation Requirements.--No
amendment made by this Act and nothing in section 242(i) of
the Immigration and Nationality Act (8 U.S.C. 1252(i)), shall
be construed to create any right or benefit, substantive or
procedural, which is legally enforceable by any party against
the United States, its agencies, its officers, or any other
person.
TITLE V--FINANCIAL RESPONSIBILITY
SEC. 501. PUBLIC CHARGE DEFINED.
Section 212(a)(4) of the Immigration and Nationality Act (8
U.S.C. 1182(a)(4)) is amended to read as follows:
``(4) Public charge.--Any alien who cannot demonstrate to
the consular officer at the time of application for a visa,
or to the Attorney General at the time of application for
admission or adjustment of status, that, taking into account
the alien's age and medical condition, he or she has assets,
education, skills, or a combination thereof that make it very
unlikely that he or she will become eligible for means-tested
public assistance of any kind (including, but not limited to,
medical care or food and housing assistance) or will
otherwise become a public charge is excludable.''.
SEC. 502. GUARANTEE OF FINANCIAL RESPONSIBILITY.
Section 213 of the Immigration and Nationality Act (8
U.S.C. 1183) is amended to read as follows:
``FINANCIAL RESPONSIBILITY OF SPONSORS
``Sec. 213. (a) An alien excludable under paragraph (4) of
section 212(a) may, if otherwise admissible, be admitted in
the discretion of the Attorney General upon the giving of a
suitable and proper bond and a guarantee of financial
responsibility by an individual (hereafter in this section
referred to as the alien's `sponsor') who is not less than 21
nor more than 60 years of age, is of good moral character,
has never been convicted of a felony, has never filed for
bankruptcy or been adjudicated a bankrupt, and is a citizen
of the United States or an alien lawfully admitted for
permanent residence.
``(b) The guarantee of financial responsibility in
subsection (a) must provide (1) that the sponsor, and the
sponsor's spouse if the sponsor is married, agree in the case
of an alien under 21 years of age, to assume legal custody
for the alien after the alien's departure to the United
States and until the alien becomes 21 years of age, in
accordance with the law of the State where the sponsor
resides, and (2) that the sponsor agrees to furnish, during
the 5-year period beginning on the date of the alien's
acquiring the status of an alien lawfully admitted for
permanent residence, or during the period beginning on the
date of the alien's acquiring the status of an alien lawfully
admitted for permanent residence and ending on the date on
which the alien becomes 21 years of age, whichever period is
longer, such financial support as is necessary to prevent the
alien's becoming a public charge.
``(c) A guarantee of financial responsibility given under
subsection (a) may be enforced with respect to an alien by a
civil suit against his sponsor by the Attorney General or by
any Federal or State agency that has provided the alien
means-tested public assistance of any kind, including but not
limited to medical, food, and housing assistance.
``(d) Civil suits under subsection (c) shall be brought in
the United States district court for the district in which
the defendant resides and may be brought at any time on or
before the date that is 5 years after the date on which the
sponsor's period of financial responsibility under subsection
(a) expired.
``(e) The bond required of an alien's sponsor by subsection
(a) shall be in favor of the United States and all States,
territories, countries, towns, municipalities, and districts
within the United States and shall hold them harmless against
the alien's becoming a public charge. The bond shall be in
such amount and shall contain such conditions as the Attorney
General may prescribe. The bond shall terminate upon (1) the
alien's permanent departure from the United States, (2) the
death of an alien, or (3) the expiration of the period of
financial responsibility described in subsection (b),
whichever occurs first, and any sums or other security held
to secure performance thereof, except to the extent forfeited
for violation of the terms thereof, shall be returned to the
person by whom furnished, or to his legal representative.''.
SEC. 503. LIMITED BENEFITS FOR ILLEGAL ALIENS.
(a) Direct Federal Financial Benefits.--(1) Notwithstanding
any other provision of law, no direct Federal financial
benefit or social insurance benefit may be paid, conferred,
or otherwise given, on or after the date of enactment of this
Act, to any alien not lawfully admitted to the United States
as a permanent resident or a refugee except pursuant to a
provision of the Immigration and Nationality Act.
(2) Federal reimbursement of emergency medical care
provided to such an alien may be provided under such
regulations as the Secretary of Health and Human Services may
in his or her discretion prescribe.
(b) Unemployment Benefits.--No alien who has not been
granted employment authorization pursuant to Federal law
shall be eligible for unemployment compensation under an
unemployment compensation law of a State or the United
States.
TITLE VI--EMPLOYER SANCTIONS
SEC. 601. IMPLEMENTATION OF GAO RECOMMENDATIONS.
(a) Work Eligibility Documents.--Effective January 1, 1995,
section 274A of the Immigration and Nationality Act (8 U.S.C.
1324a) is amended by striking subparagraphs (A) through (D)
of subsection (b)(1) and inserting:
``(A) In general.--The person or entity must attest, under
penalty of perjury and on a form designated or established by
the Attorney General by regulation, that it has verified that
the individual is not an unauthorized alien by--
``(i) examining the document described in subparagraph (B)
in the case of an individual claiming to be a United States
citizen, United States national, or a permanent resident
alien,
``(ii) examining the document described in paragraph (C) in
the case of an individual not claiming to be a United States
citizen, a United States national, or a permanent resident
alien, and
``(iii) reporting the individual's Social Security account
number to the Social Security Administration through the
telephone verification system established pursuant to section
602 of the Immigration Stabilization Act of 1994.
``(B) Documents of citizens and nationals.--The document
described in this subparagraph is an individual's Social
Security account number card issued pursuant to section
601(c) of the Immigration Stabilization Act of 1994.
``(C) Documents of aliens.--The document described in this
subparagraph is an alien's identification card issued by the
Immigration and Naturalization Service pursuant to section
601(b) of the Immigration Stabilization Act of 1994.''.
(b) Improvement of Alien Identity Cards.--
(1) Permanent resident aliens.--The Attorney General shall
cause to be issued to every alien acquiring lawful permanent
residence in the United States after June 30, 1994, and, upon
application, to any alien who acquired lawful permanent
residence before July 1, 1994, an alien identification card
that shall--
(A) be uniform in appearance,
(B) be as tamperproof and counterfeit-resistant as
practicable,
(C) contain a photograph and fingerprint,
(D) display the name, sex, date of birth, and such other
identifying information as the Attorney General shall
determine, and
(E) incorporate a machine-readable encoding of the
information displayed on the card.
(2) Other aliens.--The Attorney General shall cause to be
issued to every alien who becomes authorized to work in the
United States after June 30, 1994, other than by reason of
lawful admission for permanent residence, and shall cause to
be issued, upon application, to any other alien who is
authorized to work in the United States other than by reason
of lawful admission for permanent residence an alien
identification card that shall--
(A) be uniform in appearance,
(B) be as tamperproof and counterfeit-resistant as
practicable,
(C) contain a photograph and fingerprint,
(D) display the alien's name, sex, date of birth, place of
birth, and such other identifying information as the Attorney
General shall determine,
(E) show an expiration date that shall be determined in
accordance with regulations issued by the Attorney General,
but shall not in any case be later than 3 calendar years
after the date of issuance, and
(F) incorporate a machine-readable encoding of the
information displayed on the card.
(c) Improvement of Social Security Cards.--
(1) Improved card for citizens.--The Secretary shall cause
to be issued improved Social Security account number cards to
United States citizens and United States nationals upon
application, proof of identity, proof of citizenship or
nationality, and payment of a reasonable fee.
(2) Improved card for aliens.--The Secretary shall cause to
be issued improved Social Security account number cards to
aliens lawfully admitted for permanent residence upon
application, proof of identity, verification of status by the
Immigration and Naturalization Service, and payment of a
reasonable fee.
(3) Requirements.--The cards described in paragraphs (1)
and (2) shall--
(A) be uniform in appearance,
(B) be as tamperproof and counterfeit-resistant as
practicable,
(C) contain a photograph and fingerprint,
(D) display the name, sex, date of birth, place of birth,
and Social Security account number of the issuee, and such
other identifying information as the Secretary shall
determine, and
(E) incorporate a machine-readable encoding of the
information displayed on the card.
(4) Secretary defined.--For purposes of this subsection,
Secretary means the Secretary of Health and Human Services.
(d) Reasonable Fee.--The amount of the fee that is to be
charged under subsections (b) and (c) shall be the amount
(rounded to the nearest whole dollar), not exceeding $50,
required to cover the costs of issuing the card.
(e) No Other Cards.--No Social Security account number card
or alien identification card shall be issued after June 30,
1994, whether as an original card or as a replacement, that
does not satisfy the requirements of this section.
(f) Definitions.--For purposes of this section--
(1) ``State'' means one of the United States, the District
of Columbia, or Puerto Rico, and
(2) ``place of birth'' means, for an individual--
(A) born in a State, the two-letter symbol used by the
United States Post Office to identify that State, or
(B) not born in a State, such two-letter symbol as the
Secretary shall determine by regulations.
SEC. 602. VERIFICATION BY TELEPHONE.
(a) Social Security Database.--By September 30, 1994, the
Secretary of Health and Human Services shall make such
modifications to the Social Security account number data base
(NUMIDENT) as are practicable and enable confirmation through
the telephone verification system described in subsection (d)
that a Social Security account number has been issued to an
individual identified by last name, sex, year of birth, and
place of birth and that such individual is not known to the
Secretary of Health and Human Services to be an alien not
authorized to work in the United States. At a minimum the
data base shall be modified to enable confirmation that a
Social Security account number is not assigned to an
individual authorized to work in the United States because
the number--
(1) has not been issued,
(2) was issued to an individual known by the Secretary of
Health and Human Services as not authorized to work,
(3) was issued to a person that is deceased and has not
been reissued, or
(4) was issued to an alien that any data base of the
Immigration and Naturalization Service shows is not
authorized to work in the United States.
The Attorney General shall provide such assistance as the
Secretary of Health and Human Services may require to merge
or otherwise make use of any data base of the Immigration and
Naturalization Service for the purposes of this section.
(b) Exchange of Information.--The Attorney General shall
notify the Secretary of Health and Human Services of the
expiration of an alien's authorization to work in the United
States not later than 14 calendar days after the date of
expiration. The Secretary of Health and Human Services shall
furnish the Attorney General with a list of any aliens for
whom confirmation of work eligibility has been requested not
later than 5 calendar days after such request. Such list
shall include the telephone number from which the request was
made and the employer identification number of the requester.
(c) Adult Applicants.--The Secretary of Health and Human
Services shall furnish to the Attorney General a copy of any
application (including supporting documentation) for a Social
Security account number by an alien or by an individual over
16 years of age who claims to be a United States citizen or
national and shall not issue a number before the earlier of
the following dates:
(1) The date on which the Attorney General confirms in
writing that his records do not show that the applicant is an
alien unauthorized to work in the United States.
(2) 60 days after a copy of the application and supporting
documentation has been delivered to the Attorney General.
(d) Telephone Verification System.--Before January 1, 1995,
the Secretary of Health and Human Services shall test and
place in operation a system whereby an employer can report by
touch-tone telephone his employer identification number and
the Social Security account number, last name, sex, year of
birth, and place of birth of any individual who is to be
employed and can receive immediate confirmation that the
number was issued to the individual having that identity and
that such person is not identified within the Social Security
account number data base as an individual who is not a United
States citizen, a United States national, or an alien
authorized to work in the United States. The charge for each
call will be sufficient to cover the costs of operating the
system, except that it shall not exceed $2 plus any line
charges payable to the telephone carrier. The system shall
provide for access to a live operator if an entry is not
accepted or confirmed, shall provide a verification code to
the caller, and shall accommodate devices that read the
magnetic strip incorporated by a card issued under section
601.
(e) Abuse of System.--The use of the telephone verification
system established by subsection (d) by a person other than--
(1) an employer acting pursuant to section 274A(b)(1) of
the Immigration and Nationality Act, or
(2) an officer or employee of an agency of the United
States or of any State acting in the performance of official
duties,
shall be punishable by a fine of not more than $1,000 per
occurrence.
SEC. 603. UNIFORM VITAL STATISTICS.
The Secretary of Health and Human Services shall consult
with the State agency responsible for registration and
certification of births and deaths and, within 2 years of the
date of enactment of this Act, shall establish a national
electronic network linking the vital statistics records of
such States. The network shall provide, where practical, for
the matching of deaths with births and shall enable the
confirmation of births and deaths of citizens of the United
States, or of aliens within the United States, by any Federal
or State agency or official in the performance of official
duties. The Secretary shall institute measures to achieve
uniform and accurate reporting of vital statistics into the
national network, to protect the integrity of the
registration and certification process, and to prevent fraud
against the Government and other persons through the use of
false birth or death certificates.
TITLE VII--BORDER SECURITY
SEC. 701. BORDER PATROL PERSONNEL.
The number of full-time officer positions authorized for
the Border Patrol of the Immigration and Naturalization
Service shall be increased to 5,900 in fiscal year 1994,
6,900 in fiscal year 1995, 7,900 in fiscal year 1996, 8,900
in fiscal year 1997, and 9,900 in fiscal year 1998.
SEC. 702. BORDER CROSSING FEE.
The Commissioner of Immigration and Naturalization shall
collect a user fee for each entry into the United States by
land or by sea after December 31, 1993. The fee shall be $3
for each person entering other than by private automobile,
van, or truck and $5 for each private automobile, van, or
truck. The Commissioner by regulation may establish a reduced
fee or a multiple-crossing fee for frequent border crossers.
SEC. 703. BORDER CONTROL TRUST FUND.
There is established a Border Control Trust Fund (``Fund'')
under the control of the Commissioner of Immigration and
Naturalization. The fees collected under section 702 shall be
deposited into the Fund. Amounts deposited into the Fund and
the earnings thereon shall be expended by the Commissioner
exclusively on (1) measures, personnel, structures, and
devices to deter and prevent illegal entry of persons and
contraband into the United States by land or by sea, (2)
construction and operation of facilities to expedite lawful
border traffic and reduce, where practical, extensive delays
in the time required for lawful entry of goods and persons,
and (3) financial and other assistance to State and local law
enforcement agencies that have entered into cooperative
arrangements with the Immigration and Naturalization Service.
Not less than 80 percent of the sum of--
(1) amounts deposited into the Fund during a fiscal year;
and
(2) the earnings of the Fund during that fiscal year,
shall be expended during that or the subsequent fiscal year.
SEC. 704. RESPONSIBILITY OF INTERNATIONAL CARRIERS.
(a) In General.--Section 273 of the Immigration and
Nationality Act (8 U.S.C. 1323) is amended--
(1) in subsection (a), by striking ``(other than from
foreign contiguous territory)'';
(2) by redesignating subsections (c) and (d) as subsections
(e) and (f), respectively;
(3) by inserting after subsection (b) the following:
``(c) Records.--The Attorney General shall maintain a
record of each undocumented alien arriving on or after the
date of enactment of this subsection at a United States port
of entry and of the carrier which brought such alien to that
port of entry.'';
(4) by inserting after subsection (c) (as added by
paragraph (4)), the following:
``(d) Repeat Offenses.--(1)(A) If the Attorney General
determines that, during the preceding calendar year, any
carrier has delivered an average of more than 0.5
undocumented aliens per arrival at United States ports of
entry then, for the next calendar year, in lieu of the
penalty of $3,000 specified in subsection (b), such carrier
shall pay to the Attorney General a penalty of $10,000 for
each alien brought in violation of subsection (a) or,
alternatively, such carrier may choose to participate in a 1-
year pilot program intended to reduce the number of
undocumented aliens arriving at United States ports of entry
via international carriers.
``(B) If such international carrier chooses to participate
in the 1-year pilot program, that carrier will be subject to
the penalty levels prescribed in subsection (b), rather than
the increased penalty levels specified in this subsection,
for each alien brought in violation of subsection (a).
``(C) The 1-year pilot program, which can be extended for
multiple years at the discretion of the Attorney General,
shall consist of a program whereby the international carrier
collects the travel documents necessary for entry into the
United States from all passengers upon their entry to the
carrier and physically returns them to the passengers on an
individual basis only at the actual point of inspection at
the United States port of entry by United States immigration
officials.
``(2) If the Attorney General determines that, during the
preceding calendar year, any carrier has delivered an average
of more than 1.5 undocumented aliens per arrival at United
States ports of entry, then, for the next calendar year, in
lieu of the penalties specified in subsection (b) and in
paragraph (1) of this subsection, such carrier shall pay to
the Attorney General a penalty of $20,000 for each alien
brought in violation of subsection (a).
``(3) If the Attorney General determines that, in the
preceding calendar year, any carrier has delivered an average
of more than 2 undocumented aliens per arrival at United
States ports of entry, then such carrier shall forfeit all
landing rights in the United States for the next calendar
year.''; and
(5) subsection (e) (as redesignated) is amended--
(A) by inserting after ``refunded,'' the following:
``unless the alien transported is granted asylum status in
the United States or''; and
(B) by inserting before the period at the end thereof ``or
that the visa or other immigration documentation presented to
the carrier was forged, counterfeit, altered, falsely made,
stolen, or inapplicable to the alien presenting the
document''.
(b) Effective Date.--The amendment made by subsection
(a)(4) shall take effect on January 1 of the second calendar
year following the date of enactment of this Act.
TITLE VIII--ALIEN SMUGGLING
SEC. 801. COOPERATIVE ARRANGEMENTS.
The Secretary of State shall undertake to enter into, on
behalf of the United States, cooperative arrangements with
appropriate foreign governments for the purpose of preventing
the unlawful entry of aliens by land, air, or sea.
SEC. 802. COAST GUARD INSTRUCTIONS.
The Secretary of Defense, in consultation, when
appropriate, with the Attorney General and the Secretary of
State, shall instruct the Coast Guard to deter and prevent
the unlawful entry of aliens into the United States by sea.
Such instructions shall include directives providing for
stopping and boarding vessels, making inquiries of persons
and inspecting documents and property on board such vessels,
and returning a vessel to the country from which it came or
to another country. In the case of vessels outside the
territorial sea of the United States, such instructions shall
be limited to vessels of the United States, vessels without
nationality, vessels assimilated to vessels without
nationality, and vessels of foreign nations with which the
United States has arrangements authorizing the United States
to stop and board such vessels. Except as otherwise provided
in the preceding sentence, actions pursuant to this section
are authorized to be undertaken both within and beyond the
territorial sea of the United States.
SEC. 803. APPLICATION OF RICO.
Section 1961(1) of title 18, United States Code, is amended
by striking ``or'' immediately prior to ``(E)'', and by
adding: ``or (F) any act which is indictable under any of the
following provisions of the Immigration and Nationality Act:
section 274(a)(i) (relating to prohibitions on bringing in or
harboring certain aliens), section 275 (relating to illegal
entry, marriage fraud, or establishing a commercial
enterprise for the purpose of evading the immigration laws),
section 277 (relating to aiding or assisting certain aliens
to enter the United States), or section 1328 (relating to the
importation of aliens for immoral purpose).''.
SEC. 804. INCREASED PENALTIES FOR ALIEN SMUGGLING.
Pursuant to section 994 of title 28, United States Code,
the United States Sentencing Commission shall promulgate
guidelines, or amend existing guidelines, to provide that a
defendant convicted of violating, or conspiring to violate
section 274(a) of the Immigration and Nationality Act, shall
be assigned not less than offense level 25 under section
2L1.1 of the United States Sentencing Guidelines if any of
the following factors exist--
(1) if the offense involved five or more aliens in a single
scheme or otherwise;
(2) if the offense involved other criminal activity
including, but not limited to, violations of the Controlled
Substances Act, prostitution, importation of aliens for
immoral purposes, trafficking in firearms, money laundering,
illegal gang activities, kidnapping or ransom demands,
fraudulent documents, or extortion;
(3) if the offense involves smuggling of persons under the
age of 18 years for the purposes of illegal adoption or of
sexual or commercial exploitation;
(4) if the offense involves the smuggling of known or
suspected terrorists or persons involved in organized crime;
(5) if the offense involves dangerous or inhumane treatment
of the persons smuggled; or
(6) if death or serious bodily harm occurs to persons
smuggled.
Otherwise, the base offense level shall be 13, except for an
offense described in section 274(a)(2)(A) of the Immigration
and Nationality Act.
SEC. 805. EXPANDED FORFEITURE FOR SMUGGLING OR HARBORING.
Subsection 274(b) of the Immigration and Nationality Act (8
U.S.C. 1324(b)) is amended--
(1) by amending paragraph (1) to read as follows:
``(1) Any property, real or personal, which facilitates or
is intended to facilitate, or which has been used in or is
intended to be used in the commission of a violation of
subsection (a) or of sections 274A(a)(1) or 274A(a)(2), or
which constitutes or is derived from or traceable to the
proceeds obtained directly or indirectly from a commission of
a violation of subsection (a), shall be subject to seizure
and forfeiture, except that--
``(A) no property, used by any person as a common carrier
in the transaction of business as a common carrier shall be
forfeited under the provisions of this section unless it
shall appear that the owner or other person in charge of such
property was a consenting party or privy to the illegal act;
``(B) no property shall be forfeited under the provisions
of this section by reason of any act or omission established
by the owner thereof to have been committed or omitted by any
person other than such owner while such property was
unlawfully in the possession of a person other than the owner
in violation of the criminal laws of the United States or of
any State; and
``(C) no property shall be forfeited under this paragraph
to the extent of an interest of any owner, by reason of any
act or omission established by that owner to have been
committed or omitted without the knowledge or consent of the
owner, unless such action or omission was committed by an
employee or agent of the owner, and facilitated or was
intended to facilitate, or was used in or intended to be used
in, the commission of a violation of subsection (a) or of
section 274A(a)(1) or 274A(a)(2) which was committed by the
owner or which intended to further the business interests of
the owner, or to confer any other benefit upon the owner.'';
(2) by striking from paragraph (2)--
(A) ``conveyance'' both places it appears and inserting in
lieu thereof ``property''; and
(B) ``is being used in'' and inserting in lieu thereof ``is
being used in, is facilitating, has facilitated, or was
intended to facilitate'';
(3) by striking from paragraphs (4) and (5) ``a
conveyance'' and ``conveyance'' each place such phrase or
word appears and inserting in lieu thereof ``property'';
(4) by striking from paragraph (4)--
(A) ``or'' at the end of subparagraph (C), and
(B) the period at the end of subparagraph (D) and inserting
``; or''; and
(5) by adding at the end the following:
``(E) transfer custody and ownership of forfeited property
to any Federal, State, or local agency pursuant to the Tariff
Act of 1930, as amended (19 U.S.C. 1616a(c)).''.
SEC. 806. WIRETAP AUTHORITY FOR ALIEN SMUGGLING
INVESTIGATIONS.
(a) Section 2516(1) of title 18, United States Code, is
amended--
(1) in paragraph (c), by inserting after ``weapons),'' the
following: ``or a felony violation of section 1028 (relating
to production of false identification documentation), section
1546 (relating to fraud and misuse of visas, permits, and
other documents),'';
(2) by striking ``or'' after paragraph (l) and
redesignating paragraphs (m), (n), and (o) as paragraphs (n),
(o), and (p), respectively;
(3) by inserting after paragraph (l) the following new
paragraph:
``(m) a violation of section 274 of the Immigration and
Nationality Act (8 U.S.C. 1324) (relating to alien
smuggling), of section 277 of the Immigration and Nationality
Act (8 U.S.C. 1327) (relating to the smuggling of aliens
convicted of aggravated felonies or of aliens subject to
exclusion on grounds of national security), or of section 278
of the Immigration and Nationality Act (8 U.S.C. 1328)
(relating to smuggling of aliens for the purpose of
prostitution or other immoral purpose);''; and
(4) by striking ``or any Deputy Assistant Attorney General
in the Criminal Division specially designated by the Attorney
General'' and inserting ``or any Deputy Assistant Attorney
General or acting Deputy Assistant Attorney General in, or
one other officer or employee of, the Criminal Division
specially designated by the Attorney General''.
(b) Section 2518(5) of title 18, United States Code, is
amended by inserting ``(including personnel of a foreign
government or of a State or subdivision of a State)'' after
``Government personnel''.
(c) Section 2510(7) of title 18, United States Code, is
amended by inserting before the semicolon ``and additionally,
for purposes of paragraphs (1) and (2) of section 2517, any
person authorized to perform investigative, law enforcement,
or prosecutorial functions by a foreign government''.
TITLE IX--EFFECTIVE DATE
SEC. 901. EFFECTIVE DATE.
Except where otherwise specifically provided, this Act, and
the amendments made by this Act, shall take effect on October
1, 1994.
______
By Mr. HATCH (for himself, Mr. Exon, and Mr. Lieberman):
S. 1924. A bill to amend the Internal Revenue Code of 1986 to provide
clarification for the deductibility of expenses incurred by a taxpayer
in connection with the business use of the home; to the Committee on
Finance.
home office deduction act of 1994
Mr. HATCH. Mr. President, I rise today to introduce the Home Office
Deduction Act of 1994. I am joined in this effort by my friends and
colleagues, Senator Exon and Senator Lieberman. Companion legislation
(H.R. 3407) has already been introduced in the House of Representatives
by Representatives Peter Hoagland, Nancy Johnson, Kweisi Mfume, Phil
Crane, and others.
This bill is designed to reverse an inequity for hundreds of
thousands of taxpayers that was created by last year's Supreme Court
decision in Commissioner versus Soliman. That decision effectively
closed the door to legitimate home office deductions for many
taxpayers. Moreover, the decision unfairly penalizes many small
businesses simply because they operate from a home rather than from a
store front, office building, or industrial park.
Mr. President, until the Soliman decision, small business owners and
professionals who dedicated a space in their homes to use for business
activities were allowed to deduct the expenses of the home office if
the following factors applied: First, the space in the home was used
solely and exclusively as an office; second, the taxpayer had no other
office for the business; and third, the deduction claimed was not
greater than the income earned by the business. Through the Soliman
case, the Supreme Court has narrowed significantly the availability of
this deduction by adding two more requirements: First, the owner of the
business physically meet clients or customers in the home office; and
second, the revenue of the business is actually earned in the home
office.
The ironic effect of the Supreme Court's decision is that a taxpayer
who rents office space outside of the home is allowed a full deduction,
but one who tries to economize by working at home is penalized. This
makes no sense to me.
The Home Office Deduction Act of 1994 is designed to restore the
deduction for home office expenses to pre-Soliman law. Rather than
requiring taxpayers to meet the new criteria set out by the Court, the
bill allows a home office to meet the definition of a principal place
of business if it is the location where essential administrative or
management activities are conducted on a regular and systematic basis
by the taxpayer. To avoid possible abuses, the bill requires that the
taxpayer have no other location for the performance of the
administrative or management activities of the business.
Our economy is presently in a state of flux. Many corporations are
down-sizing. This restructuring of the job market is generally a
progressive and beneficial move for the long-term health of our
economy. In the short term, however, this change is causing many
Americans to rethink, retrain, and redream. Many workers who have been
laid off or forced from the job market are helping to restructure our
Nation's job market by starting new businesses with their limited
resources. For many, this means the fledgling business is based in the
home of the entrepreneur. For these individuals, the Soliman decision
could not have come at a worse time.
In most cases, Mr. President, startup businesses are very short on
cash. Yet, for many, ultimate success depends on the ability to hold
out for just a few more months. In these situations, even a relatively
small tax deduction for the expenses of the home office can make a
critical difference. It is important to note that some of America's
fastest growing and dynamic corporations originated in the home or
garage of the founder. Our tax policies should support those who dare
to risk everything to bring their ideas to the marketplace. In today's
changing world, many of tomorrow's jobs will come from entrepreneurs
who are struggling to survive in a home-based business.
We should also recognize the family impact that a home-based business
can have. Mothers and fathers, whether single or married, are more
often choosing to work at home to be with their children. Having a
parent at home who can help supervise children, while earning a living,
can have a tremendous positive effect on the well being of our families
and of society. This can also be very important when a taxpayer must
stay at home to care for elderly or disabled relatives. This
legislation supports these choices by treating a home-based business on
a more equal footing with one away from home.
Recent improvements in computer and telecommunications technology
have now made it possible for many individuals to do much of their work
at home. In many cases, a home office can be just as technologically
competitive as any commercial office space. Our tax policy should not
discriminate against home businesses simply because a taxpayer makes
the choice, often based on economic or family considerations, to
operate his or her business out of the home.
This legislation can also have an important effect on rural areas,
such as in my home State of Utah. Many small business owners and
professionals in rural areas must spend a great deal of time on the
road, meeting clients, customers, or patients. It is likely that many
of my rural constituents will be unable to meet the new requirements
for the home office deduction.
Mr. President, the Home Office Deduction Act of 1994 has the support
of the American Institute of Certified Public Accountants, the National
Federation of Independent Businesses, the Family Research Council, the
Small Business Legislative Council, the National Association of the
Self-Employed, the National Association of the Remodeling Industry, the
National Association of Small Business Investment Companies, the Direct
Selling Association, the Promotional Products Association
International, the Illinois Women's Economic Development Summit, the
Alliance of Independent Store Owners and Professionals, the American
Veterinary Medical Association, the Bureau of Wholesale Sales
Representatives, the National Association of Home Builders, the
International Home Furnishings Representatives Association, the
National Association of Women Business Owners, Communicating for
Agriculture, and the National Society of Public Accountants.
Mr. President, I ask unanimous consent that the text 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. 1924
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 ``Home Office Deduction Act of
1994''.
SEC. 2. CLARIFICATION OF DEFINITION OF PRINCIPAL PLACE OF
BUSINESS.
Subsection (f) of section 280A of the Internal Revenue Code
of 1986 is amended by redesignating paragraphs (2), (3), and
(4) as paragraphs (3), (4), and (5), respectively, and by
inserting after paragraph (1) the following new paragraph:
``(2) Principal place of business.--For purposes of
subsection (c), a home office shall in any case qualify as
the principal place of business if--
``(A) the office is the location where the taxpayer's
essential administrative or management activities are
conducted on a regular and systematic (and not incidental)
basis by the taxpayer, and
``(B) the office is necessary because the taxpayer has no
other location for the performance of the administrative or
management activities of the business.''
SEC. 3. TREATMENT OF STORAGE OF PRODUCT SAMPLES.
Paragraph (2) of section 280A(c) of the Internal Revenue
Code of 1986 is amended by striking ``inventory'' and
inserting ``inventory or product samples''.
SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall apply to taxable
years beginning after December 31, 1991.
____
American Institute of
Certified Public Accountants,
Washington, DC, March 8, 1994.
Hon. Orrin G. Hatch,
U.S. Senate, Washington, DC.
Dear Senator Hatch: On behalf of the American Institute of
Certified Public Accountants (AICPA), I would like to take
this opportunity to express our support for the Home Office
Deduction Act. We believe your proposal will be well received
among the many home-based businesses in our country.
The recent Supreme Court decision, Commissioner v. Soliman,
(113 S. Ct. 701 (1993)) curtails or at least throws into
question a legitimate business expense deduction for many
taxpayers. It penalizes certain home-based businesses solely
because they operate from their homes rather than from a
store front, industrial park or office building, even though
these businesses may be practically identical.
Prior to Soliman, home office expenses were deductible if:
(1) space in the home was used ``solely and exclusively'' as
an office; (2) the taxpayer had no other office for the
business; and (3) the business generated enough income to
cover the deduction. (In addition, for employees the office
at home had to be established for the convenience of the
employer.) Soliman, at the very least, has now raised serious
questions as to whether a deduction is allowable unless: (1)
the customers of the home-based business physically visit the
home office; and (2) the business revenue is produced within
the home office.
Without passage of legislation to liberalize the rules for
the eligibility of the home-office deduction some home-based
business owners are likely to lose this deduction. We believe
your bill upholds the original intent of the home office
deduction, but provides standards that reflect the realities
of the business world. It would maintain the three criteria,
prior to Soliman, for the deduction, while making clear that
essential administrative and management activities, such as
tax preparation, bookkeeping and billing, and soliciting
business, are legitimate uses of business time and office
space for the purpose of deducting the expenses of a home
office.
In the interest of tax simplification, we generally do not
support retroactive legislation. However, since the IRS has
announced in Notice 93-12 (1993-8 I.R.B. 46), that Soliman
would be effective for 1993 and later years, we support the
effective date in your proposal.
As you know, the AICPA is comprised of 310,000 members
whose clients include many small business owners. We commend
you for your advocacy on behalf of small business and look
forward to working with you toward enactment of this
legislation.
Sincerely,
Harvey L. Coustan,
Chairman, Tax Executive Committee.
____
National Federation of
Independent Business,
Washington, DC, March 10, 1994.
Hon. Orrin Hatch,
U.S. Senate, Washington, DC.
Dear Senator Hatch: On behalf of the over 600,000 members
of the National Federation of Independent Business (NFIB),
thank you for introducing legislation to clarify who is
eligible for the home office deduction.
Millions of business owners work out of their homes. The
vast majority of these businesses are new entities and their
owners lack the resources to rent office space. Many of these
businesses will grow into larger, more successful firms,
providing jobs and tax revenue for their local communities.
Other home-based businesses will remain small, but will allow
their owners to stay close to their families while they work.
Unfortunately, the Supreme Court has interpreted current
law in such a way that very few home offices will be able to
take the home office deduction. Eliminating the deduction for
these businesses makes it more expensive for those with
entrepreneurial spirit to go into business for themselves.
NFIB supports enact of legislation to allow business owners
who are working out of their homes to utilize the deduction
if a room of their house is used exclusively for business
purposes and if no other location in available.
Sincerely,
John J. Motley III,
Vice President,
Federal Governmental Relations.
____
March 10, 1994.
Hon. Orrin G. Hatch,
U.S. Senate,
Washington, DC.
Dear Senator Hatch: The undersigned associations strongly
support the Home Office Deduction Act of 1994, legislation
which recognizes the growing importance of home-based
businesses to the nation's economy.
In striving to ameliorate the economic hardships caused by
the recent U.S. Supreme Court decision in Commissioner v.
Soliman, your legislation will do much to promote economic
growth and create prosperity for the American work force. The
proposal is an excellent response to the current spate of
corporate downsizings which have resulted in the layoffs of
tens of thousands of workers. They, like many other people,
are now attempting to live the American dream by starting
businesses out of their homes.
The legislation is a clear recognition of the convenience
that home-based businesses offer American families. A home-
based business provides a spouse (including a single parent)
with the emotional benefits of taking care of his or her
children at home while earning money at the same time.
Your proposal is also in tune with the fact that modern
telecommunications equipment (such as personal computers,
facsimile machines, and modems) make home-based businesses
technologically competitive with any commercially leased
space. Unfortunately, without enactment of your initiative,
tens of thousands of persons stand to lose the home office
deduction based on the Soliman decision--such as independent
sales persons, plumbers, electricians, remodeling
contractors, rural veterinarians, and others. Your proposal
reaches for the right result by ensuring that these people
continue to be eligible for the deduction even though they
(a) visit customers outside the home and (b) generate the
revenues of the business outside the home.
Thank you for introducing your home office deduction
initiative. We will strongly support your efforts to obtain
enactment of this very important piece of legislation for
small business.
Sincerely,
Alliance of Independent Store Operators and
Professionals, American Veterinary Medical Association,
Bureau of Wholesale Sales Representatives,
Communicating for Agriculture, Direct Selling
Association, Family Research Council, Illinois Women's
Economic Development Summit, International Home
Furnishings Representatives Association, National
Association for the Self-Employed, National Association
of Home Builders, National Association of the
Remodeling Industry, National Association of Small
Business Investment Companies, National Association of
Women Business Owners, National Society of Public
Accountants, Promotional Products Association
International, Small Business Legislative Council.
Mr. LIEBERMAN. Mr. President, I am pleased to join in the
introduction of this important bill to restore the home office
deduction.
After being turned down by two tax courts, the IRS succeeded in
narrowing the definition of the home office deduction by taking their
case to the Supreme Court. In essence, the early 1993 decision narrows
the home office deduction test to businesses where income is generated
in the home and to businesses where customers come to the home.
These new tests are flawed. They disallow the deduction for a whole
host of legitimate home businesses. Take plumbers or house painters.
Both plumbers and painters may run virtually all aspects of their
businesses from the home but in the end they must travel to the
customer. A plumber simply cannot insist that a bathtub be brought to
the office. There is a clear and compelling reason for a house painter
to make house calls.
Mr. President, this issue is of particular importance to my home
state of Connecticut where laid-off workers are using severance
packages to start businesses out of their homes where underemployed
workers are making ends meet through part-time home businesses. These
are the forced entrepreneurs I have been talking about for some time.
These are the people who have struck out on their own in such numbers
that they appear to be showing up in labor statistics. To quote an
October 1993 report by the New England Economic Project,
Households have been reporting more buoyant employment
conditions than establishments have. The number of New
Englanders now indicating they are working is 2 percent
higher than a year earlier. This upturn appears to reflect a
rise in self-employment and the emergence of small young
businesses that are not yet tabulated in the establishment
survey. In other words, people may be adjusting to shrinking
job opportunities at the region's traditional employers by
becoming entrepreneurs.
Mr. President, these new rules are truly a step backward. They ignore
the trend toward home-based businesses by those who have lost
traditional office jobs, they ignore those who are working second jobs
to make ends meet, and they ignore those parents who choose to stay at
home with the children while still earning a much-needed income.
In the past, there have undoubtedly been abuses of this deduction. I
believe there has been cause to tighten these rules. But the solution
to these abuses has clearly not been found. To exclude whole sectors of
legitimate home office businesses is hardly the answer to the problem
of abuse. I should also point out that in this economy, the last thing
we should be doing is hurting legitimate businesses.
I encourage my colleagues to join me as a sponsor of this
legislation.
____________________