[Congressional Record Volume 140, Number 101 (Thursday, July 28, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ROCKEFELLER:
  S. 2331. A bill to amend title 38, United States Code, to extend to 
make permanent certain authorities and requirements under that title: 
to the Committee on Veterans Affairs.


                  va authorities extension act of 1994

 Mr. ROCKEFELLER. Mr. President, as chairman of Committee on 
Veterans' Affairs, I am pleased to introduce a bill that would make 
permanent two authorities relating to activities of the Department of 
Veterans Affairs, and extend a third.
  Mr. President, the first provision would give VA permanent authority 
to waive military retired pay forfeiture requirements in the case of 
registered nurses employed by VA in shortage situations. The second 
provision would make permanent procedures to be followed in the case of 
special pay agreements for physicians and dentists employed by VA--
including both basic pay and special pay--that would provide for total 
annual pay exceeding the amount for a person in Executive Level, grade 
I. The third provision would extend for 2 years VA's authority to enter 
into enhanced use leases of VA real property.
  Mr. President, the provisions contained in this bill are technical 
ones which are necessary to enable VA to continue practices which 
Congress has previously authorized. The bill would make permanent 
certain temporary authorizations, and extend a third. I hope and expect 
that my colleagues in the committee will support this measure, and that 
we will report this bill for consideration by the Senate in the near 
future.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2331

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

     SECTION 1. PERMANENT AUTHORITY FOR WAIVER OF REDUCTION OF 
                   RETIREMENT PAY FOR REGISTERED-NURSE POSITIONS.

       Section 7426(c) of title 38, United States Code, is amended 
     by striking out the second sentence.

     SEC. 2. PERMANENT REQUIREMENT FOR REVIEW OF AGREEMENTS FOR 
                   SPECIAL PAY FOR PHYSICIANS AND DENTISTS.

       Section 7432(d) of title 38, United States Code, is amended 
     by striking out paragraph (4).

     SEC. 3. EXTENSION OF AUTHORITY TO ENTER INTO ENHANCED-USE 
                   LEASES.

       Section 8169 of title 38, United States Code, is amended by 
     striking out ``December 31, 1994,'' and inserting in lieu 
     thereof ``December 31, 1996''.
                                 ______

      By Mr. HATFIELD (for himself and Mrs. Murray):
  S. 2332. A bill to amend the Federal Columbia River Transmission 
System Act to provide for the reconstitution of outstanding repayment 
obligations of the Administrator of the Bonneville Power Administration 
for the appropriated capital investments in the Federal Columbia River 
Power System; to the Committee on Energy and Natural Resources.


            Bonneville power administration refinancing act

  Mr. HATFIELD. Mr. President, today I am pleased to introduce 
legislation which will end the decade-long battle to increase the 
electric power rates of the Bonneville Power Administration [BPA] in 
the Pacific Northwest. The legislation will resolve, once and for all, 
the perception by some that electric rates in the Pacific Northwest are 
subsidized by the Federal Government, and will discourage future 
proposals to raise electric rates to levels which would injure the 
region's economy.
  The legislation is comprised of two primary elements: First, it 
provides for the refinancing of approximately $6.7 billion of 
Bonneville's low interest, appropriated debt, and replaces it with new 
debt that carries current market interest rates. Second, it provides an 
additional $100 million to the Federal Treasury, money that will be 
raised by BPA from its electrical customers.
  In return for this arrangement, the Northwest's electrical ratepayers 
seek a permanent guarantee that the costs of repaying the Federal 
investment in the Columbia River hydroelectric system will not be 
altered further in the future. This is a proposal which is fair to both 
taxpayers and ratepayers and should be considered favorably by the 
Senate.
  This legislation has its roots in a decade of proposals made by 
successive administrations to alter the repayment of the Federal 
investment in the Nation's hydroelectric system. As budget deficit 
grew, a cash-starved Federal Government looked to all sources of 
revenue generation to produce more dollars. The power marketing 
administrations, which produce large sums of annual revenues, became 
easy targets for those who look only at the bottom line. Little or no 
consideration was given to the impacts on local economies or the 
overall impact on Federal revenues. Let me recount some of the history 
associated with this issue.
  In 1985, the first proposal to alter Federal power marketing 
administration repayment practices was offered by President Reagan. 
Under that initial proposal, electric rates for the Bonneville Power 
Administration would have increased from between 50 to 80 percent. The 
interest rates on outstanding investments would have been raised to 
current rates, and the methodology for defining the amount of repayment 
due in any given year would have been altered.
  Then, in 1986, the Reagan administration proposed selling the power 
marketing administrations to the highest bidders. The methodology for 
selling the PMA's was never determined, however, and the potential 
impact of the proposal was impossible to calculate. It is safe to say, 
though, that the purpose of the initiative was to create at least as 
much money for the Treasury as the earlier proposal.
  From 1987 through 1990, the Reagan and Bush administrations proposed 
various repayment schemes that would have resulted in PMA rate 
increases of 10 to 40 percent. In 1991 and 1992, the Bush 
administration lowered its sights and submitted a revised proposal 
which would have raised rates approximately 12 to 15 percent.
  In 1993, the Clinton administration proposed increasing rates for the 
PMA's such that an additional $100 million would be generated annually. 
Because the costs of this proposal were not allocated between PMA's, it 
was impossible to identify the exact rate impact.
  While none of these proposals ultimately was successful, each created 
a cost for the economies which depend on PMA electric power. 
Electricity is the cornerstone of much of the Nation's economy, 
particularly in the Pacific Northwest. The high reliability and low 
cost of electric power provides the United States, and especially the 
Pacific Northwest, with a global competitive advantage which benefits 
the entire Nation.
  As each of these proposals was made, uncertainty over the future cost 
of electricity was created. In the Pacific Northwest, where over half 
the electric power consumed is marketed by the Bonneville Power 
Administration, these proposals cast a cloud of uncertainty over future 
electric power prices. Rate increases of the magnitude contemplated by 
the proposals would devastate the economy of the region by discouraging 
investment in infrastructure, including modernization of new plants and 
equipment, and close factories and businesses which operate on the 
margin, many of which were attracted to the availability of low cost 
hydroelectric power in the region.
  In fact, the benefit of these proposals was overstated by every 
administration because the potential for lost tax revenue as a result 
of business failure or lack of investment was never taken into account.
  Let me make it perfectly clear that I have opposed each and every one 
of these proposals over the years, and believe that they were, at best, 
misguided, if not hypocritical. Water projects throughout this country 
were built with no expectation of payback by the users of the 
facilities. Unlike these other situations, in the case of hydroelectric 
generation, the users are paying back the investment, with interest, 
based on the terms agreed to at the time the investment was made. 
Accordingly, there is no subsidy associated with the Federal Power 
Marketing Program. This situation is often, and aptly, compared to a 
home mortgage. Attempting to alter unilaterally the terms of these 
financial arrangements years after the investment was made, based on 
current financial conditions, is predatory and unfair.
  But, Mr. President, this is politics and not business. The lure of 
short-term fixes to generate cash during periods of huge budget 
deficits will not vanish in the night. It is time, therefore, to 
resolve this matter and put it behind us, despite the fact that 50 U.S. 
Senators signed a letter in 1990 opposing repayment reform, and that 
every proposal that has been made has been rejected by the Congress.
  The development of this legislation actually began over 3 years ago. 
In 1991, I urged BPA and its customers to develop proposals to resolve 
the issue permanently. Customers of other power marketing 
administrations also were invited to work with the Pacific Northwest, 
or to develop proposals on their own. In 1992, after a year of study 
and consultation involving Bonneville, its customers and the customers 
of other power marketing administrations, a study document was 
produced. That study identified a range of alternatives, including one 
to refinance BPA's debt to increase the rate of interest it pays to the 
Treasury.
  When that study was completed, another meeting of BPA and other PMA 
customers was held in my Washington, DC office to discuss the 
ramifications of the study. At that meeting, a variety of views were 
expressed as to whether PMA customers wanted to continue to fight each 
and every repayment alternative in the future, or if it was time to 
find a permanent solution. The Pacific Northwest's representatives 
voiced their interest in supporting an appropriate proposal, provided 
that it ensured long-term certainty to end the long-term threat of 
further rate increases on Bonneville's appropriated debt. Customer 
representatives for all PMA's also were encouraged to consider options 
which would benefit their systems, and support for any such changes was 
expressed.
  A significant opportunity to advance the BPA proposal occurred last 
year with the release of Vice President Gore's National Performance 
Review [NPR]. To the Vice President's credit, the Department of Energy 
and others in the administration recognized that a new and realistic 
approach to repayment reform could be formulated. The NPR took the 
dramatic step of recommending the BPA debt refinancing proposal 
originally identified in the study developed by Bonneville and its 
customers. The NPR, however, also included a $100 million premium as an 
additional cost the BPA ratepayers would be required to pay--over and 
above the annual principal and interest payments on the appropriated 
debt. While this premium is distasteful, it will, over the long-term, 
benefit the Pacific Northwest ratepayers, and is a price worth paying.
  The most fundamental concern with the $100 million premium is that it 
may suggest to some there is a subsidy of PMA customer electric rates. 
Let me be perfectly clear on this issue. There is no subsidy. 
Accordingly, the $100 million may be viewed as nothing less than 
extortion. In my opinion, however, the $100 million price tag is 
analogous to the costs a business might experience when settling 
litigation.
  While the subsidy issue is important, it is merely a side show to the 
real issue, that being the urgent need of the Government to reduce the 
Federal debt. Considering the need to raise additional revenue, there 
may well come a time when the Congress will conclude that the path of 
least resistance is to embrace the dubious notion that subsidies for 
PMA customers exist. Given the inherent risk in that outcome, the $100 
million premium is quite attractive. But, this transfer of wealth from 
Pacific Northwest ratepayers to U.S. taxpayers is supportable only if 
it is accompanied by a long-term guarantee there will be no future 
increases in the cost of repaying the Federal investment in the 
Northwest hydroelectric system. The NPR initiative included such a 
guarantee.
  The NPR initiative led to hastily drafted legislation which was 
introduced in the Congress last October. That proposal would have 
allowed BPA to raise money in the private capital markets to fund the 
refinancing of its debt. The Congressional Budget Office, in its 
testimony before the Senate Committee on Energy and Natural Resources, 
indicated that the NPR proposal would lead to an increase in the 
Federal budget deficit. While this was disappointing, other 
alternatives remained available for consideration.
  We are now on a different path. The legislation I am introducing 
today provides for the refinancing of BPA's appropriated debt through 
the U.S. Treasury rather than the private capital markets. It is my 
understanding this resolves the fundamental issue which concerned CBO 
and caused it to score the previous proposal as an increase in the 
deficit.
  Let me take a moment to describe the specifics of the legislation. 
The legislation will require that BPA's outstanding repayment 
obligations on appropriations be reconstituted by resetting outstanding 
principal at the present value of the current principal and annual 
interest that BPA would owe to the Federal Treasury, plus $100 million. 
Enactment of the bill will represent agreement between Northwest 
ratepayers and the U.S. Government that the subsidy criticisms are 
resolved permanently. Interest rates on the new principal will be 
reassigned at the Treasury's current long-term interest rates. Interest 
rates on new investments financed by appropriations, which are now 
administratively set equivalent to long-term Treasury financing costs, 
will be required by law.
  The legislation also proposes that certain credits be granted to 
BPA's cash transfers to the Treasury in connection with payments BPA 
would make under a proposed litigation settlement between the United 
States and the Confederated Tribes of the Colville Reservation. It is 
my understanding that it is the administration's view that these 
credits, taken together with the one-time judgment fund payment, 
represent an equitable allocation of the costs of litigation settlement 
between BPA ratepayers and Federal taxpayers. Section 9 of the 
legislation complements legislation submitted by the administration on 
the Colville settlement. This new legislation contains repayment credit 
provisions that are different in timing but achieve the same results in 
terms of the present value cost to ratepayers and taxpayers.
  This proposal addresses only the repayment of the Bonneville Power 
Administration and not other power marketing administrations. As noted 
earlier, every attempt was made to keep the customers of other power 
marketing administrations apprised of our intentions to resolve the 
repayment issue. We have encouraged them to find solutions which also 
would resolve permanently their own concerns. If the customers of other 
PMA's are in a position to make changes that will ensure long-term 
certainty for them, they are invited to join this effort.
  Besides providing a $100 million premium to the Federal Treasury, 
this legislation provides an additional benefit to taxpayers. 
Competition within the electric power industry is increasing 
dramatically, particularly since the passage of the Energy Policy Act 
of 1992. That competition is felt most keenly at the wholesale level 
because the Energy Policy Act provided greater transmission access at 
that level. Bonneville is unique in that it operates essentially only 
in the wholesale arena. Competitors are attempting to attract BPA's 
customers away with some limited success. One primary reason given for 
departing the BPA system is that rates may escalate dramatically and 
swiftly in the future as a result of repayment reform. The elimination 
of this risk not only benefits Bonneville, but also provides greater 
assurance that the repayment of the Federal investment will be 
accomplished on time and in full.
  Finally, this legislation also benefits taxpayers by assuring that 
any future investments in the Northwest hydroelectric system will be 
repaid with interest rates reflecting the Treasury's cost of money at 
the time the investment is made. This will assure that no additional or 
lingering charges of the existence of a Federal electrical subsidy are 
made with respect to future investments.
  Mr. President, the administration was exceptionally helpful in 
developing this legislation, and I especially appreciate the assistance 
provided by the Office of Management and Budget and the Department of 
Energy. I understand that the administration is continuing to review 
certain aspects of the bill, and that various revisions may be 
necessary. I look forward to continuing to work with the administration 
over the next several weeks to identify any provisions in need of 
further clarification, and hope that all remaining issues can be 
resolved to our mutual satisfaction.
  I ask unanimous consent that the bill and a section-by-section 
analysis of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2332

       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 ``Bonneville Power 
     Administration Refinancing Act''.

     SEC. 2. DEFINITIONS.

       Section 3 of the Federal Columbia River Transmission System 
     Act (16 U.S.C. 838a) is amended--
       (1) by redesignating paragraphs (b) and (c) as paragraphs 
     (c) and (d), respectively;
       (2) by inserting after paragraph (a) the following new 
     paragraph (b):
       ``(b) The term `capital investment' means a capitalized 
     cost funded by Federal appropriations that--
       ``(1) is for a project, facility, or separable unit or 
     feature, of a project or facility;
       ``(2) is a cost for which the Administrator is required by 
     law to establish rates to repay to the United States Treasury 
     through the sale of electric power, transmission, or other 
     services;
       ``(3) excludes a Federal irrigation investment; and
       ``(4) excludes an investment financed by the current 
     revenues of the Administrator or by bonds issued and sold, or 
     authorized to be issued and sold, by the Administrator under 
     section 13 of this Act.''; and
       (3) by adding after paragraph (d), as redesignated by 
     paragraph (1), the following:
       ``(e) The term `old capital investment' means a capital 
     investment whose capitalized cost--
       ``(1) was incurred, but not repaid, before October 1, 1995; 
     and
       ``(2) was for a project, facility, or separable unit or 
     feature, of a project or facility placed in service before 
     October 1, 1995.
       ``(f) The term `repayment date' means the end of the period 
     within which the Administrator's rates are to ensure the 
     repayment of the principal amount of a capital investment.
       ``(g) The term `Treasury rate', for a fiscal year, means a 
     rate that the Secretary of the Treasury determines as soon as 
     practicable after the beginning of the fiscal year and that 
     is equal to the average prevailing market yield during the 
     preceding fiscal year on interest-bearing marketable 
     securities of the United States which, at the time the 
     computation is made, have terms of 15 years or more remaining 
     to maturity. The average yield is computed as the average 
     during the preceding fiscal year using the daily bid prices. 
     When the average yield so computed is not a multiple of one-
     eighth of 1 percent, the rate is the multiple of one-eighth 
     of 1 percent nearest to the average yield.''.

     SEC. 3. RECONSTITUTION OF OUTSTANDING PAYMENT OBLIGATIONS.

       The Federal Columbia River Transmission System Act (16 
     U.S.C. 838 et seq.) is amended by adding at the end the 
     following:


                        ``new principal amounts

       ``Sec. 14. (a) Effective October 1, 1995, an old capital 
     investment has a new principal amount that is the sum of--
       ``(1) the present value, calculated using a discount rate 
     equal to the Treasury rate for fiscal year 1996, of the old 
     payment amounts for the old capital investment; and
       ``(2) an amount equal to $100,000,000 multiplied by a 
     fraction whose numerator is the principal amount of the old 
     payment amounts for the old capital investment and whose 
     denominator is the sum of the principal amounts of the old 
     payment amounts for all old capital investments.
       ``(b) The Administrator shall determine the new principal 
     amounts for old capital investments. The Administrator shall 
     obtain the approval of the Secretary of the Treasury of the 
     Administrator's determination of the new principal amounts 
     and the Administrator's assignment of the interest rate to 
     the new principal amounts, on the basis of consistency with 
     the provisions of section 14 and 15 of this Act.
       ``(c) For the purposes of this section, the term `old 
     payment amounts', in the case of an old capital investment, 
     means the annual interest and principal that the 
     Administrator would have paid to the United States Treasury 
     from October 1, 1995, if the Bonneville Power Administration 
     Refinancing Act were not enacted, assuming that--
       ``(1) the principal were repaid--
       ``(A) on the repayment date the Administrator assigned 
     before October 1, 1993, to the old capital investment; or
       ``(B) in the case of an old capital investment for which 
     the Administrator has not assigned a repayment date before 
     October 1, 1993, on a repayment date the Administrator shall 
     assign to the old capital investment in accordance with 
     paragraph 10(d)(1) of the version of Department of Energy 
     Order RA 6120.2 in effect on October 1, 1993; and
       ``(2) interest were paid--
       ``(A) at the interest rate the Administrator assigned 
     before October 1, 1993, to the old capital investment; or
       ``(B) in the case of an old capital investment for which 
     the Administrator has not assigned an interest rate before 
     October 1, 1993, at the Treasury rate for the fiscal year in 
     which construction is initiated on the project, facility, or 
     separable unit or feature the old capital investment 
     concerns.


               ``interest rate for new principal amounts

       ``Sec. 15. As of October 1, 1995, the unpaid balance on the 
     new principal amount established for an old capital 
     investment under section 14 of this Act bears interest 
     annually at the Treasury rate for fiscal year 1996 until the 
     earlier of the date that the new principal amount is repaid 
     or the repayment date for the new principal amount.


                           ``repayment dates

       ``Sec. 16. As of October 1, 1995, the repayment date for 
     the new principal amount established for an old capital 
     investment under section 14 of this Act is no earlier than 
     the repayment date for the old capital investment provided 
     for under section 14(b)(1) of this Act.


                        ``prepayment limitations

       ``Sec. 17. During the period beginning on October 1, 1995, 
     and ending on September 30, 2000, the total new principal 
     amounts of old capital investments, as established under 
     section 14 of this Act, that the Administrator may pay before 
     their respective repayment dates shall not exceed 
     $100,000,000.


    ``interest rates for new capital investments during construction

       ``Sec. 18. (a) The principal amount of a capital investment 
     for a project, facility, or separable unit or feature, of a 
     project or facility placed in service after September 30, 
     1995, includes interest in each fiscal year of construction 
     of the project, facility, or separable unit or feature the 
     capital investment concerns at a rate equal to the 1-year 
     rate for the fiscal year on the sum of--
       ``(1) construction expenditures that were made from the 
     date construction commenced through the end of the fiscal 
     year; and
       ``(2) accrued interest during construction.
       ``(b) The Administrator is not required to pay, during 
     construction of the project, facility, or separable unit or 
     feature the interest calculated, accrued, and capitalized 
     under subsection (a).
       ``(c) For the purposes of this section, the term `1-year 
     rate', for a fiscal year, means the 1-year Treasury agency 
     borrowing rate as determined by the Secretary of the Treasury 
     for use during the first month of the fiscal year taking into 
     consideration the average of market yields on outstanding 
     marketable interest-bearing obligations of the United States 
     with approximate periods to maturity of 1 year.


              ``interest rates for new capital investments

       ``Sec. 19. The unpaid balance on the principal amount of a 
     capital investment for a project, facility, or separable unit 
     or feature, of a project or facility placed in service after 
     September 30, 1995, bears interest--
       ``(1) from the date the project, facility, or severable 
     unit or feature the investment concerns is placed in service 
     until the earlier of the date the capital investment is 
     repaid or the end of the repayment period for the capital 
     investment; and
       ``(2) at a rate determined by the Secretary of the Treasury 
     for use in assigning interest rates to new capital 
     investments during the month that includes the date the 
     project, facility, or separable unit or feature the new 
     capital investment concerns is placed in service, taking into 
     consideration the average of market yields on outstanding 
     marketable interest-bearing obligations of the United States 
     with periods to maturity comparable to the repayment period 
     of the capital investment.


  ``credits to administrator's payments to the united states treasury

       ``Sec. 20. (a) Notwithstanding any other law, the 
     Administrator shall apply against amounts payable by the 
     Administrator to the United States Treasury a credit in the 
     amount and for a fiscal year as follows:
       ``(1) $15,250,000 in fiscal year 1996.
       ``(2) $15,860,000 in fiscal year 1997.
       ``(3) $16,490,000 in fiscal year 1998.
       ``(4) $17,150,000 in fiscal year 1999.
       ``(5) $17,840,000 in fiscal year 2000.
       ``(6) $4,100,000 in each succeeding fiscal year so long as 
     the Administrator makes annual payments to the tribes under 
     the settlement agreement.
       ``(b) For purposes of this section:
       ``(1) The term `settlement agreement' means the agreement 
     between the United States of America and the Confederated 
     Tribes of the Colville Reservation signed by the tribes on 
     April 16, 1994, and by the United States of America on April 
     21, 1994, which agreement resolves claims of the tribes in 
     docket 181-D of the Indian Claims Commission, which docket 
     has been transferred to the United States Court of Federal 
     Claims.
       ``(2) The term `tribes' means the Confederated Tribes of 
     the Colville Reservation, a federally recognized Indian 
     tribe.


                         ``contract provisions

       ``Sec. 21. In each contract of the Administrator that 
     provides for the Administrator to sell electric power, 
     transmission, or related services and that is in effect after 
     September 30, 1995, the Administrator shall offer to include 
     or shall offer to amend to include, as the case may be, 
     provisions specifying that after September 30, 1995--
       ``(1) the Administrator shall establish rates and charges 
     on the basis that--
       ``(A) the principal amount of an old capital investment 
     shall be no greater than the new principal amount established 
     under section 14 of this Act;
       ``(B) the interest rate applicable to the unpaid balance of 
     the new principal amount of an old capital investment shall 
     be no greater than the interest rate established under 
     section 15 of this Act;
       ``(C) any payment of principal of an old capital investment 
     shall reduce the outstanding principal balance of the old 
     capital investment in the amount of the payment at the time 
     the payment is tendered; and
       ``(D) any payment of interest on the unpaid balance of the 
     new principal amount of an old capital investment shall be a 
     credit against the appropriate interest account in the amount 
     of the payment at the time the payment is tendered;
       ``(2) apart from charges necessary to repay the new 
     principal amount of an old capital investment as established 
     under section 14 of this Act and to pay the interest on the 
     principal amount under section 15 of this Act, no amount may 
     be charged for return to the United States Treasury as 
     repayment for or return on an old capital investment, whether 
     by way of rate, rent, lease payment, assessment, user charge, 
     or any other fee;
       ``(3) amounts provided under section 1304 of title 31, 
     United States Code, shall be available to pay, and shall be 
     the sole source for payment of, a judgment against or 
     settlement by the Administrator or the United States on a 
     claim for a breach of the contract provisions required by 
     sections 14 through 21 of this Act; and
       ``(4) the contract provisions specified in sections 14 
     through 21 of this Act do not--
       ``(A) preclude the Administrator from recovering, through 
     rates or other means, any tax that is generally imposed on 
     electric utilities in the United States; or
       ``(B) affect the Administrator's authority under applicable 
     law, including section 7(g) of the Pacific Northwest Electric 
     Power Planning and Conservation Act (16 U.S.C. 839e(g)), to--
       ``(i) allocate costs and benefits, including but not 
     limited to fish and wildlife costs, to rates or resources; or
       ``(ii) design rates.


                          ``savings provisions

       ``Sec. 22. (a) Sections 14 through 21 of this Act do not 
     affect the obligation of the Administrator to repay the 
     principal associated with each capital investment, and to pay 
     interest on the principal, only from the `Administrator's net 
     proceeds,' as defined in section 13 of this Act.
       ``(b) Sections 14 through 21 of this Act do not affect the 
     authority of the Administrator to pay all or a portion of the 
     principal amount associated with a capital investment before 
     the repayment date for the principal amount.''.
                                  ____


                      Section-by-Section Analysis


                              introduction

       The Bonneville Power Administration (BPA) markets electric 
     power produced by federal hydroelectric projects in the 
     Pacific Northwest and provides electric power transmission 
     services over certain federally owned transmission 
     facilities. Among other obligations, BPA establishes rate to 
     repay to the U.S. Treasury the federal taxpayers' investments 
     in these hydroelectric projects and transmission facilities 
     made primarily through annual and no-year appropriations. 
     Since the early 1980's, subsidy criticisms have been directed 
     as the relatively low interest rates applicable to many of 
     these Federal Columbia River Power System (FCRPS) 
     investments. This legislation, the Bonneville Power 
     Administration Refinancing Act (the ``Act''), amends the 
     Federal Columbia River Transmission System Act (16 U.S.C. 838 
     et seq.) (the ``Transmission Act'') with the intention of 
     resolving permanently the subsidy criticisms in a way that 
     benefits the taxpayer while minimizing the impact on BPA's 
     power and transmission rates.
       The legislation accomplishes this purpose by resetting the 
     principal of BPA's outstanding repayment obligations at an 
     amount that is $100 million greater than the present value of 
     the principal and interest BPA would have paid in the absence 
     of this Act on the outstanding appropriated investments in 
     the FCRPS. The interest rate applicable to the reset 
     principal amount is based on the U.S. Treasury's long-term 
     interest rate in effect at the time the principal is reset. 
     The resetting of the repayment obligations is effective 
     October 1, 1995, coincident with the beginning of BPA's next 
     rate period.
       While the Act increases BPA's repayment obligations, and 
     consequently will increase the rates BPA charges its 
     ratepayers, it also provides assurance to BPA ratepayers that 
     the Government will not further increase these obligations in 
     the future. By eliminating the exposure to such increases, 
     the legislation substantially improves the ability of BPA to 
     maintain its customer base, and to make future payments to 
     the U.S. Treasury on time and in full. Since the Act will 
     cause both BPA's rates and its cash transfers to the U.S. 
     Treasury to increase, it will aid in reducing the Federal 
     budget deficit by an estimated $50 million over the current 
     budget window.


                         section 1. short title

       The short title for this Act is the Bonneville Power 
     Administration Refinancing Act.


                         section 2. definitions

       This section amends the definitions section, section 3, of 
     the Transmission Act.
       The Transmission Act is amended to add a new paragraph 
     3(b), which clarifies the repayment obligations to be 
     affected under this Act by defining ``capital investment'' to 
     mean a capitalized cost funded by a Federal appropriation for 
     a project, facility, or separable unit or feature of a 
     project or facility provided that the investment is one 
     for which the Administrator of the Bonneville Power 
     Administration (Administrator or BPA) is required by law 
     to establish rates to repay to the U.S. Treasury. The 
     definition excludes Federal irrigation investments 
     required by law to be repaid by the Administrator through 
     the sale of electric power, transmission or other 
     services; and, investments financed either by BPA current 
     revenues or by bonds issued and sold, or authorized to be 
     issued and sold, under section 13 of the Transmission Act.
       The Transmission Act is amended to add a new paragraph 
     3(e), which defines those capital investments whose principal 
     amounts are reset by this Act. ``Old capital investments'' 
     are capital investments whose capitalized costs were incurred 
     but not repaid before October 1, 1995, provided that the 
     related project, facility, or separable feature or facility 
     was placed in service before October 1, 1995. Thus, the 
     capital investments whose principal amounts are reset by this 
     Act do not include capital investments placed in service 
     after September 30, 1995. The term ``capital investments'' is 
     defined in new section 3(b).
       The Transmission Act is amended to add a new paragraph 
     3(f), which defines ``repayment date'' as the end of the 
     period that the Administrator is to establish rates to repay 
     the principal amount of a capital investment.
       The Transmission Act is amended to add a new paragraph 
     3(g), which defines the term ``Treasury rate'' as a long-term 
     rate determined by the Secretary of the Treasury based on 
     marketable interest-bearing securities of the United States 
     having terms to maturity of 15 years or more. The Secretary 
     of the Treasury determines the Treasury rate for a specified 
     fiscal year by reference to the preceding fiscal year's 
     average of daily bid prices on such securities. For example, 
     the ``Treasury rate for fiscal year 1996'' would be 
     determined by reference to the average of daily bid prices in 
     the twelve months comprising fiscal year 1995. The term 
     Treasury rate, in particular the term Treasury rate for 
     fiscal year 1996, is used to establish both the discount rate 
     for determining the present value of the old capital 
     investments (section 14(a) of the Transmission Act, as 
     amended by this Act) and the interest rate that will apply to 
     the new principal amounts of the old capital investments 
     (section 15 of the Transmission Act, as amended by this Act). 
     The term Treasury rate is also used in section 14(c)(2)(B) of 
     the Transmission Act, as amended by this Act, to determine 
     the interest that would have been paid in the absence of this 
     Act on old capital investments, whose facilities are brought 
     into service between the end of fiscal year 1993 and the end 
     of fiscal year 1995. For example, if an old capital 
     investment is brought into service in fiscal year 1994, the 
     Treasury rate that would apply under new section 14(c)(2)(B) 
     to that investment would be the Treasury rate for fiscal year 
     1994. The Treasury rate is not to be confused with other 
     interest rates that this Act directs the Secretary of the 
     Treasury to determine, specifically, the short-term (one-
     year) interest rates to be used in calculating interest 
     during construction of new capital investments (section 17 of 
     the Transmission Act, as amended by the Act) and the interest 
     rates that apply to capital investments the related 
     facilities of which are brought into service after September 
     30, 1995 (section 18 of the Transmission Act, as amended by 
     the Act).


       section 3. reconstitution of outstanding payments amounts

       Section 3 further amends the Transmission Act as follows:

                         New principal amounts

       The Transmission Act is amended to add a new section 14, 
     which establishes new principal amounts of the old capital 
     investments, which the Administrator is obligated by law to 
     establish rates to repay. These investments were made by 
     Federal taxpayers primarily through annual appropriations and 
     include investments financed by appropriations to the U.S. 
     Army Corps of Engineers, the U.S. Bureau of Reclamation, and 
     to BPA prior to implementation of the Federal Columbia River 
     Transmission System Act. In general, the new principal amount 
     associated with each such investment is determined 
     (regardless of whether the obligation is for the transmission 
     or generation function of the FCRPS) by (a) calculating the 
     present value of the stream of principal and interest 
     payments on the investment that the administrator would have 
     paid to the U.S. Treasury absent this Act and (b) adding to 
     the principal of each investment a pro rata portion of $100 
     million. The new principal amount is established on a one-
     time-only basis. Although the new principal amounts become 
     effective on October 1, 1995, the actual calculation of the 
     reset principal will not occur until early 1996, because the 
     discount rate will not be determined, the BPA's final audited 
     financial statements will not become available, until later 
     in that fiscal year.
       As prescribed by the term ``old capital investments,'' the 
     new principal amount is not set for appropriations-financed 
     FCRPS investments the related facilities of which are placed 
     in service in or after fiscal year 1996; for Federal 
     irrigation investments required by law to be recovered by the 
     Administrator from the sale of electric power, transmission 
     or other services, or for investments financed by BPA current 
     revenues or by bonds issued or sold, or authorized to be 
     issued and sold, under section 13 of the Transmission Act.
       The discount rate used to determine the present value is 
     the Treasury rate for fiscal year 1996 and is identical to 
     the interest rate that applies to new principal amounts for 
     the old capital investments. Thus, the Secretary of the 
     Treasury is responsible for determining the interest rate and 
     the discount rate.
       The discount period for a principal amount begins on the 
     date that the principal amount associated with an old capital 
     investment is reset (October 1, 1995) and ends, for purposes 
     of making the present value calculation, on the repayment 
     dates provided in this section. The repayment dates for 
     purposes of making the present value calculation are already 
     assigned to almost all of the old capital investments. For 
     old capital investments that will be placed in service after 
     October 1, 1993, but before October 1, 1995, no such dates 
     have been assigned. The Administrator will establish the 
     dates for these latter investments in accordance with U.S. 
     Department of Energy Order RA 6120.2--``Power Marketing 
     Administration Financial Reporting,'' as in effect at the 
     beginning of fiscal year 1994. These ideas are captured in 
     the definition of the term ``old payment amounts.''
       The interest portion of the old payment amounts is 
     determined on the basis that the principal amount would bear 
     interest annually until repaid at interest rates assigned by 
     the Administrator. For almost all old capital investments, 
     these interest rates were assigned to the capital investments 
     prior to the effective date of this Act. (For old capital 
     investments that are placed in service after September 30, 
     1993, the interest rates to be used in determining the old 
     payment amounts will be the Treasury rate for the fiscal year 
     in which the construction of the related project or facility, 
     or the separable unit or feature of a project or facility, 
     was initiated. Section 3(g) of the Transmission Act, as 
     amended by this Act, provides the manner in which these 
     interest rates are established.) Thus, for purposes of 
     determining the present value of an interest payment on a 
     capital investment, the discount period for the payment 
     begins on October 1, 1995, and ends on the date the interest 
     payment would have been made.
       The pro rata allocation of $100,000,000 is based on the 
     ratio that the nominal principal amount of the old capital 
     investment bears to the sum of the nominal principal amounts 
     of all old capital investments. This added amount fulfills a 
     key financial objective of the Act to provide the U.S. 
     Treasury and Federal taxpayers with a $100,000,000 increase 
     in the present value of BPA's principal and interest payments 
     with respect to the old capital investments. Since the 
     $100,000,000 is a nominal amount that bears interest at a 
     rate equal to the discount rate, the present value of the 
     stream of payments is necessarily increased by $100,000,000.
       Paragraph (b) of section 14 of the Transmission Act, as 
     amended by this Act, provides that the Administrator will 
     determine the new principal amounts and obtain the approval 
     of the Secretary of the Treasury for such determinations. The 
     Administrator will calculate the new principal amount of each 
     old capital investment in accord with section 14 on the basis 
     of (i) the outstanding principal amount, the interest rate 
     and the repayment date of the related old capital investment, 
     (ii) the discount rate provided by the Secretary of the 
     treasury, and (iii) for purposes of calculating the pro rata 
     share of $100 million in each new principal amount under 
     section 14(a)(2) of the Transmission Act, as amended by this 
     Act, the total principal amount of all old capital 
     investments. The Administrator will provide this data to the 
     Secretary of the Treasury and obtain approval by the 
     Secretary that the Administrator's calculation of each new 
     principal amount and the Administrator's assignment of the 
     interest rate to the new principal amounts is consistent with 
     the provisions of this Act.
       The approval by the Secretary of the Treasury will be 
     completed as soon as practicable after the data is provided 
     by the Administrator. It is expected that the Secretary of 
     the Treasury will identify possible errors in the 
     Administrator's calculations and raise and resolve these 
     issues in consultation with the Administrator. Due to the 
     ministerial nature of these one-time determinations and 
     approvals under this section, it is expected that the 
     confirmation by the Secretary will not require substantial 
     time.

                Interest rate for new principal amounts

       The Transmission Act is amended to add a new section 15, 
     which provides that the unpaid balance of the new principal 
     amount of each old capital investment shall bear interest 
     at the Treasury rate for fiscal year 1996 determined by 
     the Secretary of the Treasury under section 3(g) of the 
     Transmission Act, as amended by this Act. The unpaid 
     balance of each new principal amount shall bear interest 
     at that rate until the earlier of the date the principal 
     is repaid or the end of the repayment period for the 
     investment.

                            Repayment dates

       The Transmission Act is amended by adding a new section 16, 
     which in conjunction with the term ``repayment date'' as that 
     term is defined in section 3(f) of the Transmission Act, as 
     amended by this Act, provides that the end of the repayment 
     period for each new principal amount for an old capital 
     investment shall be no earlier than the repayment date used 
     in making the present value calculations in section 14 of the 
     Transmission Act, as amended by this Act. Under existing law, 
     the Administrator is obligated to establish rates to repay 
     capital investments within a reasonable number of years. 
     Section 16 of the Transmission Act, as amended by this Act, 
     confirms that the Administrator retains this obligation 
     notwithstanding the enactment of this Act.

                         Prepayment limitations

       The Transmission Act is amended by adding a new section 17, 
     which places a cap on the Administrator's authority to prepay 
     the new principal amounts of old capital investments. During 
     the period October 1, 1995, through September 30, 2000, the 
     Administrator may pay the new principal amounts of old 
     capital investments before their respective repayment dates 
     provided that the total of the prepayments during the period 
     does not exceed $100,000,000.

     Interest rates for new capital investments during construction

       The Transmission Act is amended by adding a new section 18, 
     which establishes in statute a key element of the repayment 
     practices relating to capital investments the facilities of 
     which are placed in service after September 30, 1995. The new 
     section 18 provides the interest rates for determining the 
     interest during construction of these facilities. For each 
     fiscal year of construction, the Secretary of the Treasury 
     determines a short-term interest rate upon which that fiscal 
     year's interest during construction is based. The short-term 
     interest rate for a given fiscal year applies to the sum of 
     (a) the cumulative construction expenditures made from the 
     start of construction through the end of the subject fiscal 
     year, and (b) interest during construction that has accrued 
     prior to the end of the subject fiscal year. The short-term 
     rate for the subject fiscal year is set by the Secretary of 
     the Treasury and is the one-year agency borrowing rate as 
     determined by the Secretary of the Treasury for use during 
     the first month of the fiscal year taking into consideration 
     the average of current market yields on outstanding 
     marketable obligations of the United States with approximate 
     periods to maturity of one year. These ideas are included in 
     the definition of the term ``one-year rate.''
       This method of calculating interest during construction 
     equates to common construction financing practice. In this 
     practice construction is funded by rolling, short-term debt 
     which, upon completion of construction, is finally rolled 
     over into long-term debt that spans the expected useful life 
     of the facility constructed. Accordingly, new section 18 of 
     the Transmission Act provides that amounts for interest 
     during construction shall be included in the principal amount 
     of a new capital investment. Thus, the Administrator has no 
     obligation with respect to the payment of this interest until 
     construction is complete, at which point the interest during 
     construction is included in the principal amount of the 
     capital investment.

               Interest rates for new capital investments

       The Transmission Act, is amended by adding a new section 
     19, which establishes in statute an important component of 
     BPA's repayment practice, that is, the methodology for 
     determining the interest rates for capital investments the 
     related facilities of which are placed in service after 
     September 30, 1995. Heretofore, administrative policies and 
     practice established the interest rates applicable to capital 
     investments as a long-term Treasury interest rate in effect 
     at the time construction commenced on the related facilities. 
     By contrast, new section 19 provides that the interest rate 
     assigned to capital investments made in a project, facility, 
     or separable unit of feature of a project or facility, 
     provided it is placed in service after September 30, 1995, is 
     a rate that more accurately reflects the repayment period for 
     the capital investment. The interest rate applicable to these 
     capital investments is a rate determined by the Secretary of 
     the Treasury taking into consideration the average of yields 
     of certain marketable securities of the United States during 
     the month in which the related project, facility, or 
     separable unit or feature is placed in service. The 
     marketable securities to be used by the Secretary of the 
     Treasury in the interest rate determination are securities 
     whose remaining maturities are comparable to the repayment 
     period for the capital investment. BPA will obtain the 
     applicable interest rate from a table of interest rates 
     provided by the Secretary of the Treasury. The interest rates 
     in this table shall be for various maturities and shall be 
     determined by the Secretary of the Treasury by taking into 
     consideration the average of the yields on marketable 
     securities of the United States that have maturities 
     comparable to the various maturities. Each of these 
     investments would bear interest at the rate so assigned until 
     the earlier of the date it is repaid or the end of its 
     repayment period.

      Credits to the Administrator's payments to the U.S. Treasury

       The Transmission Act is amended to add a new section 20, 
     which provides that the Administrator shall receive credits 
     to annual cash transfers that would otherwise be made by the 
     Administrator to the U.S. Treasury. The credits are tied to 
     annual payments to be made by the Administrator under a 
     settlement of certain claims against the United States by the 
     Confederated Tribes of the Colville Reservation, which claims 
     relate to the construction and operation of Grand Coulee Dam. 
     The credits, together with a lump-sum payments by the United 
     States to the Tribes, represent an equitable allocation of 
     the costs of the settlement between BPA ratepayers and 
     federal taxpayers. The credits provided under this section 
     shall be applied against interest payments or others payments 
     to be made by the Administrator to the U.S. Treasury. The 
     payments to the U.S. Treasury available for crediting 
     include, without limitation, interest payments associated 
     with capital investment, are reset under this Act; 
     interest on bonds issued by BPA to the U.S. Treasury, and 
     interest payments in connection with FCRPS investments 
     that are placed in service after September 30, 1995.
       New section 20 of the Transmission Act also provides that 
     it will apply ``notwithstanding any other law.'' This clause 
     assumes that new section 20 will supplant a similar provision 
     in proposed Federal legislation validating the settlement 
     agreement, should that legislation be enacted before this 
     Act. The proposed short title for the settlement agreement 
     legislation is the ``Colville Tribes Grand Coulee Dam 
     Settlement Act.''

                          Contract provisions

       The Transmission Act, is amended to add a new section 21, 
     which is intended to capture in contract the purpose of this 
     legislation to permanently resolve issues relating to the 
     repayment obligations of BPA's customers associated with an 
     old capital investment. With regard to such investments, 
     paragraph (1) of new section 21 requires that the 
     Administrator offer to include in power and transmission 
     contracts terms that prevent the Administrator from 
     recovering and returning to the U.S. Treasury any return of 
     the capital investments other than the interest payments or 
     principal repayments authorized by this Act. Paragraph (1) of 
     new section 21 also provides assurance to rate payers that 
     outstanding principal and interest associated with each old 
     capital investment, the principal of which is reset in this 
     legislation, shall be credited in the amount of any payment 
     in satisfaction thereof at the time the payment is tendered. 
     This provision assures that payments of principal and 
     interest will in fact satisfy principal and interest payable 
     on these capital investments.
       Whereas paragraph (1) of new section 21 limits the return 
     to the U.S. Treasury of the Federal investments in the 
     designated projects and facilities, together with interest 
     thereon, paragraph (2) of section new 21 requires the 
     Administrator to offer to include in contracts terms that 
     prevent the Administrator from recovering and returning to 
     the U.S. Treasury any additional return on those old capital 
     investments. Thus, the Administrator may not impose a charge, 
     rent or other fee for such investments, either while they are 
     being repaid or after they have been repaid. Paragraph (2) of 
     new section 21 also contractually fixes the interest 
     obligation on the new principal obligation at the amount 
     determined pursuant to section 15 of the Transmission Act, as 
     amended by this Act.
       Paragraph (3) of new section 21 is intended to assure BPA 
     rate payers that the contract provisions described in 
     paragraphs (1) and (2) of new section 21 are not indirectly 
     circumvented by requiring BPA rate payers to bear through BPA 
     rates the cost of a judgment or settlement for breach of the 
     contract provisions. The subsection also confirms that the 
     judgment fund shall be available to pay, and shall be the 
     sole source for payment of, a judgment against or settlement 
     by the Administrator or the United States on a claim for a 
     violation of the contract provisions required by new section 
     21. Section 1304 of title 31, United States Code, is a 
     continuing, indefinite appropriation to pay judgments 
     rendered against the United States, provided that payment of 
     the judgment is ``not otherwise provided for.'' Paragraph 3 
     of new section 21 of this Act assures both that the 
     Bonneville fund, described in section 838 of title 16, 
     United States Code, shall not be available to pay a 
     judgment or settlement for breach by the United States of 
     the contract provisions required by new section 21, and 
     that no appropriation, other than the judgment fund, is 
     available to pay such a judgment.
       Paragraph (4)(A) of new section 21 establishes that the 
     contract protections required by new section 21 do not extend 
     to Bonneville's recovering a tax that is generally applicable 
     to electric utilities, whether the recovery by Bonneville is 
     made through its rates or by other means.
       Paragraph (4)(B) of new section 21 makes clear that the 
     contract terms described above are in no way intended to 
     alter the Administrator's current rate design discretion or 
     ratemaking authority to recover other new costs or allocate 
     costs and benefits. This Act, including the contract 
     provisions under section 21, does not preclude the 
     Administrator from recovering any other costs such as general 
     overhead, operations and maintenance, fish and wildlife, 
     conservation, risk mitigation, modifications, additions, 
     improvements, and replacements to facilities, and other costs 
     properly allocable to a rate or resource.

                           Savings provisions

       The Transmission System Act is amended by adding a new 
     section 22. Subsection (a) of this section assures that the 
     principal and interest payments by the Administrator as 
     established in this Act shall be paid only from the 
     Administrator's net proceeds. Subsection (b) confirms that, 
     except with respect to the prepayment limitations under 
     section 17 of the Transmission Act, as amended by this Act, 
     the Administrator may repay all or a portion of the principal 
     associated with a capital investment before the end of its 
     repayment period.
                                 ______

      By Mr. KERRY (for himself and Mr. Kennedy):
  S. 2333. A bill to authorize the Secretary of Transportation to issue 
a certificate of documentation with appropriate endorsement for 
employment in the coastwise trade for the vessel a certificate of 
documentation for the vessel Shamrock V; to the Committee on Commerce, 
Science, and Transportation.


        ``shamrock v'' certificate of documentation act of 1994

  Mr. KERRY. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2333

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     notwithstanding sections 12106, 12107, and 12108 of title 46, 
     United States Code, and section 27 of the Merchant Marine 
     Act, 1920 (46 App. U.S.C. 883), as applicable on the date of 
     enactment of this Act, the Secretary of Transportation may 
     issue a certificate of documentation with appropriate 
     endorsement for employment in the coastwise trade for the 
     vessel SHAMROCK V, (United States official number 900036).
                                 ______

      By Mr. BAUCUS (by request):
  S. 2334. A bill to improve safety at rail-highway grade crossings and 
railroad rights-of-way, and for other purposes; to the Committee on 
Environment and Public Works.


             rail-highway grade crossing safety act of 1994

 Mr. BAUCUS. Mr. President, today I am introducing, upon 
request, a bill to improve safety at rail-highway grade crossings and 
railroad rights-of-way. I ask unanimous consent that the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2334

  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 ``Rail-Highway Grade Crossing 
     Safety Act of 1994''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) there are approximately 170,000 public and 110,000 
     private at-grade rail-highway crossings in the United States;
       (2) during 1993, there were nearly 4,900 accidents at these 
     crossings;
       (3) it is necessary to improve safety at our Nation's rail-
     highway crossings and along rail rights-of-way;
       (4) there are insufficient public funds to provide for the 
     installation of warning systems that are automatically 
     activated by approaching trains at all public crossings;
       (5) many of the Nation's public rail-highway crossings are 
     unnecessary and should be closed;
       (6) rail-highway crossing consolidation will reduce the 
     potential for rail-highway crossing collisions and will allow 
     states to concentrate on improving safety at the remaining 
     crossings;
       (7) incentives are needed to encourage state and local 
     governments to increase the consolidation of rail-highway 
     crossings; and
       (8) increased funding must be provided to educate motorists 
     in their responsibilities at crossings in order to realize 
     the full benefits from the public investment in rail-highway 
     crossing warning systems.

     SEC. 3. RAIL-HIGHWAY GRADE CROSSING CLOSING PROGRAM.

       (a) Section 120(c) of title 23, United States Code, is 
     amended by inserting ``rail-highway crossing closures,'' 
     after ``vanpooling.''
       (b) Section 130 of title 23, United States Code, is amended 
     by relettering subsection (h) as (j) and adding new 
     subsections (h) and (i) to read as follows:
       ``(h) Incentive Funds for Closing Crossings.--
       ``(1) Subject to paragraph (2) of this subsection, any 
     state after adopting a policy requiring the review of the 
     need for all new public at-grade rail-highway crossings, may, 
     in its discretion, use the funds authorized under this 
     section to provide an incentive payment to a local 
     jurisdiction upon the permanent closing by the jurisdiction 
     of a public at-grade crossing.
       ``(2) The incentive payments authorized by paragraph (1) of 
     this subsection may not exceed $7,500, provided that the 
     funds are matched by an equal payment from the railroad 
     owning the tracks on which the crossing is located.
       ``(3) The local jurisdiction receiving funds under this 
     subsection shall use the Federal funds portion of the 
     incentive payment for transportation safety improvements 
     only.
       ``(i) Public Benefits and Costs Analyses.--Within 18 months 
     after the date of this Act, the Secretary shall establish 
     guidelines to enable states to determine the public benefits 
     and costs resulting from any new rail-highway grade 
     crossing.''

     SEC. 4. OPERATION LIFESAVER.

       Section 104(d)(1) of title 23, United States Code, is 
     amended by striking everything after ``Operation lifesaver.--
     '' and inserting in lieu thereof the following: ``Before 
     making an apportionment of funds under subsection (b)(3) for 
     a fiscal year, the Secretary shall set aside $500,000 of the 
     funds authorized to be appropriated for the surface 
     transportation program for such fiscal year for carrying out 
     a public information and education program to help prevent 
     and reduce motor vehicle accidents, injuries, and fatalities 
     and to improve driver performance at railway-highway 
     crossings, and to help prevent trespassing on rail rights-of-
     way and the resulting injuries and fatalities, provided 
     however, expenditure of any funds in excess of $300,000 
     shall be contingent upon receipt of matching funds from 
     non-public sources.''

     SEC. 5. GRADE CROSSING CORRIDOR SAFETY INCENTIVE PROGRAM.

       Section 104 of title 23, United States Code is amended by 
     adding a new paragraph (4) to subsection (d) to read as 
     follows:
       ``(4) Grade Crossing Corridor Safety Incentive Program.--
     Before making an apportionment of funds under subsection 
     (b)(3) for a fiscal year, the Secretary shall set aside 
     $15,000,000 of the funds authorized to be appropriated for 
     the surface transportation program for such fiscal year to 
     carry out a program to provide a financial incentive to 
     States that would review and implement grade crossing safety 
     improvements on a corridor basis in accordance with section 
     130(k) of title 23, United States Code.''
       Section 130 of title 23, United States Code is amended by 
     adding subsection (k) to read as follows:
       ``(k) Grade Crossing Corridor Safety Incentive Program.--
       ``(1) The Secretary shall carry out a program to provide an 
     additional financial incentive to States that would review 
     and implement grade crossing safety improvements on a 
     corridor basis. This financial incentive would be in addition 
     to those funds available in accordance with the preceding 
     subsections.
       ``(2) Funds authorized to be appropriated to carry out this 
     subsection shall be available for obligation at the 
     discretion of the Secretary. The Secretary shall issue 
     investment criteria for approving projects under this 
     section.
       ``(3) All provisions of chapter 1 of title 23, United 
     States Code, other than provisions relating to apportionment 
     formula and Federal share, shall apply to funds made 
     available to carry out this subsection, except as determined 
     by the Secretary to be inconsistent with this subsection. 
     Funds authorized to be appropriated to carry out this section 
     shall remain available until expended.''
                                 ______

      By Mr. BROWN:
  S. 2335. A bill to amend the Balanced Budget and Emergency Deficit 
Control Act of 1985 to require that OMB and CBO estimates for paygo 
purposes to recognize the increased revenues generated by economic 
growth resulting from legislation implementing any trade agreement; to 
the Committee on the Budget and the Committee on Governmental Affairs, 
jointly, pursuant to the order of August 4, 1977, to the Committees on 
the Budget and Governmental Affairs, with instructions that if one 
committee reports, the other committee have 30 days to report or be 
discharged.


                      trade agreements legislation

 Mr. BROWN. Mr. President, I rise today to introduce a bill 
that adopts a dynamic budget scoring for trade agreements.
  Mr. President, the Senate will soon be voting on legislation to 
implement the Uruguay round of the General Agreement on Tariffs and 
Trade [GATT]. In order to approve the Uruguay round GATT, Congress will 
have to choose between increasing taxes, restraining spending, or 
waiving the budget rules.
  According to a report to be released tomorrow by the Joint Economic 
Committee, GATT will create over $30 billion in economic growth in the 
first 5 years after its enactment. This growth would generate 
sufficient revenues to offset the projected loss on tariff revenue. 
U.S. Trade Representative Mickey Kantor also has testified before 
Congress that he expects the GATT to generate tax revenue sufficient to 
cover the expected $11 billion loss over 5 years. Unfortunately, the 
budget pay-as-you-go rules prevent the Congressional Budget Office from 
taking such economic growth into account.
  The Clinton administration has recently proposed a series of measures 
to make up for the loss of revenue. However, the administration's 
proposals rely heavily on tax increases and not on budget cuts. Some 
budget cuts proposed by the administration also are included in its 
welfare reform proposal.
  Mr. President, I support the paygo process because it helps keep the 
deficit from growing even larger. However, it does not make economic 
sense to only look at revenue reductions and ignore the revenue 
increases that will occur because of economic growth generated by trade 
agreements.
  The legislation I introduce today adopts a dynamic budget scoring for 
trade agreements. Dynamic budget scoring allows the OMB and CBO to take 
into account the increased revenues generated by the trade agreements, 
so they may be used to offset lost revenues when tariffs are lowered.
  Mr. President, let me make it clear that this bill only applies to 
trade agreements, and the increased revenues generated by GDP growth 
resulting from the legislation implementing a trade agreement cannot be 
used as offsets beyond the total of lost revenues. If the offset does 
not fully cover the lost tariff revenues, we will still need to pay for 
the difference.
  Mr. President, Americans need more open borders, not higher taxes. We 
must reject any proposal to raise taxes on working Americans to pay for 
trade agreements that will generate tax revenues. By adopting dynamic 
budget scoring, we can eliminate the need for tax increases as an 
option to pay for GATT and other future trade agreements.

                          ____________________