[Congressional Record Volume 140, Number 51 (Tuesday, May 3, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTION

      By Mr. KOHL (for himself, Mr. Grassley, and Mr. Exon):
  S. 2057. A bill to replace the aid to families with dependent 
children program under title IV of the Social Security Act and a 
portion of the food stamp program under the Food Stamp Act of 1977 with 
a block grant to give the States the flexibility to create innovative 
welfare to work programs, and for other purposes; to the Committee on 
Finance.


                      welfare to work act of 1994

  Mr. KOHL. Mr. President, today I am introducing a bipartisan welfare 
reform proposal that I have developed with my colleague, Chuck 
Grassley. Our legislation is based on one fundamental conviction: that 
the current welfare system is so bad--so removed from the American 
values of work, family, and responsibility--that it must be completely 
abolished. Our legislation will take the Federal Government out of the 
business of welfare and put the States into the business of empowering 
their residents to find and keep jobs.
  Before I describe our bill, let me talk a moment about the current 
system. It discourages work, discourages marriage, and discourages 
responsible choices about parenthood. We have set up a cash grant 
program that tells young women--don't work, don't marry, have children, 
and you will get support. Work, marry, plan your family for when you 
can afford to support it, and we will leave you out in the cold--in 
fact, we will take your tax money to support those who have decided not 
to work. The current welfare system pays people to reject the values of 
work and family that have made this country strong, and the time has 
come to reject that approach.
  Right now, State and local governments that want to reject this 
system and implement something that helps those down on their luck get 
jobs don't have the freedom to do so--they have to beg Washington for 
waivers from myriad Federal rules, and often as not, they get turned 
down or have to wait years and years for an answer. Meanwhile, another 
generation grows up in our broken welfare system.
  We think there is a better way. A simple, commonsense approach, that 
is consistent with American values. Our legislation truly ends welfare 
as we know it by abolishing AFDC and most of food stamps. The money now 
used for welfare payments and Federal administrative costs is turned 
over to the States in the form of a block grant. They will use the 
grant to establish welfare-to-work systems designed to meet the needs 
of their local communities.

  Our legislation ensures that the elderly and disabled continue to get 
food stamp assistance and that needy children get food through an 
expansion of WIC. Beyond that, States are allowed to use the money we 
now spend on welfare to connect people to work in any way they 
determine will be successful--through job placement assistance, job 
training, child care, transportation assistance, earnings supplements, 
public service jobs, et cetera.
  To have its block grant renewed each year, all a State would have to 
do is show that it is moving people into work. If it meets this test, 
then it is doing better than we have ever done at the Federal level, 
and its block grant will be continued.
  Our welfare-to-work legislation will spend not one penny more on 
welfare than we currently spend. There are many who would argue that we 
have to add more money to the current system to get it to work. But, as 
most people operating in the private sector know, it doesn't matter how 
much you spend to dress up a product nobody wants, in the end, all you 
have is an expensive product nobody wants. It is time to stop pouring 
money into a welfare system that doesn't help anyone, because in the 
end all we will get is an expensive welfare system that still doesn't 
help anyone. We can use the money currently spent on welfare--including 
$3 billion in administrative expenses--to let the States design systems 
that work for them and their citizens. By turning over to the States 
most of the money we currently spend on Federal administrative costs, 
and getting States to reorient their systems away from checkwriting and 
toward helping people find jobs, we can make big strides in getting 
people to work.
  Another reason we keep the block grant at current welfare spending 
levels is the fact that placing people in jobs will generate savings 
for State welfare-to-work programs, since such individuals won't need 
as much assistance as they were getting before, allowing those savings 
to be used to help harder-to-place people get the job training, child 
care, and other assistance they need to get and keep jobs. Another part 
of the answer lies in encouraging States to better utilize other 
Federal resources they already get. Right now, we give States over $7 
billion to help people attain, and maintain self-sufficiency through 
child care, social services, and job training grants. These grants 
could be better targeted, and if connected to State welfare-to-work 
systems, could provide additional support to help welfare-to-work 
programs be even more successful.
  Economic circumstances and people in Kenosha, WI are different from 
those in Ottumwa, IA. Portland, ME, is not San Diego, CA. A one-size-
fits-all welfare plan designed in Washington cannot work for all these 
communities. By introducing this bill, we are saying that it is time to 
face the fact that the answer to something as hard as helping people 
get work is not going to be developed in Washington--the many answers 
we need are going to come from communities throughout this country. 
State and local governments have been pleading for flexibility to 
design programs that work--it is time to get out of their way.
  Some may think that we're bashing the Federal Government when we say 
that we don't think it can solve this problem. We're not. We're simply 
saying that there are some things Washington is good at, such as the 
relatively straight-forward tasks of collecting payments for Social 
Security and sending out the checks our elderly so depend on. And there 
are some things our Federal Government is not good at, such as trying 
to help individuals get back on their feet. This is because so much of 
the answer to getting welfare beneficiaries into jobs depends on an 
individual's circumstances and the local situation--both of which are 
impossible to take completely into account when developing a 
comprehensive, national solution.
  The crucial difference between our bill and others you may hear about 
is this: instead of adding yet another layer to the overly complex 
welfare system we have today, we admit that it needs to be abolished 
and completely replaced, and propose to do so with a simple program, 
run by States, that moves people to work.
  Many of us are concerned that welfare reform plans need to show 
compassion for children. We think this proposal meets that test: it 
ensures needy children will get nutrition assistance through WIC and 
that their parents will receive assistance getting connected to a job. 
Frankly, we think the most compassionate thing we can do for these 
children is to help their parents get a job, which is more than the 
current system can say. Our bill says that Government has the 
responsibility to provide a helping hand to assist individuals, but 
also that individuals have the responsibility to use the assistance to 
help themselves.
  As a final note, let me point out that this plan would remove the 
requirement that families break up before they can get assistance. With 
this block grant, States can help families who need help before they 
break up. This is one more reason why we think this bill is more 
consistent with American values--the values of compassion, work, 
family, and responsibility--than our current welfare system.
  Mr. President, I ask unanimous consent to enter the text of the 
attached bill summary into the Record, as well as the entire text of 
the bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2057

       Be it enacted by 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 ``Welfare to 
     Work Act of 1994''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purpose.
Sec. 4. Definition of State.
Sec. 5. Applications by States.
Sec. 6. State welfare to work program described.
Sec. 7. State grants.
Sec. 8. State maintenance of effort.
Sec. 9. Termination of certain Federal welfare programs.
Sec. 10. Eligibility for WIC program.
Sec. 11. Secretarial submission of legislative proposal for amendments 
              to medicaid eligibility provisions and technical and 
              conforming amendments.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) The current welfare system is broken and requires 
     replacement.
       (2) Work is what works best for American families.
       (3) Since State and local governments know the best methods 
     of connecting welfare recipients to work and since each 
     community faces different circumstances, Federal assistance 
     to the States should be flexible.
       (4) Government has the responsibility to provide a helping 
     hand to assist individuals but individuals have the 
     responsibility to use the assistance to help themselves.

     SEC. 3. PURPOSE.

       The purpose of this Act is to create a block grant program 
     to replace the aid to families with dependent children 
     program under title IV of the Social Security Act and a 
     portion of the food stamp program under the Food Stamp Act of 
     1977 and give the States the flexibility to create innovative 
     welfare to work programs.

     SEC. 4. DEFINITION OF STATE.

       For purposes of this Act, the term ``State'' means each of 
     the several States of the United States, the District of 
     Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, and American Samoa.

     SEC. 5. APPLICATIONS BY STATES.

       (a) In General.--Each State desiring to receive a grant to 
     operate a State welfare to work program described in section 
     6 shall annually submit an application to the Secretary of 
     Health and Human Services (hereafter in this Act referred to 
     as the ``Secretary'') containing the matter described in 
     subsection (b) in such manner as the Secretary may require.
       (b) Contents.--
       (1) Fiscal year 1995.--An application for a grant to 
     operate a State welfare to work program during fiscal year 
     1995 shall contain a description of the program in accordance 
     with section 6.
       (2) Subsequent fiscal years.--
       (A) In general.--
       (i) Contents.--Except as provided in clause (ii), an 
     application for a grant to operate a State welfare to work 
     program during fiscal year 1996 and each subsequent fiscal 
     year shall contain--

       (I) a description of the program in accordance with section 
     6;
       (II) the State work percentage (as determined under 
     subparagraph (B)) for each of the 2 preceding fiscal years;
       (III) a statement of the number of participants who became 
     ineligible for participation in the program due to increased 
     income for each of the 2 preceding fiscal years; and
       (IV) a statement of the amount of non-Federal resources 
     that the State invested in the program in the preceding 
     fiscal year.

       (ii) Special rule for applications submitted for fiscal 
     year 1996.--An application for a grant to operate a State 
     welfare to work program during fiscal year 1996 shall contain 
     the information described in subclauses (II) and (III) of 
     clause (i) only for the preceding fiscal year in lieu of such 
     information for each of the 2 preceding fiscal years.
       (B) State work percentage.--For purposes of subparagraph 
     (A)(ii), the State work percentage (prior to any adjustment 
     under subparagraph (C)) for a fiscal year is equal to--
       (i) the number of participants in the State welfare to work 
     program in the fiscal year who were employed in private 
     sector or public sector jobs for at least 20 hours per week 
     for 26 weeks out of the year, divided by
       (ii) the total number of participants in the State welfare 
     to work program in the fiscal year.
       (C) Adjustment.--
       (i) In general.--The State work percentage determined under 
     subparagraph (B) for a fiscal year shall be adjusted by 
     subtracting 1 percentage point from such State work 
     percentage for each 5 percentage points by which the 
     percentage of individuals described in subparagraph (B)(i) 
     who are also described in clause (ii) participating in the 
     program in such fiscal year falls below 75 percent of the 
     number of individuals described in subparagraph (B)(i) in 
     such fiscal year.
       (ii) Individual described.--An individual described in this 
     clause is a custodial parent or other individual who is 
     primarily responsible for the care of a child under the age 
     of 18.
       (D) Monitoring of data.--The Secretary shall ensure the 
     validity of the data provided by a State under this 
     paragraph.
       (c) Approval.--
       (1) Fiscal years 1995 and 1996.--The Secretary shall 
     approve each application for a grant to operate a State 
     welfare to work program--
       (A) during fiscal year 1995, if the application contains 
     the information described in subsection (b)(1); and
       (B) during fiscal year 1996, if the application contains 
     the information described in subsection (b)(2).
       (2) Automatic approval in subsequent fiscal years.--The 
     Secretary shall approve any application for a grant to 
     operate a State welfare to work program during fiscal year 
     1997 and each succeeding fiscal year if the State's 
     application reports that--
       (A) the State work percentage for the preceding fiscal year 
     is greater than the State work percentage for the second 
     preceding fiscal year; or
       (B) more participants became ineligible for participation 
     in the State welfare to work program during the preceding 
     fiscal year due to increased income than became ineligible 
     for participation in the program in the second preceding 
     fiscal year as a result of increased income.
       (3) Secretarial review.--
       (A) In general.--If a State application for a grant under 
     this Act is not automatically approved under paragraph (2), 
     the Secretary shall approve the application upon a finding 
     that the application--
       (i) provides an adequate explanation of why the State work 
     percentage or the number of participants who became 
     ineligible for participation in the State welfare to work 
     program due to increased income during the preceding fiscal 
     year did not exceed such State work percentage or the number 
     of participants who became ineligible for participation in 
     the program in the second preceding fiscal year; and
       (ii) provides a plan of remedial action which is 
     satisfactory to the Secretary.
       (B) Adequate explanations.--An adequate explanation under 
     subparagraph (A) may include an explanation of economic 
     conditions in the State, failed program innovations, or other 
     relevant circumstances.
       (4) Resubmission.--A State may resubmit an application for 
     a grant under this Act until the Secretary finds that the 
     application meets the requirements of paragraph (3)(A).

     SEC. 6. STATE WELFARE TO WORK PROGRAM DESCRIBED.

       (a) In General.--A State welfare to work program described 
     in this section shall provide that--
       (1) during fiscal year 1995, the State shall designate 
     individuals who are eligible for participation in the program 
     and such individuals shall include at least those individuals 
     who received benefits under the State plan approved under 
     part A of title IV of the Social Security Act during fiscal 
     year 1994;
       (2) during fiscal year 1996 and each subsequent fiscal 
     year, the State shall designate individuals who are eligible 
     for participation in the program (as determined by the 
     State), with priority given to those individuals most in need 
     of such services; and
       (3) the program shall be designed to move individuals from 
     welfare to self-sufficiency and may include--
       (A) job placement and training;
       (B) supplementation of earned income;
       (C) nutrition assistance and education;
       (D) education;
       (E) vouchers to be used for rental of privately owned 
     housing;
       (F) child care;
       (G) State tax credits;
       (H) health care;
       (I) supportive services;
       (J) community service employment; or
       (K) any other assistance designed to move such individuals 
     from welfare to self-sufficiency.
       (b) No Entitlement.--Notwithstanding any criteria a State 
     may establish for participation in a State welfare to work 
     program, no individual shall be considered to be entitled to 
     participate in the program.

     SEC. 7. STATE GRANTS.

       (a) In General.--The Secretary shall annually award to each 
     State with an application approved under section 5(c) an 
     amount equal to--
       (1) in fiscal year 1995, 100 percent of the State's base 
     amount;
       (2) in fiscal year 1996, the sum of 80 percent of the 
     State's base amount, 20 percent of the State's share of the 
     national grant amount, and any applicable bonus payment;
       (3) in fiscal year 1997, the sum of 60 percent of the 
     State's base amount, 40 percent of the State's share of the 
     national grant amount, and any applicable bonus payment;
       (4) in fiscal year 1998, the sum of 40 percent of the 
     State's base amount, 60 percent of the State's share of the 
     national grant amount, and any applicable bonus payment;
       (5) in fiscal year 1999, the sum of 20 percent of the 
     State's base amount, 80 percent of the State's share of the 
     national grant amount, and any applicable bonus payment; and
       (6) in fiscal year 2000 and each subsequent fiscal year, 
     the sum of 100 percent of the State's share of the national 
     grant amount and any applicable bonus payment.
       (b) State Base Amount.--
       (1) In general.--For purposes of subsection (a), a State's 
     base amount is equal to--
       (A) for fiscal year 1995, 100 percent of the amount 
     determined under paragraph (2); and
       (B) for fiscal year 1996 and succeeding fiscal years, 99.6 
     percent of the amount determined under paragraph (2).
       (2) Amount determined.--The amount determined under this 
     paragraph for a State is an amount equal to the sum of--
       (A) the amount of Federal financial participation received 
     by the State under section 403 of the Social Security Act 
     during fiscal year 1994; and
       (B) an amount equal to the sum of--
       (i) the benefits under the food stamp program under the 
     Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), including 
     benefits provided under section 19 of such Act (7 U.S.C. 
     2028), during fiscal year 1994 other than benefits provided 
     to elderly or disabled individuals in the State (as 
     determined under section 3(r)) of such Act (7 U.S.C. 2012); 
     and
       (ii) the amount paid to the State under section 16 of the 
     Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) during fiscal 
     year 1994 for administrative expenses for providing benefits 
     to non elderly and non disabled individuals.
       (c) State Share of the National Grant Amount.--
       (1) In general.--For purposes of subsection (a), the 
     State's share of the national grant amount for a fiscal year 
     is equal to the sum of the amounts determined under paragraph 
     (2) (relating to economic need) and paragraph (3) (relating 
     to State effort) for the State.
       (2) Economic need.--The amount determined under this 
     paragraph is equal to the sum of the amounts determined under 
     subparagraphs (A) and (B) for the State.
       (A) State per capita income measure.--The amount determined 
     under this subparagraph is an amount which bears the same 
     ratio to one-quarter of the national grant amount as the 
     product of--
       (i) the population of the State; and
       (ii) the allotment percentage of the State (as determined 
     under paragraph (4)),
     bears to the sum of the corresponding products for all 
     States.
       (B) State unemployment measure.--The amount determined 
     under this subparagraph is an amount which bears the same 
     ratio to one-quarter of the national grant amount as the 
     number of individuals in the State who are estimated as being 
     unemployed according to the Department of Labor's annual 
     estimates bears to the number of individuals who are 
     estimated as being unemployed according to the Department of 
     Labor's annual estimates in all States.
       (3) State effort.--The amount determined under this 
     paragraph is the amount which bears the same ratio to one-
     half of the national grant amount as the product of--
       (A) the dollar amount the State invested in the State 
     welfare to work program in the previous fiscal year, as 
     reported in section 5(b)(2)(A)(iv); and
       (B) the allotment percentage of the State (as determined 
     under paragraph (4)),
     bears to the sum of the corresponding products for all 
     States.
       (4) Allotment percentage.--
       (A) In general.--Except as provided in subparagraph (C), 
     the allotment percentage for any State shall be 100 percent, 
     less the State percentage.
       (B) State percentage.--The State percentage shall be the 
     percentage which bears the same ratio to 50 percent as the 
     per capita income of such State bears to the per capita 
     income of all States.
       (C) Exception.--The allotment percentage shall be 70 
     percent in the case of Puerto Rico, the Virgin Islands, Guam, 
     and American Samoa.
       (5) Determination of grant amounts.--Each State's share of 
     the national grant amount shall be determined under this 
     subsection on the basis of the average per capita income of 
     each State and all States for the most recent fiscal year for 
     which satisfactory data are available from the Department of 
     Commerce and the Department of Labor.
       (6) National grant amount.--The term ``national grant 
     amount'' means an amount equal to 99.6 percent of sum of the 
     amounts determined under subsection (b)(2) for all States.
       (d) Bonus Payment.--Beginning with fiscal year 1996, the 
     Secretary may use 0.4 percent of the sum of the amounts 
     determined under subsection (b)(2) for all States to award 
     additional bonus payments under this section to those States 
     which have the highest or most improved State work percentage 
     as determined under section 5(b)(2)(B). The Secretary shall 
     designate one State as the leading job placement State and 
     such State shall receive the highest bonus payment under the 
     preceding sentence and the President is authorized and 
     requested to acknowledge such State with a special 
     Presidential award.
       (e) Use of Funds for Administrative Purposes.--A State 
     shall not use more than 10 percent of the amount it receives 
     under this section for the administration of the State 
     welfare to work program.
       (f) Capped Entitlement.--This section constitutes budget 
     authority in advance of appropriations Acts, and represents 
     the obligation of the Federal Government to provide the 
     payments described in subsection (a) (in an amount not to 
     exceed the sum of the amounts determined under subsection 
     (b)(2) for all States).

     SEC. 8. STATE MAINTENANCE OF EFFORT.

       Any funds available for the activities covered by a State 
     welfare to work program conducted under this Act shall 
     supplement, and shall not supplant, funds that are expended 
     for similar purposes under any State, regional, or local 
     program.

     SEC. 9. TERMINATION OF CERTAIN FEDERAL WELFARE PROGRAMS.

       (a) Termination of AFDC and JOBS Programs.--
       (1) AFDC.--Part A of title IV of the Social Security Act 
     (42 U.S.C. 601 et seq.) is amended by adding at the end the 
     following new section:


                       ``termination of authority

       ``Sec. 418. The authority provided by this part shall 
     terminate on October 1, 1994.''.
       (2) JOBS.--Part F of title IV of the Social Security Act 
     (42 U.S.C. 681 et seq.) is amended by adding at the end the 
     following new section:


                       ``termination of authority

       ``Sec. 488. The authority provided by this part shall 
     terminate on October 1, 1994.''.
       (b) Food Stamp Program To Serve Only Elderly and Disabled 
     Individuals.--
       (1) Definitions.--Section 3 of the Food Stamp Act of 1977 
     (7 U.S.C. 2012) is amended--
       (A) in subsection (g)--
       (i) in paragraph (4), by striking ``(and their spouses)'';
       (ii) in paragraph (5)--

       (I) by striking ``in the case of'' and inserting ``in the 
     case of elderly or disabled''; and
       (II) by inserting ``disabled'' before ``children''; and

       (iii) in paragraph (8), by inserting ``elderly or 
     disabled'' before ``women and children temporarily'';
       (B) in subsection (i)--
       (i) in the first sentence--

       (I) in paragraph (1), by inserting ``elderly or disabled'' 
     before ``individual''; and
       (II) in paragraph (2), by inserting ``, each of whom is 
     elderly or disabled,'' after ``individuals'';

       (ii) in the second sentence, by inserting before the period 
     at the end the following: ``, if each of the individuals is 
     elderly or disabled'';
       (iii) in the third sentence--

       (I) by striking ``, together'' and all that follows through 
     ``of such individual,''; and
       (II) by striking ``, excluding the spouse,''; and

       (iv) in the fifth sentence--

       (I) by striking ``coupons, and'' and inserting ``coupons, 
     and elderly or disabled''; and
       (II) by inserting ``disabled'' after ``together with 
     their''; and

       (C) in subsection (r), by striking ``Elderly'' and all that 
     follows through ``who'' and inserting the following: 
     ``Elderly or disabled', with respect to a member of a 
     household or other individual, means a member or other 
     individual who''.
       (2) Conforming amendments.--
       (A) Eligibility.--Section 5 of such Act (7 U.S.C. 2014) is 
     amended--
       (i) in the first sentence of subsection (c)--

       (I) by striking ``program if--'' and all that follows 
     through ``household's income'' and inserting ``program if the 
     income of the household'';
       (II) by striking ``respectively; and'' and inserting 
     ``respectively.''; and
       (III) by striking paragraph (2); and

       (ii) in subsection (e)--

       (I) in the first sentence, by striking ``containing an 
     elderly or disabled member and determining benefit levels 
     only for all other households'';
       (II) in the fifteenth sentence--

       (aa) by striking ``containing an elderly or disabled 
     member''; and
       (bb) in subparagraph (A), by striking ``elderly or disabled 
     members'' and inserting ``the members'';

       (III) in the seventeenth sentence, by striking ``elderly 
     and disabled''; and
       (IV) by striking the fourth through fourteenth sentences.

       (B) Periodic reporting.--Section 6(c)(1)(A)(iv) of such Act 
     (7 U.S.C. 2015(c)(1)(A)(iv)) is amended by striking ``and in 
     which all adult members are elderly or disabled''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply on and after October 1, 1994.
       (c) References in Other Laws.--
       (1) In general.--Any reference in any law, regulation, 
     document, paper, or other record of the United States to any 
     provision that has been terminated by reason of the 
     amendments made in subsection (a) shall, unless the context 
     otherwise requires, be considered to be a reference to such 
     provision, as in effect immediately before the date of the 
     enactment of this Act.
       (2) State plans.--Any reference in any law, regulation, 
     document, paper, or other record of the United States to a 
     State plan that has been terminated by reason of the 
     amendments made in subsection (a), shall, unless the context 
     otherwise requires, be considered to be a reference to such 
     plan as in effect immediately before the date of the 
     enactment of this Act.

     SEC. 10. ELIGIBILITY FOR WIC PROGRAM.

       (a) In General.--Section 17(d)(1) of the Child Nutrition 
     Act of 1966 (42 U.S.C. 1786(d)(1)) is amended by adding at 
     the end the following new sentence: ``For purposes of 
     participation in the program under this section, a child 
     shall be considered to be at nutritional risk if such child 
     is in the care of a custodial parent or other individual 
     primarily responsible for the care of such child who is a 
     participant in a State welfare to work program which receives 
     Federal funds under the Welfare to Work Act of 1994.''.
       (b) Conforming Amendments.--Section 17(d)(2)(A)(ii) of the 
     Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(2)(A)(ii)) is 
     amended--
       (1) by striking ``(ii)(I)'' and inserting ``(ii)''; and
       (2) by striking subclause (II).
       (c) Effective Date.--The amendments made by this section 
     shall apply on and after October 1, 1994.

     SEC. 11. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR 
                   AMENDMENTS TO MEDICAID ELIGIBILITY CRITERIA AND 
                   TECHNICAL AND CONFORMING AMENDMENTS.

       The Secretary shall, within 90 days after the date of 
     enactment of this Act, submit to the appropriate committees 
     of Congress, a legislative proposal providing eligibility 
     criteria for medical assistance under a State plan under 
     title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 
     in lieu of the eligibility criteria under section 
     1902(a)(10)(A)(i) of such Act (42 U.S.C. 1396a(a)(10)(A)(i)) 
     relating to the receipt of aid to families with dependent 
     children under a State plan under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) and such 
     technical and conforming amendments in the law as are 
     required by the provisions of this Act.
                                  ____


                      Summary--Welfare-to-Work Act


                                overview

       The ``Welfare-To-Work Act'' will take Federal welfare money 
     and replace it with a flexible, community-based program that 
     connects people to work and makes work pay. Aid to Families 
     with Dependent Children (AFDC) and part of Food Stamps will 
     be replaced with a new Federal Block Grant, which would allow 
     states and local communities to design work-based systems to 
     help low-income Americans get jobs that enable them to 
     support their families. Food Stamps would remain in place for 
     the disabled and elderly and the USDA feeding programs for 
     children and for the elderly would also be maintained. The 
     Supplemental Feeding Program for Women, Infants, and Children 
     (WIC) program would be expanded so that needy children can 
     get food.


                            major provisions

       Bill replaces welfare (AFDC and most of Food Stamps) with 
     state block grant for implementing ``welfare to work'' 
     programs.
       Block grant gives states almost complete flexibility in 
     designing program--as long as it WORKS to move people from 
     welfare to work. Each year a state gets more participants 
     working, it continues to get the block grant with no other 
     federal constraints.
       Bill modifies WIC eligibility to ensure children of 
     participants in this program are eligible for WIC food 
     assistance.


                                 costs

       Bill caps amount spent on block grant at current welfare 
     spending levels, ensuring money will always be there for 
     states by creating a capped entitlement. The block grant 
     amount is approximately $37 billion.
       Block grant is allocated to states based on: (1) economic 
     need (defined by unemployment rates and per capita income) 
     and; (2) state effort (measured by how much the state invests 
     in this program).


                           how program works

       States would use the block grant money to design their own 
     work-connection systems that fit local economic circumstances 
     rather than being forced to just hand out federally-regulated 
     welfare checks.
       Bill uses a simple outcome measure--whether states get 
     participants to work--as the only major Federal requirement 
     for getting their block grant cash.
       Bill ensures accountability by requiring states which do 
     NOT get more people working to explain why their system did 
     not succeed and to submit new plans to the Department of 
     Health and Human Services.
       Bill ensures former beneficiaries have access to new system 
     by requiring states to serve such people in the first year.
       Bill recognizes successful state innovations through 
     awarding bonus payments & Presidential awards to states with 
     particularly good work-connection systems.
       Bill requires states to ensure they spend at least as much 
     on their welfare-to-work system as they currently do on 
     welfare.
       States could work with their counties and cities to use 
     whatever mix of job training and placement, earnings 
     supplementation, nutrition assistance and education, housing 
     vouchers, community service employment, child care, tax 
     credits, support payment, and health care that will get, and 
     keep people in, jobs.

  Mr. GRASSLEY. Mr. President, I am pleased to join my colleague, 
Senator Kohl, in his effort to dramatically and unalterably change the 
welfare system as we know it. This proposal is reinventing Government 
at its best. It moves the decisionmaking process closer to the people. 
The most relevant place to start when discussing standards for 
reinventing Government is with President Clinton's own words. On March 
3, 1993, in the White House Rose Garden, the President said:

       Our goal is to make the entire Federal Government both less 
     expensive and more efficient. * * *. We intend to redesign, 
     to reinvent, to reinvigorate the entire national Government.

  The President went on to say:

       We'll challenge the basic assumptions of every program, 
     asking does it work; does it provide quality service; does it 
     encourage innovation and reward hard work? If the answer is 
     no, or if there's a better way to do it or if there's 
     something that the Federal Government is doing it should 
     simply stop doing, we'll try to make the changes needed.

  When we ask the President's question concerning the current welfare 
system, it comes up pretty short.
  First, does it work? While Democrats and Republicans may not agree on 
many things, there is one issue about which there is complete 
agreement: The current welfare program is a dismal failure.
  President Clinton acknowledges that the war on poverty has failed. He 
ran his Presidential campaign on the promise to ``end welfare as we 
know it.'' That promise rang true with the American people, who believe 
the current system is in need of dramatic reform.
  President Clinton is not alone in his appraisal. In a recent 
interview, Finance Committee Chairman Moynihan joined in the call for 
welfare reform when he said that there was not a health care crisis but 
a welfare crisis. He called for the President to move welfare reform 
this year or risk the administration's health care proposal.
  David Ellwood, Assistant Secretary for Planning and Evaluation at the 
Department of Health and Human Services and Co-chairman of the 
President's Task Force on Welfare Reform acknowledged that there ``is 
near universal agreement that the welfare system is broken.''
  The second question is also important. Does it provide quality 
service? Senator Breaux, chairman of the Subcommittee on Social 
Security and Family Policy stated in a recent subcommittee hearing that 
``our welfare system does not serve well the people who are on it, nor 
does it serve well the people who are paying for it.''
  The current system encourages the breakdown of the family, destroys 
independence and self reliance, and discourages work. I have to agree 
with Senator Breaux that these things do not serve the needs of 
recipients or those taxpayers who are funding the program.
  The third question which must be considered is: Does it encourage 
innovation are reward hard work? Under the current system, States which 
desire to try innovative approaches to the problem of helping low-
income people move toward independence must pass a State law with the 
new ideas, apply to the Federal Government for a waiver, gain approval 
of their ideas and receive the waiver, and finally, implement their 
plan. The process is time-consuming and expensive.
  The current system also discourages hard work. The welfare mother 
receives her check on two conditions: She must not marry an employed 
male and she must not work. If she works, she risks losing much of her 
welfare and health care benefits.
  During that March 3, Rose Garden ceremony, the President said in 
response to these three questions that ``if the answer is no, or if 
there's a better way to do it if there's something that the Federal 
Government is doing it should simply stop doing, we'll try to make the 
changes needed.''
  Mr. President, that is what the Kohl-Grassley proposal is all about. 
This proposal starts with a basic assumption: The welfare program is a 
dismal failure and all efforts to reform it at a national level have 
failed. That is because the incentives are not properly structured so 
that success is required, not just desired.
  Under the proposal we are introducing today, the entire Federal Aid 
to Families With Dependent Children Program, the JOBS Program, and the 
Food Stamp Program as it applies to AFDC recipients are simply 
repealed. They are ended. The role of the Federal Government is 
unalterably changed.
  This is important because this is a reform effort first, not a budget 
exercise. The resulting budget and deficit reductions are important but 
secondary. They must be viewed as an enforcement mechanism for the 
reforms--the teeth, if you will.
  The focus must be on reform. Because, if we're not careful and view 
this as a budget cutting exercise only, these programs may be trimmed 
now, but the structural deficiencies that brought them about will grow 
right back again as soon as we look away. We need to perform corrective 
surgery so that what we have now will not come back again.
  This proposal is that corrective surgery but there are also clear 
budget implications in this bill. It establishes a cap for Federal 
spending on assistance programs for low-income Americans at 1994 levels 
and block grants the money to the States to serve the same population.
  States are then free to experiment with new ideas for dramatic 
change. They are also responsible to make the changes work because 
their funding is capped at 1994 levels and the incentive is there to 
get people off of welfare and into work. This is the way it should be. 
The program should have performance standards that reward work and 
change the culture of welfare.
  The only affirmative requirement in the law is that States must have 
more people working in each year than the previous year. Apart from 
that requirement, States are completely free to create a plan that will 
work in their own State and meet the needs of their own citizens.
  This is the essence of reinventing Government. If the Federal 
Government has failed at a given operation, under the President's own 
analysis, it is time for us to find new ways to achieve our goals.
  This is what the Kohl/Grassley proposal would do.
                                 ______
                                 
      By Mr. NUNN (for himself and Mr. Thurmond) (by request):
  S. 2058. A bill to authorize certain construction at military 
installations for fiscal year 1995, and for other purposes; to the 
Committee on Armed Services.


      military construction authorization act for fiscal year 1995

 Mr. NUNN. Mr. President, by request, for myself and the senior 
Senator from South Carolina [Mr. Thurmond], I introduce, for 
appropriate reference, a bill to authorize certain construction at 
military installations for fiscal year 1995, and for other purposes.
  I ask unanimous consent that a letter of transmittal requesting 
consideration of the legislation and explaining its purpose be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            Department of Defense,


                                    Office of General Counsel,

                                   Washington, DC, April 20, 1994.
     Hon. Albert J. Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: Enclosed is a draft of legislation ``To 
     authorize certain construction at military installations for 
     Fiscal Year 1995, and for other purposes.'' This legislative 
     proposal is needed to carry out the President's Fiscal Year 
     1995 budget plan. The Office of Management and Budget advises 
     that the enactment of this proposal is in accord with the 
     program of the President.
       The proposal would authorize appropriations in Fiscal Year 
     1995 for new construction and family housing support for the 
     Active Forces, Defense Agencies, NATO Infrastructure Program, 
     and Guard and Reserve Forces. The proposal establishes the 
     effective dates for the program. The Fiscal Year 1995 
     Military Construction Authorization Bill includes 
     construction projects resulting from base realignment and 
     closure actions. Additionally, the Fiscal Year 1995 draft 
     legislation does not include General Provisions.
           Sincerely,
                                               Stephen W. Preston,

                                   Acting General Counsel.

                                 ______
                                 
      By Mr. NUNN (for himself and Mr. Thurmond) (by request):
  S. 2059. A bill to authorize appropriations for fiscal year 1995 for 
military activities of the Department of Defense, to prescribe military 
personnel strengths for fiscal year 1995, and for other purposes; to 
the Committee on Armed Services.


        national defense authorization act for fiscal year 1995

 Mr. NUNN. Mr. President, by request, for myself and the senior 
Senator from South Carolina [Mr. Thurmond], I introduce, for 
appropriate reference, a bill to authorize appropriations for fiscal 
year 1995 for military activities of the Department of Defense, to 
prescribe military personnel strength for fiscal year 1995, and for 
other purposes.
  I ask unanimous consent that a letter of transmittal requesting 
consideration of the legislation and explaining its purpose be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            Department of Defense,


                                    Office of General Counsel,

                                   Washington, DC, April 22, 1994.
     Hon. Albert J. Gore,
     President of the Senate, Washington, DC.
       Dear Mr. President: Enclosed is a draft of legislation ``To 
     authorize appropriations for fiscal year 1995 for military 
     activities of the Department of Defense, to prescribe 
     military activities of the Department of Defense, to 
     prescribe military personnel strengths for fiscal year 1995, 
     and for other purposes.''
       This proposal is part of the Department of Defense 
     legislative program for the 103d Congress. The Office of 
     Management and Budget advises that the proposed 
     authorizations are in accord with the program of the 
     President and that there is no objection from the standpoint 
     of the President's program to the general provisions of the 
     bill.
       Title I of the bill provides procurement authorization for 
     the Military Departments and for the Defense Agencies in 
     amounts equal to the budget authority included in the 
     President's budget for fiscal year 1995. Title II provides 
     for the authorization of each of the research, development, 
     test, and evaluation appropriations for the Military 
     Departments and the Defense Agencies in amounts equal to the 
     President's budget for fiscal year 1995. Title III provides 
     for authorization of the operation and maintenance accounts 
     of the Military Departments and Defense Agencies and Title IV 
     prescribes the personnel strengths for the active forces and 
     the Selected Reserve of each reserve component of the Armed 
     Forces in the amounts and numbers, respectively, provided for 
     by the budget authority and appropriations requested for the 
     Department of Defense in the President's budget for fiscal 
     year 1995.
       The general provisions of the bill are an omnibus proposal 
     that will aid in the management and operation of the 
     Department of Defense.
       Enactment of this proposal is of great importance to the 
     Department of Defense and the Department urges its favorable 
     consideration.
           Sincerely,
                                               Stephen W. Preston,
     Acting General Counsel.
                                  ____


Department of Defense Legislative Program for the Second Session of the 
                             103d Congress


                          title i--procurement

              Subtitle A--Authorization of Appropriations

                             Sec. 101. Army

       Section 101 authorizes the appropriation of funds for 
     procurement for the Army.

                    Sec. 102. Navy and Marine Corps

       Section 102 authorizes the appropriation of funds for 
     procurement for the Navy and Marine Corps.

                          Sec. 103. Air Force

       Section 103 authorizes the appropriation of funds for 
     procurement for the Air Force.

                   Sec. 104. Defense-wide procurement

       Section 104 authorizes the appropriation of funds for 
     Defense-wide procurement.

                  Sec. 105. Defense Inspector General

       Section 105 authorizes the appropriation of funds for 
     procurement for the Defense Inspector General.

                    Sec. 106. Defense health program

       Section 106 authorizes the appropriation of funds for 
     procurement for the Defense health program.

              Sec. 107. Chemical demilitarization program

       Section 107 authorizes the appropriation of funds for the 
     demilitarization and destruction of lethal chemical weapons 
     in the chemical stockpile as specified in section 1412 of the 
     Department of Defense Authorization Act, 1986, and for the 
     destruction of chemical warfare material of the United States 
     that is not covered by section 1412 of such Act.

                       Subtitle B--Other Matters

    Sec. 111. Repeal of requirement for separate budget request for 
                    procurement of Reserve equipment

       Section 111 repeals the requirement contained in section 
     114(e) of title 10, United States Code, that amounts 
     requested for procurement for the Reserve forces be set forth 
     separately from other amounts requested for procurement for 
     the Armed Forces.


         title ii--research, development, test, and evaluation

               Sec. 201. Authorization of Appropriations

       Section 201 authorizes the appropriation of funds for the 
     Armed Forces for research, development, test, and evaluation.


                  title iii--operation and maintenance

              Subtitle A--Authorization of Appropriations

              Sec. 301. Operation and maintenance funding

       Section 301 authorizes the appropriation of funds for the 
     Armed Forces for operation and maintenance.

                    Sec. 302. Working capital funds

       Section 302 authorizes the appropriation of funds for 
     working capital.

Sec. 303. Repeal of limitations on operation of activities included in 
                    Defense Business Operations Fund

       Section 303 repeals the limitations on the implementation 
     of the Defense Business Operations Fund which are contained 
     in section 316 of the National Defense Authorization Act for 
     Fiscal Years 1992 and 1993. Section 316 was enacted at the 
     time that the Defense Business Operations Fund was first 
     established. At the time it was established some temporary 
     evaluation period for the Fund and the activities operating 
     under it may have been appropriate. Now that the Fund has 
     been operating for some time, however, a ``probationary 
     period'' for the Fund and temporary extensions and 
     limitations on the operation of the Fund should not be 
     needed.

   Sec. 304. Repeal of provisions relating to charges for goods and 
     services provided through the Defense Business Operations Fund

       Section 304 repeals limitations on the operation and 
     management of the Defense Business Management Fund which were 
     contained in section 316(a) and (b) of the National 
     Defense Authorization Act for Fiscal Year 1994. These 
     changes reflect the plans for operation of the Fund which 
     were contained in the Defense Business Operations Fund 
     that was submitted to the Congress in September 1993.

   Sec. 305. Disposition of proceeds from operation of Naval Academy 
                                laundry

       Section 305 amends the provisions of section 6971 of title 
     10, United States Code, relating to disposition of proceeds 
     from certain activities at the United States Naval Academy. 
     Currently, section 6971 consists of two subsections. Current 
     subsection (a) provides that funds collected from the 
     operation of the midshipmen's store, including the barber 
     shop, the cobbler shop, and the tailor shop, and the dairy at 
     the Academy are deposited to the Treasury and are available 
     for operating expenses of these activities and such other 
     expenditures as the Superintendent of the Naval Academy 
     considers to be necessary for the health, comfort, and 
     education of the midshipmen. Current subsection (b) provides 
     that funds collected from the operation of the Naval Academy 
     laundry shall be accounted for as public funds and that they 
     are available for necessary laundry service for Academy 
     activities and personnel. Section 305 combines the two 
     separate, but essentially similar, provisions contained in 
     subsections (a) and (b) into a single provision.

                       Subtitle B--Other Matters

   Sec. 311. Revision of date for submission of future years mission 
                                 budget

       Section 311 changes the required date for the submission of 
     the Department's future years mission budget from the same 
     time that the President's budget is submitted to a time not 
     later than 60 days after the date of the submission of the 
     President's budget. Under the current law, the President's 
     budget, the Future Years Defense Program (FYDP), and the 
     Future Years Mission Budget (FYMB) must all be submitted at 
     or about the same time. As a practical matter each is 
     independent, with the FYDP based on the President's Budget 
     and the FYMB based on the FYDP. Under section 221 of title 
     10, the FYDP is required to be submitted ``at or about the 
     same time that the President's budget is submitted to 
     Congress.'' Under section 222 of title 10, the FYMB is 
     required to be submitted ``at the same time that the 
     President's budget is submitted to the Congress.'' About 30 
     days are required between the time each report is prepared in 
     order to ensure consistency and to prepare the reports in an 
     orderly manner. To reflect this fact, this section would 
     change the submission date for the FYMB to not later than 60 
     days after date that the President's budget is submitted to 
     the Congress.

      Sec. 312. Live-fire survivability testing of F-22 Aircraft.

       Section 312 requires the Secretary of Defense to submit a 
     report explaining how the Secretary plans to evaluate the 
     survivability of the F-22 system and assessing various 
     alternatives to realistic survivability testing. The 
     provision also requires the Secretary to ensure that major 
     components and subsystems that could significantly affect the 
     survivability of the F-22 be made available for live-fire 
     testing.
       Section 2366 of title 10, United States Code, requires 
     realistic survivability and lethality testing of covered 
     systems and munitions programs prior to full-rate production. 
     The requirement is that the covered system must be tested for 
     vulnerability in combat by firing munitions, likely to be 
     encountered in combat, at the system configured for combat.
       Section 2366 of title 10 allows the Secretary of Defense to 
     waive the requirement if, before the system enters full-scale 
     engineering development, the Secretary certifies to Congress 
     that live fire testing of the system would be unreasonably 
     expensive and impractical. Because of the cost of an F-22 
     aircraft, such testing is both unreasonably expensive and 
     impractical. Since the F-22 has already entered full-scale 
     engineering development, legislation is needed to allow the 
     Secretary of Defense to grant a waiver.
       In order for the Secretary of Defense to evaluate the 
     survivability of the F-22 aircraft, the Air Force developed 
     the revised live fire test program that is summarized in an 
     enclosure to this letter. This plan includes detailed 
     analyses, review of historical test data, and incremental 
     build-up testing that includes material characterization 
     tests and live fire testing of selected components and 
     subassemblies. Information from the results of these tests 
     will be taken into account in the F-22's design. In this way, 
     we plant to achieve fully the objective of section 2366 in as 
     realistic a manner as is consistent with cost effectiveness 
     and practicality.
       The proposal will authorize the Secretary of Defense to 
     grant a waiver to the survivability testing requirements in 
     section 2366 as they apply to the F-22 system. The enactment 
     of this legislative proposal shall not cause any increase in 
     appropriated funding for the Department of Defense or have 
     any budgetary impact.

              Sec. 313. Ballistic Missile Defense mission

       The purpose of the section 313 is to amend the statutory 
     requirement for an Annual Report on Strategic Defense 
     Initiative (SDI) programs to reflect the current Ballistic 
     Missile Defense mission.
       The Annual Report to congress provides congressional 
     committees with an assessment of the progress of BMDO in 
     fielding a ballistic missile defense and a road map that BMDO 
     intends to follow for the future. The statutory provision 
     which prescribes an Annual Report, requires BMDO to report on 
     actions that are no longer pertinent to the direction of the 
     BMDO program and the current world situation. This proposed 
     legislation would amend those requirements to reflect the 
     current mission of BMDO.
       Sections 224(b)(3) and 224(b)(4) require that the Annual 
     Report to congress detail objectives for the planned 
     deployment phases and the relationships of the programs and 
     projects to the deployment phases. The deployment phases were 
     germane when the SDI was developing a system to be fielded in 
     phases, with each phase (after phase 1), designed to offset 
     expected Soviet countermeasures and add to U.S. ballistic 
     missile defensive capabilities. The current focus of the 
     BMD program is to field improved theater missile defense 
     systems and maintain a technology readiness program for 
     contingency fielding of a national missile defense. The 
     concept of phased additions to offset Soviet 
     countermeasures and provide large incremental improvements 
     to U.S. ballistic missile defense capabilities no longer 
     exists.
       Section 224(b)(7) requires an assessment of the possible 
     Soviet countermeasures to the SDI programs. With the demise 
     of the Soviet-Union and the shift in focus of the BMD program 
     to fielding theater missile defense systems, this requirement 
     is no longer applicable and should be amended to reflect the 
     current threat.
       Sections 224(b)(9) and 224(b)(10) require details on the 
     applicability of SDI technologies to other military missions. 
     The missions addressed have largely become the primary focus 
     of BMDO and reporting how SDI technologies could be applied 
     to other military missions is no longer relevant. These two 
     subparagraphs should be repealed, as they are redundant with 
     reporting the status of today's BMD.
       Enactment of the proposed legislation will not result in 
     any increase in budgetary requirements. Our analysis of the 
     costs incurred and the benefits derived is that this 
     legislation is budget neutral.

Sec. 314. Repeal of requirement for the Secretary of Defense to provide 
advance review and approval of proposed developmental tests of limited 
 defense system program projects and to provide independent monitoring 
                              of the tests

       The purpose of section 314 is to remove the current 
     requirement for the Secretary of Defense to provide advance 
     review and approval of proposed developmental tests of 
     Limited Defense System (LDS) program projects and to provide 
     independent monitoring of the tests.
       The requirement for Secretary of Defense review and 
     approval of proposed LDS program projects developmental tests 
     prior to conducting the test and for the Secretary to provide 
     an independent monitoring of the implementation of tests is 
     an unnecessary requirement. Any additional review, approval, 
     or monitoring requirements above those already established 
     for LDS testing would be redundant and bring little value to 
     the current test and evaluation process that is aggressively 
     enforced.
       Currently the LDS developmental testing program is 
     monitored by a senior level steering group composed of the 
     Under Secretary of Defense (Acquisition) Director of Test and 
     Evaluation, the Deputy Under Secretary of the Army 
     (Operations and Research), the Director of Operational Test 
     and Evaluation and senior Test and Evaluation officials from 
     each of the Services. To impose a requirement for additional 
     monitoring of LDS development testing above the current level 
     of expertise and responsibility would not be prudent and only 
     serve to generate a redundant and costly layer of reviews.
       Enactment of the proposed legislation will not result in 
     any increase in budgetary requirements. Our analysis of the 
     costs incurred and the benefits derived is that this 
     legislation is budget neutral.

   Sec. 315. Expansion of the methods of test and evaluation used to 
 demonstrate theater missile defense interceptor performance prior to 
  the interceptor program proceeding into low-rate initial production 
                           acquisition phase

       The purpose of section 315 is to expand the methodology 
     used to demonstrate TMD interceptor performance before the 
     interceptor program proceeds into the Low-Rate Initial 
     Production (Milestone IIIA) acquisition phase. The 
     legislation would allow using validated modeling and 
     simulation to augment live-fire testing to demonstrate that 
     interceptors have achieved weapons system performance goals 
     established in the system baseline document pursuant to 
     section 235(a)(1)(A) of title 10, United States Code, before 
     the program entered engineering and manufacturing systems 
     development.
       The requirement for demonstrating interceptor performance 
     to achieve multiple shot engagements involving multiple 
     interceptors and multiple targets is traditionally conducted 
     during Initial Operational Testing and Evaluation (IOT&E). 
     The IOT&E is conducted at the end of engineering 
     manufacturing and development (EMD) acquisition phase prior 
     to entering the production and deployment phase at Milestone 
     III. The rationale for conducting multiple shot engagements 
     during the IOT&E is that it provides time for system maturing 
     during the EMD acquisition phase to obtain a level of 
     performance capability necessary to conduct multiple shot 
     engagements. The level of performance needed to achieve 
     multiple shot engagements can only be obtained from 
     interceptors that are production representative and available 
     only during the latter part of EMD.
       Requiring interceptor performance to be demonstrated solely 
     through the use of live-fire testing will be expensive and 
     likely increase the acquisition time needed to get 
     interceptor programs into production and fielded. Augmenting 
     live-fire testing with modeling and simulation can provide a 
     less expensive and more timely method for predicting 
     interceptor performance. Validated models and simulations can 
     augment flight tests to provide accurate projections of 
     interceptor performance, under varying operational 
     environments and threats, reducing the number of costly 
     flight tests that must be conducted several times to 
     establish confidence in the data.
       The Ballistic Missile Defense Organization (BMDO) has 
     developed an intense and comprehensive test and evaluation 
     policy to ensure TMD interceptors meet performance 
     requirements prior to expending funding for their production. 
     This policy uses a Continuous Comprehensive Evaluation 
     process that maximizes the use of technical testing data and 
     supplements flight test with models and simulations. The 
     policy includes the procedure for verifying and validating 
     all models and simulations used to predict interceptor 
     performance. The models and simulations are based on actual 
     data collected and analyzed from live-fire 
     interceptor testing to ensure realistic and accurate 
     predictions.
       TMD interceptor performance will be reported to Congress 
     prior to entering production (Milestone III) under section 
     2399 of title 10, United States Code. The Director of 
     operational Test and Evaluation, Office of the Secretary of 
     Defense, prepares and submits a Beyond Low-Rate Initial 
     Production Report to the Secretary of Defense, Under 
     Secretary of Defense (Acquisition), and congressional defense 
     committees. This report will confirm that adequate testing 
     has been conducted in an operational environment consistent 
     with what the interceptor will be expected to operate in when 
     fielded to evaluate system performance prior to committing to 
     a production decision.
       Enactment of the proposed legislation could result in a 
     cost avoidance of approximately $249 million for FY95-99 and 
     beyond by delaying or reducing the required quantity of 
     multiple simultaneous engagements for TMD interceptor 
     programs. More accurate cost estimates will be available as 
     the TMD programs mature and actual testing costs are 
     available.

                        [In millions of dollars]
------------------------------------------------------------------------
                              Fiscal year
-------------------------------------------------------------------------
             1995                1996    1997    1998    1999    Beyond
------------------------------------------------------------------------
143...........................       3      50       2       2        50
------------------------------------------------------------------------

       A more detailed cost analysis follows:
       This proposal will result in a reduction of the costs 
     necessary for compliance with the current statutory language 
     in Section 237a., Testing of Theater Missile Defense 
     Interceptors.
       These cost are estimates based on evolving Service testing 
     programs. They reflect the cost savings that can be 
     reasonable expected to result from the proposed language 
     change. However, many of the programs that make up Theater 
     Missile Defense have not reached a level of maturity that 
     enable them to predict actual testing costs. In some cases, 
     the selection process for test sites and instrumentation 
     systems has not been completed. Test article and target 
     costs, and testing quantities for validation and 
     demonstration have not been determined. Therefore, for those 
     cases, costs are estimated to represent probable courses of 
     action.
       The matrix below represent estimated cost savings that 
     could result from adopting the proposed language, by delaying 
     or reducing the required quantity of multiple simultaneous 
     engagements.

                                                 SAVINGS BY YEAR
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                             Fiscal year--
              Program              -----------------------------------------------------------------     Out
                                        1995         1996         1997         1998         1999
----------------------------------------------------------------------------------------------------------------
PAC-3.............................          *72          (^)  ...........  ...........  ...........  ...........
                                        (9I+9T)
THAAD.............................  ...........  ...........           72  ...........          (^)  ...........
                                                                  (9I+9T)
Corps SAM.........................  ...........  ...........  ...........  ...........  ...........           72
                                                                                                         (9I+9T)
Navy L Tier.......................           72  ...........          (^)  ...........  ...........  ...........
                                        (9I+9T)
Instrument........................           45  ...........  ...........  ...........  ...........  ...........
O&M...............................           10           10           10           10           10           10
                                   -----------------------------------------------------------------------------
      Total.......................          199           10           82           10           10           82
----------------------------------------------------------------------------------------------------------------
I--=Interceptors required.
T--=Targets required.
*--=First opportunity for funding; may be insufficeint lead time to avoid program slip and additional costs.
^--=LRIP IPR.

       Assumptions used in the Savings by Year matrix.
       1. One test (multiple simultaneous engagement) requires 3 
     interceptors and three targets.
       2. Programs listed above have generally budgeted for a 
     single interceptor/target flight test rather than multiple 
     simultaneous engagements. Therefore, the above costs reflect 
     the cost of the other two interceptors and targets.
       3. Estimated cost for an interceptor is $5M.
       4. Estimated cost for a target is $3M.
       5. No ranges are currently equipped to safely conduct MS? 
     Required instrumentation and safety equipment will cost an 
     estimated $54M.
       6. LRIP IPRs are tentatively scheduled as follow:

------------------------------------------------------------------------
         Program                 LRIP IPR            Source of date
------------------------------------------------------------------------
PAC-3....................  MM 2Q96............  Patriot TEMP, Oct 93.
                           ER 3Q96............  Patriot TEMP, Oct 93.
THAAD....................  2Q99...............  THAAD TEMP, Aug 93.
CORPS SAM................  FY 02..............  CORPS SAM TEMP, 17 Mar
                                                 93.
Navy Lower Tier..........  Late FY 97.........  TMD Briefing Chart, back
                                                 up for TMDI Review,
                                                 ``Sea Based TBMD
                                                 Proposed Schedule''.
------------------------------------------------------------------------

                       Sec. 316. Disaster relief

       Section 316 provides authority for the President to provide 
     disaster relief assistance in response to civil or foreign 
     man-made or natural disasters.
       The fiscal year 1993 Appropriations Act provided authority 
     for $50 million in Operation and Maintenance, Defense-wide 
     funding, to be used for the global disaster relief activities 
     of the Department of Defense. Under this authority, the 
     Department provided initial support for disaster relief 
     activities in response to the famine in Somalia, relief for 
     the Chinese migrants under Operation Provide Refuge; Meals 
     Ready to Eat and Humanitarian Daily Rations for use in the 
     Former Yugoslavia; and support of the transportation costs of 
     the Bosnia Airlift and Airdrop.
       In fiscal year 1994, the Appropriations Conference 
     Committee deleted funding requested specifically for global 
     Disaster Relief, but directed that the Department use 
     existing cash balances in the Defense Emergency Response Fund 
     for natural and other disasters. The Defense Emergency 
     Response Fund, enacted by Public Law 101-165, the Department 
     of Defense Appropriations Act of 1990, was initially 
     established to serve as a revolving contingency fund in 
     anticipation of reimbursements from State, Federal and local 
     government agencies for Department of Defense costs incurred 
     in responding to civil disasters. In amending this language, 
     Congress expanded authority to use the Defense Emergency 
     Response Fund to fund any natural of manmade disasters, civil 
     or foreign, without requiring reimbursement.
       The proposed fiscal year 1995 legislation provides clear 
     authorization within the Defense Authorization Act for 
     funding these activities. Delegation of this authority by the 
     President to the Secretary of Defense would be provided by 
     Executive order. With this language, the Disaster Relief 
     program would continue to provide the flexibility necessary 
     to respond to urgent, unanticipated requirements due to civil 
     or foreign manmade or natural disaster.
       Enactment of this proposal will support the 
     Administration's fiscal year 1995 Budget Request to 
     appropriate $46 million to support the Disaster Relief 
     Activities of the Department of Defense. The Department of 
     Defense considers this proposal to be an important component 
     of its fiscal year 1995 national security program.

    Sec. 317. Amendment to the emergency and extraordinary expense 
    authority for the Inspector General of the Department of Defense

       Section 317 would remove the statutory ceiling on the 
     Inspector General, Department of Defense, for emergency and 
     extraordinary expenses authority provided in section 361 of 
     the National Defense Authorization Act of Fiscal year 1994 
     (Public Law 103-160). The removal of this ceiling is 
     consistent with the emergency and extraordinary expense 
     authority of the Secretary of Defense and the Secretaries of 
     the military departments. The ceiling could jeopardize 
     ongoing Inspector General investigatory operations. In that 
     funds made available are contained within the overall 
     Operation and Maintenance Appropriations available to the 
     Inspector General, there would remain in effect a ceiling but 
     at a higher subdivision, thereby providing the Inspector 
     General with greater flexibility. Since the overall ceiling 
     would remain in effect, there is no impact on the budget.


              title iv--military personnel authorizations

                       Subtitle A--Active Forces

               Sec. 401. End strengths for active forces

       Section 401 authorizes the end strengths (the end of the 
     fiscal year--September 30, 1995) for active duty personnel of 
     the Armed Forces.

                       Subtitle B--Reserve forces

              Sec. 411. End strengths for Selected Reserve

       Section 411 authorizes the end strengths (the end of the 
     fiscal year--September 30, 1995) for Selected Reserve 
     personnel of the reserve components.

 Sec. 412. End strengths for Reserves on active duty in support of the 
                                Reserves

       Section 412 authorizes the end strengths (the end of the 
     fiscal year--September 30, 1995) for the Reserves serving on 
     full-time active duty in support of the Reserves as 
     contemplated in section 678 of title 10, United States Code.

Sec. 413. Increase in number of members in certain grades authorized to 
              be on active duty in support of the Reserves

       Section 413 increases the number of members in the grades 
     of E-9, E-8, Major or Lieutenant Commander, Lieutenant 
     Colonel or Commander, and Colonel or Navy Captain authorized 
     to be on active duty in support of the Reserves. The 
     provision amends the table in section 517 of title 10, United 
     States Code.

              Subtitle C--Military Training Student Loads

           Sec. 421. Authorization of training student loads

       Section 421 authorizes the average training student loads 
     for the components of the active and Reserve Armed Forces.


                   TITLE V--MILITARY PERSONNEL POLICY

                  Subtitle A--Officer Personnel Policy

  Sec. 501. Authority of Secretary of Military Department to approve 
        officers serving on certain successive selection boards

       Section 501 amends section 612(b) of title 10, United 
     States Code, to authorize the Secretary of the military 
     department concerned to approve officers to serve as members 
     on successive selection boards convened under section 611(a) 
     of this title for the consideration of officers of the same 
     competitive category and grade if the second board does not 
     consider the same officer or officers as the first board.
       Section 612(b) of title 10, United States Code, provides 
     that board members may not be a member of two successive 
     promotion selection boards convened under section 611(a) of 
     title 10, United States Code, for the consideration of 
     officers of the same competitive category and grade. Section 
     628 of title 10, United States Code, provides that the 
     membership for special selection boards will be composed in 
     accordance with section 612.
       This legislation proposal provides, under approval of the 
     Secretary of the military department concerned, that officers 
     may serve as board members on successive selection boards 
     convened under section 611(a) of title 10, United States 
     Code, for the consideration of officers of the same 
     competitive category and grade if the second board does not 
     consider the same officer or officers from the first board. 
     There would be no budget impact if this proposal is enacted.

Sec. 502. Technical changes to sections codified by the Warrant Officer 
                             Management Act

       The purpose of section 502 is to amend chapter 33A of title 
     10, concerning the personnel management of warrant officers, 
     to make certain sections in the chapter consistent with 
     parallel provisions applicable to commissioned officers other 
     than warrant officers. The proposal would also remove 
     inconsistent language in certain sections and would make the 
     provisions in chapter 33A applicable to retired warrant 
     officers who are recalled to active duty.
       Currently, regular warrant officers must execute a new oath 
     of office under section 3331 of title 5 upon appointment to a 
     higher grade. This oath serves as evidence of the acceptance 
     of the appointment. Section 626 of title 10, concerning 
     commissioned officers above the grade of chief warrant 
     officer, W-5, provides that an officer appointed to a higher 
     grade is considered to have accepted such appointment on the 
     date on which the appointment is made unless the officer 
     expressly declines the appointment. Section 626 also provides 
     that an officer who has served continuously since the officer 
     subscribed to the oath required by section 3331 is not 
     required to take a new oath upon appointment to a higher 
     grade. This proposal would add virtually identical provisions 
     to section 578 of title 10 concerning promotions of warrant 
     officers on the warrant officer active-duty list.
       Section 573(a)(2) requires that a warrant officer, W-1, 
     serve not less than 18 months on active duty in that grade 
     before promotion to chief warrant officer, W-2. Similarly, 
     section 574(e) provides that a chief warrant officer may not 
     be considered for promotion to the next higher grade under 
     chapter 33A of title 10 until the officer has completed three 
     years on active duty in the grade in which the officer is 
     serving. Section 619 of title 10, concerning the promotion of 
     commissioned officers above the grade of chief warrant 
     officer, W-5, does not provide that the minimum periods of 
     service required prior to promotion to a higher grade be 
     service on active duty. This proposal would amend sections 
     573(a)(2) and 574(e) to make their service requirements 
     consistent with those imposed on commissioned officers above 
     the grade of chief warrant officer, W-5.
       Section 575(d) of title 10 provides that each time a 
     selection board is convened to consider warrant officers on 
     the active duty list for promotion, each warrant officer in 
     the promotion zone and each warrant officer above the zone 
     shall be considered for promotion. Section 577, however, 
     provides that the Secretary concerned may, by regulation, 
     preclude from consideration by a selection board a warrant 
     officer who has an established separation date that is within 
     90 days after the date on which the board is convened. This 
     proposal would amend section 575(d) to recognize explicitly 
     that warrant officers who have an established separation date 
     within 90 days after the board convened would not have to be 
     considered for promotion.
       Section 576(e) of title 10 provides that a report of a 
     selection board must be submitted to the Secretary concerned 
     for approval or disapproval. Section 576(f)(1) indicates that 
     after the Secretary's review, unless the Secretary returns 
     the report for corrective action, the Secretary must submit 
     the report as required by section 576(e), i.e., to the 
     Secretary of the military department concerned. Read 
     literally, the last sentence in section 576(f)(1) requires 
     the Secretary to submit a report to himself. This proposal 
     would strike that sentence.
       Under section 580 of title 10, a warrant officer who has 
     twice failed of selection for promotion to the next higher 
     regular warrant officer grade shall be retired if retirement 
     eligible or separated from active duty. Currently under 
     section 580(a)(3), a warrant officer who has at least 18 but 
     not more than 20 years of creditable active service on ``(A) 
     the date on which the Secretary approves the report of the 
     board under section 576(e) of [title 10], or (B) the date on 
     which his name was removed from the recommended list under 
     section 579 of [title 10], whichever applies'' may remain on 
     active duty until the officer is retirement eligible. The 
     date of retirement of such an officer is not later than the 
     first day of the seventh calendar month beginning after the 
     date upon which the officer completes 20 years of active 
     service. These provisions parallel those applicable to 
     commissioned officers above the grade of chief warrant 
     officer, W-5, with one exception. To remain on active duty 
     after having twice failed of selection, a warrant officer 
     must have at least 18 years but not more than 20 years 
     active service at the time the Secretary approves the 
     selection board report. A commissioned officer above the 
     grade of chief warrant officer, W-5, may remain on active 
     duty if on the date on which the officer is to be 
     separated the officer is within two years of qualifying 
     for retirement, i.e., not later than the first day of the 
     seventh calendar month beginning after the month the 
     report is approved. This proposal would amend section 580 
     to permit a warrant officer to remain on active duty if 
     the officer is within two years of qualifying for 
     retirement at the time the officer would otherwise be 
     separated, rather than at the time the Secretary approves 
     the selection board report.
       Section 582(2) indicates that retired warrant officers on 
     active duty are not subject to chapter 33A of title 10. This 
     has resulted in an inequity due to a warrant officer 
     personnel policy of the past. Section 1305 of title 10 
     provides that a regular warrant officer below the grade of 
     chief warrant officer, W-5, who completes 24 years of active 
     service as a warrant officer shall be retired and that a 
     chief warrant officer, W-5, who completes 30 years of active 
     service as a warrant officer shall be retired. Subsection (c) 
     of section 1305 authorizes the Secretary concerned to defer 
     retirement for length of service, but not later than 60 days 
     after the warrant officer becomes 62 years of age. Currently, 
     members whose retirement dates are deferred remain on active 
     duty and are subject to chapter 33A of title 10 and can 
     compete for promotion. In the past, however, rather than 
     defer retirement, warrant officers were retired and then 
     recalled to active duty. Because of section 582(2), these 
     warrant officers are not subject to chapter 33A. This 
     proposal would make retired warrant officers who were 
     recalled to active duty without a break in service prior to 
     the effective date of the Warrant Officer Management Act 
     (February 1, 1992) subject to chapter 33A. If enacted, this 
     legislative proposal would not increase the budgetary 
     requirements of the Department of Defense.

 Sec. 503. Authority for facilitated promotions when all officers on a 
            confirmation list are not confirmed at one time

       Section 503(a) of the bill amends section 624 of title 10, 
     United States Code, to authorize the Secretary concerned, in 
     a case where the Senate has given its advice and consent to 
     the promotion of some, but not all officers on a promotion 
     list, to appoint those confirmed officers junior to the 
     nonconfirmed officers on the list in the order and at the 
     time they would otherwise have been appointed. Should the 
     Senate later confirm an additional officer on the same 
     promotion list, the Secretary concerned may, upon his 
     appointment, give him the same date of rank, effective date 
     for pay and allowances in the higher grade, and the same 
     position on the active-duty list he would have had if the 
     delay had not occurred or make such other adjustments as the 
     Secretary concerned considers appropriate. Section 503(b) of 
     the bill makes a conforming amendment.
       The Department of Defense is required by section 624(c) of 
     title 10, United States Code, to submit promotion lists for 
     most officers on the active duty list to the Senate for its 
     advice and consent. From time to time, the Senate withholds 
     its advice and consent to some officers on a promotion list 
     for further inquiry into matters affecting their fitness for 
     promotions. Under section 624(a)(2) promotions must be made 
     in the order in which they appear on the promotion list and 
     only after officers previously selected for promotion in that 
     competitive category have been promoted. No confirmed officer 
     on a list who is junior to a nonconfirmed officer is promoted 
     until the Senate either confirms the senior officer or 
     finally rejects the officer under section 629(b). Pending 
     that Senate resolution, proposed section 624(e)(1) would 
     remove any statutory impediment to the promotion of such 
     junior officers and thereby ``facilitate their orderly 
     promotion in accordance with the needs of the service.''
       Proposed section 624(e)(2) would grant the Service 
     secretaries the same power to make an officer whole in the 
     cases of delayed Senate confirmation, as they currently 
     possess in cases of formal promotion delay. Under proposed 
     section 624(e)(2), the Secretary concerned, upon the 
     officer's confirmation, could adjust the date of rank, 
     effective date for pay and allowances in the higher grade, 
     and position on the active duty list as though the officer 
     had been confirmed with the other officers on the same list, 
     or grant intermediate relief if the Secretary deems it 
     appropriate. This authority would be used in cases where the 
     allegations which gave rise to the original delay in 
     confirmation were found to be unsubstantiated, and the 
     officer would suffer an injustice if such an adjustment was 
     not made. Proposed section 624(e)(2) would empower the 
     Secretary concerned to afford the officer meaningful relief 
     by an expeditious administrative process without the need to 
     petition a board for the correction of military records for 
     such redress under section 1552 of title 10, United States 
     Code.
       This proposal would result in no increase in cost to the 
     Department of Defense.

Sec. 504. Retirement or enlistment of certain limited duty officers of 
                       the Navy and Marine Corps

       Section 504 applies to limited duty officers in the Naval 
     service who have twice failed selection for promotion to the 
     next higher grade. The purpose of the legislation is twofold: 
     first, it would establish a similar right to achieve 
     retirement eligibility for limited duty officers of the Navy 
     and Marine Corps as now exists for those officers who are not 
     designated for limited duty and for warrant officers; second, 
     it would provide clear authority for enlistment in a grade 
     determined by the Secretary if a limited duty officer, having 
     twice failed selection, was not within two years of achieving 
     retirement eligibility and it would terminate the current 
     option of reversion to warrant officer grade now provided in 
     section 6383 of title 10, United States Code.
       Section 632 of title 10, United State Code, provides that 
     officers of the Navy serving in grades of lieutenant 
     commander and lieutenant and officers of the Marine Corps 
     serving in grades of major and captain, who are not 
     designated for limited duty, shall be retained on active duty 
     until qualified for retirement in their present grades if 
     they will qualify for such retirement within two years of the 
     date on which they would be involuntarily separated following 
     the second failure of selection. Section 580 of title 10 
     establishes similar authority for warrant officers. However, 
     under section 6383 of title 10, the limited duty officer in 
     the same grade as an officer not designated for limited duty 
     is not retained automatically in his current grade until 
     eligible for retirement under the same circumstances. Rather, 
     the options provided are discharge, possible continuation on 
     active duty in his current grade if selected by a board by 
     the Secretary of the Navy under authority of section 
     611(b) of title 10, or reversion to a warrant officer 
     grade.
       There is no compelling reason to discharge the limited duty 
     officer who is within two years of retirement eligibility 
     when non-limited duty officers are retained until retirement 
     under the same circumstances. While authority to continue the 
     officers in question by board action does exist under section 
     6383(i) of title 10, it is considered inefficient and 
     unnecessary to hold a board for limited duty officers when 
     officers when officers not designated for limited duty in the 
     same grades are automatically retained until eligible for 
     retirement. This proposal would thus promote efficiency in 
     the management of limited duty officers of the Navy and 
     Marine Corps.
       Some limited duty officers may twice fail of selection for 
     lieutenant or lieutenant commander, captain or major, before 
     reaching the point of being within two years of qualifying 
     for retirement. Others may be considered not qualified for 
     promotion to lieutenant (junior grade) or first lieutenant. 
     Officers in this category will not have been commissioned 
     from the warrant ranks, but from the middle enlisted grades. 
     Some recognition should be given the effort and time that 
     those officers will have invested in a military career and it 
     is considered unduly harsh to terminate their military 
     careers at that point. The enlistment option is considered to 
     be the best way of permitting such an individual to continue 
     his or her career when retirement as an officer is not 
     available and is preferred to the current practice of 
     appointment in a warrant officer grade. Reversion to the 
     warrant officer grades creates significant manpower planning 
     and integration difficulties in those ranks and therefore is 
     not a desired option. The possibility of continuation in the 
     grade then serving would be preserved through Board action 
     for officers with the rank of Lieutenant Commander (Major) or 
     Lieutenant (Captain) if, in the opinion of the Secretary, the 
     needs of the Navy so require.
       This proposal would result in no increase in cost to the 
     Department of Defense.

     Sec. 505. Authority for temporary promotions of certain Navy 
                              lieutenants

       This section would make permanent section 5721 of title 10, 
     United States Code, by repealing its sunset provision thereby 
     authorizing on a permanent basis the temporary promotions of 
     certain Navy lieutenants.

                 Subtitle B--Reserve component matters

            Sec. 511. Reserve Forces Policy Board amendments

       Section 511 amends section 175 of title 10, United States 
     Code, establishing the membership of the Board to include a 
     regular flag/general officer assigned to the joint staff and 
     a general officer of the Regular Marine Corps.
       The rationale for this proposal is that the enactment of 
     the Goldwater-Nichols Department of Defense Reorganization 
     Act of 1986 increased the role of the Chairman of the Joint 
     Chiefs of Staff and established a new channel of 
     communication between the Chairman of the Joint Chiefs of 
     Staff and the commanders of the combatant commands. As a 
     result of the fundamental changes occurring in budgets, roles 
     and missions, and national strategy, more and more Reserve 
     component issues are emerging which require the attention of 
     the Board. The addition of a member of the Joint Staff would 
     provide an essential communication link on Reserve component 
     matters between the Board, the Joint Staff, and the combatant 
     commanders, providing a channel for the war fighting CINC's 
     to bring Reserve component issues to the Board.
       Similarly, Board membership should be expanded to include 
     an Active component representative of both the Navy and the 
     Marine Corps, providing representation from the active 
     military side of both elements of the Department of the Navy. 
     In addition, this would also be an opportune time to amend 
     the law to affirm the long-standing practice of filling Board 
     positions with flag and general officers.

 Sec. 512. Authorization of Limited Selected Reserve call up authority 
                 and expansion of 90-day call up period

       Section 512 would amend section 673b of title 10, United 
     States Code. It would permit the activation of Selected 
     Reserve units and members of the Selected Reserve not 
     assigned to units organized to serve as units for an initial 
     period of service of 180 days, with extension of an 
     additional 180 days. Such an amendment would assure the 
     availability of Selected Reserve units and individuals and 
     would increase the flexibility of the Total Force in 
     responding to a crisis. It would authorize the President to 
     designate the Secretary of Defense and the Secretary of 
     Transportation to order up to 25,000 members of the Selected 
     Reserve to active duty to support the early phases (up to 90 
     days) of an operational mission; e.g., to put in place the 
     infrastructure for movement; to open the seaports; to provide 
     air crews and maintenance; to establish enroute support; to 
     set up and operate crisis action teams; to deploy civil 
     affairs teams; to deploy special operations forces; to 
     establish mobilization stations; and to surge logistics and 
     medical support.

 Sec. 513. Repeal of obsolete provisions pertaining to transfer to the 
                            retired Reserve

       Section 513 would repeal the requirement that Regular 
     enlisted members who retire after completion of at least 20 
     but less than 30 years of active service becomes a member of 
     the Army Reserve or the Air Force Reserve and be subject to 
     such active duty as may be prescribed until his total 
     service, including such Reserve service reaches 30 years. The 
     provisions of section 3914 and 8914 which would be repealed 
     date to 1946. Since 1983, section 688 of title 10, United 
     States Code, has provided that a retired member of the 
     Regular Army or the Regular Air Force who has completed at 
     least 20 years of active service may be ordered to active 
     duty by the Secretary concerned at any time, thus rendering 
     the subject provisions of sections 3914 and 8914 obsolete. 
     Repeal of these obsolete provisions would also reduce the 
     requirement for administrative actions which unnecessarily 
     complicate the Reserve structures of the Army and the Air 
     Force.

           Sec. 514. Guard and Reserve transition initiatives

       Section 514 would modify the program of Guard and Reserve 
     Transition Initiatives to ensure the effective operation of 
     these initiatives through the life of the program. Section 
     561(f) of the National Defense Authorization Act for Fiscal 
     Year 1994 extended these initiatives for an additional four 
     years and they are now effective through October 1, 1999.
       Section 514 would modify the special transition program of 
     annual payments for Reservists authorized by section 4416 of 
     the National Defense Authorization Act for Fiscal Year 1993 
     as amended. Since the period of this authority has been 
     extended by four years, additional flexibility in the program 
     is needed to ensure its most cost-effective utilization to 
     meet the needs of the armed forces consistent with 
     congressional intent.
       Section 514(1) would revise the current provision for five 
     annual payments to authorize from one to five such payments. 
     Section 514(2) would correct what appears to be an unintended 
     anomaly of existing law. Under the current law, a member 
     entitled to an annual payment which is due just prior to the 
     member's 60th birthday would receive the full amount of the 
     annual payment, even though the member would be entitled to 
     retired pay beginning at age 60. The recommended change would 
     provide for a prorated payment in such cases. Section 514(3) 
     would conform the annual payment with other separation pays 
     by requiring that the full amount of any annual payment 
     received be repaid by reduction from the member's retired 
     pay, travel, transportation, and relocation expenses of 
     employees transferred from the Department of Defense to the 
     Postal Service.

                       Subtitle C--Other Matters

     Sec. 521. Use of exchanges and Morale, Welfare and Recreation 
                     facilities by certain retirees

       Section 521 amends section 1065 of title 10, United States 
     Code, to align the entitlement of retired members of the 
     Selected Reserve to use Department of Defense exchanges and 
     other revenue-generating morale, welfare, and recreation 
     facilities with those of other Armed Force retirees.
       The purpose of the proposal is to modify the current 
     entitlement of members of the Selected Reserve in good 
     standing (as determined by the Secretary concerned) who would 
     be eligible for retired pay under chapter 67 of title 10, 
     United States Code, but for the fact that the members are 
     under 60 years of age (``gray area'' retirees), and the 
     dependents of such members, to use Department of Defense 
     exchanges and other morale, welfare, and recreation revenue 
     generating facilities.
       Section 321(c) of Public Law 101-510 extended members of 
     the Selected Reserve in good standing (as determined by the 
     Secretary concerned), and their dependents, and these ``gray 
     area'' retirees, and their dependents, eligibility to use 
     Defense exchanges and revenue generating facilities. The 
     section further provided that their use ``shall be permitted 
     on the same basis as members on active duty.''
       Consistent with long-standing guidance from the Armed 
     Services Committees of the Senate and the House of 
     Representatives, Department of Defense policy has provided 
     that its exchanges and other morale, welfare, and recreation 
     facilities are operated primarily for active duty personnel 
     and their dependents. This policy has also provided that 
     individuals who retired from military careers with pay (and 
     their dependents) are eligible to use these exchanges and 
     other facilities, but their use entitlement has been 
     subordinate to that of active duty military members and their 
     dependents. The effect of Section 321(c) as it applies to 
     ``gray area'' retirees and their dependents is that it 
     provides them a use entitlement equal to that of Armed Forces 
     personnel on active duty and their dependents, and a higher 
     use-entitlement than that available to individuals who 
     retired from active duty military careers and retired with 
     pay and their dependents.
       The proposal will not affect the entitlement of members of 
     the Selected Reserve in good standing (as determined by the 
     Secretary concerned) and their dependents to use these 
     exchange and other facilities on the same basis as members on 
     active duty. It will, however, specifically realign the 
     entitlement of the ``gray area'' retirees and their 
     dependents to use these facilities with those of individuals 
     who retired from active duty military careers and retired 
     with pay and their dependents.
       If enacted, this section would not result in an increase in 
     the budgetary requirements of the Department of Defense.

               Sec. 522. Overseas military end strengths

       Section 522 repeals Section 1302 of the National Defense 
     Authorization Act for Fiscal Year 1993 (Public Law 102-484) 
     mandating a 40 percent reduction in U.S. overseas troop 
     strength by the end of fiscal year 1996.
       Section 1302 of the FY 1993 Authorization Act directed a 
     ceiling on military permanently stationed ashore outside the 
     United States after September 30, 1996 to no more than 60% of 
     those so stationed on September 30, 1992. Our initial 
     estimates show that this ceiling will not allow the 
     Department of Defense to execute the forward positioning 
     determined in the Bottom Up Review and directed in the 
     Defense Program Guidance. Specifically, if the troop strength 
     ceiling of 100,000 is maintained in Europe, the projected 
     Pacific troop strength will require a significant troop 
     reduction to meet the Congressional overseas troop strength 
     ceiling. Exacerbating the problem in Korea is that the 
     planned Nunn-Warner phase II drawdown has been postponed due 
     to the North Korean threat. The option of reducing troops in 
     Japan is also counterproductive since that country is a major 
     burden sharing contributor.
       The overseas troop ceiling imposed by Public Law 102-484 
     does not allow effective implementation of the East Asia 
     Strategic Initiative and inhibits the ability to further 
     national interests through the strategy of cooperative 
     engagement in the Asia-Pacific region. The legislation also 
     runs counter to President Clinton's commitment during his 
     visit in July 1993 that there would be no reduction in 
     force structure in the region.
       No cost and budget data is available at this time.


          title vi--compensation and other personnel benefits

                     Subtitle A--Pay and allowances

           Sec. 601. Military pay raise for fiscal year 1995

       Section 601(a) waives any adjustment required by section 
     1009 of title 37, United States Code, in elements of 
     compensation of members of the uniformed services to become 
     effective during fiscal year 1995.
       Section 601(b) increases the rates of basic pay, basic 
     allowance for subsistence, and basic allowance for quarters 
     of members of the uniformed services by 1.6 percent, 
     effective January 1, 1995.

 Sec. 602. Calculation of retired pay of a commissioned officer of the 
 Armed Forces when the Secretary concerned determines the officer did 
        not serve satisfactorily in the grade held at retirement

       The purpose of section 602 is to correct the unintended 
     effect of section 1401a(f) of title 10, United States Code, 
     which permits certain commissioned officers of the armed 
     forces to receive retired pay in a grade higher than the 
     grade in which they were retired.
       Section 1401a authorizes an increase in military retired or 
     retainer pay to reflect increases in the Consumer Price 
     Index. Subsection (f) of the statute provides that the 
     monthly retired pay of a member who initially became entitled 
     to that pay on or after January 1, 1971, may not be less than 
     the monthly amount to which the member would be entitled if 
     the member had retired at an earlier date. The purpose of 
     this subsection was to correct the ``retired pay inversion 
     problem.'' For several years prior to the enactment of the 
     provision, upward adjustments of retired pay under section 
     1401a occurred in greater amounts and at greater frequency 
     than did increases in active duty basic pay. This caused many 
     members who remained on active duty after becoming eligible 
     for retirement to lose substantial retired pay relative to 
     those who retired earlier with fewer years of service and, in 
     some instances, at a lower grade.
       Although the section was successful in remedying the 
     inversion problem, it also had an unexpected result. It 
     protected the retired pay of members who were reduced in 
     grade after becoming retirement eligible. Congress partially 
     corrected this problem in 1988 by exempting soldiers reduced 
     in grade by court-martial from the protection of section 
     1401a(f). Section 622, National Defense Authorization Act, 
     Fiscal Year 1989 (Pub. L. 100-456). However, a commissioned 
     officer who is retired in a grade lower than that which the 
     officer held at the time of retirement, due to a Secretarial 
     determination that the officer did not serve satisfactorily 
     in the highest grade, is still covered by section 1401a(f) 
     and receives retired pay at the higher grade.
       Section 1370 of title 10, provides that a commissioned 
     officer is retired in the highest grade in which the officer 
     served on active duty satisfactorily, as determined by the 
     Secretary concerned, for not less than six months. Section 
     1371 and 1374 authorize the Secretary concerned to make a 
     similar determination for warrant officers and reserve 
     commissioned officers. There is no similar provision for 
     enlisted members. The authority to retire an officer at a 
     grade lower than that which the officer holds at the time of 
     retirement is exercised judiciously in cases involving 
     officers who have clearly not performed satisfactorily in the 
     higher grade. Most grade determinations involve misconduct 
     which precipitates the officer's retirement. Although section 
     1370 requires the Secretary concerned to make a determination 
     of satisfactory service in these cases, that determination is 
     rendered ineffective, for retired pay purposes, by section 
     1401a(f). This permits an officer who commits misconduct, or 
     fails to perform up to standard once the officer becomes 
     retirement eligible, to avoid the requirement to perform 
     satisfactorily in order to retire in the highest grade held.
       This proposal amends section 1401a(f) to exempt grade 
     determinations under 1370, 1371, and 1374 from the protection 
     afforded by section 1401a(f). If enacted, this proposal will 
     not increase the budgetary requirements of the Department of 
     Defense.

                     Sec. 603. Expiring authorities

       Sections 603(a) through 603(e) amend sections 308b(f), 
     308c(e), 308h(g) and 308i(i) of title 37, United States Code, 
     to extend the authority to pay bonuses for (1) enlistment, 
     reenlistment or affiliation with the Selected Reserve, (2) 
     enlistment, reenlistment or extension of an enlistment in the 
     Ready Reserve other than the Selected Reserve, and (3) 
     enlistment in the Selected Reserve of individuals with prior 
     service. These authorities currently expire on September 30, 
     1995. Termination of these Reserve bonus programs would 
     adversely impact the readiness of Reserve component units by 
     limiting the ability to recruit individuals possessing 
     critical skills or qualified to train for critical skills and 
     to ensure necessary manning levels in specific critical 
     units.
       Section 603(f) amends section 301b(a) of title 37, United 
     States Code, to extend the authority to pay a retirement 
     bonus to aviation career officers extending their period of 
     active duty for at least one year. this authority currently 
     expires on September 30, 1994. This extended authority is 
     necessary to counter a decade-long problem in aviator 
     retention that has not been solved, and will not be solved by 
     the time the current authority expires in September 1994. 
     This bonus represents a vital component of aviation readiness 
     since it keeps seasoned aviators in the military, assuring a 
     higher level of performance and safety. Moreover, the cost of 
     this bonus represents a fraction of the costs associated with 
     training new aviators to overcome retention deficits that 
     would worsen, if this authority were allowed to lapse. Annual 
     cost is $12.8 million for the Navy, $1.8 million for the 
     Marine Corps, and $46.4 million for the Air Force. This money 
     has been budgeted by the Services for FY 1995.
       Section 603(g) amends section 308(g) of title 37, United 
     States Code, to extend the authority to pay reenlistment 
     bonus to active duty service members who reenlist or who 
     extend their enlistment in a regular component of the service 
     concerned for at least three years. This authority currently 
     expires on September 30, 1995.
       Section 603(h) amends section 308a(c) of title 37, United 
     States Code, to extend the authority to pay enlistment bonus 
     to a person who enlists in an armed force for at least four 
     years in a skill designated as critical, or who extends his 
     initial period of active duty in that armed force to a total 
     of at least four years in a skill designated as critical. 
     This authority currently expires on September 30, 1995.
       Section 603(i) amends section 308d(c) of title 37, United 
     States Code, to extend the authority to which permits the 
     payment of additional compensation to enlisted members of the 
     Selected Reserve assigned to high priority units, so 
     designated by the Secretary concerned because that unit has 
     experienced or reasonably might be expected to experience, 
     critical personnel shortages. This authority currently 
     expires on September 30, 1995.
       Section 603(j) amends section 2172(d) of title 10, United 
     States Code, to extend the authority which permits the 
     repayment by the Secretary concerned of educational loans of 
     health professionals who serve in the Selected Reserve and 
     who possess professional qualifications in a health 
     profession that the Secretary of Defense has determined to be 
     needed critically in order to meet identified wartime combat 
     medical skill shortages. This authority currently expires on 
     October 1, 1995. Termination of Reserve health professional 
     incentive programs would limit the ability of the Reserve 
     components to fill shortages in the designated health 
     professions.
       Section 603(k) amends section 613(d) of the National 
     Defense Authorization Act for Fiscal Year 1989 (37 U.S.C. 302 
     note) to extend the authority which permits payment of 
     special pay to a health care professional who is qualified in 
     a specialty designated by regulation as a critically short 
     wartime specialty and who agrees to serve in the Selected 
     Reserve for at least one year. This authority currently 
     expires on September 30, 1995. Extension of this authority 
     will allow the Department of Defense to conclude a test 
     program of a reserve medical bonus.
       Sections 603(l) through 603(n) amend sections 312(e), 
     312b(c), and 312c(d) of title 37, United States Code, to 
     extend the authority to pay certain bonuses to attract and 
     retain top quality nuclear career officers. These authorities 
     currently expire on September 30, 1995 or October 1, 1995. 
     Extension of these authorities is essential in mitigating 
     historical shortages and to ensure continued safe reactor 
     operations. Current nuclear officer retention is at a ten-
     year low. Failure to renew the authority for these pays will 
     further exacerbate the situation.

             Subtitle B--Retired Pay and Survivor Benefits

   Sec. 611. Authority for survivors of uniformed service members to 
     receive, upon death of member, payment for all leave accrued, 
                   regardless of sixty-day limitation

       Section 611 amends Section 501(d) of title 37, United 
     States Code, to authorize survivors of members of the 
     uniformed services to receive a payment upon death of a 
     member for all leave accrued.
       The purpose of this legislation is to allow the beneficiary 
     of a member who dies on active duty with accrued leave to 
     receive payment for all accrued leave, regardless of the 
     sixty day career limitation. The amendment would prevent the 
     deceased member from losing credit for accrued leave for 
     which the beneficiary does not receive payment due to the 
     sixty day limitation and which the member obviously can no 
     longer use.
       The current law sets a career limit of sixty days on the 
     number of accrued leave days for which a member may receive 
     payment. The survivor of a member who dies on active duty 
     with an accrued leave balance may only receive payment for a 
     total of sixty days, less any amount previously sold back by 
     the member. This denies survivors the benefit of payment for 
     all leave which the member actually earned, but cannot use 
     only because death intervened. The Persian Gulf Conflict 
     Supplemental Authorization and Personnel Benefits Act of 1991 
     waived the sixty day limit for leave accrued during fiscal 
     years 90 and 91 for survivors of members who die on active 
     duty as a result of injury or illness incurred during the 
     Gulf Conflict. The National Defense Authorization Act for 
     Fiscal Year 1992 waived the sixty day limit for future 
     members who die in the course of real-world contingency 
     operations, but limits the waiver of the sixty day sellback 
     cap to those leave days accrued during the contingency or 
     conflict. We need a permanent waiver of the sixty day leave 
     sellback cap for all members who die on active duty, whether 
     associated with contingency operations or not. In addition, 
     we should pay for all accrued leave, not just that which is 
     earned during a contingency operation.
       The estimated costs are unknown but expected to be minimal 
     in comparison to the economic suffering which may otherwise 
     exist.

  Sec. 612. Disability coverage for officer candidates granted excess 
                                 leave

       Section 612 amends section 1201 of title 10, United States 
     Code, by including certain members not entitled to basic pay 
     among those who receive physical disability coverage. Section 
     312 entitles Service Members on active duty for 30 days or 
     more to disability benefits under those sections of law only 
     if disabled while entitled to basic pay. Except as provided 
     in section 502(a) of Title 37, an individual who is granted 
     excess leave by the Secretary of the military department 
     concerned under section 502(b) of that title is not entitled 
     to basic pay as long as the member is in that status. If such 
     an individual were to incur any disability while on excess 
     leave, he or she would not be entitled to any of the benefits 
     provided under the provisions of sections 1201, 1202, and 
     1203 of title 10.

Sec. 613. Forfeiture of annuity or retired pay of members convicted of 
                               espionage

       Section 613 corrects an apparent oversight in the original 
     legislation creating Article 106(a), U.C.M.J. Article 106(a) 
     U.C.M.J., added 8 November 1985, is based on Section 794 of 
     Title 18, United States Code, which already included in the 
     list of offenses contained in section 8312 of title 5, United 
     States Code. When article 106(a), U.C.M.J., was created, it 
     should have been added to the list of offenses contained in 
     section 8312, title 5, United States Code.
       Specifically, section 613 prohibits an individual, or his 
     or her survivor or beneficiary, from being paid an annuity to 
     retired pay on the basis of the service of the individual 
     creditable toward the annuity or retired pay if the 
     individual was convicted of violating article 106(a) 
     (Espionage) of the Uniform Code of Military Justice.

 Sec. 614. Crediting of reserve service for computation of retired pay

       Section 614 would provide equitable treatment, in 
     comparison to officers, for enlisted members retiring after 
     20 or more years (or during the force drawdown transition 
     period, 15 or more years) by providing for the crediting of 
     inactive duty performed while a member of a reserve 
     component. The current inequity appears to be the result of 
     legislative oversight.


                   TITLE VIII--HEALTH CARE PROVISIONS

                   Subtitle A--Health Care Management

  Sec. 701. Improving coordination of benefits information by sharing 
 health insurance information from the Medicare and Medicaid coverage 
                               data bank

       Section 701 will improve the ability of the Department to 
     identify and collect from third party payers for health care 
     services provided in facilities of the Uniformed Services and 
     under the Civilian Health And Medical Program of the 
     Uniformed Services (CHAMPUS).
       Part A of title XI of the Social Security Act (42 U.S.C. 
     1301 et seq.) was amended by the First Session of the 103rd 
     Congress establishing a Medicare and Medicaid Coverage Data 
     Bank to be operated by Health and Human Services. Annually, 
     employers are required to submit to the Data Bank health care 
     insurance coverage data on individuals electing coverage 
     under the employers' group health plans.
       Both the Medicare and Medicaid programs are, by law, second 
     payers to commercial insurers in situations where Medicare or 
     Medicaid beneficiaries also have group health coverage 
     through their own or their spouse's employment. The Data Bank 
     will substantially improve the ability of Medicare and 
     Medicaid in identification of, and collection from, third 
     parties responsible for payment for health care items and 
     services furnished to their beneficiaries.
       The Department of Defense likewise has a legislative 
     mandate to identify and collect from responsible third 
     parties the cost of medical care items and services furnished 
     its beneficiaries within Uniformed Services medical 
     facilities and under CHAMPUS. However, the current language 
     in Part A of title XI (42 U.S.C. 1301 et seq.) restricts 
     access to the insurance coverage information in the Medicare 
     and Medicaid Coverage Data Bank to those two entities.
       The proposed provision would amend the language in Part A 
     of title XI extending access to information in the Data Bank 
     to the Department of Defense. This information will enhance 
     the effectiveness of the Department of Defense third party 
     collection program. Section 701 would also extend access 
     regarding this information to the Secretary of the department 
     in which the Coast Guard is operating when the Coast Guard is 
     not operating as a service of the Navy.
       An accurate estimate of cost savings that would accrue to 
     the Department as a result of having access to the Medicare 
     and Medicaid Data Bank cannot be calculated. At present, the 
     Department has no way to determine what percentage of 
     beneficiaries have other coverage through employment. 
     However, an estimate of $34 million in annual savings can be 
     made based on (a) the current experience of uniformed 
     services medical facilities and CHAMPUS in identifying and 
     collecting from third party payers, and (b) private sector 
     estimates of the percentage of medical claims submitted which 
     have other coverage.

Sec. 702. Expanded use of partnership and resource sharing programs for 
                      improved cost-effectiveness

       Section 102 would notify the Military-Civilian Health 
     Services Partnership Program under section 1096 of title 10, 
     United States Code. This program allows the sharing of health 
     care resources between military medical treatment facilities 
     and CHAMPUS-funded civilian facilities when cost-effective. 
     Section 702 provides authority to the Department to pay for 
     state licenses for Department of Defense providers when it is 
     in the government's best interests to do so, in order to 
     fulfill requirements for such providers to obtain a state 
     license specifically so that they will be allowed to practice 
     in civilian facilities under the Department of Defense 
     External Partnership Program. The amount of any reimbursement 
     may not exceed $500.

   Sec. 703. Improvement of uniformed services treatment facilities 
                                program

       The purpose of section 703 is to provide a sound basis for 
     integrating Uniformed Services Treatment Facilities into the 
     Department's management health care program, rather than 
     continuing to treat them in isolation from the rest of the 
     military health services system.
       The special status of the former Public Health Service 
     Hospitals as deemed military medical treatment facilities was 
     granted in the early 1980s. Since 1982, the projected 
     termination date for this special status has been extended 
     repeatedly. Most recently, the National Defense Authorization 
     Act for Fiscal year 1994, section 717, moved the first date 
     at which termination could be authorized from December 31, 
     1993 to December 31, 1996. That means that what was 
     intended as a short-term program to assist former Federal 
     facilities in their transition to operation in the private 
     sector will have extended for more than 15 years.
       At the same time that Uniformed Services Treatment 
     Facilities have been receiving ongoing, special 
     noncompetitive agreements with the Department of Defense (as 
     current law requires), dramatic changes have been taking 
     place in the remainder of the military health services 
     system. Large-scale tests of managed care approaches, 
     integration of military and civilian health care delivery, 
     and important provider reimbursement reforms have changed the 
     landscape of military health care, while the Uniformed 
     Services Treatment Facilities remain in isolation--a nearly 
     $300 million program ``island'' within the several-billion-
     dollar military health services system. Now, as dramatic 
     reforms of the nation's health care system are being 
     considered by Congress, is the appropriate time to integrate 
     Uniformed Services Treatment Facilities into the larger 
     managed care approach which has been developed for military 
     health care and, under legislative mandate, is being robustly 
     implemented.
       This proposed revision will provide for the potential 
     incorporation of Uniformed Services Treatment Facilities into 
     Department of Defense's health programs, eliminating 
     redundancy while accommodating the Uniformed Services 
     Treatment Facilities special status with Department of 
     Defense beneficiaries. It enactment will provide needed 
     integration of a small, isolated component of the military 
     health services system, eliminate existing redundancy, 
     provide needed economies, and maximize our ability to focus 
     on the vital task of bringing the military health services 
     system into harmony with national health care reform.
       Precise cost avoidance figures are difficult to estimate, 
     but the rate of funding growth in the Uniformed Services 
     Treatment Facilities program over the past five years has 
     been approximately 15 percent per year, while the military 
     health services system as a whole has grown at about 5 
     percent per year. Integration of the Uniformed Services 
     Treatment Facilities can be expected to reduce their growth 
     rate to that of the system as a whole, which would save about 
     $15.4 million in fiscal year 1995.

   Sec. 704. Authority to conduct health care surveys of families of 
                            retired members

       Section 704 would allow the Department to consider all 
     persons receiving health care under chapter 55 of title 10, 
     United States Code, as employees of the United States to 
     determine the availability of health care services to such 
     persons, their familiarity with facilities and services 
     provided, their health and their level of satisfaction. 
     Currently, the Department has authority to survey active duty 
     members, their families and retired members regarding their 
     health care. This provision would remove the present 
     impediment to including the family members of retirees within 
     the research sample. It would allow the Department to more 
     readily and accurately determine the availability of health 
     care services, health status and level of satisfaction, 
     thereby enhancing the resource allocation process and the 
     Department's health care reform initiatives. In addition, 
     section 724 of the National Defense Authorization Act for 
     Fiscal Year 1993 Act requires that Department of Defense 
     conduct an annual beneficiary survey.
       The provision will not increase the budgetary requirements 
     of the Department of Defense.

                        Sec. 705. Effective date

       Section 705 establishes an effective date for this 
     subtitle.

                     Subtitle B--Personnel Matters

 Sec. 711. Increase in incentive special pay for certified registered 
                           nurse anesthetists

       The purpose of section 711 is to provide the Department 
     with authority to increase annual Incentive Special Pay for 
     military Certified Registered Nurse Anesthetists to a maximum 
     of $15,000. The original legislation, which authorizes a 
     maximum Incentive Special Pay of $6,000, was effective 
     November 29, 1989 as part of the National Defense 
     Authorization Act for Fiscal Year 1990. This valuable program 
     has been successful in helping maintain the number of 
     Certified Registered Nurse Anesthetists on active duty in the 
     Military services, however, the current Incentive Special Pay 
     amount has not proven adequate to enable the Department to 
     increase the number of active duty Certified Registered Nurse 
     Anesthetists to meet staffing requirements. Shortages of 
     Certified Registered Nurse Anesthetists nationwide continue 
     to make it difficult for Department of Defense to attract and 
     retain sufficient numbers of these nurses. Competition with 
     the private sector for this highly-skilled specialty is 
     intense, and recruitment and retention of Certified 
     Registered Nurse Anesthetists continues to be an area of 
     major concern for the Military Departments. The proposed 
     change to the Incentive Special Pay maximum amount is needed 
     so that the Department can effectively compete for this 
     critical professional resource. At present, civilian earning 
     potential far exceeds military compensation for Certified 
     Registered Nurse Anesthetists, and the compensation gap 
     continues to increase.
       This provision would increase the Department's budget 
     requirements for Incentive Special Pay for Certified 
     Registered Nurse Anesthetists as follows:

                        [In millions of dollars]

DOD totals:
  Fiscal year:
    1995...........................................................+2.4
    1996...........................................................+2.9
    1997...........................................................+3.4
    1998...........................................................+3.9
    1999...........................................................+4.4

Sec. 712. Authority for nurse accession bonuses, incentive special pay 
  for nurse anesthetists, and nurse officer candidate accession bonus

       The purpose of section 712 is to provide the Department 
     with continued authority to pay (a) a nurse accession bonus, 
     (b) Incentive Special Pay to military Certified Registered 
     Nurse Anesthetists, and (c) a nurse officer candidate 
     accession bonus. The original legislation was effective 
     November 29, 1989 as part of the National Defense 
     Authorization Act for Fiscal Year 1990. Under current 
     legislation, the authority for these programs will expire on 
     September 30, 1995. Each of these valuable programs has been 
     successful in helping the Military Departments obtain 
     needed numbers of professional nurses on active duty. 
     Shortages of nurses nationwide continue to make recruiting 
     of nurses difficult in light of intense competition with 
     the private sector. The Department believes that the 
     effectiveness of these programs would be enhanced by their 
     continuation. Section 712 would extend these authorities 
     to September 30, 1998.

                         Resource Requirements

                        [In millions of dollars]

DOD totals for fiscal year:
  Nurse accession bonus:
    1994............................................................8.0
    1995............................................................8.0
    1996............................................................8.0
    1997............................................................8.0
    1998............................................................8.0
  Incentive special pay for certified registered nurse anesthetists:
    1994............................................................4.0
    1995............................................................4.0
    1996............................................................4.0
    1997............................................................4.0
    1998............................................................4.0
  Nurse candidate accession bonus:
    1994............................................................1.0
    1995............................................................4.0
    1996............................................................4.0
    1997............................................................4.0
    1998............................................................4.0

   Sec. 713. Reduction in the maximum number of years for a military 
    member to be maintained on the temporary disability retired list

       The purpose of section 713 is to reduce from five to three 
     the maximum number of years a military member may remain on 
     the temporary disability retired list before a final 
     determination is made. The Department's disability evaluation 
     system maintains a fit and vital force by separating or 
     retiring eligible military members determined to be unfit to 
     perform their duties because of disease or injury incurred 
     while entitled to basic pay. When a disabling condition is 
     unstable and the permanence of the degree of disability 
     cannot yet be determined, the member is placed on the 
     temporary disability retired list.
       This proposed revision would reduce the number of 
     individuals retained on the temporary disability retired list 
     by more than 2,400, resulting in a smaller, more easily-
     managed list. Required temporary disability retired list re-
     evaluations would also be reduced by this same number, 
     resulting in a net cost savings to the government and 
     releasing essential medical resources to provide patient 
     care.
       The proposed revision should have no negative effect on the 
     benefit provided to the disabled member, rather, it would 
     shorten the period of uncertainty by providing a final 
     determination at an earlier point in time. Very few 
     disability ratings, even a determination for cancer, are 
     changed after the three-year re-evaluation. This fact leads 
     to the conclusion that three years is sufficient time to 
     determine the permanence of a disabling condition. The 
     proposed revision was mutually agreed upon by the Assistant 
     Secretary of Defense (Health Affairs) and the Department of 
     Defense Inspector General, as a result of a recent audit of 
     the disability evaluation system.
       The proposed revision should result in a net cost avoidance 
     to the government estimated at $2.1 million yearly.

                        Subtitle C--Other Matter

 Sec. 721. Revision of definition of dependents for purposes of health 
                                benefits

       Section 721 modifies the newly enacted revision of the 
     definition of dependents for purposes of Department of 
     Defense health benefits found in section 702 of the National 
     Defense Authorization Act for Fiscal Year 1994. It would 
     authorize for the purposes of coverage in the military health 
     care system individuals placed in the home of a member or 
     former member by a placement agency for the purposes of 
     adoption and make the new category of ``dependents'' eligible 
     for CHAMPUS as well as military treatment facility care. The 
     projected health care cost submitted to the Congress with the 
     revised definition of dependent was $9.7 million. This was 
     based on an estimate of 7,940 potential beneficiaries, with 
     an annual cost of $1,227 per person. This proposed 
     legislative change would be a negligible part of the original 
     cost projection.

   Sec. 722. Repeal of the statutory restriction on use of funds for 
                               abortions

       Section 722 repeals section 1093 of title 10, United States 
     Code, which prohibits using funds available to the Department 
     of Defense to perform abortions except where the life of the 
     mother would be endangered if the fetus were carried to term. 
     The provision being repealed is sometimes referred to as the 
     ``Hyde Amendment''.

     Sec. 723. Authorization for medical and dental care of abused 
        dependents of certain members of the uniformed services

       The purpose of section 723 is to include authorization for 
     medical and dental care of abused dependents of members of 
     the uniformed services who are administratively discharged 
     from a uniformed service due to a conviction under military 
     or civil law relating to the abuse of the dependent. Members 
     of the uniformed services who are convicted in a civilian 
     court of an offense related to the abuse of a dependent are 
     administratively discharged from a uniformed service. Under 
     present law, only those abused dependents of service members 
     who have been discharged as a result of a court-martial for 
     the related abuse are provided access to medical and dental 
     care for treatment of injuries or illness resulting from the 
     abuse. Our objective is to provide equal access to care for 
     abused dependents of members who are administratively 
     discharged from a uniformed service as a result of a civilian 
     conviction for abuse or who are not convicted but are 
     discharged due to the underlying abuse. In order to eliminate 
     this disparity, it is recommended that this proposal be 
     enacted by the Congress.
       In the Navy, over 3,000 substantiated cases of child abuse 
     and 6,000 substantiated cases of spouse abuse have been 
     reported for each of the past two years; similar results are 
     expected at the end of 1992. Access to medical care for 
     abused dependents should be based on their need for treatment 
     as a result of the abusive behavior and should not be 
     contingent upon the method by which the member is discharged.
       The estimated cost incurred by the Department of Defense 
     for enactment of this proposal would be negligible. 
     Approximately $35,000 a year, based on five cases a year at 
     $7,000 a case. This estimate is based on the costs of an 
     actual Secretary of the Navy case.


     title viii--department of defense organization and management

                   Subtitle A--Department of Defense

         Sec. 801. Order of succession in military departments

       The purpose of this section 801 is to include the General 
     Counsels of the military departments in order of succession 
     of officers to act as the Secretary of their departments. The 
     current orders of succession in sections 3017, 5017, and 8017 
     of title 10, United States Code, were established in 1986, 
     when the General Counsels were ranked at level V of the 
     Executive Schedule, one grade below the Assistant Secretaries 
     for their departments. In 1991, title 10 was amended to raise 
     the General Counsels to level IV of the Executive Schedule, 
     equal in rank to the Assistant Secretaries. Like the 
     Assistant Secretaries, the General Counsel's appointment is 
     subject to confirmation by the Senate.
       On December 31, 1991, an Executive Order was issued 
     concerning the order of succession of officers to act as 
     Secretary of Defense. The Executive Order included the 
     General Counsels in the same rank of succession as the 
     Assistant Secretaries. Consequently, the General Counsels of 
     the military departments are currently included within the 
     order of succession of officers to act as the Secretary of 
     Defense, while they are not included within the order of 
     succession to act as the Secretary of their departments.
       Section 801 would also establish by statute the order of 
     succession among the Assistant Secretaries and the General 
     Counsel of a military department. Succession would be in the 
     order fixed by their length of service as permanent 
     appointees in such positions. Currently, the order of 
     succession must be prescribed by the Secretary of the 
     military department concerned and approved by the Secretary 
     of Defense.

     Sec. 802. Authority to prepare the official table of distances

       The purpose of section 802 is to transfer responsibility 
     for maintaining the Official Table of Distances from the 
     Secretary of the Army to the Secretary of Defense. Current 
     law (37 U.S.C. 404(d)(1)(A)) requires the Official Table of 
     Distances to be prepared under the direction of the Secretary 
     of the Army. Because this table is used to reimburse members 
     of all the services for travel and all service finance 
     centers have been consolidated under the Defense Finance and 
     Accounting Service (DFAS), it is clear that the Secretary of 
     Defense is the appropriate officer to maintain the official 
     Table of Distances. This legislation will allow the Secretary 
     of Defense to delegate this authority to the Director of the 
     Per Diem, Travel, and Transportation Allowance Committee. 
     Enactment of this legislation will not increase the budgetary 
     requirements of the Department of Defense.

  Sec. 803. Authority to conduct a program to commemorate World War II

       Section 378 of the National Defense Authorization Act for 
     Fiscal Year 1993 permits the Secretary of Defense to conduct 
     a program to commemorate the 50th anniversary of World War II 
     during fiscal years 1993 through 1995. Section 803 extends 
     that authorization through fiscal year 1996.
       The anniversary committee planning the 50th anniversary 
     program proposes to end the three year celebration with a 
     week of nation-wide events, such as displays, educational 
     programs, ceremonies, displays, shows, and parades, 
     culminating on Veterans Day, November 11, 1995. Because this 
     day commemorates the 50th anniversary of the first Armistice 
     Day after the end of World War II, it is a particularly 
     appropriate day to mark the end of the celebration and to 
     focus the attention of the Nation not only on our 
     achievements during World War II but during other conflicts 
     as well.
       The extension of the program into fiscal year 1996 will 
     also permit the final weeks of celebration to coincide with 
     the 50th anniversary of the United Nations, tentatively set 
     for October 24, 1995. The anniversary committee hopes to 
     schedule a joint session of Congress immediately before or 
     after the United Nations anniversary. This would allow many 
     of our allies and former adversaries attending the United 
     Nations anniversary to be present for the joint session of 
     Congress.
       This legislative proposal will not increase the budgetary 
     requirements of the Department of Defense. Instead, the 
     increased activities of the last week of celebration should 
     greatly expand the opportunity for the anniversary committee 
     to receive revenues from licensing agreements involving the 
     use of its logo. The anniversary committee anticipates that 
     revenue will continue to be generated throughout fiscal year 
     1996.

 Sec. 804. Authority for the Department of Defense to share equitably 
 the costs of claims under international armaments cooperation programs

       Liability claims under cooperative agreements are very 
     rare; however, the issue of claims sharing is often a 
     sticking point in negotiating cooperative project agreements 
     with nations that insist on such claims sharing. The current 
     authority to share claims equitably has greatly facilitated 
     the negotiation of cooperative project agreements with other 
     nations, and has not proven to pose a financial burden on the 
     United States.

  Sec. 805. Change of title of Deputy Under Secretary of Defense for 
   Acquisition and Technology to Principal Deputy Under Secretary of 
                 Defense for Acquisition and Technology

       Section 805 is necessary to distinguish the individual 
     responsible for exercising the powers of the Under Secretary 
     of Defense for Acquisition and Technology from the four other 
     Deputy Under Secretaries of Defense for Acquisition and 
     Technology when the Under Secretary is absent or disabled. 
     Adoption of this amendment will result in no direct 
     expenditures by the Federal Government.

  Sec. 806. Change of title of Deputy Under Secretary of Defense for 
    Policy to Principal Deputy Under Secretary of Defense for Policy

       Section 806 distinguishes the individual responsible for 
     exercising the powers of the Under Secretary of Defense for 
     Policy, when the Under Secretary is absent or disabled, from 
     other Deputy Under Secretaries that are currently in the 
     Office of the Under Secretary of Defense for Policy, or may 
     be established in the future. Enactment of this proposal will 
     not result in an increase in budgetary requirements for the 
     Department of Defense.

     Sec. 807. Chief Financial Officer of the Department of Defense

       Section 807 amends the provisions of section 135 of title 
     10, United States Code, relating to the duties of the 
     Comptroller of the Department of Defense by deleting the 
     provisions providing that he performs the additional duty of 
     the Chief Financial Officer of the Department of Defense. Its 
     purpose is to revise the structure of the Office of the 
     Comptroller to permit the assignment of the duties and 
     responsibilities of the Department of Defense Chief Financial 
     Officer to a position other than the Comptroller. In addition 
     to improving the structure for compliance with the Chief 
     Financial Officers Act, this proposal would permit the 
     Department to more effectively focus its resources on the 
     required actions to improve financial management in the 
     Department. It would also provide for a more consistent 
     alignment of the Chief Financial Officer organization within 
     the Department to that of other Federal Agencies. Consistent 
     with this amendment, the section amends section 5315 of title 
     5, United States Code to place the Chief Financial Officer at 
     level IV of the Executive Schedule. This is the level of all 
     other Chief Financial Officers.

 Sec. 808. Change of title of Comptroller of the Department of Defense 
              to Under Secretary of Defense (Comptroller)

       Title IX of the National Defense Authorization Act for 
     Fiscal Year 1994 (Public Law 103-160:107 Stat. 1547) made the 
     Comptroller of the Department of Defense the equivalent of an 
     Under Secretary of Defense by elevating that official to 
     Level III of the Executive Salary Schedule and placing the 
     Comptroller between the Under Secretary of Defense for Policy 
     and the Under Secretary of Defense for Personnel and 
     Readiness in the order of precedence. However, that 
     legislation did not formally designate the Comptroller as an 
     Under Secretary of Defense. By redesignating the Comptroller 
     of the Department of Defense as the Under Secretary of 
     Defense (Comptroller), this provision establishes consistency 
     in titles among senior Department of Defense officials and 
     removes all doubt concerning the Comptroller's stature within 
     the Department of Defense. Enactment of this provision will 
     not result in an increase in budgetary requirements for the 
     Department of Defense.

              Subtitle B--Professional Military Education

     Sec. 811. Authority to hire civilian faculty members for the 
 Information Resources Management College, National Defense University

       The purpose of section 811 is to add the Information 
     Resources Management College to the list of National Defense 
     University components eligible to employ civilian professors, 
     instructors, and lecturers under the authority of section 
     1595(a) of title 10, United States Code. Because of the 
     unique structure of the National Defense University, the 
     wording of the current law failed to include all component 
     parts. This proposal would remedy current law by adding the 
     only missing component, the Information Resources Management 
     College.
       The Information Resources Management College is an integral 
     component of the National Defense University. Public Law 101-
     189, enacted in 1989 and codified at 10 U.S.C. 1595, gave the 
     National Defense University the authority to hire faculty in 
     order to permit the colleges to recruit highly qualified 
     faculty that might not otherwise be recruited under the 
     General Schedule in title 5. The law defined the National 
     Defense University as the National War College, the 
     Industrial College of the Armed Forces, and the Armed Forces 
     Staff College. The Information Resources Management College 
     became the fourth college of the National Defense University 
     in March 1990. The Institute for National Strategic Studies 
     was added to the definition of the National Defense 
     University in 1991 by Public Law 102-190. Thus, the 
     Information Resources Management College is the only 
     component now missing from the statutory definition of the 
     National Defense University.
       Nationally recognized faculty are fundamental to the 
     intellectual development and mission of the Information 
     Resources Management College, as well as to maintain the 
     National Defense University's preeminence in educational 
     excellence. Thus, the flexibility and incentives associated 
     with title 10 are needed to attract nationally recognized 
     faculty.
       Enactment of this proposal will not result in an increase 
     in the budgetary requirements of the Department of Defense.

                     Subtitle C--Education Matters

   Sec. 821. Defense Department Overseas Teachers Pay and Personnel 
                        Practices Act Amendments

       Section 821 would amend the Overseas Teachers Pay and 
     Personnel Practices Act (Public Law 86-91, 20 U.S.C. 901-907) 
     to authorize the Secretary of Defense to bring the pay of 
     certain educator personnel employed by the Department of 
     Defense Dependents Schools into parity with their 
     counterparts in U.S. public schools and eliminate a pay 
     inequity between these employees and their classroom teacher 
     colleagues, and would make certain technical and conforming 
     amendments.
       Section 521(1) and (2) would modify 20 U.S.C. Sec. 901 and 
     Sec. 903 to afford discretion to the Secretary of Defense to 
     redesignate certain General Schedule (GS) educational program 
     management positions as ``teaching positions'' (TPs) 
     administered under the TP pay provisions of the Overseas 
     Teachers Pay and Personnel Practices Act. Currently the TP 
     pay system applies only to positions ``performed on a school 
     year basis principally in a school'' (i.e., teaching 
     positions with a 10-month work year). Under the Overseas 
     Teachers Pay and Personnel Practices Act, the Secretary 
     determines base pay of TP employees by reference to an annual 
     wage survey of urban public school jurisdictions serving 
     populations of 100,000 or more. Consequently, base pay for 
     TPs under the TP pay system have risen faster than pay for 
     educational program manager personnel employed in the GS 
     (including educational coordinators and other educational 
     specialist holding positions generally classified at the GS-
     11 or GS-12 level). The GS educational program management 
     employees work a 12-month work year and perform work that is 
     critical to the school level teacher, but their work is not 
     conducted ``principally in school.'' Section 521, if enacted 
     will eliminate the pay inequity that currently has certain GS 
     educational program management employees earning a lower 
     daily rate of pay (because of their longer work year) than 
     the classroom teacher they are required to coordinate. This 
     section of the bill would permit the Secretary to prescribe 
     which educational program manager personnel should be 
     classified as ``teaching positions'' and paid on the basis of 
     comparability with the salaries and personnel practices of 
     surveyed urban school jurisdictions. This section will bring 
     the pay of any redesignated educational program management 
     position overseas into parity with their counterparts in 
     surveyed urban school jurisdictions in the United States of 
     100,000 or more population. The redesignation if selected 
     overseas educator positions will facilitate the movement of 
     school level teachers into critical educational program 
     management positions.
       Section 521(3)(A) would permit the Secretary of Defense to 
     prescribe regulations by which to increase leave from 10 days 
     for teachers who work the standard 190-day teacher work year 
     to 13 days of leave for educational program manager personnel 
     who would be converted by this bill to ``teaching positions'' 
     under the Overseas Teachers Pay and Personnel Practices Act 
     and who would be employed for a longer work year. Personnel 
     who move from the GS to the TP pay system would be moving 
     from a system that authorizes up to 30 days of annual leave, 
     to a system that currently authorizes only 10 days, 
     predicated upon a standard 190-day teacher work year. The 
     positions that are converted to the TP system will typically 
     require more than 190 work days. This provision creates leave 
     equity between personnel on the TP pay system who would work 
     longer work years.
       Sections 521(2) and (3)(B) conform the provisions of the 
     Overseas Teachers Pay and Personnel Practices Act to the 
     language of the subsequently enacted Public Law 95-561 (20 
     U.S.C. Sec. 921-932). These sections place pay and personnel 
     practices under the control of the Secretary of Defense, 
     consistent with the requirements of Public Law 95-561 
     (specifically 20 U.S.C. Sec. 222) which removes those duties 
     from the Military Department secretaries.

       Sec. 822. Adjustment of pay of certain overseas educators

       Section 822 amends Section 5334 of title 5, United States 
     Code, to permit a flexible, rather than a fixed, adjustment 
     of pay when an overseas educator employed on a school-year 
     basis under the provisions of the Defense Department Overseas 
     Teachers Pay and Personnel Practices Act moves to an educator 
     position established on a calendar-year basis under the 
     General Schedule (GS). Current law recognizes an increase of 
     approximately one-fifth in the work year of an educator 
     required to move from a 190 duty day Overseas Teachers Pay 
     and Personnel Practices Act position (about 180 actual work 
     days after adjustments for leave and holidays) to a 260-day 
     calendar year position (about 217 actual work days after 
     adjustments for accrued leave and paid holidays) by 
     authorizing the fixing of GS pay at a rate equal to the 
     Overseas Teachers Pay and Personnel Practices Act rate plus a 
     fixed 20 percent. The inflexibility of the current law 
     requires the same 20 percent increase when an educator, such 
     as a principal, with a 222 day work-year is appointed to a 
     260-day GS position. This section would bring flexibility to 
     the current law by permitting the Secretary to issue 
     regulations by which to equitably adjust pay for personnel 
     moving from the Overseas Teachers Pay and Personnel Practices 
     Act to the GS pay schedule by an amount not to exceed 20 
     percent.

   Sec. 823. Reauthorization of United States Department of Defense 
            elementary and secondary schools for dependents

       Section 823 would provide title 10 authority for the 
     Secretary of Defense in a similar manner as such authority 
     currently is resident in Section 6 of Public Law 81-874, as 
     amended (20 U.S.C. 241), and Section 505(c) of Public Law 97-
     35 (20 U.S.C. 241 note). Public Law 81-874 and Public Law 97-
     35 authorize establishment of Section 6 arrangements for the 
     purpose of providing public education for eligible federally-
     connected children. The Department of Education has proposed 
     legislation, the ``Impact Aid Amendments of 1993'' that would 
     reauthorize the Impact Aid program while at the same time 
     repealing section 6 of Public Law 81-874 and 505(c) of the 
     Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35). 
     The proposed section would continue the authority that 
     otherwise would be terminated by the enactment of the Impact 
     Aid Amendments of 1993.
       The proposed section 823 substantially is the same as that 
     currently resident in the law. It contains one additional 
     authority--the authority to the Secretary of Defense to fix 
     the compensation of employees. Subsection (e)(3) of the 
     proposed section 2163 of title 10 would authorize the 
     Secretary of Defense to fix such compensation but only 
     after considering compensation for comparable employees at 
     educational institutions in the capitol of the state where 
     the school is located, the school district for the 
     governmental agency that provides public education to 
     students who live next door to the military installation 
     involved, and the average compensation for similar 
     positions in up to three other school districts in the 
     State where the installation is located.

                       Subtitle D--Other Matters

Sec. 831. Clarification and expansion of authority of the Department of 
                 Defense to receive voluntary services

       Section 831 amends section 1588 of title 10, United States 
     Code, to expand the areas in which volunteers can provide 
     services in military communities. Under the amendment, 
     volunteers are considered government employees for the 
     purposes of compensation for work related injuries, tort 
     liability, access to records, and conflict of interest 
     restrictions.
       The section expands the current authority of the military 
     departments to receive voluntary services and permits 
     volunteers in medical treatment facilities, child development 
     centers, recreational facilities, schools, and other programs 
     and facilities where volunteers routinely provide services in 
     the civilian communities. The section provides the military 
     departments valuable services, while ensuring that the 
     volunteers are properly trained and supervised and are 
     protected from suit under the provisions of the Federal Tort 
     Claims Act and other applicable claims statutes.

  Sec. 832. Repeal of prohibition of contracting for firefighting and 
            security guard functions at military facilities

       The purpose of section 832 is to repeal section 2465 of 
     title 10, United States Code, to authorize the Department of 
     Defense to enter into contracts for firefighting and security 
     guard functions at military installations and facilities.
       The Department of Defense has been prohibited from 
     contracting for security guards and firefighters since 1983. 
     This broad prohibition has three limited exceptions:
       a. when the contract is to be performed overseas;
       b. when the contract is to be performed on Government-owned 
     but privately operated installations; and
       c. when the contract (or a renewal of the contract) is for 
     the performance of a function under contract on September 24, 
     1983.
       Prior to 1983, firefighting and security guard functions 
     were successfully contracted out. The reason for the current 
     statutory restriction is unclear.
       The prohibition against contracting for firefighting and 
     security guard functions prevents the Department of Defense 
     from realizing savings in circumstances where private firms 
     or state or local governments might provide the services at a 
     lower cost. It also prohibits commanders from obtaining 
     contract services for temporary requirements at remote 
     locations or at leased facilities outside military 
     installations.
       The importance of repealing section 2465 is underscored by 
     the imminent closure or realignment of many installations. 
     The Department of Defense must maintain firefighting and 
     security guard functions at many installations which are 
     substantially closed. A study of the costs associated with 
     providing firefighters and security guards at Fort Wingate 
     Depot Activity (FWDA), New Mexico, provides an example of the 
     problem that section 2465 presents.
       In 1993, FWDA will move into a ``caretaker'' status. Prior 
     to the disposition of the property, there will be a 
     requirement for firefighters and security guards. Surveys 
     indicate a number of firms are available to provide 
     firefighting and security guard protection for an estimated 
     $110,000 annually. The United States Army Material Command 
     estimates that contracting for these functions would save 
     $474,000 annually.
       The repeal of section 2465 will not automatically result in 
     the elimination of civilian firefighters or security guards 
     from the Government workforce. Reductions in force may occur 
     as a result of commercial activities cost competitions 
     performed under chapter 146 of title 10 and OMB Circular A-
     76. In accordance with existing procedures, the Department of 
     the Army provides Congressional notification of the intent to 
     study specific functions, and will continue to provide the 
     results of cost comparisons. Separations from Federal Service 
     may result from the development of the most efficient in-
     house organization, an agreement to receive services from 
     another government instrumentality, or a contract with the 
     private sector when the costs are lower than that estimated 
     for in-house performance. The policy of requiring contractors 
     to offer displaced Government employees the right of first 
     refusal for comparable employment with the contractor will 
     continue to be enforced.
       OMB Circular A-76 specifically recognizes that firefighting 
     and security functions are Government functions that can be 
     the subject of a cost comparison study and contracted out if 
     a contractor can provide services effectively and at a lower 
     cost than an in-house organization. Firefighting and security 
     functions with the Department of Defense are no different 
     than other similar functions in the Department and other 
     federal agencies. The Department of Defense is unaware of any 
     rationale for excluding firefighting and security functions 
     from the Government-wide process of determining the least 
     expensive method for performing Government work.
       While exact savings across services are difficult to 
     assess, contracting for the estimated 6,500 civilian 
     firefighters and security guards within the Department of the 
     Army alone could potentially save an estimated $50 million 
     annually.

   Sec. 833. Statute of limitations for claims under the Fair Labor 
                             Standards Act

       Section 833 specifies the statute of limitations period as 
     two years in order to comply with the Fair Labor Standards 
     Act two year limitation. This will end the conflict over the 
     general statute of limitations (6 years) versus the Fair 
     Labor Standards Act statute of limitation (2 years) and 
     assist us in limiting retroactive back pay claims to the 2 
     year period.


                      TITLE IX--GENERAL PROVISIONS

                     Subtitle A--Financial Matters

Sec. 901. Exemption certain routine adjustments of pay from due process 
                               provisions

       The Debt Collection Act of 1982 (Public Law Number 97-365; 
     96 Stat. 1749) provides for due process safeguards prior to 
     salary offset under section 5514 of title 5 of the United 
     States Code. These rights include (1) a minimum of 30 days 
     written notice, (2) the opportunity to inspect and copy 
     Government records relating to the debt, (3) the opportunity 
     to enter into a written repayment agreement, and (4) the 
     right to a hearing. The proposed language amending section 
     5514 exempts from these procedures those routine intra-agency 
     adjustments of pay that are attributable to administrative or 
     clerical errors or delays in the processing of pay documents 
     that have accrued within the four pay periods preceding the 
     adjustment and to any adjustment that amounts to 50 dollars 
     or less. Substituted therefore is the requirement that, at 
     the time of the adjustment or as soon thereafter as 
     practical, the individual be provided written notice of the 
     nature and the amount of the adjustment and a point of 
     contact for questioning or contesting such adjustment.
       The Department's employees are paid a wide number of 
     complex payroll benefits. The nature of these benefits and 
     entitlements is such that complex interpretations are 
     sometimes involved with the accurate and timely pay of the 
     work force. Examples of these types of transactions include 
     overtime pay conditions, environmental entitlements, leave 
     accruals and base pay changes under various changing 
     circumstances. Because of the rather complex rules, the large 
     numbers of employees involved, and a work force that is 
     located world wide, the need for clerical or administrative 
     adjustments each time a payroll is prepared is inevitable. As 
     a result even a very small percentage of these types of 
     adjustments could generate a significant workload subject to 
     the Debt Collection Act.
       The Department is working towards the implementation of 
     modern business systems that will further minimize these type 
     of adjustments. However, since human nature is involved with 
     determining entitlements and calculating benefits, 
     adjustments of this type will probably always exist to some 
     extent. Although the amounts are every minimal, the 
     application of full due-process protection could impose a 
     substantial workload at a time when the Department is 
     attempting to scale back on its work force. The intent of the 
     Debt Collection Act is to provide safeguards for employees 
     where significant amounts are owed. Applying the provisions 
     of the Act to minimal amounts due as described above could 
     work to subvert the Administration's efforts in streamlining 
     government operations. This is not to say that the Department 
     of Defense advocates the elimination of all due process 
     safeguards when making such routine adjustments. It should be 
     noted that in its proposed amendment to 5 U.S.C., section 
     5514, the Department of Defense has provided for written 
     notice of the nature and amount of the adjustment and a point 
     of contact for questioning or contesting such adjustments.
       In summary, although the legislative history of the Debt 
     Collection Act of 1982 indicates that its primary purpose was 
     to enhance the capability of federal agencies to collect 
     money or property owed to them, it also provides a number of 
     new procedures and safeguards designed to assure that alleged 
     debtors will be provided appropriate due process protections. 
     Applying the full panoply of such safeguards to routine 
     adjustments in pay, however, will actually frustrate the 
     Act's primary purpose because other cost of collecting such 
     overpayments will exceed recovery.
       The enactment of this proposal will cause no apparent 
     increase and should, in fact, decrease the budgetary 
     requirements of the Department of Defense.

   Sec. 902. Contract Disputes Act amendment relating to payment of 
                     interest on contractor claims

       Section 902 amends section 12 of the Contract Disputes Act 
     of 1978 (41 U.S.C. 611) by striking out the first sentence, 
     which provides that interest found due on a contractor's 
     claim shall be paid from the date the contracting officer 
     receives the claim, and inserting in lieu thereof a new 
     sentence providing that such time shall run from the date the 
     contracting officer receives the claim or the date payment 
     otherwise would be due, if that date is later, until the date 
     of payment.
       Section 902 would overrule the case of Servidone 
     Construction Corp. v. United States, 931 F.2d 860 (Fed. Cir. 
     1991) and avoid the windfall created when interest on a claim 
     is charged for costs not yet incurred and thus not the 
     subject of a payment request to the Government. It would also 
     make the interest provision of the Contract Disputes Act of 
     1978 (P.L. 95-563) consistent with the Federal Acquisition 
     Regulation (FAR) 33.208 and the general concept of 
     prejudgment interest, as articulated by the Supreme Court.
       Section 12 of the Contract Disputes Act provides that 
     interest found due on a contractor's claim shall be paid from 
     the date the contracting officer receives the claim. In the 
     case mentioned above the Court of Appeals for the Federal 
     Circuit recently interpreted this provision to require the 
     Government to pay interest on claimed costs from the date the 
     contracting officer received the claim, even though the 
     contractor had not yet incurred the costs at the time he 
     submitted the claim.
       The current provision allows contractors to receive a 
     windfall payment of interest on claimed costs not yet 
     incurred. Apparently, this windfall was based on the desire 
     to have a ``single date'' for calculating interest on all 
     amounts due by a court decision without regard to when the 
     contractor actually incurred the costs.
       If enacted, this proposal would not increase the budgetary 
     requirements of the Department of Defense.

               Subtitle B--Civilian Employee Pay Matters

                     Sec. 911. Expiring authorities

       Section 911 extends certain civilian personnel drawdown 
     authorities (special RIF notification rules, separation pay, 
     and continued health benefits) for two years in the outyears. 
     This would parallel the extension to certain military 
     drawdown authorities that was enacted in the FY 1994 
     Authorization Act. In addition, under current law, employees 
     at bases which close between October 1, 1992 and December 31, 
     1997 may carry over unlimited annual leave from one year to 
     the next. Some installations designated for closure by the 
     1993 Base Realignment and Closure Commission (BRAC) will not 
     close until 1998. This section extends the annual leave 
     carry-over provisions to employees at any installation closed 
     through the BRAC process.
       The extension of RIF notification and leave restoration 
     will result in no cost. Congress appropriated $70 million in 
     FY 1993 and $100 million in FY 1994 for civilian separation 
     pay. We should be able to absorb the cost of extending 
     separation pay by avoiding the cost of severance pay, health 
     insurance, and unemployment compensation. Our estimate of the 
     cost of continued health benefits if $12 millin per year.

Sec. 912. Travel, Transportation, and Relocation Expenses of Employees 
    transferred for the Department of Defense to the Postal Service

       Under title 5, Federal agencies may pay the cost of travel, 
     transportation and location for employees scheduled for 
     separation when the employee is selected for a position with 
     another Federal agency. The Postal Service is not considered 
     a Federal agency for this purpose. We have had several 
     instances where employees who were facing involuntary 
     separation because of reduction in force or base closure were 
     selected for positions with the Postal Service in a different 
     geographic location. Because we have no authority to pay 
     travel related expenses, and because the employees could not 
     afford the move, they were separated. As a result, the 
     Department incurred the cost of severance pay, unemployment 
     compensation, and continued health insurance. Allowing these 
     payments will offset the costs.

 Sec. 913. Limitation of Severance Pay for Certain Civilian Employees 
               who are employed by Nonappropriated Funds

       Section 913 is needed to prevent appropriated fund 
     employees from immediately receiving severance pay upon 
     movement to nonappropriated fund positions under the pay and 
     benefits protections of the Portability of Benefits for 
     Nonappropriated Fund Employees Act of 1990. These employees 
     continue to be employed with little or no loss in benefits. 
     Employees who are vested in a civil service retirement plan 
     are given the option to remain in that plan with a goal of 
     receiving a civil service retirement annuity. Under these 
     circumstances, immediate entitlement to severance pay is not 
     warranted and represents an unjust enrichment.
       Under the proposed legislation, entitlement to appropriated 
     fund severance pay would be suspended until the employee is 
     involuntarily separated from nonappropriated fund employment. 
     If the employee involuntarily is separated from 
     nonappropriated fund employment, the original appropriated 
     fund severance pay entitlement would resume. Under the 
     proposed new section, eligibility for appropriated fund 
     severance pay would not resume if the employee is eligible 
     for an immediate annuity from a nonappropriated fund civil 
     service or military retirement system at the time of the 
     separation from nonappropriated fund employment. The 
     legislation also prevents an employee from receiving 
     appropriated fund and nonappropriated fund severance pay for 
     the same period of appropriated fund service, in the same 
     amounts. Regulations will be written by the Department of 
     Defense in consultation with the Department of Transportation 
     to implement the legislation upon enactment.

                       Subtitle C--Other Matters

                Sec. 921. National Guard youth programs

       The purpose of section 921 is to authorize the National 
     Guard to provide limited assistance to certain youth and 
     other organizations in conjunction with training. This 
     initiative would enhance the involvement of the National 
     Guard with youth in the local communities while contributing 
     to social needs for constructive activities for America's 
     young people.
       This section would authorize members or units of the 
     National Guard to provide certain assistance to specified 
     youth and other organizations in conjunction with training if 
     the provision of such services does not degrade the quality 
     of the training or otherwise interfere with the ability of 
     any unit to perform its military functions; the services 
     provided are not commercially available or commercial 
     entities affected have agreed in writing not to object; and 
     the assistance does not materially increase the cost of the 
     training activities services which could be provided would 
     include ground transportation; limited air transportation in 
     support of the Special Olympics; administrative support; 
     technical training; emergency medical assistance; 
     communications; and security support.
       This section will not result in an increase in the 
     budgetary outlays of the Department of Defense. The 
     activities authorized would be carried out within funding 
     appropriated for the public affairs and youth program 
     activities of the National Guard.

   Sec. 922. Protection from unauthorized use of the name ``Defense 
                            Mapping Agency''

       As part of its mandated charter, the Defense Mapping Agency 
     provides accurate and inexpensive aids for navigators (10 
     U.S.C. 2791). Further, it prepares maps, charts and nautical 
     books (10 U.S.C. 2792). The authenticity of this material 
     must be protected.
       Certain DMA mapping, charting and geodesy (MC&G) nautical 
     and aeronautical products are needed and used by the general 
     public. DMA accommodates this need through an extensive 
     public sale program. It is crucial that end users rely on 
     the most current and accurate products available to assure 
     safety of navigation. This currency and accuracy of 
     various publicly available products is increasingly 
     difficult in the digital data era since DMA's paper, or 
     ``hard copy'' products can be obtained and easily 
     transformed into digital products or copied onto video or 
     laser disks for distribution, modification or alteration.
       The section is modeled after section 202 of title 10, 
     United States Code, which provides similar protection for the 
     Defense Intelligence Agency, the initials ``DIA'' and the 
     official seal and emblem. No judicial, executive or 
     Administrative provisions would be overturned or affected by 
     this change.

Sec. 923. Limitation of liability for any navigational aid prepared or 
               disseminated by the Defense Mapping Agency

       Section 923 amends chapter 147 of title 10, United States 
     Code, by adding a new section to grant the Defense Mapping 
     Agency an express exemption from liability associated with 
     the preparation or dissemination of its products, in whatever 
     form. This language would make clear that the activities of 
     the Defense Mapping Agency in the preparation and production 
     of maps, charts, aids to navigation, publications, products 
     and information are expressly exempt from any claim or 
     action.
       DMA is a combat support agency of the Department of 
     Defense. Its mission is to produce topographic, aeronautical 
     and nautical maps, charts and other publications in hardcopy 
     and softcopy versions to support United States warfighters. 
     However, many of its products are used by mariners navigating 
     vessels around the world.
       DMA relies heavily upon nautical and aeronautical products 
     and information of other countries. A tremendous quantity of 
     information is processed in preparing and distributing 
     thousands of maps and charts and related information. DMA 
     exercises great care to ensure the accuracy of all its 
     products. Since DMA cannot independently verify all the 
     information supplied by foreign sources it is unreasonable to 
     subject the United States to unlimited liability in the 
     production and distribution of these many products.
       For example, in the case of Hyundai Merchant Marine Co., 
     Ltd. at. al. v. United States, the HYUNDAI NEW WORLD, a 
     200,000 deadweight ton bulk cargo carrier, stranded in the 
     Bay of Sao Marcos, Brazil, on 31 March 1987, resulting in a 
     total loss of ship and cargo. The ship owner, cargo owners 
     and underwriters of same, sued the United States for 
     negligence alleging that the navigators of HYUNDAI NEW WORLD 
     were using DMA chart 2471 (A DMA facsimile of a Brazilian 
     chart) containing errors and omissions which were the cause 
     of the stranding. The potential damages to date are estimated 
     at $60 million.
       This proposed statutory language would make it clear that 
     the activities of the Defense Mapping Agency in the 
     preparation and production of maps, charts, aids to 
     navigation, publications, products and information, in 
     whatever form, primarily for use of U.S. warfighters, are 
     expressly exempt from any claim or cause of action.

 Sec. 924. Reorganization of the Air Force liaison with the Civil Air 
                                 Patrol

       Section 924 amends section 9441 of title 10, United States 
     Code, to reorganize the Air Force liaison with the Civil Air 
     Patrol. The section adds a new paragraph (b)(12), which 
     authorizes the Secretary of the Air Force to reimburse the 
     Civil Air Patrol the cost of maintaining the staff at the 
     Civil Air Patrol National Headquarters. The section also adds 
     a new subsection (d), which authorizes the Secretary of the 
     Air Force to detail retired members as liaison or 
     administrators to the Civil Air Patrol and provides that 
     these retired members will receive as compensation not more 
     than the difference between their retired pay and the active 
     duty pay and allowances they would receive if ordered to 
     active duty in the grade and rank in which they retired. It 
     further provides that duty with the Civil Air Patrol by such 
     retired members is not to be considered active duty or 
     inactive duty training for any purpose.

 Sec. 925. Informed consent of persons participating in human medical 
                                research

       Section 925 amends section 980 of title 10, United States 
     Code, concerning the use of humans in experimental research. 
     Currently, the subject must provide informed consent. In the 
     case of an incompetent person, a legal representative may 
     provide consent if the research is intended to be beneficial 
     to the subject. Section 925 permits an incompetent person's 
     representative to consent to research that is not 
     specifically intended to be beneficial to the subject, but 
     which would be of minimal or no risk and could be beneficial 
     to the subject or to others.

   Sec. 926. Military-to-military contacts and comparable activities

       This section amends Chapter 6 of title 10, United States 
     Code, by adding a new section providing permanent statutory 
     authority for the Secretary of Defense to conduct Military-
     to-Military Contacts and Comparable Activities. The section 
     extends language in the Department of Defense FY 1994 
     Authorization Act which applies only to FY 1994. Currently, 
     Defense and Military Contacts also are authorized under the 
     Cooperative Threat Reduction (Nunn-Lugar) legislation solely 
     for States of the Former Soviet Union.
       Funds appropriated under this new section may be provided 
     to a CINC on request, an officer designated by the Chairman 
     of the Joint Chiefs of Staff, or to a Department of Defense 
     component implementing Military-to-Military Contact 
     activities. The new section identifies activities to be 
     supported in order to promote the democratic orientation of 
     the civilian defense establishments and military forces of 
     other countries. These activities are fully coordinated with 
     other US agencies and undertaken with the full support of 
     State Department representatives in host countries. The 
     legislation provides that activities may not be conducted 
     with any foreign country unless the Secretary of State 
     approves such activities. The legislation also provides for 
     funds appropriated for these activities to reimburse pay and 
     allowance accounts to fund National Guard and Reserve 
     personnel participating in regional and bilateral exchange 
     familiarization programs, such as the National Guard's 
     ``Partnership State'' program. The program links the 
     National Guards of selected U.S. States to appropriate 
     military organizations within selected emerging 
     democracies in Central and Eastern Europe.
       In FY 1994, Congress authorized and appropriated $10 
     million for Military-to-Military Contacts and Comparable 
     Activities. The Conferees, however, recognized that these 
     funds would only serve as a ``bridge until Congress can take 
     up the broader issue of the permanent level and scope of such 
     contacts''. The proposed legislation for FY 1995 is required 
     to continue this program annually.
       This program recognizes that the Department of Defense has 
     unique skills to assist foreign defense establishments in 
     consolidating civilian control of their militaries, and 
     developing respect for and adherence to democratic principles 
     and practice. U.S. defense personnel dispatched to a host 
     nation can encourage these goals through working closely with 
     their counterparts in areas such as defense planning, 
     programming and budgeting, defense personnel and resource 
     management, civil-military relations, military justice and 
     legal systems, military medicine, and other related defense 
     issues. These activities generally will be undertaken through 
     Military Liaison Teams (MLT) stationed in the host countries, 
     supplemented by Traveling Contract Teams whose visits are 
     coordinated by the MLT. This approach was initiated in 
     Central and Eastern Europe in FY 1991-92 and is expected to 
     continue in this area through FY 1996. Thereafter, the 
     functions of these teams are expected to be absorbed into the 
     regular, ongoing activities of the Defense Attache Officers 
     and Security Assistance Officers.
       A critical component of the Military-to-Military Contact 
     program in Central and Eastern Europe is the U.S. National 
     Guard and Reserve. These personnel bring essential skills 
     from both the military and civilian sectors to the tasks of 
     democratizing foreign defense establishments and their 
     militaries. Through Reserve contact programs, such as the 
     ``Partnership State'' program, and other regional and 
     bilateral exchange and familiarization programs, these 
     citizen-soldiers link the military and civilian personnel of 
     the defense establishments of democratizing nations to grass 
     roots America at the State level in institutional and people-
     to-people relationships. For FY 1994, no funds were 
     authorized to provide pay and allowances for Guard and 
     Reserve personnel in this program. In FY 1995, this proposal 
     will allow reimbursement from Military-to-Military Contact 
     program funds to military appropriations accounts for pay and 
     allowances for U.S. National Guard and Reserve participants.
       Enactment of this proposal will support the 
     Administration's FY 1995 request for $46.3 million to support 
     Military-to-Military Contacts and Comparable Activities. 
     These funds will be managed by the Joint Staff with policy 
     direction and oversight by the Secretary of Defense through 
     the Under Secretary of Defense for Policy.

       Sec. 927. Purchase of vessels for the Ready Reserve Force

       The Ready Reserve Force (RRF) provided a vital strategic 
     sealift capability in the Persian Gulf War. Failure to fully 
     fund the RRF in FY 1995 could lead to loss of critical 
     strategic mobility capability required for future overseas 
     military interventions. It is essential to assure a high 
     degree of strategic mobility readiness, for the critical 
     force deployment requirements identified in the Bottom-Up 
     Review and the Mobility Requirements Study, by acquiring 
     additional shipping. The forthcoming update to the Mobility 
     Requirements Study will further substantiate the requirements 
     for these essential strategic mobility forces. The proposed 
     legislation is required to ensure that funding allocated for 
     RRF enhancement in FY 1995 can be obligated for purposes in 
     which it was intended.

  Sec. 928. Technical Amendment to Authorize Implementation of Junior 
           Reserve Officers' Training Corps Program Expansion

       This amendment is a technical amendment to permit the 
     Department of Defense to meet the Congressional intent of 
     section 533 of the National Defense Authorization Act for 
     Fiscal Year 1993 (Public Law 102-484, October 23, 1992; 106 
     Stat. 2315 at 2411). That section instituted a Junior Reserve 
     Officers' Training Corps which with funding authorizations in 
     Fiscal Years 1993 and 1994 necessitated increases 
     substantially in excess of the statutorily mandated 
     provisions of section 2031(a)(1) of title 10, United States 
     Code. Section 928 required an increase in the number of JROTC 
     units from 1,600 to 3,500. The 200 annual limitation on 
     additional units in section 2031 precludes the Department of 
     Defense from meeting the Congressional guidelines recently 
     imposed. This technical correction will enable the Department 
     of Defense to meet the congressional mandates in this area.


         title x--matters relating to allies and other nations

   Sec. 1001. Extension of authority to acquire logistic support for 
forces deployed outside the United States to authority to acquire from 
the United Nations or regional organizations of which the United States 
                              is a member

       This section extends the authority to acquire logistical 
     support from the United Nations or any regional organization 
     of which the United States is a member in support of 
     humanitarian or peacekeeping operations such as the United 
     Nations sanctioned operation in Somalia. Experience during 
     the U.S. led operation in Somalia, the blockade of Haiti and 
     the sea blockade of the former Yugoslavia has shown that the 
     U.S. needs more flexibility in obtaining support from the 
     United Nations and regional organizations. This authority is 
     not as critical in United Nations assessed operations where 
     all support is provided through the United Nations but is 
     critical to participation in voluntary operations in which 
     logistic support is a national responsibility. An example of 
     this requirement would have been the capability to obtain 
     support for various common support items such as water from 
     the United Nations during the initial stages of the U.S. led 
     operation in Somalia (UNITAF).

    Sec. 1002. Extension of authority to enter into cross servicing 
   agreements to authority to enter into agreements with the United 
Nations organization or any regional organizations of which the United 
                           States is a member

       This section is similar to Section 1001 except that it 
     allows the United States to provide support on a reciprocal 
     basis to the United Nations and other regional organizations. 
     This authority allows for the United Nations to designate 
     lead logistics support nations for various support 
     commodities, thereby reducing the requirement for each nation 
     to maintain duplicative force structure and reducing overall 
     costs through economies of scale.

      Sec. 1003. Method of payment for acquisitions and transfers

       This section requires modification to incorporate the 
     United Nations or regional international organizations of 
     which the United States as organizations to which the present 
     legal basis for the method of payment for acquisitions and 
     transfers applies. Technical change to incorporate extension 
     of acquisition and cross-servicing authority to those 
     organizations.

   Sec. 1004. Limitation on amounts that may be obligated or accrued

       This section has a dual purpose. The first reason is to 
     include the United Nations and other regional organizations 
     under the legal ceilings for obligations and accruals. The 
     second, and most important, purpose of this section is to 
     change the manner in which dollar ceilings are applied during 
     contingency operations. The current language states that 
     dollar limitations remain in place until the determination of 
     active hostilities. Application of these limitations to 
     extended military activities short of a state of declared 
     hostilities could prevent use of these authorities when they 
     are most needed. Therefore, it is proposed that the dollar 
     limitations be waived during contingency operations (as 
     defined in section 101(a)(13), chapter 1 of title 10, United 
     States Code). United States Armed Forces participating in 
     multinational operations, like Operation Desert Shield/Storm 
     and Operation Restore Hope, could benefit from this proposal 
     by taking advantage of available coalition resources during 
     activities conducted leading up to or that fall short of 
     active hostilities.

                         Sec. 1005. Definitions

       This section permits deployed United States armed forces to 
     loan or borrow general purpose vehicles and other items of 
     military equipment which would not affect readiness. The 
     authority to temporarily exchange logistic support of this 
     nature with designated countries and international 
     organizations would facilitate greater cooperation during an 
     exercise or military operation. An example would be loaning 
     general purpose vehicles to a designated nation during a 
     joint exercise conducted at a U.S. military base. The section 
     also clarifies several points concerning the basic 
     legislation to include the provision of airlift services in 
     those cases where a Cooperative Airlift Agreement does not 
     exist and defines calibration services as an allowed logistic 
     support service.

                       Sec. 1006. Effective date

       This section specifies the effective date for which any 
     acquisitions or transfers of logistic support, supplies and 
     services undertaken under the authority of this subchapter 
     shall be effective.


               title xi--peacekeeping and related matters

     Sec. 1101. Assistance to international peacekeeping and peace 
                         enforcement activities

        Section 1101 authorizes the President to provide 
     assistance including, but not limited to, personnel, 
     supplies, services, and equipment, in support of 
     international peacekeeping and peace enforcement activities. 
     The section further authorizes the President to pay 
     assessments on behalf of the United States to the United 
     Nations.
       This authority is parallel to the peacekeeping authority in 
     the Foreign assistance Act and is the foundation for the 
     Department of Defense's responsibilities under ``shared 
     responsibility.'' under the ``shared responsibility'' model 
     as it is expected to be implemented by executive order, State 
     would have lead responsibility for managing and funding 
     traditional non-combat Chapter VI peacekeeping activities 
     that do not involve U.S. combat units. The Department of 
     Defense would have lead responsibility for managing and 
     funding all Chapter VII peace enforcement operations and 
     those traditional non-combat Chapter VI peacekeeping 
     operations with U.S. combat units. (In order for the 
     Department of Defense to have lead responsibility for 
     managing and funding these operations, the legislation 
     proposes a DOD CIPA account, as described below.)
       Section 1101 provides that the President shall require 
     reimbursement to the United States for the agreed costs of 
     any peacekeeping assistance provided pursuant to this 
     authority. The legislation would, however, allow the 
     exception that the President may waive, in whole or in part, 
     reimbursement in exceptional circumstances and when it is in 
     the national interest. The legislation would provide further, 
     that reimbursements from the United Nations may be credited 
     against the United States Government's share of any 
     assessment due and owing after the Department of Defense has 
     been reimbursed for its incremental costs (subject to section 
     (c)(1)).
       Section (c)(1) of the legislation outlines the order in 
     which agencies of the United States Government are to be 
     reimbursed for assistance provided to international 
     peacekeeping and peace enforcement activities. Any 
     reimbursement received shall first be used to reimburse the 
     appropriate department of the Department of Defense for any 
     incremental costs. At the option of the appropriate 
     department of the Department of Defense, the reimbursement 
     shall be credited either to the appropriation, fund, or 
     account from which the obligation was incurred or to a 
     currently available like account.
       The legislation would create in the Treasury of the United 
     States an account, Contributions for International 
     Peacekeeping and Peace Enforcement Activities Fund, parallel 
     to the State CIPA account, which can be used only for purpose 
     of paying assessments on behalf of the United States for 
     United Nations operations made under this section. 
     Reimbursements in excess of the incremental costs may be 
     credited to this account. The legislation makes clear that 
     funds appropriated or deposited into this account shall 
     remain available until expended.
       The legislation would require the President to submit to 
     Congress an annual report on international peacekeeping and 
     peace enforcement activities supported under the authority of 
     this section during the previous fiscal year. The report 
     would be due no later than 1 February of each year and would 
     include descriptions of each international peacekeeping and 
     peace enforcement activity supported under the authority of 
     this section, the type of assistance provided under the 
     authority of this section, and the dollar value, by activity 
     supported, of all assistance provided, reimbursements 
     received, reimbursements waived, credits taken, and 
     obligations incurred in the Contributions for International 
     Peacekeeping and Peace Enforcement Activities Fund under the 
     authority of this section.
       Finally, this legislation authorizes the appropriation of 
     funds to the Department of Defense to pay assessments as 
     authorized under this section with the limitation that such 
     payments may be provided from the Contributions for 
     International Peacekeeping and Peace Enforcement Activities 
     Fund only for those activities for which the Secretary of 
     Defense has primary responsibility.


                    TITLE XIII--COUNTERPROLIFERATION

 Sec. 1201. Extension and amendment of counterproliferation authorities

       Section 1201(a) would permanently extend the International 
     Nonproliferation Initiative contained in Section 1505 of the 
     ``Weapons of Mass Destruction of 1992 as amended.'' In 
     addition, it would broaden the Department's authority to work 
     with international organizations to ensure more effective 
     safeguards against proliferation and more aggressive 
     verification of compliance with international agreements on 
     nonproliferation. It would also authorize the Department to 
     participate in technical projects and information sharing 
     programs related to biological, chemical, and missile 
     proliferation. Current law permits participation in such 
     programs in the area of nuclear proliferation.
       This section would also authorize the Department to provide 
     assistance and support in the destruction and elimination of 
     weapons of mass destruction. Activities of this nature 
     demonstrate United States willingness to assist other nations 
     to dismantle weapons of mass destruction. As new arms control 
     or assistance agreements come into effect, such efforts could 
     increase, especially in the chemical, biological, and 
     ballistic missile weapons arena.
       Section 1201(b) would permanently extend authority 
     contained in title XVI of the fiscal year 1994 National 
     Defense Authorization Act for the Department to initiate 
     Counterproliferation Policy research and proliferation 
     analysis programs to support the Department's 
     Counterproliferation activities.
       Section 1201(c) would authorize in addition to funds 
     otherwise available, funding of $30,159,000 for fiscal year 
     1995 for the purposes of conducting Counterproliferation 
     activities.


                     TITLE XIII--ACQUISITION REFORM

              Sec. 1301. Amendment to research authorities

       This proposed language amends Section 2358 of title 10, as 
     amended by Section 827 of the National Defense Authorization 
     Act for Fiscal Year 1994, essentially to delete ``other 
     transactions'' as a type of instrument that may be 
     unqualifiedly used for all research and development. The 
     Department believes that the unique authority to enter into 
     ``other transactions,'' granted by Congress under 10 U.S.C. 
     Sec. 2371, was intended to provide a specialized authority 
     primarily for advanced research purposes. This authority 
     should not, at this time, be broadened to apply to 
     Department-wide development projects.
       Other, clarifying language changes are also proposed. For 
     example, the authority of section 2371 would be extended to 
     apply to the Secretaries of the military departments and such 
     other elements of the Department of Defense as the Secretary 
     of Defense may designate. However, the authority of 
     subsection (d) to establish separate accounts on the Treasury 
     books has been deleted because, under the broadened statute, 
     it could lead to a proliferation of such accounts. Instead, 
     proposed subsection (b)(2) would provide authority to credit 
     such reimbursements to applicable appropriations.
       This proposed language also makes a corresponding amendment 
     to section 2371 of title 10, United States Code, to reinstate 
     ``other transactions'' and ``cooperative agreements'' as the 
     sole types of instruments that may be used to implement the 
     authority of section 2371, including its unique authority to 
     merge funds.

    Sec. 1302. Amendment of acquisition laws relating to industrial 
                              mobilization

       Section 1302 amends a newly-created statue, section 2373 of 
     title 10, United States Code, relating to procurement for 
     experimental purposes, The newly-created statute had 
     consolidated and modernized previously existing Army and Air 
     Force unique authorities at sections 4504 and 9504 of title 
     10. Under those prior statutory sections, these services had 
     authority to procure limited items on a experimental basis, 
     with or without competitive bidding when not purchased in 
     quantity. When enacted in the National Defense Authorization 
     Act for Fiscal Year 1994, however, this competition exception 
     was deleted. To ensure that the new, consolidated statute 
     remains coextensive with these prior, service-specific 
     authorities that were the basis for the new statute, the 
     proposed amendment reinstates the competition exception.
       Section 2538 of title 19, United States Code, authorizes 
     the President, through the Secretary of Defense, to order the 
     production of necessary products or materials and to take 
     possession of plants required for the production of arms, 
     ammunition, or necessary supplies for the armed forces during 
     time of war or when war is imminent. Section 1302(b) would 
     amend a newly enacted authority to sell to add ``rent'' as a 
     method of disposition and to provide that the government 
     shall negotiate for the appropriate disposition of resultant 
     data when it makes available the use of test facilities to 
     private entities. Section 1302(d) would amend sections 2538 
     (a) and (c) to expand the President's authority to act 
     through the head of any department, including civilian 
     agencies.

                Sec. 1303. Disposition of naval vessels

       Current statutory provisions at 10 U.S.C. 7304, 7305, 7307, 
     7308, and 7309 provide authority for the disposition of naval 
     vessels. Specifically, under current law:
       Section 7304 provides that the Secretary of the Navy shall 
     designate boards of naval officers to examine naval vessels 
     at least every three years, and recommend which, if any, 
     shall be found unfit for service and stricken from the Naval 
     Vessel Register.
       Section 7305 provides that the Secretary of the Navy shall 
     appraise stricken vessels. When in the national interest, the 
     Secretary is directed to offer the vessel for sale. A 
     detailed advertisement and bid procedure is to be utilized 
     when offering such vessels for sale. That procedure requires 
     a three month advertisement period, a 10% of bid deposit, 
     other manner or for less than the appraised value unless the 
     President directs in writing. These provisions do not apply 
     to vessels whose disposition is authority by the federal 
     Property and Administrative Services Act.
       Section 7306 provides that the Secretary of the Navy, with 
     presidential approval, may use any stricken vessel for 
     experimental purposes when in the best interests of the U.S. 
     The Secretary must carry out such stripping of the vessel as 
     is practicable before use for experimental purposes, with 
     stripping proceeds credited to applicable appropriations.
       Section 7307 provides that notwithstanding any other 
     provision of law, no battleship aircraft carrier, cruiser, 
     destroyer or submarine may be sold, transferred, or otherwise 
     disposed of unless the chief of Naval Operations certifies 
     that it is not essential to the national defense. It further 
     provides that, after August 5, 1974, no vessel in excess of 
     3,000 tons or less than 20 years of age may be sold or 
     otherwise disposed of to another nation unless such 
     disposition has been approved by law. It also provides that, 
     after August 5, 1974, any other type of naval vessel may be 
     sold or otherwise disposed of to a foreign nation only after 
     notification to the Senate and House Armed Services 
     Committees and after expiration of 30 days continuous session 
     of the Congress.
       Section 7308 provides that, subject to certain provision in 
     the Federal Property and Administrative Services Act of 1949, 
     the Secretary of the Navy may transfer by gift or under such 
     terms as the Secretary prescribes, any obsolete, condemned or 
     captured naval vessel to any State, Territory, Commonwealth 
     or U.S. possession, any municipal corporation or political 
     subdivision thereof, the District of Columbia or any non-
     profit or not for profit entity. Each transfer agreement must 
     provide that the transfer shall be without cost to the 
     government and that the vessel will be maintained in a 
     condition satisfactory to the Navy. The section also contains 
     a 60 day congressional notice requirement.
       Section 1303 consolidates these previously existing 
     authorities relating to disposition of naval vessels. With 
     the exception of a redundant congressional notification 
     period in 10 U.S.C. 7307 (the same notification is obtained 
     by numerous other statutes), the proposal retains the 
     substance of the prior authorities in their entirety. It also 
     adds an indemnification requirement.

          Sec. 1304. Contract for fuel storage and management

       This section makes a technical language change to an 
     authority to contract for the storage or management of liquid 
     fuels or natural gas. By making the authority disjunctive, 
     the agency may contract for either item separately.
                                 ______
                                 
      By Mr. BUMPERS (by request):
  S. 2060. A bill to amend the Small Business Act; to the Committee on 
Small Business.
      By Mr. BUMPERS (for himself and Mr. Hatfield) (by request):
  S. 2061. A bill to amend the Small Business Investment Act of 1958 to 
permit prepayment of debentures issued by State and local development 
companies; to the Committee on Small Business.


                       small business legislation

 Mr. BUMPERS. Mr. President, today I am introducing two 
administration bills concerning Small Business Administration programs. 
The first reauthorizes and significantly increases several SBA lending 
programs and makes other changes to the Small Business Act to implement 
the President's fiscal year 1995 budget request.
  The second bill would permit borrowers who have been funded with the 
proceeds of debentures guaranteed under section 503 of the Small 
Business Investment Act to prepay principal and interest with a reduced 
prepayment penalty. The section 503 program provides long term capital 
for plant and equipment investments. The President's fiscal year 1995 
budget contains $30 million for the purpose of relieving the prepayment 
penalties of 503 borrowers.
  I applaud the administration's efforts to strengthen SBA's programs, 
and to relieve the onerous prepayment penalties on 503 borrowers. 
However, the bills contain some provisions which warrant close 
examination by the Committee on Small Business. One such example is the 
proposal to return the funding of the 504 program to the Federal 
Financing Bank. This proposal contradicts a policy which has been in 
place legislatively since 1986 and which was enacted as a significant 
cost-savings measure.
  These bills provide an important step in the reauthorization process 
of SBA's major programs, which provide financial, procurement and 
business development assistance to the Nation's small businesses. The 
committee has already held several hearings on some of SBA's key 
programs. Later this month, the committee plans to hold a hearing on 
the 504 program and the issue of 503 prepayment penalties.
  Mr. President, I ask unanimous consent that the bills be printed in 
the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                S. 2060

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That this 
     Act may be cited as the ``Small Business Administration 
     Amendments of 1994.''

                                TITLE I

       Section 101. Section 7(m)(1)(B) of the Small Business Act 
     is amended by adding the words ``, a lender or alliance of 
     lenders'' after the word ``Administration'', and by adding 
     after the word ``intermediaries'' in clause (i) thereof the 
     following phrase ``provided however, that the Administration 
     may make in its sole discretion up to 100 percent deferred 
     participation loans to ten intermediaries which will be 
     located in urban areas and ten intermediaries which will be 
     located in rural areas,''.
       Sec. 102. Section 7(m)(7) of the Small Business Act is 
     amended by deleting the number ``50'' from subparagraph (B) 
     thereof, and replacing it with the number ``140'', and by 
     deleting the period at the end thereof and adding the phrase: 
     ``provided that no more than 200 total microloan programs may 
     be funded'', and by deleting subparagraph (C) thereof and 
     inserting in lieu thereof: ``(C) In no case shall a State 
     receive more than $5 million to fund all microloan programs 
     conducted in the State.''
       Sec. 103. Section 7(m)(3)(C) of the Small Business Act is 
     amended by replacing the number ``$1,250,000'' with the 
     number ``$1,750,000''.
       Sec. 104. Section 7(m)(3)(F) of the Small Business Act is 
     amended by adding after the phrase ``10 years'' in clause (i) 
     the following: ``with the first five years of any deferred 
     participation loan being a revolving line of credit on which 
     only monthly payments of interest will be required and the 
     balance amortized over the second five year period, with 
     equal monthly payments of principal and interest''; and by 
     revising clause (ii) to read as follows: ``(ii) Applicable 
     interest rates--Exception as provided in clause (iii), loans 
     made by the Administration under this subsection to an 
     intermediary shall bear an interest rate equal to the rate of 
     interest on comparable five year obligations of the United 
     States Treasury.

                                TITLE II

       Sec. 201. Section 7(a)(2)(B)(iv) of the Small Business Act 
     is amended to read as follows:

     ``. . . (iv) not more than 90 percent of the financing 
     outstanding at the time of disbursement if such financing is 
     an extension or a revolving line of credit made under 
     paragraph (14) and not less than 90 percent of the financing 
     outstanding at the time of disbursement if such financing is 
     a loan under paragraph (16).''
       Sec. 202. Section 7(a)(14) of the Small Business Act is 
     amended to read as follows:

     ``(14) (A) The Administration under this subsection may 
     provide extensions, specifically including guarantees of 
     standby letters of credit and revolving lines of credit for 
     export purposes, and financings to enable small business 
     concerns, including small business export trading companies 
     and small business export management companies, to develop 
     foreign markets. A bank or participating lending institution 
     may establish such rate of interest on extensions, revolving 
     lines of credit and financings made under this paragraph as 
     may be legal and reasonable.''
       Sec. 203. Section 7(a)(3)(B) of the Small Business Act is 
     amended to read as follows:

     ``. . . if the total amount outstanding and committed (on a 
     deferred basis) solely for the purposes provided in paragraph 
     (16) to the borrower from the Business Guaranteed Loan 
     Financing Account established by this Act would exceed 
     $1,000,000 such amount to be in addition to any financing 
     solely for working capital, supplies, or revolving lines of 
     credit for export purposes up to a maximum of $750,000; 
     Provided, however that in no event my be aggregate amount 
     outstanding and committed by the Administration under this 
     subsection exceed $1,250,000 . . .''

                               TITLE III

       Sec. 301. Section 8(b) (2), (3) and (4) of the Small 
     Business Act are amended by inserting the words ``and other'' 
     after the word ``small'' wherever it appears.

                                TITLE IV

       Sec. 401. Section 28[2](g) of the Small Business Act is 
     deleted and in its place the following is substituted:
       ``(g) There is established within the Administration an 
     Office of Women's Business Ownership which shall be 
     responsible for the administration under the supervision by 
     the Administration of all authority conferred by this 
     section. Such Office shall be headed by a director who shall 
     be appointed by the Administrator.''

                                TITLE V

       Sec. 501. Section 8(b)(1)(A) of the Small Business Act is 
     amended by adding at the end thereof the following sentence: 
     ``Notwithstanding any other provision of law, the authority 
     provided by this subparagraph shall remain available until 
     expressly repealed.''
       Sec. 502. Section 411(a)(3) of the Small Business 
     Investment Act of 1958 is amended by adding the following 
     sentence at the end thereof: ``Notwithstanding any other 
     provision of law, the authority granted by this paragraph 
     shall remain available until expressly repealed.''
       Sec. 503. Section 5(b)(8) of the Small Business Act is 
     amended by deleting the words ``not in excess of six 
     months''.
       Sec. 504. The second sentence of Section 732 of Public Law 
     100--656 is repealed.
       Sec. 505. Section 4(c) of the Small Business Act is amended 
     to read as follows:
       ``(c)(1) There is hereby established in the Treasury one 
     Loan Liquidation Fund. All repayment of loans and debentures, 
     payments of interest, and other receipts arising out of 
     transactions entered into by the Administration pursuant to 
     Sections 5(e), 5(g), 7(a), 7(b), 7(c)(2), 7(e), 7(h), 7(l), 
     7(m), and 8(a) of this Act, and Titles III, IV, and V of the 
     Small Business Investment Act of 1958, prior to October 1, 
     1991, shall be paid into such Loan Fund Liquidating Account. 
     Balances existing in those revolving funds, as in effect 
     immediately prior to the effective date of this paragraph, 
     shall be transferred into such Loan Liquidation Fund. This 
     Loan Liquidation Fund shall have available, without fiscal 
     year limitation, such funds as are necessary to finance its 
     operational needs.
       (2) The Administration shall submit to the Committees on 
     Small Business and Appropriations of the Senate and the House 
     of Representatives, as soon as possible after the beginning 
     of each fiscal year, a full and complete report on the status 
     of the Loan Liquidation Fund established pursuant to 
     paragraph (1).''
       Sec. 506. Section 4(c)(5)(B)(ii) of the Small Business Act 
     is amended to read as follows:
       ``(ii) The Administration shall pay into the miscellaneous 
     receipts of the Treasury following the close of each fiscal 
     year, the actual interest it collects during that fiscal year 
     on all financings made under the authority of this Act.''
       Sec. 507. Section 3(a)(2) of the Small Business Act is 
     amended to read as follows:

     ``. . . (2) In addition to the criteria specified in 
     paragraph (1), the Administrator may specify detailed 
     definitions or standards for example, by number of employees 
     or dollar volume of business, by which a business concern is 
     to be recognized as a small business concern for the purposes 
     of this Act or any other Act. Unless specifically authorized 
     by statute, the Secretary of a department or the head of a 
     Federal agency, other than the Administrator of the Small 
     Business Administration, may not prescribe for the use of 
     such department or agency a size standard for categorizing a 
     business concern as a small business concern, unless such 
     proposed size standard--
       (A) is being proposed after an opportunity for public 
     notice and comment;
       (B) provides for determining, over a period of not less 
     than 3 years--
       (i) the size of a manufacturing concern as measured by its 
     average employment based upon employment during each of the 
     concern's pay periods for the preceding completed twelve 
     calendar months; or
       (ii) the size of a concern providing services on basis of 
     the annual average gross receipts of the concern over a 
     period of not less than three years; and
       (C) is approved by the Administrator.
       (3) When establishing or approving any size standard 
     pursuant to paragraph (2), the Administrator shall consider 
     variations in economic activity from industry to industry 
     unless the Administrator determines that size standards 
     should not vary in order to meet program needs.''
       Sec. 508. Section 5(b) of the Small Business Act is amended 
     by deleting the word ``and'' at the end of paragraph (10) 
     thereof, by removing the ``.'' at the end of paragraph (11) 
     thereof and replacing it with ``, and'' and (b) adding a new 
     paragraph (12) which reads as follows: ``. . . (12) to impose 
     reasonable fees to be charged in connection with applications 
     for assistance, and the provision of assistance under this 
     Act and the Small Business Investment Act of 1958 and to 
     retain such fees to offset the costs of administration of 
     such assistance.''
       Sec. 509. Section 8(b) of the Small Business Act is amended 
     by deleting the word ``and'' at the end of paragraph (15), by 
     striking the period at the end of paragraph 8(b)(16) and 
     replacing it with ``; and'', and by adding a new paragraph 
     8(b)(17) which reads as follows:

     ``. . . (17) to charge and collect such fees as may be 
     necessary to cover all costs associated with the production 
     and dissemination of information of compilations of 
     information produced by the Administration under the 
     authority of the Small Business Act and the Small Business 
     Investment Act of 1958, and to retain such fees and utilize 
     such fees to offset the costs of production and dissemination 
     of such compilations of information.''

                                TITLE VI

       Sec. 601. Sections 20(k) through 20(p) of the Small 
     Business Act are repealed and the following is substituted in 
     their place:
       ``(k) The following program levels are authorized for 
     fiscal year 1995:
       (1) For the programs authorized by this Act, the 
     Administration is authorized to make $13,910,000,000 in 
     deferred participation loans and other financings; and of 
     such sum, the Administration is authorized to make 
     $11,500,000,000 in general business loans as provided in 
     section 7(a), $110,000,000 in loans as provided in section 
     7(m), and $2,300,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958.
       (2) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make $23,000,000 in purchases of preferred 
     stock, $275,000,000 in guarantees of debentures of which 
     $65,000,000 is authorized for guarantees of debentures of 
     companies operating pursuant to section 301(d) of such Act, 
     and $550,000,000 in guarantees of participating securities.
       (3) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000.
       (l) There are authorized to be appropriated to the 
     Administration for fiscal year 1995 such sums as may be 
     necessary to carry out subsection (k), including salaries and 
     expenses of the Administration.
       (m) The following program levels are authorized for fiscal 
     year 1996:
       (1) For the programs authorized by this Act, the 
     Administration is authorized to make $17,475,000,000 in 
     deferred participation loans and other financings; and of 
     such sum, the Administration is authorized to make 
     $13,500,000,000 in general business loans as provided in 
     section 7(a), $175,000,000 in loans as provided in section 
     7(m), and $3,800,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958.
       (2) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make $24,000,000 in purchases of preferred 
     stock, $320,000,000 in guarantees of debentures of which 
     $70,000,000 is authorized for guarantees of debentures of 
     companies operating pursuant to section 301(d) of such Act, 
     and $1,100,000,000 in guarantees of participating securities.
       (3) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000.
       (n) There are authorized to be appropriated to the 
     Administration for fiscal year 1996, such sums as may be 
     necessary to carry out subsection (m), including salaries and 
     expenses of the Administration.
       (o) The following program levels are authorized for fiscal 
     year 1997:
       (1) For the programs authorized by this Act, the 
     Administration is authorized to make $21,450,000,000 in 
     deferred participation loans and other financings; and of 
     such sum, the Administration is authorized to make 
     $15,500,000,000 in general business loans as provided in 
     section 7(a), $250,000,000 in loans as provided in section 
     7(m), and $5,700,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958.
       (2) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make $25,000,000 in purchases of deferred 
     stock, $385,000,000 in guarantees of debentures of which 
     $75,500,000 is authorized for guarantees of debentures of 
     companies operating pursuant to section 301(d) of such Act, 
     and $1,700,000,000 in guarantees of participating securities.
       (3) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000.
       (p) There are authorized to be appropriated to the 
     Administration for fiscal year 1997, such sums as may be 
     necessary to carry out subsection (o), including salaries and 
     expenses of the Administration.''
                                  ____


                                S. 2061

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES.

       (a) In General.--Title V of the Small Business Investment 
     Act of 1958 (15 U.S.C. 695, et seq.), is amended by adding at 
     the end the following new section:

     ``SEC. 507. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES.

       ``(a) In General.--(1) If the requirements of subsection 
     (b) are met and subject to the availability of 
     appropriations, the issuer of a debenture purchased by the 
     Federal Financing Bank and guaranteed by the Administration 
     under section 503 may, at the election of the borrower whose 
     loan secures such debenture and with the approval of the 
     Administration, prepay such debenture by paying to the 
     Federal Financing Bank, the amount that is equal to the sum 
     of the unpaid principal balance due on the debenture on the 
     date of the prepayment (plus accrued interest at the coupon 
     rate on the debenture) and the amount of the repurchase 
     premium described in paragraph (2)(A). The Administration 
     shall pay to the Federal Financing Bank the difference 
     between the repurchase premium paid by the issuer of the 
     debenture under this subsection and the repurchase premium 
     that the Federal Financing Bank would otherwise have 
     received.
       ``(2)(A) The amount of the repurchase premium described in 
     this paragraph is the product of--
       (i) the unpaid principal balance due on the debenture on 
     the date of prepayment;
       (ii) the interest rate of the debenture; and
       (iii) the factor `P', as determined under subparagraph (B).
       (B) For purposes of subparagraph (A) (iii), the factor `P' 
     means the applicable percent determined in accordance with 
     the following table:

------------------------------------------------------------------------
                                            Applicable percent
   Year in which prepayment of   ---------------------------------------
 debenture is made (from date of   10-year   15-year   20-year   25-year
       original issuance)           term      term      term      term
                                    loan      loan      loan      loan
------------------------------------------------------------------------
1...............................      1.00      1.00      1.00      1.00
2...............................       .80       .85       .90       .92
3...............................       ,60       .70       .80       .84
4...............................       .40       .55       .70       .76
5...............................       .20       .40       .60       .68
6...............................         0       .25       .50       .60
7...............................         0       .10       .40       .52
8...............................         0         0       .30       .44
9...............................         0         0       .20       .36
10..............................         0         0       .10       .28
11..............................         0         0         0       .20
12..............................         0         0         0       .12
13..............................         0         0         0       .04
14 through 25...................         0         0         0         0
------------------------------------------------------------------------

       ``(b) Requirements.--The requirements of this subsection 
     are met if--
       (1) the debenture is outstanding and neither the loan that 
     secures the debenture nor the debenture is in default on the 
     date the prepayment is made;
       (2) state or personal funds, which may include refinancing 
     under the programs authorized by sections 504 and 505 of this 
     Act are used to prepay the debenture; and
       (3) the issuer certifies that the benefits, net of fees and 
     expenses authorized herein, associated with prepayment of the 
     debenture are entirely passed through to the borrower.
       (c) No fees or penalties other than those specified in this 
     section may be imposed as a condition of such prepayment 
     against the issuer or the borrower, or the Administration or 
     any fund or account administered by the Administration, 
     except as provided in this Act.
       (d) The refinancing of debentures authorized by paragraph 
     (b)(2) of this section under section 504 of this Act shall be 
     limited to only such amounts as are needed to prepay existing 
     debentures and shall be subject to all of the other 
     provisions of sections 504 and 505 of this Act and the rules 
     and regulations of the Administration promulgated thereunder, 
     including, but not limited to, rules and regulations 
     government payment of authorized expenses and commissions, 
     fees and discounts to brokers and dealers in trust 
     certificates issued pursuant to section 505; provided, 
     however, that no applicant for refinancing under section 504 
     of this Act need demonstrate that a requisite number of jobs 
     will be created with the proceeds of such refinancing.''
       Sec. 2. (a) The provisions of this Act are exercisable at 
     the option of the borrower.
       (b) Any new credit or spending authority provided for in 
     this act is subject to amounts provided in advance in 
     appropriations Acts.
       (c) There are authorized to be appropriated such sums as 
     may be necessary to carry out the provisions of this Act.
       (d) Within 30 days of the effective date of this Act, the 
     Administration shall promulgate such regulations as are 
     necessary, including establishing an order of priority to 
     accomplish the provisions of this Act.
       (e) Subsection 504(b) of this Act is hereby repealed, and 
     subsection 504(a) is renumbered as section 504, and 
     paragraphs (1) through (3) of subsection 504(a) are 
     renumbered as subsections 504(a) through (c).

  Mr. HATFIELD. Mr. President, I am pleased to join with the chairman 
of the Small Business Committee, Senator Bumpers, in cosponsoring 
important legislation that he is introducing today at the request of 
the administration. Last year at this time, I introduced very similar 
legislation, S. 737, to assist several thousand small businesses that 
are unable to refinance high interest loans under the Small Business 
Administration [SBA] Section 503 Loan Program because of the enormously 
high prepayment penalties attached to these loans. I would like to 
commend this administration for focusing on this issue and for offering 
to work with those of us who have been pushing for a solution for the 
past several years.
  Because I have concerns about certain provisions of the bill we are 
introducing today, my cosponsorship should not be construed as a total 
endorsement of this proposal. However, I have confidence that these 
issues will be closely examined both during a hearing that Chairman 
Bumpers will hold in the Small Business Committee, and separately 
during debate in the Appropriations Committee when we consider the 
President's budget request for $30 million to begin fixing this 
problem.
  The vast majority of new job creation in the United States occurs in 
our small businesses. The prepayment penalties of the 503 Program have 
had the effect of blocking the ability of many companies to add to much 
needed economic expansion in our country. These are businesses that are 
already operating and ready to grow. We should take advantage of this 
opportunity to allow them to grow by continuing to work in a bipartisan 
manner to see this problem finally put to rest.
                                 ______
                                 
      By Mr. INOUYE:
  S. 2062. A bill to amend the Federal Meat Inspection Act and the 
Poultry Products Inspection Act to permit the movement in interstate 
commerce of meat, meat food products, and poultry products that satisfy 
State inspection requirements that are at least equal to Federal 
inspection standards, and for other purposes; to the Committee on 
Agriculture, Nutrition, and Forestry.


        meat and poultry products inspection Amendments of 1994

 Mr. INOUYE. Mr. President, today I am introducing a bill to 
resolve an issue of fairness which has existed since 1967 and made more 
egregious by passage of the North American Free-Trade Agreement.
  In 1967, the Meat Inspection Act of 1906 was amended by the Wholesale 
Meat Act and renamed the Federal Meat Inspection Act. In addition to 
other changes, the State--Federal Cooperative Inspection Program was 
established, which required State inspection programs to be at least 
equal to the Federal Inspection Program, and that products receiving 
State inspection are solely for distribution within such State. The 
1968 Wholesome Poultry Product Act which amended the Poultry Products 
Inspection Act, extended the same provisions to poultry inspection.
  The acts, while stressing the need for cooperation between Federal 
and State authorities, give the United States Department of Agriculture 
[USDA] clear responsibility for setting a national standard for meat 
and poultry inspection. USDA is required to monitor State programs and 
to assume direct responsibility at State plants when a State fails to 
develop or effectively enforce inspection requirements at least equal 
to those under the acts.
  USDA's Food Safety and Inspection Service [FSIS] certifies that each 
State inspection program is equal to Federal inspection requirements. 
This is accomplished by FSIS review of State performance plans, 
feedback from inspection operations field supervisors, and documents 
submitted with annual reports. The annual State performance plan is 
evaluated for equal to status and is very comprehensive. The plan 
includes a review of State laws, State regulations, funding, and 
financial accountability, resource management--staffing, training, 
program operations--facilities and equipment, labels and standards, in-
plant reviews/enforcement, specialty programs, and laboratories.
  FSIS has been conducting the equal to review since passage of the 
acts in 1967 and 1968. Since that time, the agency has never found that 
a State inspection program should be discontinued due to inadequacies 
in its inspection program. In those instances where States have chosen 
to discontinue their State inspection programs, they have cited 
budgetary reasons rather than public health and safety reasons.
  The mission of State meat and poultry programs is to provide the 
consumer with a wholesome, unadulterated product that is properly 
labeled and safe. The programs exist to protect the public's health. 
That is why State inspection programs currently inspect nonamenable 
products which are not regulated by the Federal inspection program. 
Nonamenable products--such as deer, buffalo, squad, and pheasant--that 
are inspected by a State-inspected facility are allowed to be 
transported across State lines. These shipments have been allowed for 
quite some time with little or no evidence of any risk to the consuming 
public.
  Food safety is clearly the major issue to be considered in any 
discussion of an inspection system. Experience with interstate shipment 
of State-inspected nonamenable products provides support for my view 
that permitting interstate shipment of State-inspected meat and poultry 
can be consistent with a high level of public health and food safety.
  While the acts require all State meat and poultry inspection programs 
to be at least equal to Federal standards, they prohibit the sale of 
the product in interstate commerce. This prohibition is a matter of 
fairness with domestic and foreign dimensions. First, most of the 
State-inspected plants are small businesses who suffer the economic 
consequences of prohibitions which provide an unfair marketing 
advantage to larger firms with federally inspected plants. Consumers 
often lose in these instances since the products inspected in State-
inspected facilities often are low-volume specialty products not 
economically viable for larger operations.
  Second, when Congress passed the North American Free-Trade Agreement 
[NAFTA], Mexican-inspected meat and poultry products were permitted to 
be shipped into the United States and move interstate as long as the 
Mexican inspection program is equal to United States Federal standards. 
It is only fair that the Congress now provide small businessowners in 
the United States the same opportunity the Congress afforded to firms 
from Mexico.
  The prohibition of interstate shipment of State-inspected meat and 
poultry is the only such prohibition of any State-inspected food 
product. This prohibition disrupts that free flow of trade and 
precludes the ability of American small businesses to compete with 
larger domestic firms and Mexican exporters.
  Mr. President, this legislation is supported by a number of 
organizations including the American Farm Bureau Federation, the 
American Association of Meat Processors, the Food Marketing Institute, 
the National Association of State Departments of Agriculture, the 
National Association of State Meat and Food Inspection Directors, and 
the National Grange.
  I urge my colleagues to join me in correcting a gross inequity in the 
interstate commerce of meat and poultry products.
  Mr. President, I ask unanimous consent that the text of the bill and 
a summary be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2062

       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 ``Meat and Poultry Products 
     Inspection Amendments of 1994''.

     SEC. 2. FEDERAL AND STATE COOPERATION UNDER THE FEDERAL MEAT 
                   INSPECTION ACT.

       (a) Removal of Intrastate Distribution Limitation.--Section 
     301(a)(1) of the Federal Meat Inspection Act (21 U.S.C. 
     661(a)(1)) is amended by striking ``solely for distribution 
     within such State''.
       (b) Use of State Inspectors.--Section 301(a) of such Act 
     (21 U.S.C. 661(a)) is amended by adding at the end the 
     following new paragraph:
       ``(5) In addition to appointing inspectors under section 
     21, the Secretary may enter into an agreement with a State or 
     the District of Columbia to utilize an officer or employee of 
     the State or the District of Columbia to conduct any 
     examination, investigation, or inspection authorized under 
     this Act, if the Secretary determines that it is practicable 
     for the examination, investigation, or inspection to be so 
     conducted.''.
       (c) Termination of Designation of State as Subject to 
     Federal Inspection for Intrastate Distribution.--Section 
     301(c)(3) of such Act (21 U.S.C. 661(c)(3)) is amended by 
     striking ``, with respect to the operations and transactions 
     within such State which are regulated under subparagraph (1), 
     he'' and inserting ``with respect to each establishment 
     within the jurisdiction of the State that does not operate 
     under Federal inspection under title I and at which any 
     cattle, sheep, swine, goat, or equine is slaughtered, or the 
     carcass of the animal, or a part or product of the carcass of 
     the animal, is prepared, for use as human food, and with 
     respect to the distribution of each carcass, part of a 
     carcass, meat, or meat food product of the animal within the 
     State, the Secretary''.
       (d) Expansion of State Inspection Authority.--Section 301 
     of such Act (21 U.S.C. 661) is amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following new 
     subsection:
       ``(d)(1) Except as provided in paragraph (2), a carcass, 
     part of a carcass, meat, or meat food product of a cattle, 
     sheep, swine, goat, or equine prepared under State inspection 
     in a State (other than a State designated under subsection 
     (c)) in compliance with the meat inspection law of the State 
     shall be eligible for sale or transportation in interstate 
     commerce, and for entry into and use in the preparation of a 
     product in an establishment at which Federal inspection is 
     maintained under title I, in the same manner and to the same 
     extent as a product prepared at the establishment.
       ``(2) A State-inspected article described in paragraph (1), 
     and a federally inspected article prepared (in whole or in 
     part) from the State-inspected article--
       ``(A) shall not be eligible for sale or transportation in 
     foreign commerce; and
       ``(B) shall be separated at all times from all other 
     federally inspected articles in a federally inspected 
     establishment that engages in the preparation, sale, or 
     transportation of carcasses, parts of carcasses, meat, or 
     meat food products, for foreign commerce.
       ``(3) Each carcass, part of a carcass, meat, or meat food 
     product that is inspected in a program of inspection in a 
     State (other than a State designated under subsection (c)) 
     pursuant to State law shall be identified as so inspected 
     only by an official mark that identifies the State and is of 
     such design as the State shall prescribe. A federally 
     inspected article prepared (in whole or in part) from the 
     State-inspected article shall be identified as so inspected 
     only by the same official mark as is prescribed by the 
     Secretary for an article slaughtered or prepared under title 
     I.
       ``(4) Except as provided in paragraph (5), the operator of 
     an establishment operated under Federal or State inspection 
     who wishes to transfer to State or Federal inspection, as the 
     case may be, may do so only as of October 1 of any year. The 
     transfer shall occur only if--
       ``(A) the operator provides written notice of the intention 
     to transfer to both inspection agencies at least 180 days in 
     advance of the date referred to in the preceding sentence; 
     and
       ``(B) the Secretary determines that the transfer will 
     effectuate the purposes set forth in section 2 and will not 
     adversely affect the stability of the total State and Federal 
     inspection systems.
       ``(5) The Secretary may permit the operator of an 
     establishment to transfer from State to Federal inspection at 
     any time if the operator presents clear and convincing 
     evidence to the Secretary that the establishment intends to, 
     and will be able to, engage in foreign commerce to a 
     substantial extent in a manner that would require Federal 
     inspection.
       ``(6) As used in this subsection, the term `interstate 
     commerce' means commerce between States or between a State 
     and the District of Columbia.''.
       (e) Prohibition on Additional or Different State 
     Requirements.--Section 408 of such Act (21 U.S.C. 678) is 
     amended to read as follows:

     ``SEC. 408. PROHIBITION ON ADDITIONAL OR DIFFERENT STATE 
                   REQUIREMENTS.

       ``(a) Requirements Relating to Establishments.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     State or Territory or the District of Columbia may not impose 
     a requirement within the scope of this Act with respect to 
     the premises, facility, or operation of an establishment at 
     which inspection is provided under title I that is in 
     addition to, or different than, a requirement under this Act.
       ``(2) Recordkeeping requirements.--A State or Territory or 
     the District of Columbia may impose a recordkeeping or other 
     requirement within the scope of section 202, if the 
     requirement is consistent with such section, with respect to 
     an establishment.
       ``(b) Requirements Relating to Marking, Labeling, 
     Packaging, and Ingredients.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     State or Territory or the District of Columbia may not impose 
     a marking, labeling, packaging, or ingredient requirement 
     that is in addition to, or different than, a requirement 
     under this Act with respect to an article prepared at an 
     establishment under Federal inspection in accordance with 
     title I or with respect to an article prepared for commerce 
     at a State-inspected establishment in accordance with section 
     301(d).
       ``(2) Concurrent jurisdiction.--A State or territory or the 
     District of Columbia may, consistent with this Act, exercise 
     concurrent jurisdiction with the Secretary over an article 
     distributed in commerce or otherwise subject to this Act, for 
     the purpose of preventing the distribution for use as human 
     food of an article that is not in compliance with this Act 
     and is outside of a federally or State-inspected 
     establishment, or in the case of an imported article, that is 
     not at such an establishment, after the entry of the article 
     into the United States.
       ``(c) Effect on Other Laws.--This Act shall not preclude a 
     State or Territory or the District of Columbia from imposing 
     a requirement or taking any other action, consistent with 
     this Act, with respect to an area regulated under this Act 
     that is not referred to in this section.''.

     SEC. 3. FEDERAL AND STATE COOPERATION UNDER THE POULTRY 
                   PRODUCTS INSPECTION ACT.

       (a) Removal of Intrastate Distribution Limitation.--Section 
     5(a)(1) of the Poultry Products Inspection Act (21 U.S.C. 
     454(a)(1)) is amended by striking ``solely for distribution 
     within such State''.
       (b) Use of State Inspectors.--Section 5(a) of such Act (21 
     U.S.C. 454(a)) is amended by adding at the end the following 
     new paragraph:
       ``(5) The Secretary may enter into an agreement with a 
     State or the District of Columbia to utilize an officer or 
     employee of the State or the District of Columbia to conduct 
     any examination, investigation, or inspection authorized 
     under this Act, if the Secretary determines that it is 
     practicable for the examination, investigation, or inspection 
     to be so conducted.''.
       (c) Termination of Designation of State as Subject to 
     Federal Inspection for Intrastate Distribution.--Section 
     5(c)(3) of such Act (21 U.S.C. 454(c)(3)) is amended by 
     striking ``, with respect to the operations and transactions 
     within such State which are regulated under subparagraph (1) 
     of this paragraph (c), he'' and inserting ``with respect to 
     each establishment within the jurisdiction of the State that 
     does not operate under Federal inspection under this Act and 
     at which any poultry is slaughtered, or any poultry product 
     is processed, for use as human food, and with respect to the 
     distribution of each poultry product within the State, the 
     Secretary''.
       (d) Expansion of State Inspection Authority.--Section 5 of 
     such Act (21 U.S.C. 454) is amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following new 
     subsection:
       ``(d)(1) Except as provided in paragraph (2), a poultry 
     product processed under State inspection in a State (other 
     than a State designated under subsection (c)) in compliance 
     with the poultry products inspection law of the State shall 
     be eligible for sale or transportation in interstate 
     commerce, and for entry into and use in the preparation of a 
     product in an establishment at which Federal inspection is 
     maintained under this Act, in the same manner and to the same 
     extent as a poultry product processed at the establishment. A 
     poultry product that complies with the poultry product 
     inspection laws of the State (other than a State designated 
     under subsection (c)) in which the product was processed 
     shall be considered to comply with this Act.
       ``(2) A State-inspected poultry product described in 
     paragraph (1), and a federally inspected poultry product 
     processed (in whole or in part) from the State-inspected 
     poultry product--
       ``(A) shall not be eligible for sale or transportation in 
     foreign commerce; and
       ``(B) shall be separated at all times from all other 
     federally inspected poultry products in a federally inspected 
     establishment that engages in the processing, sale, or 
     transportation of poultry products for foreign commerce.
       ``(3) A poultry product that is inspected in a program of 
     inspection in a State (other than a State designated under 
     subsection (c)) pursuant to State law shall be identified as 
     so inspected only by an official mark that identifies the 
     State and is of such design as the State shall prescribe. A 
     federally inspected poultry product processed (in whole or in 
     part) from a State-inspected poultry product shall be 
     identified as so inspected only by the same official mark as 
     is prescribed by the Secretary for a poultry product 
     processed under this Act (other than this section or section 
     11).
       ``(4) Except as provided in paragraph (5), the operator of 
     an establishment operated under Federal or State inspection 
     who wishes to transfer to State or Federal inspection, as the 
     case may be, may do so only as of October 1 of any year. The 
     transfer shall occur only if--
       ``(A) the operator provides written notice of the intention 
     to transfer to both inspection agencies at least 180 days in 
     advance of the date referred to in the preceding sentence; 
     and
       ``(B) the Secretary determines that the transfer will 
     effectuate the legislative policy set forth in section 3 and 
     will not adversely affect the stability of the total Federal 
     and State inspection systems.
       ``(5) The Secretary may permit the operator of an 
     establishment to transfer from State to Federal inspection at 
     any time if the operator presents clear and convincing 
     evidence to the Secretary that the establishment intends to, 
     and will be able to, engage in foreign commerce to a 
     substantial extent in a manner that would require Federal 
     inspection.
       ``(6) As used in this subsection, the term `interstate 
     commerce' means commerce between States or between a State 
     and the District of Columbia.''.
       (e) Prohibition on Additional or Different State 
     Requirements.--Section 23 of such Act (21 U.S.C. 467e) is 
     amended to read as follows:

     ``SEC. 23. PROHIBITION ON ADDITIONAL OR DIFFERENT STATE 
                   REQUIREMENTS.

       ``(a) Requirements Relating to Establishments.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     State or territory or the District of Columbia may not impose 
     a requirement within the scope of this Act with respect to 
     the premises, facility, or operation of an official 
     establishment, that is in addition to, or different than, a 
     requirement under this Act.
       ``(2) Recordkeeping requirements.--A State or territory or 
     the District of Columbia may impose a recordkeeping or other 
     requirement within the scope of section 11(b), if the 
     requirement is consistent with such section, with respect to 
     an establishment.
       ``(b) Requirements Relating to Marking, Labeling, 
     Packaging, and Ingredients.--
       ``(1) In general.--A State or territory or the District of 
     Columbia may not impose--
       ``(A) except as provided in paragraph (2), a marking, 
     labeling, packaging, or ingredient requirement that is in 
     addition to, or different than, a requirement under this Act 
     with respect to an article prepared at an establishment under 
     Federal inspection in accordance with this Act or with 
     respect to an article prepared for commerce at a State-
     inspected establishment in accordance with section 5(d); or
       ``(B) any other storage or handling requirement found by 
     the Secretary to unduly interfere with the free flow of any 
     poultry product in commerce.
       ``(2) Concurrent jurisdiction.--A State or territory or the 
     District of Columbia may, consistent with this Act, exercise 
     concurrent jurisdiction with the Secretary over an article 
     distributed in commerce or otherwise subject to this Act, for 
     the purpose of preventing the distribution for use as human 
     food of any article that is not in compliance with this Act 
     and is outside of a federally or State-inspected 
     establishment, or in the case of an imported article, that is 
     not at such an establishment, after the entry of the article 
     into the United States.
       ``(c) Effect on Other Laws.--This Act shall not preclude a 
     State or territory or the District of Columbia from imposing 
     a requirement or taking any other action, consistent with 
     this Act, with respect to an area regulated under this Act 
     that is not referred to in this section.''.
                                  ____


                           Summary of S. 2062


                               Section 1

       Establishes the short title of the Act as the ``Meat and 
     Poultry Products Inspection Amendments of 1994.''


                               Section 2

       Allows State inspected meat products to be sold or 
     transported in interstate commerce.
       Allows State inspected meat products to be used in the 
     preparation of products processed in Federally inspected 
     facilities.
       Continues the export prohibition of State inspected meat.
       Provides that transferring from Federal or State inspection 
     to the other regulating body can only occur on October 1.
       Prohibits different labeling requirements on State 
     inspected meat products which flow in interstate commerce 
     from Federal labeling requirements.


                               Section 3

       Allows State inspected poultry products to be sold or 
     transported in interstate commerce.
       Allows State inspected poultry products to be used in the 
     preparation of products proceed in Federally inspected 
     facilities.
       Continues the export prohibition of State inspected 
     poultry.
       Provides that transferring from Federal or State inspection 
     to the other regulating body can only occur on October 1.
       Prohibits different labeling requirements on State 
     inspected poultry products which flow in interstate commerce 
     from Federal labeling requirements.
                                 ______
                                 
      By Mr. GORTON:
  S. 2063. A bill to amend the National Security Act of 1947 to provide 
for improved coordination of national counterintelligence policy, and 
for other purposes; to the Select Committee on Intelligence.


                national counterintelligence reform act

  Mr. GORTON. Mr. President, I am introducing legislation today 
designed to improve significantly the framework for the coordination, 
integration, and review of the United States effort to counteract a 
continuing serious problem of espionage by Americans and others. I 
believe that this legislation complements legislation already 
introduced by the chairman and vice chairman of the Select Committee on 
Intelligence, S. 1948, the Counterintelligence and Security 
Enhancements Act of 1994.
  In spite of a reordering of the world's balance of power, espionage 
against the national security and industrial security interests of the 
United States continues unabated. This espionage is being committed by 
current and former hostile nations, by some nations, friendly to the 
United States and by nongovernment entities operating in concert with 
their respective governments.
  In the past 3 months, the country has been focused on the arrest of 
CIA employee Aldrich Ames and his wife as an indication that espionage 
is alive and, unfortunately, well. While I do not intend to dwell on 
that case, I will note that the damage done by Mr. Ames is serious. In 
addition, efforts by the CIA and FBI to detect Mr. Ames have been 
uneven, not as well coordinated as I believe were necessary and have 
taken too long to bring this case to conclusion. Nine years is 
unacceptable and reflects serious flaws in our counterintelligence and 
security policies and capabilities. The Ames case is only one 
indication of the lack of full and early cooperation and sharing among 
the agencies most responsible for guarding the country against foreign 
espionage.
  During the 10-year period from 1974 to 1983, there were 23 arrests 
for espionage against the United States. During the past 10 years, 
however that number has more than doubled with 51 arrests, 45 of whom 
were American citizens who volunteered to sell classified information 
or who provided access to U.S. classified facilities for agents of 
foreign governments. Nor was the Ames case the first time a current or 
former CIA employee was arrested for espionage. In fact, Mr. Ames is 
the fifth current or former CIA employee arrested in the 10 years.
  The cooperation between the CIA and FBI on many of these was 
excellent. On others, the failure of one agency to provide full and 
early access to information or on establishing priorities delayed 
arrest.
  The overall increase in espionage arrests may be explained by more 
aggressive counterespionage actions by the CIA and FBI. but the 
increase may also identify the ineffectiveness of awareness efforts, 
earlier detection and deterrence. What is not known is the number of 
cases in which there was no arrest because of diplomatic immunity or 
because the CIA or Defense Department succeeded in turning suspects 
into double agents. Even more troubling is the number of Americans who 
may still be selling out their country and have not been detected. 
Director Woolsey recently gave us a hint of this problem when he stated 
that there are several more cases or leads in the works.

  During counterintelligence hearings before the Select Committee on 
Intelligence, it became apparent that cooperation among the agencies--
especially the FBI and CIA--responsible for countering espionage, was 
totally inadequate. In their ``Dear Colleague'' letter requesting 
cosponsors for S. 1948, Senators DeConcini and Warner emphasized that 
``there has been a problem between the CIA and the FBI in terms of 
their cooperation on counterintelligence investigations.'' I would add 
to that by noting that this inadequate cooperation on 
counterintelligence matters extends to the Department of Defense as 
well.
  These problems stem in part from the fact that the 
counterintelligence objectives and responsibilities of these respective 
agencies differ. The Central Intelligence Agency has responsibility for 
the development and protection of sources and methods to collect 
foreign intelligence. The Federal Bureau of Investigation has 
responsibility for law enforcement and for the investigation of 
espionage cases for possible prosecution. The Department of Defense 
Counterintelligence Program has responsibility for protecting DOD 
installations, material, operations, information and personnel from 
foreign intelligence and terrorist activities.
  The lack of integration of these agencies and their variant 
objectives and responsibilities into coherent and coordinated national 
counterintelligence policies and programs is indicative of systemic 
shortcomings.
  On a national policymaking level, the Director of the FBI and the 
Secretary of Defense report to the Director of Central Intelligence for 
all counterintelligence matters. This has been traditionally the case 
because counterintelligence and counterespionage has long been 
considered an element of intelligence. In my view, we should carefully 
reassess that notion: counterintelligence is also an important element 
of law enforcement.
  A vivid statistic illustrating the tail waging the dog is in the area 
of counterintelligence budget. FBI's CI budget is 10 times that of the 
CIA and DoD's is 3\1/2\ times that of the CIA. Yet, CIA has been 
driving, or attempting to drive; national counterintelligence policy.
  On the program level, the CIA runs a counterintelligence center [CIC] 
to analyze and counteract foreign intelligence efforts against the 
United States. The FBI has had only one officer located in the center 
and he recently was removed by the FBI because he was underutilized. 
This is hardly the reassurance of cooperation and coordination which we 
expect of these agencies.


                            need for reform

  The counterintelligence and counterespionage apparatus of this 
country can and must be altered if it is to be effective. This is not 
only my view, but also apparently the view of the administration. Mr. 
President, I wish to submit for the Record a copy of a front page 
article in the April 26, 1994 edition of the Washington Post. This 
article cities a White House official and CIA's Director James Woosley 
as sources for information that the administration is considering wide-
ranging reform of its counterintelligence policy and program structure.
  The public and the Congress have not seen the shape of that 
structure. What we do know is that in the words of one White House 
official, it bears an amazing resemblance to the legislation I have 
been working on for several weeks and am now introducing. On major 
difference is that the administration wants to implement its reform 
through an Executive order. I am in favor of the force of law.


                           Features of Reform

  Mr. President, I shall summarize the principal features of this 
legislation. It would:
  First, create a national policy and program framework to ensure an 
integrated and coordinated effort to counter espionage against the 
United States.
  Second, establish a senior policy decision board, the National 
Counterintelligence Review Board [NCIRB] to review and approve United 
States counterintelligence policies and programs. In addition, the 
Board would serve as the final review authority for the proper and 
timely disposition of counterintelligence cases.
  Third, the Board would consist of the Attorney General of the United 
States, who would serve as Chairman, the Secretary of Defense, the 
Director of Central Intelligence and the Director of the Federal Bureau 
of Investigation. The NCIRB would report to the President through the 
National Security Council.
  Fourth, establish a National Counterintelligence Program [NCIP] which 
will be administered by the National Counterintelligence Center [NCC]. 
The NCC would be responsible for providing a focused and coordinated 
national program to analyze and counter foreign intelligence efforts 
against the United States. The NCC would also prepare an integrated 
list of national counterintelligence threats for approval by the NCIRB.
  Fifth, the NCC would consist of personnel from the Central 
Intelligence Agency, the Federal Bureau of Investigation and the 
Department of Defense. The Directorship and the Assistant Directorship 
of the NCC would rotate on a periodic basis between the Central 
Intelligence Agency and the Federal Bureau of Investigation. The NCC 
would be located within the Department of Justice. It would also 
provide staffing support to the NCIRB.
  Sixth, the jurisdiction of the NCC would include foreign intelligence 
threats against the United States both domestically and against U.S. 
installations, personnel and information abroad.
  Seventh, the Director of the NCC would be responsible for developing 
Government-wide foreign counterintelligence policy and for approving 
the allocation of resources to deal with the foreign intelligence 
threat.
  Eighth, it would require individual agencies to continue with their 
counterintelligence responsibilities to protect agency information, 
equipment, operations and personnel.
  Mr. President, I ask unanimous consent that an article from the 
Washington Post be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Apr. 26, 1994]

Plan Shifts CIA Tasks To FBI Staff, Changes Intended To Speed Detection 
                            of Foreign Spies

                (By R. Jeffrey Smith and Pierre Thomas)

       The White House, mediating a bitter dispute between the FBI 
     and CIA over control of counterintelligence, is considering a 
     plan that would transfer key spy-catching and policy-setting 
     responsibilities from the CIA to senior FBI officials, 
     according to administration officials.
       A draft proposal worked out by the National Security 
     Council staff--and described by officials as ``broadly 
     agreed'' upon by representatives of the CIA, FBI and Justice 
     Department in meetings last week--would institute a series of 
     reforms meant to speed the early and efficient detection of 
     foreign spies who have penetrated the U.S. government.
       The proposal also is intended to soothe FBI and 
     congressional anger over what senior U.S. officials have 
     described as the CIA's failure for several years to share 
     vital information with the FBI about the case of alleged spy 
     Aldrich H. Ames and other potential spy cases.
       The plan ``would significantly alter the way 
     [counterintelligence] policy will be developed, the way 
     priorities would be decided, and establish a new structure 
     for integrating'' FBI and CIA operations to ensure that 
     information flows smoothly between them, a White House 
     official said.
       The U.S. agencies involved in counterintelligence have been 
     asked to submit their final comments on the plan this week, 
     after which it will be presented to national security adviser 
     Anthony Lake and President Clinton for their review. Several 
     officials said an agreement in principle has been reached on 
     the proposal but certain details are still being worked out.
       The proposal would establish a national ``center'' headed 
     by an FBI official to set overall policies on 
     counterintelligence operations, including the use of 
     polygraphs, the collection of information overseas and the 
     training of spy-catching experts, the officials said.
       No such center now exists, resulting in widely varying 
     counterintelligence procedures at different federal agencies. 
     An advisory group recently concluded in a report to the 
     CIA and the Defense Department that the absence of uniform 
     policies was wasteful and inhibited successful spy-
     catching operations.
       The proposal also would require that the new policy-setting 
     center report through an advisory group of senior government 
     officials to the NSC staff at the White House, rather than to 
     the CIA director.
       In addition, the plan would put a senior FBI official in 
     charge of investigating individual spy cases within the CIA's 
     existing counterintelligence center, ensuring early FBI 
     access to raw data--a primary FBI concern.
       CIA Director R. James Woolsey said in an interview 
     yesterday that he supports the plan to appoint ``one or 
     more'' FBI agents to senior supervisory positions at the 
     CIA's center.
       ``I think it will be the best way to ensure the teamwork 
     that's essential'' to finding spies among U.S. government 
     employees, he said. ``It will help with the handoff'' to law 
     enforcement authorities by CIA personnel charged with 
     conducting an internal investigation of security leaks.
       Officials said Woolsey's willingness to support the 
     proposal marked a shift for the CIA, which has generally 
     considered its counterintelligence center--and its case 
     files--off-limits to outsiders. FBI officials have told 
     lawmakers that an FBI agent appointed in 1991 to head the 
     center's Soviet and East European counterintelligence group 
     left in late 1993, before he had planned to, because he was 
     denied access to documents and had little to do.
       A senior CIA official and a counterintelligence source 
     denied the allegation. But Woolsey confirmed that only three 
     FBI agents have worked at the center since it was created in 
     1988 to manage counterintelligence operations throughout the 
     government. Two of these agents worked solely on the Ames 
     case, he said.
       By supporting the appointment of FBI officials to high-
     ranking positions within the CIA center, Woolsey is trying to 
     head off Senate legislation that he saw as ceding virtually 
     all responsibility for counterintelligence enforcement 
     matters to the FBI, officials said.
       Under the new plan, the CIA center would remain under 
     Woolsey's overall control. The CIA also would retain 
     responsibility for conducting routine investigations of its 
     own personnel, looking into internal security leaks and 
     developing key counterintelligence leads through its network 
     of officers and foreign agents stationed around the globe. 
     But the center's office in charge of investigating individual 
     spy cases would be run by an FBI agent.
       During its month-long policy review, the NSC staff had to 
     sort through sharply conflicting tales by the FBI and the CIA 
     over the handling of past spy cases. One White House official 
     said of the two agencies that ``they are acting like two 
     teenagers and raising incidents that go way back into past 
     history.''
       For example, in the case of Ames, who worked on 
     counterintelligence matters for the CIA, the FBI charged that 
     the CIA improperly withheld information about Ames' 
     difficulties with a 1991 polygraph exam, despite an agreement 
     that year that the agencies would work together in tracking 
     down any suspected mole inside the CIA.
       Sen. Dennis DeConcini (D-Ariz.), chairman of the Senate 
     intelligence committee, told reporters last week that ``the 
     FBI had the right, the absolute right'' to see the polygraph 
     tracings that indicated deception in 1991, but instead did 
     not get access to them until 1993. He said the CIA's culture 
     of ``protectiveness and deniability'' had interfered with its 
     obligations to pursue the lead.
       CIA officials blame the FBI for not asking earlier to see 
     the tracings. They also have defended their cautious approach 
     to counterintelligence cases by citing the need to maintain 
     confidentiality about their sources of information and to 
     avoid unfairly tarring employees with false accusations. FBI 
     officials say that this secrecy can be excessive and runs 
     counter to developing cases for criminal prosecution.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself and Mr. Dodd):
  S. 2064. A bill to expand the boundary of the Weir Farm National 
Historic Site in the State of Connecticut; to the Committee on Energy 
and Natural Resources.


                          weir farm expansion

  Mr. LIEBERMAN. Mr. President, today I offer a bill to expand the 
boundary of the Weir Farm National Historic Site in the State of 
Connecticut. This language will authorize the National Park Service to 
acquire the last two remaining undeveloped parcels of the historic Weir 
Farm that remain in private ownership. It will not require additional 
funding authority or appropriations to do so.
  While these parcels were a part of the historic Weir Farm and were 
identified as such when the State of Connecticut and the Trust for 
Public Land began acquiring the land that eventually became the Weir 
Farm National Historic Site, the Federal legislation that designated 
the site moved more quickly than the negotiations between the owners of 
the parcels in question, the State and the Trust for Public Land. Not 
wanting to include land from an owner who was unwilling to be so 
included within the boundaries of a National Park Site, the sponsors of 
the enabling legislation removed these parcels from the boundary maps.
  The legislation I introduce today was prompted by a recent agreement 
between the owner of the land, the recent acquisition of the land by 
the Trust for Public Land, and the expressed interest by the National 
Park Service of acquiring the land. The funds to do so have already 
been appropriated, so no new funding authority or appropriations would 
be required.
  Moving forward with this acquisition would preclude development of 
these last remaining privately owned undeveloped parcels. Because these 
parcels are directly in view of the most visited part of Weir Farm 
their undeveloped state is necessary to preserve the aesthetic 
integrity of the site. This will, in turn, ensure the continued 
evocation of the landscape as it was in the late 19th and early 20th 
century when it was painted by those--led by Weir--who became known 
internationally as the American Impressionists.
  The J. Alden Weir National Historic Site is the only site in the 
National Park System to commemorate an American painter and it is 
Connecticut's only national park.
  I ask unanimous consent that the full text of my bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2064

       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 ``Weir Farm National Historic 
     Site Expansion Act of 1994''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to preserve the last remaining 
     undeveloped parcels of the historic Weir Farm that remain in 
     private ownership by including the parcels within the 
     boundary of the Weir Farm National Historic Site.

     SEC. 3. BOUNDARY ADJUSTMENT.

       (a) Adjustment.--Section 4(b) of the Weir Farm National 
     Historic Site Establishment Act of 1990 (104 Stat. 1171) is 
     amended--
       (1) by striking out ``and'' at the end of paragraph (1);
       (2) by striking out the flush material below paragraph (2); 
     and
       (3) by adding at the end the following:
       ``(3) the approximately 2-acre parcel of land situated in 
     the town of Wilton, Connecticut, designated as lot 18 on a 
     map entitled `Revised Map of Section I, Thunder Lake at 
     Wilton, Connecticut, Scale 1''=100', October 27, 1978, Ryan 
     and Faulds Land Surveyors, Wilton, Connecticut', that is on 
     file in the office of the town clerk of the town of Wilton, 
     and therein numbered 3673; and
       ``(4) the approximately 0.6-acre western portion of a 
     parcel of land situated in the town of Wilton, Connecticut, 
     designated as Tall Oaks Road on the map referred to in 
     paragraph (3).''.
       (b) General Depiction.--Section 4 of such Act, as amended 
     by subsection (a), is further amended by adding at the end 
     the following:
       ``(c) General Depiction.--The parcels referred to in 
     paragraphs (1) through (4) of subsection (b) are all as 
     generally depicted on a map entitled `Boundary Map, Weir Farm 
     National Historic Site', dated March 1994. Such map shall be 
     on file and available for public inspection in the 
     appropriate offices of the National Park Service.''.
                                 ______
                                 
      By Mr. HARKIN (for himself and Mr. Lugar):
  S. 2065. A bill to amend the Federal Water Pollution Control Act to 
require the Administrator of the Environmental Protection Agency to 
differentiate between fats, oils, and greases of animal, marine, or 
vegetable origin, and other oils and greases, in issuing regulations 
under the act, and for other purposes; to the Committee on Environment 
and Public Works.


             animal fat and vegetable oils differentiation

  Mr. HARKIN. Mr. President, today I am introducing legislation, along 
with Senator Lugar, that will clarify congressional intent regarding 
the regulation of animal fats and vegetable oils under provisions of 
the Oil Pollution Act of 1990, which amended the Federal Water 
Pollution Control Act.
  The interpretation of these provisions is of critical importance to 
agriculture and to the entire food processing, transportation, and 
distribution system. This legislation is necessary to ensure against 
burdensome and unnecessary regulatory actions by Federal agencies based 
on interpreting the Oil Pollution Act to impose on nontoxic and 
relatively harmless animal fats and vegetable oils rules similar to the 
stringent requirements applicable to toxic and hazardous petroleum oils 
and products.
  Congress enacted the Oil Pollution Act of 1990 in direct response to 
several catastrophic petroleum oilspills in order to reduce the risk of 
oilspills, improve oilspill response capabilities, and minimize the 
impact of oilspills on the environment. That act requires owners and 
operators of vessels and facilities handling oil posing a substantial 
risk of harm to the environment in the event of a spill to prepare and 
submit response plans to Federal agencies and establishes additional 
requirements relating to the handling and transportation of oil.
  Common sense tells us that the risk posed to the environment by 
animal fats and vegetable oils--which are essential components of food 
products we eat every day--is far less than that posed by petroleum oil 
and products. The available scientific evidence shows that animal fats 
and vegetable oils are not toxic to the environment, are essential 
components of human and wildlife diets, are readily biodegradable, and 
are not persistent in the environment.
  Spills of animal fats and vegetable oils are also relatively 
infrequent and small in quantity. Such spills accounted for less than 1 
percent of oilspills in and around U.S. waters between 1986 and 1992, 
and were generally very small in quantity, with only 13 spills of more 
than 1,000 gallons in that period.
  Moreover, the types of response actions appropriate to a petroleum 
oilspill might well increase, rather than lessen, the impact of an 
animal fat or vegetable oilspill on the environment. For example, 
attempting to remove a typically small quantity of spilled animal fat 
or vegetable oil from a wetland would likely cause more environmental 
damage than the presence of the spilled substance in the environment 
alone.
  Nevertheless, last year the Department of Transportation's Research 
and Special Projects Agency sought to classify animal fats and 
vegetable oils as hazardous materials in the same manner as petroleum 
oils. That approach was abandoned only after the affected industries 
mounted a strong effort and after Members of Congress, including 
Senator Lugar  and me, wrote to the agency emphasizing that it was 
never the intent of Congress to subject animal fats and vegetable oils 
to the same regulations as apply to hazardous materials.

  Despite this action in the Department of Transportation, there are 
still pending before several Federal agencies regulations under the Oil 
Pollution Act that would treat nontoxic, biodegradable oils, such as 
corn and soybean oils, beef tallow, and fish oil similarly to highly 
toxic petroleum oils. If these agencies proceed with regulations 
imposing requirements on animal fats and vegetable oils similar to 
those covering petroleum oils, processors, transporters, and users of 
animal fats and vegetable oils will be forced to comply with costly, 
burdensome, unnecessary--and indeed often counterproductive--
requirements that are appropriate only for toxic oils. Ultimately, 
farmers, livestock producers, and consumers will bear the cost of such 
overregulation.
  Even if all of the agencies are eventually persuaded not to finalize 
these pending regulations, a large amount of effort and resources are 
likely to be expended in successive and duplicative appeals to reason 
and common sense before each of the several agencies involved.
  The legislation we are introducing today would reduce the potential 
for burdensome and unnecessary regulatory actions by directing Federal 
agencies to differentiate between animal fats, oils and greases, fish 
and marine mammal oils, or oils of vegetable origin, and other oils and 
greases, including petroleum. In differentiating between these classes, 
agencies would be required to consider differences in the physical, 
chemical, biological, and other properties, and in the environmental 
effects, of the classes.
  The legislation would not exempt animal fats, vegetable oils, or fish 
oils from appropriate oilspill prevention and response regulations. It 
would merely require that agencies develop any such regulations on the 
basis of the particular physical, chemical, biological, and other 
properties of these substances and their effects on the environment. 
Again, the problem here is the threat of sweeping, undiscriminating 
agency actions that would carelessly impose unnecessary regulatory 
burdens by treating all of these substances in a manner similar to 
petroleum. This legislation would simply require agencies to undertake 
a reasonable, commonsense analysis before regulating. That is certainly 
no more than we should expect of any agency.
  I urge my colleagues to support this important legislation. I also 
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. 2065

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DIFFERENTIATION AMONG FATS, OILS, AND GREASES.

       Section 311 of the Federal Water Pollution Control Act (33 
     U.S.C. 1321) is amended by adding at the end the following 
     new subsection:
       ``(t) Fats, Oils, and Greases.--
       ``(1) In general.--In issuing or enforcing any regulation, 
     or any interpretation or guideline, relating to a fat, oil, 
     or grease under this Act or any other Federal law, each of 
     the President, the Administrator, and the head of any Federal 
     agency shall differentiate between--
       ``(A)(i) animal fats and oils and greases, and fish and 
     marine mammal oils, within the meaning of paragraph (2) of 
     section 61(a) of title 13, United States Code; or
       ``(ii) oils of vegetable origin, including oils from the 
     seeds, nuts, and kernels referred to in paragraph (1)(A) of 
     such section; and
       ``(B) other oils and greases, including petroleum.
       ``(2) Considerations.--In differentiating between the class 
     of fats, oils, and greases described in paragraph (1)(A) and 
     the class of oils and greases described in paragraph (1)(B), 
     each of the President, the Administrator, and the head of the 
     Federal agency shall consider differences in the physical, 
     chemical, biological, and other properties, and in the 
     environmental effects, of the classes.''.

  Mr. LUGAR. Mr. President, I am pleased to join Senator Harkin in 
introducing legislation aimed at encouraging regulatory common sense. I 
would like to give my colleagues a bit of background so they will 
understand why it is needed.
  In the spring of 1993, the Transportation Department proposed 
regulations to guard against oilspills, and require response plans if 
spills did occur. To the amazement of some of us, DOT proposed to treat 
vegetable oils--that is, salad oils--in the same way as petroleum. 
Among other things, salad oils would have been officially declared 
hazardous materials, with all the regulatory requirements and extra 
costs which that designation entails.
  This was so classic an example of regulatory overreaching that it was 
almost comic. Some of us pointed out that vegetable oil is not the same 
thing as petroleum: You do not put vegetable oil in your car. We also 
pointed out that vegetable oil processors thought it entirely 
appropriate that they undertake response plans to guard against major 
spills--the industry was not arguing that they should be exempt from 
regulation.
  The industry was, however, saying that regulators should take into 
account the obvious differences--in toxicity, biodegradability, 
environmental persistence, and other factors--between vegetable oils 
and animal fats on the one hand, and petroleum oils on the other. It 
made no sense for vegetable oils to be subject to a set of regulations 
as stringent as those for petroleum oils.
  Fortunately, Secretary Pena eventually agreed with us and DOT 
modified its position. More recently, however, the industry has been 
working with other agencies which also have a role in regulating oils 
to prevent spills.
  No one is any longer proposing to call salad oil hazardous material. 
Some agencies are, however, requiring that spill response plans for 
vegetable oils be quite similar in many respects to those for 
petroleum.
  In one case--that of the U.S. Coast Guard--the industry has been 
debating an agency that reports to Secretary Pena. Mindful of his role 
last year, 13 of my colleagues and I wrote the Secretary last month 
asking him to resolve the situation.
  The Secretary does not, however, have jurisdiction over all the 
several agencies that have some role in regulating oilspills. 
Therefore, the bill we introduce today will give all executive agencies 
a common direction from Congress.
  This bill does not tell the Coast Guard or any other agency what it 
must put into regulations. That is not our business or our expertise. 
The legislation simply says that in rulemaking under the Federal Water 
Pollution Control Act or the Oil Pollution Act of 1990, these agencies 
must differentiate between vegetable oils and animal fats on one hand, 
and other oils including petroleum on the other.
  The bill specifies that the agencies should consider differences in 
the physical, chemical, biological or other properties, and the 
environmental effects of these oils. Again, it does not say exactly how 
the agencies must differentiate among oils, merely that they should do 
so.
  Mr. President, let me say clearly that this bill does not exempt 
vegetable oils from the Oil Pollution Act of 1990 or any other statute. 
It is simply a modest effort to encourage common sense in an area of 
regulation that has not always been marked by that characteristic. I 
hope my colleagues will join Senator Harkin and me as cosponsors.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Pressler):
  S. 2066. A bill to expand the Mni Wiconi Rural Water Supply Project, 
and for other purposes; to the Committee on Energy and Natural 
Resources.


               mni wiconi rural water project legislation

  Mr. DASCHLE. Mr. President, today I am proud to introduce legislation 
to expand the Mni Wiconi rural water project to include the Rosebud and 
Lower Brule Sioux Reservations. Water is a basic requirement of life. 
For too long both Indian and non-Indian people in this region of the 
State have suffered the public health risks that come from inadequate 
and contaminated water supplies. It is my hope that, with the 
construction of the Mni Wiconi rural water project, including those 
areas that would be added with this legislation, many of the water 
quality problems of the past can be solved, and the people relying on 
this project can have their hopes for a better life fulfilled.
  The Mni Wiconi project represents an important partnership between 
Indian and non-Indian communities who share common needs. In 
authorizing the project in 1988, Congress recognized that ``serious 
problems in water quantity and water quality exist in the rural 
counties of Haakon, Jackson, Jones, Lyman, Mallette, Pennington, and 
Stanley Counties.'' Given those water quality problems, Congress 
further noted in the act that the residents of these counties deserve 
``the best available, reliable, and safe rural and municipal water 
supply.''
  For those counties, the Mni Wiconi project will accomplish that 
purpose. It will provide a source of safe and clean water that is long 
overdue in this region of the State.
  It has become apparent, however, that all the drinking water needs of 
this economically challenged region of South Dakota will not be met 
under the existing project. Many residents of south-central South 
Dakota will continue to lack safe and clean supplies of drinking water.
  The lack of safe drinking water supplies in that part of South Dakota 
continues to contribute to the transmission of hepatitis A, shigella, 
impetigo, and other diseases. While the high incidence of these 
diseases on the Pine Ridge Reservation have been well documented, that 
reservation is not unique. The 1990 American Journal of Public Health 
article, ``Hepatitis Transmission Among the Sioux Indians of South 
Dakota,'' notes similar problems on the Rosebud Reservation and 
concludes by stating that:

       On Indian reservations, as well as in other parts of the 
     United States, hepatitis A has significant human and economic 
     impact, both in terms of morbidity and occasional mortality 
     and in diverting of public resources from other priorities 
     when outbreaks occur. For the immediate future, outbreaks 
     will probably continue to occur on the South Dakota and other 
     Indian reservations.

  To help alleviate these health risks, it is crucial to ensure the 
access to safe drinking water supplies to those living in this region 
of South Dakota. The State and all those involved in the project 
support the inclusion of the Rosebud and Lower Brule Tribes. I hope my 
colleagues will join me supporting this well-deserved expansion of the 
Mni Wiconi project.
  Mr. PRESSLER. Mr. President, today I am joining my colleague from 
South Dakota, Senator Daschle, in introducing new authorization 
language for the Mni Wiconi rural water system. The purpose of this 
legislation is to include the Lower Brule and Rosebud Reservations in 
the water system and to authorize the funds needed to complete the 
project.
  Last year was a milestone for the Mni Wiconi rural water system. In 
Wall, SD, there was a groundbreaking ceremony for the Mni Wiconi water 
system. That event represented yet another step toward achieving safe, 
clean, drinking water in South Dakota. I commend the South Dakotans 
working on this project for their hard work and dedication.
  The Mni Wiconi water project will greatly improve the lives of more 
than 40,000 South Dakotans. The Mni Wiconi rural water system is vital 
to ensure the health and economic viability of those who will be served 
by the project when it is completed.
  I have supported this project since its inception. I will continue 
working to ensure that Federal funding is made available to complete 
the Mni Wiconi water project.
  For my colleagues who are unaware of the conditions on these 
reservations, I want to inform them that need is critical. In areas 
that will be served, much of the drinking water is substandard. In many 
of these areas there is simply no drinking water. It may be hard to 
imagine, but thousands of South Dakotans must drive many miles for 
bottled water and they must have their water transported by truck.
  More importantly, several counties that are covered by the Mni Wiconi 
rural water system are among the poorest counties in the Nation. 
Shannon County on the Pine Ridge Reservation is the poorest county in 
the country. Nearly two-thirds of all persons living on the Pine Ridge 
Reservation have incomes below the poverty level.
  Mr. President, the legislation being introduced today will provide 
the authority needed to see that this system will become a reality. As 
I stated earlier, it brings into the system another two reservations in 
South Dakota. I urge my colleagues to support passage of this bill.
                                 ______
                                 
      By Mr. PRESSLER (for himself, Mr. Daschle, Mr. Grassley, Mr. 
        Harkin, and Mr. Durenberger):
  S. 2068. A bill to authorize the construction of the Lewis and Clark 
rural water system and to authorize assistance to the Lewis and Clark 
Rural Water System, Inc., a nonprofit corporation, for the planning and 
construction of the water supply system, and for other purposes; to the 
Committee on Energy and Natural Resources.


                   lewis and clark rural water sytem

  Mr. PRESSLER. Mr. President, today I am introducing legislation that 
authorizes construction of the Lewis and Clark rural water system. This 
system, when complete, will provide adequate quantities of safe 
drinking water for hundreds of communities in southeastern South 
Dakota, northwestern Iowa, and southwestern Minnesota.
  Joining me in introducing this legislation are Senators Daschle, 
Durenberger, Grassley, and Harkin.
  Mr. President, water development is a health issue. Water development 
is an economic development issue. Finally, it is a rural development 
issue.
  The ability of rural America to survive and grow is related directly 
to its ability to provide safe and adequate supplies of drinking water. 
Without a reliable supply of water, these areas cannot attract new 
businesses and create jobs. The creation of jobs is a paramount issue 
to a rural State like South Dakota. The Lewis and Clark rural water 
system will help assure future job growth in the areas served.
  Since first coming to Congress, I have fought continually for the 
development of South Dakota water projects, particularly those 
providing water for municipal and industrial uses. In return for the 
sacrifices South Dakotans made for the construction of the dams and 
reservoirs along the Missouri River, the Federal Government made a 
commitment to South Dakota. That commitment was to support water 
development in the State. Approval of this water project will help meet 
this commitment.

  I am proud of the citizens of South Dakota who have worked extremely 
hard on this project. In fact, several South Dakotans were in 
Washington last Wednesday to show their support for and commitment to 
seeing this project become a reality. Although these South Dakotans are 
not here today for the bill's introduction, the bill represents their 
hard work. I commend them for these efforts.
  Nothing is more important to the health of South Dakota's ranchers, 
farmers, small businesses, and people living in towns and cities than 
the availability of safe drinking water. This is important equally to 
the millions of visitors and tourists who come to South Dakota each 
year. The bill I am introducing today will see that future water needs 
are met.
  Mr. President, in this day and age of fiscal cutbacks, projects 
promoting Public health and safety deserve special consideration. The 
Lewis and Clark rural water system is the only feasible means of 
ensuring that future supplies of good quality water will be available. 
The system will serve over 180,500 people.
  My goal is to see South Dakotans from border to border enjoy clean 
safe drinking water. It becomes difficult for rural communities and 
residents to maintain a healthy standards of living if they do not have 
access to good quality drinking water. This bill is a major step toward 
achievements of this goal.
  Mr. President, the area that will be served by this project 
represents the best of America. It is part of America's breadbasket. 
Sioux Falls was rated recently as the No. 1 city in America. This water 
project will help assure the future growth and prosperity of Sioux 
Falls and the many other communities it will serve.
  America and the world rely on U.S. farmers and ranchers to provide 
the food we eat. Rural America must be able to grow and prosper. Rural 
America must be able to maintain a standard of living comparable to 
that enjoyed by urban America.
  Working together we can ensure that every South Dakotan has access to 
dependable, high-quality drinking water. For growth and prosperity, we 
must be able to utilize our most precious natural resource--water.
  Mr. President, I urge my colleagues to support this bill.
  Mr. DASCHLE. Mr. President, I join my colleague, Senator Pressler, in 
introducing legislation to authorize the Lewis and Clark rural water 
system. The Lewis and Clark rural water system is seeking authorization 
for the construction of a rural water system to provide clean water to 
southeastern South Dakota, northwestern Iowa, and southwestern 
Minnesota.
  The need for this project is clear. In Sioux Falls, and in the rural 
counties that rely on Sioux Falls as a center of economic growth, we 
are now face to face with water shortages. Population growth is 
outstripping existing supplies of clean water.
  Despite heroic efforts by the city of Sioux Falls to conserve water, 
supplies are not keeping up with demand. Sioux Falls has imposed water 
restrictions every year since 1987. Water rights for the Big Sioux 
aquifer, which supplies water to Sioux Falls, have been committed. 
Therefore, Sioux Falls has been forced to explore other long-term 
options. Similar problems exist in the nearby rural counties in 
southeastern South Dakota, Iowa, and Minnesota, areas where water use 
restrictions are not uncommon. Unless the water supply problem is 
resolved, it could affect the long-term growth and development of the 
city.
  Not only are there shortages of water, but much of the water that 
currently supplies the area is contaminated with high levels of iron, 
manganese, sulfate, and total dissolved solids. In many cases, drinking 
water is at or above EPA limits, leading to concern over public health 
in those areas.
  There is a solution: The people of this region can tap the enormous 
resources of the Missouri River to provide long-term public health and 
economic development benefits. But they cannot do this alone. It will 
require a partnership between local, State, and Federal Governments.
  With the Missouri River carrying billions of gallons of water by this 
area each year, I am reminded of the ironic line ``water, water 
everywhere, but not a drop to drink.'' With the construction of the 
Lewis and Clark system to convey Missouri River water to the people of 
this region, that irony will cease. Impacts of this project on the flow 
of the Missouri River will be negligible. Nearly all the water would be 
returned to the Missouri River via the James, Vermillion, Big Sioux, 
Little Sioux, Rock, and Floyd Rivers.
  In conclusion, there is a strong need for this project throughout the 
three-State area. The water supply shortages, the poor water quality, 
and the need to allow this region to grow economically, all demand that 
a solution be found that allows the people of this region access to 
clean, safe drinking water. The Lewis and Clark project is a sensible 
and timely answer to those needs. I encourage my colleagues to lend 
their support to this project in hopes that Congress will authorize its 
construction in the near future.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Stevens, Mr. Cochran, and Mr. 
        Campbell):
  S. 2067. A bill to elevate the position of Director of Indian Health 
Service to Assistant Secretary of Health and Human Services.


           assistant secretary for indian health legislation

  Mr. McCAIN. Mr. President, today I am introducing legislation to 
designate the Director of the Indian Health Service to be an Assistant 
Secretary for Indian Health at the Department of Health and Human 
Services. I am pleased that Senators Stevens, Cochran, and Campbell 
have joined with me as cosponsors of this legislation.
  I am also pleased to note that this legislation has the support of 
the Navajo Nation, the Port Gamble S'Klallam Tribe, the Ely Shoshone 
Tribe, the Makah Tribal Council, the Ramah Navajo School Board, the 
Grand Traverse Band of Ottawa and Chippewa Indians, the All Indian 
Pueblo Council, the Leech Lake Tribal Council, the Colorado River 
Indian Tribe, the Seattle Indian Health Board, and the National Indian 
Health Board.
  Mr. President, when Louis Merriam issued his report in 1928 
publicizing the deplorable living conditions on Indian reservations, he 
stated that the ``promotion of health and the relief of the sick are 
functions of such extreme importance that they always merit first 
consideration * * *. But taken as a whole practically every activity 
undertaken by the national government for the promotion of the health 
of the Indians is below a reasonable standard of efficiency.''
  Sadly, those words still haunt Indian people today. Unfortunately, it 
doesn't seem to matter whether the administration is Democrat or 
Republican, the attention given to Indian health care needs has been 
nothing less than a national disgrace.
  Like Indian leaders throughout the country, I am appalled at the 
President's budget request for fiscal year 1995 for the Indian Health 
Service [IHS]. The President's budget request calls for reducing the 
IHS budget by $247 million. After the budge gimmicks are eliminated, 
such as the ridiculous assumption that the IHS will be able to increase 
third party collections by 463 percent, the budget cuts surpass $300 
million. In addition, even though the IHS is already severely 
understaffed, the president's budget calls for eliminating nearly 2,000 
IHS staff positions over the next 2 years. I find it quite ironic that 
this administration, which has emphasized the need for health care 
reform and has repeatedly warned the American people that this country 
is facing a health care crisis, has recommended a budget that would 
literally devastate the ability of the IHS to address the health care 
needs of native Americans.
  Given the fact that American Indians and Alaska Natives continue to 
bear an increased burden of illness and premature mortality compared to 
other U.S. populations, how is it possible that the Public Health 
Service [PHS], the Department of Health and Human Services [HHS], and 
the Office of Management and Budget [OMB] could be so insensitive and 
uncaring? I believe one of the reasons is that the department does not 
have a senior policymaker who is knowledgeable about Indian health care 
needs and concerns. As a result, more concern is placed on budget 
numbers than on equipping IHS to meet the health care needs of Native 
Americans.
  The IHS is currently an agency under PHS within the Department. Under 
the present organizational structure, the authority of the IHS director 
is equivalent to that of a midlevel manager. The bureaucratic chain of 
command requires the IHS director to report directly to the Assistant 
Secretary for Health. Consequently, much of the director's time and 
energy is spent fighting through layers of bureaucracy to simply 
maintain existing levels of health care. Evidence of this is clearly 
seen in the following budget chart which tracks the history of the 
fiscal year 1995 budget request:

                           HISTORY OF FISCAL YEAR 1995 REQUEST--INDIAN HEALTH SERVICE
----------------------------------------------------------------------------------------------------------------
                                                               Request to   Request to   Request to   Request to
                                                                  PHS          DHHS         OMB        Congress
----------------------------------------------------------------------------------------------------------------
                          SERVICES
 
Fiscal year 1993 appropriation..............................   1,524,990    1,524,990    1,524,990    1,524,990
Fiscal year 1994 President's budget.........................   1,600,851    1,600,851            0            0
Fiscal year 1994 House allowance............................           0            0    1,652,394            0
Fiscal year 1994 appropriation..............................           0            0            0    1,646,088
Fiscal year 1994 built-in increases.........................      83,002       68,499       70,851       82,742
Fiscal year 1994 annualization:
    Belcourt, ND, Hospital..................................       1,089        1,089        1,089        1,089
    Crow, MT, Hospital......................................       4,326        4,326        4,326        4,326
    Tahatchi, NM Hlth Ctr...................................       3,354        3,354        3,354        3,354
    Stilwell, OK, Hlth Ctr..................................       2,742        2,742        2,742        2,742
                                                             ---------------------------------------------------
      Subtotal--annualization...............................      11,511       11,511       11,511       11,511
                                                             ---------------------------------------------------
      Subtotal built-in increases...........................      94,513       80,010       82,362       94,253
                                                             ===================================================
FY 1995 program increases staffing new facilities:
    Shiprock, NM Hospital...................................       7,812        7,812        5,956            0
    Kotzebue, AK Hospital...................................       4,265        4,265        3,965            0
                                                             ---------------------------------------------------
      Subtotal--new facilities..............................      12,077       12,077       10,921            0
                                                             ===================================================
    Population growth.......................................      23,831       14,874            0            0
    Women health............................................      10,000       10,000            0            0
    Contract support cost shortfall.........................       8,000        8,000            0            0
    Contract health care....................................       9,000        9,000            0            0
    Loan repayment..........................................       5,000       10,000            0            0
    Alcohol aftercare.......................................       3,000       11,000            0            0
    Hard-core substance abuse...............................           0            0            0       10,400
    Child abuse.............................................       2,500            0            0            0
    Emergency medical services..............................       1,500            0            0            0
    Additional appeal items.................................  ...........  ...........  ...........  ...........
    Population growth.......................................      12,335            0            0            0
    Contract health care....................................      30,483            0            0            0
    Mental health...........................................      10,000            0            0            0
    Hlth prevention disease prevention......................       5,000            0            0            0
    Public health nursing...................................      10,000            0            0            0
    Dental..................................................      10,000            0            0            0
    Elder health............................................       5,000            0            0            0
    Tribal management.......................................       4,000            0            0            0
    Unmet needs (H&HC)......................................      48,700            0            0            0
    Self governance.........................................       8,000            0            0            0
    Nutrition...............................................       6,960            0            0            0
    Health education........................................       5,265            0            0            0
    Direct operations.......................................       6,217            0            0            0
    Contract health support costs...........................      26,000            0            0            0
    Community health representatives........................       3,700            0            0            0
    Urban...................................................       1,300            0            0            0
    Diabetes................................................           0        5,000            0            0
    National medical expenditure survey.....................           0        4,000        4,000            0
Absorption of built-in increases............................           0            0            0      (90,094)
Administrative reduction....................................           0            0       (9,319)      (9,319)
Comparative transfer of facilities space (from facilities to           0            0            0        5,977
 H&HC)......................................................
Program transfer to be funded by private insurance..........           0            0            0      (86,000)
                                                             ---------------------------------------------------
    Total--services request.................................   1,963,232    1,764,812    1,740,358    1,571,305
                                                             ===================================================
                         FACILITIES
 
Fiscal year 1994 appropriation..............................     333,640      333,640      333,640      333,640
Fiscal year 1994 President's budget.........................     279,269      279,269            0            0
Fiscal year 1994 House allowance............................           0            0      296,997            0
Fiscal year 1994 appropriation..............................           0            0            0      296,982
Fiscal year 1994 built-in increases.........................       2,862        3,548        3,807        4,247
Fiscal year 1994 annualization:
    Belcourt, ND, Hospital..................................         131          131          131          131
                                                             ---------------------------------------------------
      Subtotal built-in increases...........................       2,993        3,679        3,938        4,378
                                                             ===================================================
Fiscal year 1995 program increases:
    Kotzebue quarters.......................................      16,400       16,400   ...........  ...........
    Ft. Belknap/Hays, MT, Clinic............................       9,000        9,000   ...........  ...........
    Spokane YRTC............................................       2,780        2,780   ...........  ...........
    Environmental assessment................................       5,000        5,000   ...........  ...........
    Alaska Native Medical Center............................  ...........  ...........      17,000   ...........
    Maintenance and improvement.............................  ...........  ...........  ...........           0
    Population growth.......................................       1,169          745   ...........  ...........
    Injury prevention.......................................       1,117       10,000   ...........  ...........
Additional appeal items:
    Environmental assessments...............................       3,000   ...........  ...........  ...........
    Ft. Belknap hlth. care fac's............................       7,699   ...........  ...........  ...........
    Alcohol rehab. facilities...............................       3,000   ...........  ...........  ...........
    Injury prevention.......................................       3,883   ...........  ...........  ...........
Absorption of built-in increases............................  ...........  ...........  ...........      (4,378)
Administrative reductions...................................  ...........  ...........      (1,081)      (1,081)
Deduct hlth. care fac's. constr.............................     (75,000)     (75,000)     (78,676)     (80,184)
Deduct sanitation facilities................................  ...........  ...........  ...........     (85,051)
Facilities space transfer to H&C............................  ...........  ...........  ...........      (5,977)
                                                             ---------------------------------------------------
    Total--Facilities request...............................     260,310      251,873      238,178      124,689
                                                             ===================================================
    Total--Indian Health Service............................   2,223,542    2,016,685    1,978,536    1,695,994
----------------------------------------------------------------------------------------------------------------

  At a time when Indian leaders are asking that the deplorable health 
conditions existing on Indian reservations today be recognized and made 
the basis of policy and action, PHS, HHS, and OMB collectively 
responded by reducing the budget level proposed by the IHS by over a 
half billion dollars.
  Mr. President, it's time PHS, HHS, and OMB get the message. Indian 
people should not be treated as second-class citizens. In order to 
ensure that Indian health care needs and concerns are given the 
attention they deserve, I believe it has become necessary to designate 
the IHS director as an Assistant Secretary of Indian Health at HHS. I 
see four advantages to establishing the position of Assistant Secretary 
for Indian Health.
  First, an Assistant Secretary for Indian Health would provide better 
representation during the budget process. Currently, the IHS director 
reports directly to the Assistant Secretary for Health. As seen in the 
chart above, the concern for Indian health care needs dramatically 
decreased as the IHS budget was reviewed by the PHS, HHS, and OMB.
  Second, an Assistant Secretary for Indian Health would eliminate 
unnecessary bureaucracy and permit quicker decisionmaking on Indian 
health care issues. In addition, the Assistant Secretary would have the 
stature to communicate directly with the other operating divisions 
within the department in requesting their expertise and assistance on 
Indian health issues such as alcohol and substance abuse, HIV/AIDS, and 
child abuse. Currently, the IHS director must forward such requests 
through the Assistant Secretary for Health.
  Third, an Assistant Secretary for Indian Health would have the 
ability to call on private sector organizations that have not 
traditionally focused on Indian health care needs and concerns, but who 
have the expertise and resources that can enhance IHS' ability to 
deliver the highest quality of health care, or to provide technical 
assistance to Indian tribes who choose to operate their own health care 
programs.
  Fourth, an Assistant Secretary for Indian Health would reaffirm the 
special relationship between Indian tribes and the United States. At a 
time when the Nation is focused on health care reform, it is imperative 
that we not lose focus on the health care needs and concerns of the 
Indian people.
  I also want to call attention to section 2 of the bill which provides 
for the organizational independence of the IHS within HHS. This section 
is necessary because the IHS is currently an agency of PHS which is 
headed by the Assistant Secretary for Health. Creating an Assistant 
Secretary for Indian Health will require relocating the IHS to the same 
organizational level as the PHS.
  Section 2 also makes it clear that this bill is not intended to 
diminish the ability of the IHS to utilize the services of the U.S. 
Public Health Service Commissioned Corps. While I do not believe HHS 
would actually prohibit the IHS from continuing to utilize Commissioned 
Corps personnel in the delivery of health care to the Indian people, 
however in light of the serious budget and staff reductions recommended 
by the administration I feel compelled to insert bill language clearly 
stating the intent of Congress on this particular matter.
  Mr. President, I ask unanimous consent that a copy of a letter from 
Navajo Nation President Peterson Zah and the bill be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2067

       Be it enacted in the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. OFFICE OF ASSISTANT SECRETARY FOR INDIAN HEALTH.

       (a) Establishment.--There is established within the 
     Department of Health and Human Services the Office of the 
     Assistant Secretary for Indian Health.
       (b) Assistant Secretary of Indian Health.--In addition to 
     the functions performed on the date of enactment of this Act 
     by the Director of the Indian Health Service, the Assistant 
     Secretary for Indian Health shall perform such functions as 
     the Secretary of Health and Human Services may designate.
       (c) References.--References in any other Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or relating to the Director of 
     the Indian Health Service shall be deemed to refer the 
     Assistant Secretary for Indian Health.
       (d) Rate of Pay.--(1) Section 5315 of title 5, United 
     States Code, is amended by striking the following:
       ``Assistant Secretaries of Health and Human Services 
     (5).'';

     and inserting the following:
       ``Assistant Secretaries of Health and Human Services 
     (6).''.
       (2) Section 5316 of such title is amended by striking the 
     following:
       ``Director, Indian Health Service, Department of Health and 
     Human Services.''.
       (e) Conforming Amendments.--(1) Section 601 of the Indian 
     Health Care Improvement Act (25 U.S.C. 1661) is amended--
       (A) in the second sentence of subsection (a), by striking 
     ``a Director,'' and inserting ``the Assistant Secretary for 
     Indian Health,'';
       (B) in the fourth sentence of subsection (a), by striking 
     ``the Director'' and inserting the Assistant Secretary for 
     Indian Health'';
       (C) by striking out the fifth sentence of subsection (a); 
     and
       (D) by striking ``Director of the Indian Health Service'' 
     each place it appears and inserting ``Assistant Secretary for 
     Indian Health''.
       (2) The following provisions are amended by striking 
     ``Director of the Indian Health Service'' each place it 
     appears and inserting ``Assistant Secretary for Indian 
     Health'':
       (A) Section 816(c)(1) of the Indian Health Care Improvement 
     Act (25 U.S.C. 1680f(c)(1)).
       (B) Section 203(a)(1) of the Rehabilitation Act of 1973 (29 
     U.S.C. 761b(a)(1)).
       (C) Subsections (b) and (e) of section 518 of the Federal 
     Water Pollution Control Act (33 U.S.C. 1377(b), (e)).
       (D) Section 803B(d)(1) of the Native American Programs Act 
     of 1974 (42 U.S.C. 2991b-2(d)(1)).

     SEC. 2. ORGANIZATION OF INDIAN HEALTH SERVICE WITHIN 
                   DEPARTMENT OF HEALTH AND HUMAN SERVICES.

       (a) Organization.--Section 601 of the Indian Health Care 
     Improvement Act (25 U.S.C. 1661), as amended by section 
     1(e)(1), is further amended--
       (1) by striking out ``within the Public Health Service of 
     the Department of Health and Human Services'' each place it 
     appears and inserting ``within the Department of Health and 
     Human Services''; and
       (2) in the second sentence of subsection (a), by striking 
     out ``report to the Secretary through the Assistant Secretary 
     for Health of the Department of Health and Human Services'' 
     and inserting ``report to the Secretary''.
       (b) Conforming Amendment.--The section heading of such 
     section is amended by striking the following:


``establishment of the indian health service as an agency of the public 
                           health service'';

     and inserting the following:


``establishment of the indian health service as an agency of department 
                    of health and human services''.

       (c) Utilization of Public Health Service Personnel.--
     Nothing in this section shall be interpreted as terminating 
     or otherwise modifying any authority providing for the 
     utilization by the Indian Health Service of officers or 
     employees of the Public Health Service for the purposes of 
     carrying out the responsibilities of the Indian Health 
     Service. Any officers or employees so utilized shall be 
     treated as officers or employees detailed to an executive 
     department under section 214(a) of the Public Health Service 
     (42 U.S.C. 215(a)).
                                  ____



                                            The Navajo Nation,

                                  Window Rock, AZ, April 29, 1994.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain: In response to your letter dated March 
     8, 1994, the Navajo Nation endorses your proposal that would 
     elevate the Indian health Services Director to the level of 
     an Assistant Secretary of Health. By doing so, we believe 
     this measure would alleviate the Administration's many 
     misunderstandings of the Indian Health Service (IHS) and its 
     delivery of health care services to American Indians and 
     Alaska Natives. It would also extend the opportunity for the 
     IHS director to actively participate in developing the IHS 
     budget, thus, it would enlace dialogue between the 
     Administration and Indian tribes that would be more 
     responsive to tribal needs and concerns.
       As you are aware, the Navajo Nation opposes the 
     Administration's proposed FY 1995 IHS budget. Current 
     examples of the lack of visibility and participation of IHS 
     abound in the concurrent budget.
       The Navajo Nation recognizes the mounting pressures of 
     budget limits and government downsizing that would 
     potentially devastate the IHS and health care services to 
     Indian people. The Executive directives explicitly reduced 
     the Full-Time Equivalent (FTE) of IHS, which is less than two 
     percent of the entire Department of Health and Human Services 
     budget, yet IHS is absorbing almost 40 percent of the FTE 
     reductions. The FTE reductions come at an unfortunate time 
     because the IHS is scheduled to open two new health 
     facilities in Shiprock and Tohatchi, New Mexico. These health 
     facilities will be partially staffed and the Navajo people 
     will again be further underserved. Moreover, the FY 1994 and 
     1995 FTE reductions harshly impact Navajo employment, since 
     the IHS is one of the Major employers on the Navajo 
     Reservation. If the IHS director were at the policy making 
     level of the department to reaffirm tribal interests, we 
     believe these incidences could have been clarified and 
     analyzed from a realistic perspective.
       I assure you that other American Indian leaders appreciate 
     and support your proposal. It can only contribute to the 
     health care of American Indians and Alaska Natives.
           Sincerely,
                                                     Peterson Zah,
                                                        President.
         

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