[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.

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